HIGH COURT OF JUDICATURE AT ALLAHABAD LUCKNOW RERA APPEAL No. - 90 of 2025 Court No. - 6 HON'BLE PANKAJ BHATIA, J. 1. Heard Shri Sanjeev Singh, learned counsel for the appellant and Shri Prasoon Kumar Anjor, learned counsel for the respondent. 2. Facts in brief of the present case are that the appellant authority had formulated a scheme for development of properties known as Trans Ganga City at Unnao. The brochure inviting applications was issued sometime in the year 2016. In terms of the said offer, the respondent applied for allotment of a plot admeasuring 200 square meters vide his application dated 02.11.2016 and also deposited the requisite amount required to be paid in terms of the brochure. 3. It appears that subsequently the property was allotted in the name of the respondent. However, the timeline for grant of possession, as indicated in the brochure, could not be followed on account of farmers' protest, and the allotment of the property, could not be done after carrying out development sufficient time, as indicated in the brochure. 4. Subsequently, as argued by learned counsel for the appellant, a letter was sent on 09.09.2019 (Annexure No.6) wherein two options were given to the respondent; the first being that if the respondent wished to continue under the said allotment and was ready to pay, he would be required to pay the charges as existing prior to the issuance of the said letter; and the second option being that in case the respondent wanted to opt out of the allotment, he could seek a refund of the amount deposited by him along with 6% interest. 5. In pursuance of the said offer, the respondent gave an affidavit and opted for option no.1, i.e., he wanted to continue with the project. The said Versus Counsel for Appellant(s) : Sanjeev Singh, Shuchita Singh Counsel for Respondent(s) : Prasoon Kumar Anjor, Ravindra Singh U.P. State Industrial Development Authority Thru. Its Project Ajay Deep Singh .....Appellant(s) Jaysi Ram Dohare .....Respondent(s) affidavit was given on 01.10.2019 (Annexure No.7). Thereafter also, the possession was not granted. Accordingly, a letter dated 29.04.2021 was sent to the respondent, giving him an option to change the plot from the sector in which it was allotted to a different sector where development had commenced. It is stated that no reply was given by the respondent to the said offer. 6. It also transpires from the record that the appellant issued another letter on 07.06.2021, giving the respondent an option to change the property. The respondent replied in the negative, stating that he was not keen to change the allotment and, in case the appellant was unable to give possession, the entire amount be returned along with 10% interest. 7. It further transpires from the record that on 21.07.2022 the appellant wrote a letter indicating that they had now obtained the development clearances and the plot could be handed over on completion of the formalities. The said letter was responded to by the respondent on 27.07.2022, once again reiterating that the requisite infrastructure had yet not been developed. He also reiterated his demand for return of the money along with 10% interest. As nothing was done, the respondent ultimately approached the authority under the RERA Act by filing a complaint case for refund of money along with interest and compensation. The said case filed by the respondent was opposed by the appellant. However, an order came to be passed against the appellant on 10.05.2023, whereby a direction was issued to hand over the possession of the allotted unit along with interest. 8. Against the said order, the respondent herein preferred an appeal bearing Appeal No.472 of 2023 before the U.P. Real Estate Appellate Tribunal. In the said appeal, it was specifically urged that the respondent had asked for refund of the amount along with interest, and the Regulatory Authority had erred in issuing a direction for handing over the possession of the unit. The appellant also preferred an appeal before the U.P. Real Estate Appellate Tribunal which was dismissed in view of the judgment passed in Appeal No.472 of 2023 on 27.03.2025. 9. The present appeal has been filed challenging the judgment dated 27.03.2025 passed in Appeal No.472 of 2023. 10. After hearing learned counsel for the parties at length, the following substantial questions of law arise for adjudication : "Question no.1-Whether the impugned order dated 27.03.2025 passed by the learned Appellate Tribunal is against the provisions of Section 18(1) of the RERA Act, RERA No. 90 of 2025 2 2016? Question no.3-Whether the learned Appellate Tribunal, erred in negating the specific undertaking on affidavit dated 01.10.2019 given by the respondent allottee, consciously opting to remain with the delayed project and not to seek refund and raise any dispute in this regard as well as the subsequent acts of the allottee in not availing the two opportunities granted by the UPSIDA for exchange of the existing plot in sector 4 with another plot in more developed sector 3 of the same project, and further act of the allottee in not responding to the offer of possession dated 21.07.2022, issued after issuance of the development certificate dated 01.06.2022 and despite such conduct, acquiescence and waiver, the claim of refund of deposited amount by the allottee respondent, has been erroneously held to be maintainable and has been allowed?" 11. Heard learned counsel for the parties on both the aforesaid questions. 12. From the brochure as well as the application form, it transpires that the date of likely possession of the plot was indicated in the brochure itself and was indicated to be in the year 2017. 13. It is an admitted case that the property could not be developed in time on account of farmer agitation, and thereafter an option was given to the respondent either to continue with the property or to seek refund of the deposited money along with 6% interest. It is already recorded above that the respondent had opted for option no.1 in September 2019. Thereafter, when he was given an option to change the property from one part of the project to another part of the project, he gave an application for refund of the amount along with 10% interest. Section 18 of the RERA Act reads as under : "18. Return of amount and compensation.