# Lko. Development Authority v. Sushma Shukla

- **Citation:** (2026) 1 ILRA 1187
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2026-01-21
- **Case number:** RERA Appeal Defective No. 125 of 2026
- **Bench:** Prashant Kumar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/lko-development-authority-v-sushma-shukla-54770
- **Pages:** 12

## Text

1 All. Lko. Development Authority Vs. Sushma Shukla
1187
the direction of the Director General of Police of the State of U.P dated 25.07.2025 clearly amounts
to dereliction of duty on the part of the police personnel investigating this case. The empty
compliance of law and justification of the same before the court, as in this case by the respondents,
deserves to be discouraged.

16. It is hereby directed that the violation of the aforesaid legal provisions by any police
officer, while affecting arrest an accused, by not disclosing the grounds of arrest as per clause 13 of
the memo of arrest, would amount to the misconduct of dereliction of duty by police official
concerned and he shall be liable for being proceeded departmentally, after being placed under
suspension, so that he may not perpetrate this illegality any more

17. Let this order by communicated to the Director General of Police, U.P., within period of
one week by the Registrar (Compliance) of this court for necessary compliance.

18. The impugned remand order and order dated 27.12.2025 passed by Civil Judge (Senior
Division), F.T.C. / Gautam Buddanagar in Case Crime No. 750 of 2025 under Section 317(2) and
317(4), P.S.- Bisrakh, District- G.B. Nagar, are hereby quashed.

19. The petitioner no. 1 is directed to be set free forthwith.

20. It shall be open for the respondents to proceed against the petitioner no. 1 strictly in
accordance with law.

21. The habeas corpus writ petition is allowed.

22. This order shall be complied by the concerned Magistrate, if a copy of this order certified
by the counsel for the petitioner no. 1, downloaded from the official website of this Court is
produced before him, till certified copy of this order is issued.
----------
(2026) 1 ILRA 1187
APPELLATE JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 21.01.2026

BEFORE

THE HON'BLE PRASHANT KUMAR, J.

RERA Appeal Defective No. 125 of 2026

Lko. Development Authority ...Appellant
Versus
Sushma Shukla ...Respondent

Issue for Consideration
(A) Whether a private contract/settlement can override the provisions of the statute? and/or,
(B) Whether agreement, which has been signed on the dotted line can be held to be valid?
1188 INDIAN LAW REPORTS ALLAHABAD SERIES
Head Notes
The Real Estate (Regulation and Development) Act, 2016-Section 18,58 & 88; The Indian
Contract Act, 1872-Section 23- Complainant sought for delivery of possession with all amenities
as per the registration book of the appellant and for payment of interest for a delay of five years
in handing over possession, and for non-levy of GST at the time of execution of the sale deedAny agreement whose object is to defeat the provisions of any law is unlawful and void ab initio-
The appellant cannot get the advantage of the settlement entered into between the parties
which are contrary to the statute. Any such settlement cannot override the rights and
obligations created by statutes. Here the statute clearly lays down that if there is a delay in
handing
over
the
possession,
the
promoter
will
have
to
pay
compensation-
A
contract/settlement term is not binding if purchasers were forced to accept a builder-drafted
agreement just to take a possession of the property on time. In this case, the consumer, after
using his life-long savings to buy a flat or a house, or after taking out a loan, would have no
other option but to sign on the dotted line to take possession of the flat.
Held- The private settlement or an agreement cannot circumvent or supersede the obligations imposed on
the parties by the provisions of the statute and also hold that an agreement or settlement arrived at any level
of duress or is against the provisions of statute, such agreement would be void. Appeal dismissed. (E-15)
(Para 38, 40 & 46)

