The High Court of Judicature at Allahabad, Lucknow Bench, presided over by Justice Prashant Kumar, has dismissed a RERA appeal filed by real estate developer M/s Aims Max Gardenia Developers Pvt. Ltd., ruling that inaction and oversight do not constitute “sufficient cause” for condoning a 721-day delay in seeking the restoration of an appeal dismissed for non-prosecution. The court affirmed that the U.P. Real Estate Appellate Tribunal correctly rejected the builder’s recall application and upheld the Real Estate Regulatory Authority’s order requiring the promoter to deliver immediate possession of a residential unit to homebuyer Mrs. Pratibha Gupta along with interest at 24% per annum for delayed possession. Taking stern note of seven successive rounds of litigation initiated by the developer over 13 years, the court imposed exemplary costs of Rs 2,50,000 on the appellant builder.
Background of the Case
On April 9, 2011, homebuyer Mrs. Pratibha Gupta booked Flat No. C3-402, measuring 1,150 square feet, in the appellant’s project named “Golf City” located at Sector-75, Gautam Buddh Nagar. Under the Builder-Buyer Agreement, the total flat cost was Rs 34,44,250, and the appellant promised to deliver possession by June 2013. Although the homebuyer paid Rs 35,90,252 upon demand, the builder failed to deliver possession within the promised timeframe.
Aggrieved by the delay, the homebuyer filed Complaint No. 320188450 before the Real Estate Regulatory Authority (RERA), Gautam Buddh Nagar. On July 26, 2018, RERA directed the builder to hand over possession of the unit immediately and pay interest for delayed possession at 24% per annum calculated from June 30, 2013.
When the builder failed to comply, the homebuyer instituted execution proceedings on October 30, 2018, leading to the issuance of a recovery certificate for Rs 41,21,411.88 on March 6, 2019. Following the recovery certificate, the builder filed an appeal before the U.P. Real Estate Appellate Tribunal (REAT) with a delay of 234 days on May 16, 2019 (Misc. Case No. 170 of 2019). Simultaneously, the builder filed Writ-C No. 17549 of 2019 in the Allahabad High Court seeking a stay on recovery, which was dismissed on May 23, 2019. A subsequent Special Leave to Appeal (C) No. 14282 of 2019 before the Supreme Court was dismissed as withdrawn on July 8, 2019.
Before the Appellate Tribunal, the appeal was repeatedly dismissed for want of prosecution due to the non-appearance of the builder’s counsel—first on September 5, 2019 (recalled on November 7, 2019), again on February 7, 2020 (recalled the same day), and finally on July 10, 2020. An email containing the dismissal order was transmitted to the parties by the Tribunal Registry on July 14, 2020.
To enforce execution, the homebuyer filed Writ-C No. 27934 of 2021 before the High Court, which directed the District Magistrate, Gautam Buddh Nagar on November 10, 2021, to execute the recovery certificate within one month. The builder filed a review application against the earlier writ order, which was dismissed for want of prosecution on February 25, 2022. Following a fresh recovery certificate issued on April 8, 2022, and contempt proceedings instituted by the homebuyer in Contempt Application (Civil) No. 6481 of 2022, the District Magistrate attached the builder’s bank accounts. The builder subsequently deposited Rs 67,77,518 via demand draft on December 13, 2022.
Meanwhile, on August 28, 2022, after a delay of 721 days, the builder filed an application before the Appellate Tribunal seeking recall of the July 10, 2020 dismissal order. The Tribunal rejected the delay condonation and recall application on September 14, 2022. Aggrieved, the builder filed the present appeal under Section 58 of the Real Estate (Regulation and Development) Act, 2016.
Arguments of the Parties
Counsel for the appellant builder, Ms. Suchita Singh, submitted that the delay in seeking restoration was neither intentional nor deliberate, arguing that regular functioning was disrupted due to the COVID-19 pandemic and the appeal had remained “out of sight and unnoticed.” She stated that possession had been handed over for fit-out purposes on July 8, 2017, when the final installment was paid. It was further argued that pre-deposit compliance under Section 43(5) of the Act had been recorded on November 7, 2019, and that the 24% interest awarded by RERA was excessive and contrary to Section 18 of the Act read with Section 2(za), which prescribes Marginal Cost of Funds Based Lending Rate (MCLR) + 1%.
Counsel for the respondent homebuyer, Ms. Aprajita Bansal along with Shri Anilesh Tewari, opposed the appeal, asserting that actual possession was never delivered as the builder lacked an Occupancy Certificate and the flat was not ready. She submitted that an offer for fit-out signed under duress does not constitute lawful possession, relying on Pioneer Urban Land and Infrastructure Limited v. Govindan Raghavan and Lko. Development Authority v. Sushma Shukla. Counsel emphasized that the Tribunal’s order was communicated via email under Section 44(4) and published on its portal. She further submitted that under Chandi Prasad v. Jagdish Prasad, the doctrine of merger did not apply because the Tribunal dismissed the appeal for non-prosecution and delay rather than on merits, precluding a challenge to the interest rate in this appeal.