-(1) If the promoter fails to complete or is unable to give possession of an apartment, plot or building- (a) in accordance with the terms of the agreement for sale or, as the case may be, duly completed by the date specified therein; or (b) due to discontinuance of his business as a developer on account of suspension or revocation of the registration under RERA No. 90 of 2025 3 this Act or for any other reason, he shall be liable on demand to the allottees, in case the allottee wishes to withdraw from the project, without prejudice to any other remedy available, to return the amount received by him in respect of that apartment, plot, building, as the case may be, with interest at such rate as may be prescribed in this behalf including compensation in the manner as provided under this Act: Provided that where an allottee does not intend to withdraw from the project, he shall be paid, by the promoter, interest for every month of delay, till the handing over of the possession, at such rate as may be prescribed. (2) The promoter shall compensate the allottees in case of any loss caused to him due to defective title of the land, on which the project is being developed or has been developed, in the manner as provided under this Act, and the claim for compensation under this sub-section shall not be barred by limitation provided under any law for the time being in force. (3) If the promoter fails to discharge any other obligations imposed on him under this Act or the rules or regulations made thereunder or in accordance with the terms and conditions of the agreement for sale, he shall be liable to pay such compensation to the allottees, in the manner as provided under this Act." 14. On a plain reading of Section 18 of the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as "RERA Act, 2016"), it is essential for grant of interest and compensation under the said section that there should be failure on the part of the promoter to complete and hand over possession of the apartment, plot or building within the time prescribed in the terms of the agreement for sale, and on demand of the allottee, in case the allottee wishes to withdraw from the project, to return the amount received from him along with interest at such rate as may be prescribed. 15. In the present case, clearly there was a failure on the part of the promoter to complete and offer possession of the plot within the time as indicated in the brochure, even if it was on account of farmers' agitation. It is also clear that subsequently a demand was made by the allottee for refund of the amount. Thus, on a plain reading of Section 18 of the RERA Act, 2016, the respondent was entitled to refund of the amount given by him along with RERA No. 90 of 2025 4 interest. 16. The contention of the appellant is that the respondent had initially given an undertaking to continue with the project, which would have material bearing. He further argued that the completion certificate itself was granted some time in the year 2022 and, as such, the same would also have a material bearing, since the failure on the part of the promoter was on account of factors beyond their control and thus he cannot be directed to pay the interest in terms of the prescriptions contained under Section 18 of the RERA Act. The said arguments deserve to be rejected for the sole reason that for bringing Section 18 of the RERA Act, 2016 into play, the only essential features are; (i) the promoter failed to complete or give possession of the apartment in terms of the agreement for sale, and (ii) there was a demand by the allottee for refund of the amount. 17. In the present case, there is no agreement for sale between the parties. There exists only a brochure and an application filed by the respondent, and thereafter an allotment letter issued. The payment of part of the sale consideration is also on record. In terms of there being an offer in the form of the brochure, an acceptance in the form of the allotment application filed by the respondent, and there being part payment of consideration as well as quantification of the entire sale consideration, all the trappings of a contract were in existence. Thus, even if the agreement for sale, as prescribed in the Rules, 2018, is not in existence, all the trappings of a contract would amount to an agreement to sell between the parties. 18. That being the case, no error can be found in the order of the Appellate Tribunal in granting interest from the date of deposits made by the respondent till actual realization, at an interest rate of MCLR + 1%. The said mandate is also indicated in Section 2(za) of the RERA Act, which defines 'interest'. Section 2 (za) reads as under : "2 (za)."interest" means the rates of interest payable by the promoter or the allottee, as the case may be. Explanation. - For the purpose of this clause - (i) the rate of interest chargeable from the allottee by the promoter, in case of default, shall be equal to the rate of interest which the promoter shall be liable to pay the allottee, in case of default; (ii) the interest payable by the promoter to the allottee shall be from the date the promoter received the amount or any RERA No. 90 of 2025 5 part thereof till the date the amount or part thereof and interest thereon is refunded, and the interest payable by the allottee to the promoter shall be from the date the allottee defaults in payment to the promoter till the date it is paid." 19. The explanation to Section 2(za) of the RERA Act is very clear, in terms of which the date from which interest is payable is indicated in Explanation II, and there being no other prescription contained in the Act prescribing the date from which interest is to be paid, there is no reason to hold otherwise. 20. With regard to the rate of interest at MCLR + 1%, although the rules framed by the State of U.P., particularly Rule 15, are silent with regard to the prescribed rate of interest, a circular has been issued by the RERA Authority in exercise of powers under Section 37 of the RERA Act, 2016 being Government Order/ Circular No.1151/Shakti Parinidhyan/2018-19 dated 19.06.2018, prescribing the rate of interest at MCLR + 1%. There being no prescribed rate of interest, the prescription issued by virtue of powers conferred under Section 37 of the RERA Act, 2016 would hold the field. Thus, with regard to the quantum of interest also, no interference is required. 21. With regard to the submissions of learned counsel for the appellant that the respondent had exercised the option by issuing an affidavit and thus was bound by the terms and conditions of the affidavit, the same would have no relevance, particularly when, even after the first affidavit was given, the possession was not handed over and thus the allottee gave an option of refund with interest. In any case, the said affidavit cannot supersede the statutory prescription, and unless the respondent's right to approach the Regulatory Authority for grant of interest is clearly absent, which is not the case here the argument merits rejection and is accordingly rejected. 22. Reliance was also placed by learned counsel for the appellant on the judgment of this Court dated 08.08.2025 passed in RERA Appeal No.59 of 2023, whereby the interest was directed to be paid from the date of demand till actual payment. The said judgment, unfortunately, did not take into consideration the mandate of Section 2 (za) of the RERA Act and the two explanations of the said section. As such, the same cannot be treated as a precedent insofar as the date from which interest is to be granted. 23. In view thereof, no good ground for interference is made out. The appeal is dismissed on both the questions of law framed. September 11, 2025 Mahesh RERA No. 90 of 2025 6 (Pankaj Bhatia,J.) Digitally signed by :- MAHESH KUMAR High Court of Judicature at Allahabad, Lucknow Bench