Case Law Cited
Krishna Bahadur v. Purna Theatre, reported in 2004 SCC OnLine SC 956; Newtech Promoters and Developers
Private Ltd. v. State of U.P. reported in (2021) 18 SCC 1; Pioneer Urban Land & Infrastructure Ltd. v.
Govindan Raghavan, reported in (2019) 5 SCC 725; Union of India v. Col. L.S.N. Murthy reported in (2012) 1
SCC 718; IREO Grace Realtech (P) Ltd. v. Abhishek Khanna, reported in (2021) 3 SCC 241;

List of Acts
The Real Estate (Regulation and Development) Act, 2016; The Indian Contract Act, 1872

List of Keywords
Private agreement; contrary to law; Void ab initio; Delay in handing over possession; Promoter will have to
pay compensation; Section 23 Contract Act

Case Arising From
RERA appeal under section 58 of the Real Estate (Regulation and Development) Act, 2016 has been filed by
the appellant against judgement and order dated 01.04.2025 passed by the learned Tribunal in Appeal No.
100 of 2019 (Smt. Sushma Shukla v. Lucknow Development Authority).

Appearances for Parties
Counsel for Appellant(s) : Abhishek Khare
Counsel for Respondent(s)

(Delivered by Hon'ble Prashant Kumar, J.)

1. The instant RERA appeal under section 58 of the Real Estate (Regulation and
Development) Act, 2016 (hereinafter referred to as Act, 2016) has been filed by the appellant
against judgement and order dated 01.04.2025 passed by the learned Tribunal in Appeal No. 100 of
2019 (Smt. Sushma Shukla v. Lucknow Development Authority).

Factual Matrix:
1 All. Lko. Development Authority Vs. Sushma Shukla
1189

2. The appellant launched a project in the name of Srishti Apartments situated at Jankipuram
Vistar, Lucknow (hereinafter referred to as project in question). The respondent applied for the
allotment of a unit in the project in question and was allotted flat bearing no. 1101-G Block on the
eleventh floor vide allotment letter dated 15.11.2011, which was later changed to flat no.6-G Block
at the request of the respondent.

3. The total estimated cost was Rs.22,30,000/- and the respondent had opted for self finance
for which he was supposed to pay 7 installments from 31.12.2011 till 31.03.2013. For this the
appellant also issued No Objection Certificate in favour of the respondents on their request for
taking Home Loan subject to certain terms and conditions.

4. The flat was proposed to be handed over in 24 months as per clause 2.4 of the booklet i.e.,
on or before 15.11.2013. As there was a delay in handing over possession, the respondent filed a
complaint before the U.P. RERA on 18.09.2018 under Section 31 of the Act, 2016 against the
appellant. The complainant sought for delivery of possession with all amenities as per the
registration book of the appellant and for payment of interest for a delay of five years in handing
over possession, and for non-levy of GST at the time of execution of the sale deed.

5. On 05.12.2018 the parties entered into some private settlement/agreement and, only
thereafter the sale deed of the unit came to be executed on 18.12.2018.

6. After hearing the complaint the learned Regulatory Authority has rejected the delay interest
and compensation for lack of amenities on the ground that the parties entered into a settlement with
the respondents vide its order dated 07.05.2019. The relevant extract of the order is as follows :

"पवश्लेषण से स्ट्पष्ट है क्रक दोनों पिों के मध्य पवचारार्ीन भू-सम्पदा इकाई के
अचर्ग्रहण सम्बन्र्ी कायतवाही पूणत की िा चुकी है तथा ददनांक- 18.12.2018 को इस भू-सम्पदा
इकाई का र्नबन्र्ीकरण भी कराया िा चुका है। सूच्य है क्रक यह पररयोिना रेरा में पंिीकृत
पववरण के अन्तगत ददनांक 31.12.2018 को पूणत की िानी थी, अतः र्नर्ातररत अवचर् में ही
अचर्ग्रहण ददया िा चुका है तथा र्नबन्र्ीकरण की कायतवाही पूणत की िा चुकी है। यह भी स्ट्पष्ट है
क्रक पररवाददनी द्वारा एक शपथ - पत्र (पत्रावली क्रमांक- 36) ददया गया है जिसमें उसे प्रर्तवादी से
क्रकसी प्रकार की कोई सशकायत नहीं होने तथा पररयोिना से पूणत रूप से सन्तुष्ट होने का तथ्य भी
अंक्रकत क्रकया है।