Analysis of the Court
Justice Prashant Kumar examined the three substantial questions of law framed in the appeal regarding whether COVID-19 disruptions constituted sufficient cause, whether the Tribunal erred in dismissing the appeal during the pandemic, and whether Section 44(4) statutory notice provisions were met.
Evaluating the principle of condonation of delay under Section 5 of the Limitation Act, the court emphasized that the burden of proving bona fide cause rests on the applicant. Citing Ramlal v. Rewa Coalfields Ltd., the court noted that proof of sufficient cause is a condition precedent for exercising discretionary jurisdiction. Observing the strict requirements against dilatory practices, the court referred to Maniben Devraj Shah v. Municipal Corporation of Brihan, Mumbai, Chennai Metropolitan Water Supply & Sewerage Board v. T.T. Murali Babu, Pathapati Subba Reddy v. Collector (LA), and Union of India v. Jahangir Byramji Jeejeebhoy, stating:
“We should not keep the ‘Sword of Damocles’ hanging over the head of the respondent for indefinite period of time to be determined at the whims and fancies of the appellants.”
“However, the Courts must not condone gross negligence, deliberate inaction, or casual indifference, for to do so would undermine the maxim interest reipublicae ut sit finis litium and destabilise the certainty that limitation law seeks to secure.”
The court observed that even after excluding the period from March 15, 2020, to February 28, 2022, pursuant to the Supreme Court’s directions in Suo Motu Writ (Civil) No. 3/2020 In Re: Cognizance for Extension of Limitation, the builder failed to demonstrate reasonable diligence. The plea that the case remained “out of sight and unnoticed” until the recovery officer arrived did not constitute sufficient cause. Referring to Narendra v. Ajabrao, the court held that the Tribunal correctly rejected the restoration application and that factual findings of perversity were absent.
Regarding Section 44(4) of the RERA Act, 2016, the court noted that the Tribunal issued public notices on June 1, 2020, updated its portal, and sent dismissal orders via email on July 14, 2020, thereby fully complying with statutory notification obligations.
Addressing the merits of possession and interest, the court held that in the absence of an Occupancy Certificate, formal possession cannot be legally granted. One-sided clauses in pre-formatted agreements signed under duress are void ab initio. Examining Clause 19 of the Builder-Buyer Agreement dated April 9, 2011, the court noted that the builder charged 24% penal interest on defaults by homebuyers. Under Section 2(za) of the Act, interest payable by a promoter equals the interest charged from an allottee in case of default.
Citing the Supreme Court’s ruling in Newtech Promoters & Developers (P) Ltd. v. State of U.P., which interpreted retroactive application of the Act to ongoing projects and reference to Jay Mahakali Rolling Mills v. Union of India, Shanti Conductors (P) Ltd. v. Assam SEB, and Vineeta Sharma v. Rakesh Sharma, the court affirmed that statutory interest provisions under Section 18 are compensatory and contractual terms cannot override statutory liabilities.
Decision of the Court
The High Court dismissed RERA Appeal No. 1 of 2023, finding no illegality or infirmity in the U.P. Real Estate Appellate Tribunal’s orders dated July 10, 2020, and September 14, 2022, or RERA’s order dated July 26, 2018.
Observing that the builder subjected the homebuyer to seven successive rounds of litigation over 13 years despite receiving near-total consideration, the court observed:
“The present case is a classic example of a homebuyer, who invested her lifetime savings with the hope of securing a roof over her head.”
Quoting Justice Brennan, the court highlighted:
“Nothing rankles more in the human heart than a brooding sense of injustice. Illness we can put up with. But injustice makes us want to pull things down. When only the rich can enjoy the law, as a doubtful luxury, and the poor, who need it most, cannot have it because its expense puts it beyond their reach, the threat to the continued existence of free democracy is not imaginary but very real, because democracy’s very life depends upon making the machinery of justice so effective that every citizen shall believe in and benefit by its impartiality and fairness.”
Citing Bhusawal Municipal Council v. Nivrutti Ramchandra Phalak, Subrata Roy Sahara v. Union of India, Phool Chandra v. State of Uttar Pradesh, Varinderpal Singh v. M.R. Sharma, Ramrameshwari Devi v. Nirmala Devi, Gurgaon Gramin Bank v. Khazani, and Manoj Kumar v. State of U.P. on curbing frivolous litigation through exemplary costs, the High Court directed the builder to pay costs of Rs 2,50,000 to the respondent homebuyer within four weeks.
Case Title: M/s Aims Max Gardenia Developers Pvt. Ltd. Vs. Mrs. Pratibha Gupta
Case No.: RERA Appeal No. – 1 of 2023
Bench: Justice Prashant Kumar
Date: July 31, 2026
