The Vardhman Developers vs. Uttarakhand Real Estate Regulatory Authority

Facts

The appellant, The Vardhman Developers, filed an appeal before the Uttarakhand High Court challenging an order passed by the Uttarakhand Real Estate Appellate Tribunal. The Appellate Tribunal had directed the appellant to deposit 50% of the amount payable to allottees, as per an order from the Uttarakhand Real Estate Regulation Authority (RERA). The RERA order directed the appellant to refund car parking fees collected from allottees, along with interest, due to failure to provide parking facilities. The appellant argued that no penalty was imposed and no amount was realized from allottees, thus Section 43(5) of the Real Estate (Regulation and Development) Act, 2016, was not attracted. The RERA order specified refund of parking fees including service tax or GST, with interest at 10.85% from the date of payment.

Held

The Court held that the proviso to sub-section (5) of Section 43 of the Real Estate (Regulation and Development) Act, 2016, has two parts. The first part deals with penalties, requiring a deposit of 30% of the penalty. The second part deals with any other amounts, including interest or compensation, imposed by the Authority, which must be deposited as a pre-condition for appeal. The present case falls under the latter part, as RERA found that the appellant realized parking fees and failed to provide parking facilities, ordering a refund of these fees along with interest. The Court found the Appellate Tribunal's direction to deposit only 50% of the amount to be lenient, as the requirement is to deposit the entire amount. The Court refrained from commenting on the merits of RERA's findings, stating that their correctness would be examined by the Appellate Tribunal. Consequently, the appeal was dismissed. The operative direction was that the appeal was dismissed, upholding the Appellate Tribunal's order for deposit.

Key Issues

1. Whether sub-section (5) of Section 43 of the Real Estate (Regulation and Development) Act, 2016, is attracted when the RERA order directs refund of amounts realized as parking fees along with interest, and not a penalty, as a pre-condition for filing an appeal before the Appellate Tribunal? Petitioner's arguments: The appellant contended that sub-section (5) of Section 43 of the Act would not be attracted because the RERA had not imposed any penalty. Furthermore, the appellant claimed they had not realized any amount from the allottees, and the sale deed only mentioned the right to use common parking. Therefore, the RERA order was illegal. Revenue's arguments: The respondent argued that sub-section (5) of Section 43 of the Act is attracted in every case where any amount has been ordered to be refunded, whether by way of penalty or otherwise.