पररवाददनी ने अनुतोष में मुख्यतः वस्ट्तु एवं सेवा कर को नहीं लगाये िाने तथा पवलम्ब
के कारण आवासीय ऋण पर ददये गये ब्याि को प्रर्तवादी द्वारा भुगतान क्रकये िाने की मांग की
है परन्तु पररवाददनी द्वारा ददये गये शपथ -पत्र एवं दोनों ही पिों के मध्य हुए सम्पर्त पवषयक
र्नबन्र्ीकरण की कायतवाही से स्ट्पष्ट है क्रक अब क्रकसी प्रकार का आचथतक लेन -देन के प्रश्न को
उठाना न्यायोचचत नहीं होगा। िहां तक पररवाददनी द्वारा पररयोिना में अन्य सुपवर्ायें िैसे
स्ट्वीसमंग पूल, क्लब आदद को पूणत कराये िाने के अनुतोष का प्रश्न है, पररवाददनी को यह अचर्कार
1190 INDIAN LAW REPORTS ALLAHABAD SERIES
होगा क्रक यदद यह सुपवर्ायें पूणत नहीं की गई है तो पुनः उ०प्र० भू-सम्पदा पवर्नयामक अचर्र्नयम
के अन्तगत वह पररवाद संजस्ट्थत कर सकता है।

अतः पररवाददनी के पररवाद में कोई बल नहीं है। पररवाददनी यदद इन सुपवर्ाओं के
र्नमातण से पूणतः सन्तुष्ट नहीं रहता है तो उ०प्र० रेरा अचर्र्नयम 2016 की र्ारा-14 की उपर्ारा -
3 के अन्ततगत अचर्ग्रहण प्राजप्त के 5 वषत तक पररवाद संजस्ट्थत कर सकता है जिसके सलए वह
स्ट्वतन्त्रण है। अतः पररवाददनी के पररवाद में पररयोिना समय से पूणत होने, इकाई के र्नबन्र्ीकरण
एवं अचर्ग्रहण की कायतवाही पूणत होने के आर्ार पर बलहीन पाते हुए र्नरस्ट्त क्रकया िाता है। अन्य
सुपवर्ाओं के सम्बन्र् में पररवाददनी अचर्र्नयम की र्ारा 14 की उप र्ारा -3 के अन्तगत भपवष्य
में कायतवाही करने के सलए स्ट्वतन्त्र रहेगा।"

7. Thereafter, on 04.06.2019 the physical Possession of the unit was handed over to the
complainant.

8. Aggrieved by the order dated 07.05.2019 passed by the learned Regulatory Authority, the
complainant preferred an appeal under Section 44 of the Act, 2016 before the U.P. Real Estate
Appellate Tribunal, Lucknow (hereinafter referred to as Tribunal).

9. After hearing the parties and considering the facts and circumstances of the case, learned
Tribunal, passed the impugned judgement and order dated 01.04.2025 in Appeal No.100 of 2019.
The relevant extract of the impugned judgement is as follows:

"20. Having due regard to the facts and circumstances of the case, the appeal is allowed
by passing following orders:-

(i) The impugned order dated 07.05.2019 passed by the learned Regulatory Authority in
Complaint No.9201819142, is set aside and quashed.

(ii) The appellant allottee shall be entitled to interest at MCLR +1% with effect from
16.11.2013 till the date of physical possession of the unit, i.e., 04.06.2019, and on the amount so
computed allottee shall be entitled to interest at MCLR+1% till the date of payment; the amount to
be paid within forty five days from uploading of the order on the portal;

(iii) The Regulatory Authority to proceed against the respondent under Chapter VIII for
violating and not complying the mandatory obligation imposed upon the promoter under the Act,
2016.

