HC Upholds Tribunal’s Grant of Interest u/s 18(1)(a) for Delay in Possession

Case Details: Ratan Buildtech (P.) Ltd. vs. Anil Kumar - [2025] 178 taxmann.com 218 (HC-Allahabad)

Judiciary and Counsel Details

• Pankaj Bhatia, J.
• Prashant Kumar Singh, Sudeep Kumar & Twinkle Rajpal for the Petitioner.
• Suryansh Narula, Anupama Bhadauria, Surabhi Rawat, Manish Singh, Azhar Ikram, Awadhesh Kumar Misra & Piyush Tripathi for the Respondent.

Facts of the Case

In the instant case, the respondent-allottee was allotted an apartment by the appellant-promoter under a builder-buyer agreement. The completion certificate was issued by the concerned authority in favour of the promoter. However, possession was not provided as per the agreement.

Thereafter, the allottee filed a complaint before the RERA for the grant of interest and compensation. The RERA granted compensation as well as interest to the allottee. On appeal, the Appellate Tribunal set aside the order passed by the RERA and held that the allottee was entitled to a delayed interest only at MCLR + 1 per cent on the deposited amount.

It was noted that on a plain reading of section 58 of the RERA Act and section 100 of the Code, it is clear that an appeal would lie only against a decree passed in appeal in any court when only substantial questions of law are involved.

Further, there was no dispute with regard to the date of delivery of possession and offer of possession and only ground taken with regard to grant of interest, where allottee had taken possession without protest and thus, he was not liable to any interest for delay in terms of Section 18(1) of Act, there being no other submission made before the Tribunal.

High Court Held

The High Court observed that in regard to non-entitlement of interest under Section 18(1) of the Act, merely because allottee had taken possession without protest and there being no dispute with regard to date of possession of project and date of offer of possession, no appeal could be preferred before this Court in excess of what was argued before Tribunal and thus, to that extent, appeal would not even lie on any issue beyond what was argued before Tribunal.

The High Court held that the allottee is entitled to interest for every month of delay, till handing over of possession, at such rate as may be prescribed. Thus, the Tribunal was justified in granting delayed interest directly, in exercise of its appellate powers under section 43 of the Real Estate (Regulation and Development) Act, 2016.

List of Cases Referred to

• Newtech Promoters and Developers (P) Ltd. v. State of U.P. [2021] 132 taxmann.com 137/[2022] 169 SCL 455 (SC) (para 5)
• CIT v. Walchand & Co. (P) Ltd. 1967 SCC OnLine SC 119 (para 12)
• CIT v. S. Chenniappa Mudaliar (1969) 1 SCC 591 (para 13)
• Subramaniam Shanmugham v. M.L. Rajendran (1987) 4 SCC 215 (para 15)
• Mahindra & Mahindra Financial Services Limited v. State of U.P. 2019 SCC OnLine All 5336 (para 16)
• U.P. Avas Evam Vikas Parishad v. Dhruv Kumar Chaturvedi [RERA APPEAL No. – 67 of 2023, dated 18-11-2023] (para 18)
• Vibhor Vaibhav Infrahomes Pvt. Ltd. v. Union of India [Writ C. No. 13904 of 2020, dated 8-10-2020] (para 18)
• Harinagar Sugar Mills Ltd. v. State of Bihar (2003) 11 SCC 40 (para 34)
• Axis Bank v. SBS Organics Private Limited [2016] 68 taxmann.com 290/135 SCL 415 (SC) (para 35)
• Kut Energy Pvt. Ltd. v. Punjab National Bank (2020) 19 SCC 533 (para 36).