RERA Appeal Pre-Deposit Requirement Applies To Refunds, Interest And Compensation, Not Just Penalties: Uttarakhand HC

The Uttarakhand High Court has recently held that the mandatory pre-deposit requirement for entertaining a promoter's appeal under the Real Estate (Regulation and Development) Act, 2016, applies not only in cases involving penalties.

It also applies where a promoter challenges directions requiring payment of amounts to allottees, including interest and compensation.

A bench of Chief Justice Manoj Kumar Gupta and Justice Subhash Upadhyay made the observation while dismissing an appeal filed by Vardhman Developers. The appeal challenged an order of the Uttarakhand Real Estate Appellate Tribunal directing the developer to deposit 50% of the amount payable to allottees in compliance with the pre-deposit requirement.

Explaining the scope of the provision, the court observed,

“The proviso to sub-section (5) of Section 43 of the Act is in two parts. Earlier part of the provision deals with the cases of penalty, where the pre-condition for entertaining appeal is deposit of 30% of the penalty or such higher percentage as may be determined by the Appellate Tribunal. The second and the latter part deals with any other amounts including interest or compensation, imposed by the Tribunal and in such cases, the same is required to be deposited as a precondition for availing the remedy of appeal”

Applying the provision to the facts of the case, the Court further observed,

“The present case would be covered by the latter part of the proviso, whereunder any amount directed to be paid to the allottees including interest and compensation is required to be deposited as a pre-condition for availing the remedy of appeal.”

The appeal arose from an order dated April 29, 2026 passed by the Uttarakhand Real Estate Appellate Tribunal. By that order, the Tribunal directed Vardhman Developers to deposit 50% of the amount payable to allottees in pursuance of an order passed by the Uttarakhand Real Estate Regulatory Authority (RERA).

Before the High Court, the developer contended that the pre-deposit requirement would not apply because RERA had not imposed any penalty on it. It also contended that the sale deeds only provided that allottees would be entitled to use common parking.

The allottees, on the other hand, contended that the provision would apply in every case where any amount had been ordered to be refunded, whether by way of penalty or otherwise.

The High Court noted that RERA had recorded findings that the developer had realised parking fees from individual allottees and had failed to provide parking facilities. Consequently, the amount realised as parking fee, along with interest, had been directed to be refunded.

Rejecting the developer's contention, the Court held that the case was covered by the latter part of the proviso. It therefore attracted the pre-deposit requirement applicable to amounts directed to be paid to allottees.

The bench also observed that the appellate tribunal had shown leniency by directing a deposit of only 50% of the amount imposed by the tribunal.

In this regard, the court observed,

“We find that the Appellate Tribunal has, in fact, been lenient to the appellant in directing deposit of only 50% of the amount imposed by the Tribunal although the requirement in such cases is to deposit the entire amount.”

As regards the challenge to the findings recorded by RERA, the court declined to express any opinion on the merits. It observed that the correctness of those findings was yet to be examined by the Appellate Tribunal.

Holding that no ground for interference was made out, the High Court dismissed the appeal.

For Appellant/developer: Senior Advocate I.M. Kuddusi assisted by Deep Chandra Joshi.

For Respondent no. 1: Advocate Monika Pant

For Respondent no. 2/allottees: Advocates Ajar Rab and Ankit Singh.