(iv) The Registrar to transmit this order to the learned Regulatory Authority at Lucknow,
for compliance.

(v) The cost of litigation is assessed at Rs.20,000/- to be paid to the appellant by the
respondent promoter.

10. The aforesaid judgement and order dated 01.04.2025 passed by the learned Tribunal in
Appeal No. 100 of 2019 (Smt. Sushma Shukla v. Lucknow Development Authority) has been
assailed by the appellant by means of the instant appeal with the following main prayer :-
1 All. Lko. Development Authority Vs. Sushma Shukla
1191

"A. Set aside the judgement dated 01.04.2025 passed by the Learned Real Estate
Appellate Tribunal in Appeal No. 100 of 2019 in re: Smt. Sushma Shukla v. Lucknow Development
Authority and all the other consequential orders.

10. The following substantial questions of law are to be considered and determined in this
instant appeal by this court :

(A) Whether a private contract/settlement can override the provisions of the statute?
and/or,

(B) Whether agreement, which has been signed on the dotted line can be held to be valid?

Submissions of the learned counsel for the appellant :

11. Learned counsel for the appellant submits that the parties had entered into a settlement, if a
settlement has been arrived at, there is no question for the learned Tribunal to have granted interest
on compensation at MCLR+1% w.e.f. November 16, 2013 till the date of possession taken on June
4, 2019.

12. She further submitted that while granting such relief the learned Tribunal completely
ignored the settlement between the party and passed the impugned judgement and order.

13. She further submitted that the provision of Section 88 of the Act, 2016 clearly states that
Act shall be in addition to, and not in derogation of the provisions of any other law for the time
being in force. The provisions of the Act, 2016 would not supersede the settlement, which had been
arrived at between the parties.

14. She further submitted that the appellant is not liable to pay interest to the allottee. Learned
Tribunal should not have directed to initiate proceeding under Chapter VIII of the Act, 2016 merely
because the appellant did not adjust delayed interest under Section 18. This was not adjusted
because there was no demand made by the respondents.

15. To buttress her arguments, she placed reliance on the judgement passed by the Hon'ble
Supreme Court in the matter of Krishna Bahadur v. Purna Theatre, reported in 2004 SCC
OnLine SC 956 and submits that the right can be waived by the party for whose benefit certain
requirements or conditions had been provided by the statute subject to the conditions that no public
interest is involved therein.

Analysis

16. Heard Ms. Aahuti Agarwal, Advocate holding brief of Shri Abhishek Khare, learned
counsel for the appellant on admission and perused the record.

17. The learned Tribunal in para 5 of the impugned judgement and order has clarified that the
facts inter se parties are not in dispute.
1192 INDIAN LAW REPORTS ALLAHABAD SERIES

18. Learned Tribunal after hearing the matter considered the following questions to be
adjudicated upon :-

A) Whether the appellant allottee is entitled to interest on her deposit till handing over
possession of the unit in terms of proviso to section 18 (1) of the Act,2016 and/or,

B) Whether the settlement entered into between the parties, would waive the statutory
obligations cast upon the promoter to pay interest to the allottee in the event of delay till handing
over possession of the unit in terms of proviso to Section 18 (1) of the Act, 2016.

19. Learned Tribunal has elaborately decided the above questions and passed the impugned
judgement and order dated 01.04.2025 which has been assailed by the appellant in the instant
appeal.

