RERA: Whether REAT has Power to Reimburse the Builder From the Allottee in Case Appeal Succeeds? Allahabad HC Directs Tribunal to Decide Issue

Recently, The Allahabad HC answered an important question that whether REAT has the power to reimburse the builder from the allottee in case an appeal Succeeds.

The bench of Justice Manish Mathur was dealing with the petition seeking a direction to the Real Estate Appellate Tribunal to decide the pending application for interim relief filed along with an appeal under Section 43 of the Real Estate (Regulation and Development) Act, 2016. 

In this case, the private respondent had sought allotment of two flats in the building in question which was constructed by the petitioner. 

The part payment of the cost of flats was made by the private respondent whereas the rest of the payment was made to the petitioner by the bank from which the private respondent had taken a loan. 

The aforesaid payments were made in pursuance of a tripartite agreement dated 5th May 2015 in which the petitioner was also a party. Subsequently private respondent withdrew his application for allotment of the flats concerned and sought a refund of the sale consideration. 

For the purposes of refund of money deposited by and on behalf of the private respondent, the complaint was filed which was decided by means of the order dated 27th July 2021 directing the petitioner to refund the amount deposited by the private respondent within a period of 45 days along with interest.

In the meantime, the private respondent had filed a petition in which initially the petitioner was not a party. The petition was filed seeking direction to the concerned authorities for taking necessary action on the recovery certificate dated 18th December 2021 and for the execution of the order dated 27th July 2021 expeditiously.

In the aforesaid petition, the Sub Divisional Magistrate was directed to file an affidavit indicating steps taken for executing the recovery certificate.

Subsequent thereto, the petitioner had also filed a petition challenging the order as well as the recovery certificate issued. The aforesaid petition was filed challenging the standard operating procedure issued by U.P. RERA on 2nd September 2020 which provides that an amount recovered in pursuance to directions issued by the authority is to be disbursed to the allottee.

The aforesaid petition was dismissed vide judgment and order leaving it open for the petitioner to approach the U.P. Real Estate Appellant Tribunal for effecting challenge in the appropriate case.

Mr. Shobit Mohan Shukla counsel appearing for Tribunal submitted that appeal along with the application for condonation of delay and exemption from making a deposit in terms of Section 43(5) of the Act of 2016 is listed before the Tribunal on 13th February 2023 at Sl. No. 1. As such it was submitted that the Tribunal can very well look into and adjudicate the aforesaid factors, particularly the application for exemption in depositing the statutory amount as indicated in the section.

The bench noted that at this stage, it appears that except for filing suit for recovery, the builder may not have any option to enforce the reimbursement of the amount disbursed to an allottee. As such prima facie, the apprehension of the petitioner may have some force but the same is required to be adjudicated and looked into by the Tribunal itself.

High Court stated that in view of apprehension expressed by counsel for the petitioner, it is provided that till the application for exemption from making the deposit and the application for interim relief are decided by the Tribunal, the amount of Rs. 1,07,00,000/- deposited by the petitioner before the District Magistrate, Noida in pursuance to the recovery proceedings as per judgment and order dated 27th July 2021 shall not be disbursed to the allottee.

In view of the above, the bench disposed of the petition. 

Case Title: M/S Antriskh Engineers Pvt. Ltd. v. U.P. Real Estate Appellate Tribunal

Bench: Justice Manish Mathur

Case No.: MATTERS UNDER ARTICLE 227 No. – 617 of 2023

Counsel for the petitioner: Advs Sudeep Kumar and Abhishek Khare

Counsel for the respondent: Mr. Shobhit Mohan Shukla

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