20. Before proceeding with the instant appeal, this Court deems it appropriate to examine with
the objective of the RERA Act of 2016. The RERA Act of 2016 is introduced with the objective to
ensure the accountability towards consumers, reducing fraud, imposing responsibilities and
liabilities and to bring transparency in the real estate sector. The object and purpose of the statute
have been clearly delineated by the Hon'ble Supreme Court Newtech Promoters and Developers
Private Ltd. v. State of U.P. reported in (2021) 18 SCC 1, wherein it was observed as under:

"9. It was introduced with an object to ensure greater accountability towards consumers,
to significantly reduce frauds and delays and also the current high transaction costs, and to
balance the interests of consumers and promoters by imposing certain responsibilities on both, and
to bring transparency of the contractual conditions, set minimum standards of accountability and a
fast-track dispute resolution mechanism. It also proposes to induct professionalism and
standardisation in the sector, thus paving the way for accelerated growth and investments in the
long run.
***

11. The Bill provides for establishment of the Authority for regulation and promotion of
real estate sector, to ensure sale of plot, apartment or building or sale of real estate project in an
efficient and transparent manner and to protect the interest of consumers in the real estate sector
and provide the adjudicating mechanism for speedy dispute redressal mechanism by establishing
the Regulatory Authority and the adjudicating officer and in hierarchy, the Appellate Tribunal for
early and prompt disposal of the complaint being instituted primarily by the homebuyers for whom
this Act has been enacted by Parliament in 2016."
(emphasis added)

21. Before proceeding with the instant appeal, this Court also deems it appropriate to delve
into the provisions of Section 18 of the RERA Act, 2016, which read as follows:

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
1 All. Lko. Development Authority Vs. Sushma Shukla
1193

(b) due to discontinuance of his business as a developer on account of suspension or
revocation of the registration under 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 subsection 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.

22. After perusal of the provisions of Section 18 of the Act, 2016, it is clear that the promoter
has to give a specific date for completion of the project and this date would be binding on the
promoter to be taken as the date of completion of the project.

23. It is also clear from the above provision that if 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.

24. In this case, evidently there was a delay in completion of the project. Sale deed was
executed and the possession was handed over but the certificate of completion was only received
on September 25, 2019. The proviso governs those allottees, who have continued in the delayed
project.

25. The legislative mandate insofar such allottees is that they are entitled to interest on their
deposit till the handing over of possession of the unit. A mandatory statutory obligation is cast upon
the promoter to pay the interest to such allottees. The expression employed by the legislature is
'shall be paid by the promoter. Unlike the main provision, under the proviso allottee is not
required to make a demand for the interest. In the event promoter fails to comply the mandatory
obligation to pay the interest, the promoter exposes itself for penal consequences under Chapter
VIII of the RERA Act, 2016.

26. As for as the settlement is concerned, the respondent is said to have entered into a
settlement thereby waiving of her right to receive the money towards interest and bare perusal of
the settlement shows that a cyclostyled document on which the allottee has to put the signature on
the dotted line. The settlement provides that there has been no delay in completion of the
project/handing over possession of the unit by the promoter. It further provides that the allottee has
not suffered any financial/mental loss/harassment and that in future the allottee undertakes not to
1194 INDIAN LAW REPORTS ALLAHABAD SERIES
institute any complaint/petition before any forum/court against the promoter. It also provides that
the allottee shall withdraw all pending cases instituted against the promoter.

27. This is also evident that the respondent has filed a complaint before the U.P. RERA and
has prayed for delivery of possession with all amenities as per the registration book of the appellant
and for payment of interest for a delay of five years in handing over possession, and for non-levy of
GST at the time of execution of the sale deed.

28. Later the parties entered into a settlement agreement and the U.P. RERA rejected the
complaint on the very same ground.

29. On perusal of the settlement, it appears that it is one-sided settlement, wherein the details
of the allottee and her signatures are on a dotted line seeking waiver of all the obligation of the
promoter even though project was delayed. Evidently, a person who has put his life time savings
for his dream house/flat, has no strength to fight with the builder, and also has no choice but to sign
on the dotted lines on an agreement drafted by the builder, wherein he creates a situation of take
it or leave it, the flat owner will have no other alternative but to sign on the dotted lines. It will
not be wrong to say that such settlement normally are executed under duress.

30. Even if the settlement is taken as binding document, this would be contrary to the proviso
to Section 18 (1) of the Act, 2016. The allottee is entitled to interest till handing over possession.
The promoter has to make an offer of possession of the unit to the allottee after receiving
completion certificate of the project. The accounts are required to be settled by the promoter of the
unit on the date of offer/possession. It is a statutory obligation mandated by law that the promoter
shall pay the interest, meaning thereby the promoter is bound to compute and disclose the quantum
of money towards interest admissible and due to the allottee on his deposit at the time of offer of
possession. In the event promoter fails to comply the statutory obligation, the promoter exposes
itself for penal consequences.

31. Though it is open for the parties to feel negotiate the terms of the settlement and if there is
a settlement, it is just a private agreement between the parties.

32. Now the question is whether a private settlement between the parties can have overriding
effect on the statutory provisions of law?

33. Learned Tribunal has rightly held that the statutes that are enacted to govern the society
and are designed to protect their interest, ensure fairness, justice and establish the minimum
standard of behavior. The settlement cannot override the rights and obligations created by statutes
in favour of a party. The proviso to Section 18 (1) of the Act, 2016 casts upon the promoter a
statutory obligation to pay interest for the delayed project creates a statutory right in favour of
allottee to receive the amount towards interest. Any agreement/settlement circumventing the
statutory provision (proviso to Section 18 (1) of the Act, 2016), cannot contradict or circumvent the
statutory requirements and the mandatory legal obligations that govern to protect the interest of the
allottee. The compromise/settlement or the contract must align with the statutory provisions and the
1 All. Lko. Development Authority Vs. Sushma Shukla
1195
terms of the contract cannot be interpreted in a manner that would contradict the statutory
requirement of Act, 2016.

34. In view thereof, the promoter cannot shirk/resile from the responsibility/liabilities under
the RERA Act, 2016 as the contractual terms cannot override the mandatory statutory
obligations/rights created by the Act in favour of the allottee. The promoter in the given facts,
cannot take shelter behind the one sided settlement imposed upon the allottee to waive its
obligations mandated and imposed upon the allottee under the proviso to Section 18 (1) of the Act,
2016. The settlement of such a nature cannot be made a condition precedent by the promoter to
handover possession of the unit to the allottee. The settlement is void ab initio.

35. In the case of Pioneer Urban Land & Infrastructure Ltd. v. Govindan Raghavan,
reported in (2019) 5 SCC 725, Hon'ble Supreme Court after hearing the parties and perusing the
records has held as under:

"6.1. In the present case, admittedly the appellant builder obtained the occupancy
certificate almost 2 years after the date stipulated in the apartment buyer's agreement. As a
consequence, there was a failure to hand over possession of the flat to the respondent flat
purchaser within a reasonable period. The occupancy certificate was obtained after a delay of
more than 2 years on 28-8-2018 during the pendency of the proceedings before the National
Commission. In LDA v. M.K. Gupta [LDA v. M.K. Gupta, (1994) 1 SCC 243], this Court held that
when a person hires the services of a builder, or a contractor, for the construction of a house or a
flat, and the same is for a consideration, it is a service as defined by Section 2(1)(o) of the
Consumer Protection Act, 1986. The inordinate delay in handing over possession of the flat clearly
amounts to deficiency of service. In Fortune Infrastructure v. Trevor D'Lima [Fortune
Infrastructure v. Trevor D'Lima, (2018) 5 SCC 442, this Court held that a person cannot be made
to wait indefinitely for possession of the flat allotted to him, and is entitled to seek refund of the
amount paid by him, along with compensation.

6.2. The respondent flat purchaser has made out a clear case of deficiency of service on
the part of the appellant builder. The respondent flat purchaser was justified in terminating the
apartment buyer's agreement by filing the consumer complaint, and cannot be compelled to accept
the possession whenever it is offered by the builder. The respondent purchaser was legally entitled
to seek refund of the money deposited by him along with appropriate compensation.
(emphasis added)

36. Hon'ble Supreme Court in the matter of Newtech Promoters & Developers (P) Ltd
(supra) has categorically held that the right of an allottee under the provisions of Section 18(1)(a)
and Section 19(4) of the RERA Act to seek refund and interest on delay in handing over possession
is absolute and unqualified, and is not dependent on any contingencies or stipulations contained in
the agreement between the parties. The Court observed that the legislature has consciously
provided this right irrespective of unforeseen events or stay orders, and that the promoter remains
bound by the statute to honour these rights. The relevant para of the judgement are as follows :-

"21. If we take a conjoint reading of sub-sections (1), (2) and (3) of Section 18 of the Act,
the different contingencies spelt out therein, (a) the allottee can either seek refund of the amount by
1196 INDIAN LAW REPORTS ALLAHABAD SERIES
withdrawing from the project; (b) such refund could be made together with interest as may be
prescribed; (c) in addition, can also claim compensation payable under Sections 18(2) and 18(3) of
the Act; (d) the allottee has the liberty, if he does not intend to withdraw from the project, will be
required to be paid interest by the promoter for every months' delay in handing over possession at
such rates as may be prescribed.

22. Correspondingly, Section 19 of the Act spells out "Rights and duties of allottees".
Section 19(3) makes the allottee entitled to claim possession of the apartment, plot or building, as
the case may be. Section 19(4) provides that if the promoter fails to comply or being unable to give
possession of the apartment, plot or building in terms of the agreement, it makes the allottees
entitled to claim the refund of amount paid along with interest and compensation in the manner
prescribed under the Act.

23. Section 19(4) is almost a mirror provision to Section 18(1) of the Act. Both these
provisions recognise right of an allottee two distinct remedies viz. refund of the amount together
with interest or interest for delayed handing over of possession and compensation.

24. The unqualified right of the allottee to seek refund referred under Section 18(1)(a)
and Section 19(4) of the Act is not dependent on any contingencies or stipulations thereof. It
appears that the legislature has consciously provided this right of refund on demand as an
unconditional absolute right to the allottee, if the promoter fails to give possession of the
apartment, plot or building within the time stipulated under the terms of the agreement regardless
of unforeseen events or stay orders of the court/tribunal, which is in either way not attributable to
the allottee/homebuyer, the promoter is under an obligation to refund the amount on demand with
interest at the rate prescribed by the State Government including compensation in the manner
provided under the Act with the proviso that if the allottee does not wish to withdraw from the
project, he shall be entitled for interest for the period of delay till handing over possession at the
rate prescribed."
(emphasis added)

37. Regarding the validity of the settlement or an agreement between the party which defeats
the object of the provisions of RERA Act, 2016, this Court also deems it appropriate to delve into
the provisions of Section 23 of the Indian Contract Act, 1872, which is as follows :-

23. What considerations and objects are lawful, and what not.-

The consideration or object of an agreement is lawful, unless

it is forbidden by law; or

is of such a nature that, if permitted, it would defeat the provisions of any law; or

is fraudulent ; or

involves or implies, injury to the person or property of another; or

the Court regards it as immoral, or opposed to public policy.

In each of these cases, the consideration or object of an agreement is said to be unlawful.
Every agreement of which the object or consideration is unlawful is void.

38. The above provision of Section 23 of the Indian Contract Act, 1872 expressly states that
where the object of any agreement is of such nature that if permitted or allowed it would defeat the
provisions of law is void. Where the object of an agreement is intended to circumvent the operation
1 All. Lko. Development Authority Vs. Sushma Shukla
1197
of a statutory provision, such an agreement is opposed to law and public policy. Thus, any
agreement whose object is to defeat the provisions of any law is unlawful and void ab initio.

39. The agreement/settlement between the parties is void in case when it is permitted it would
defeat the provisions of law. The Hon'ble Supreme Court in the matter of Union of India v. Col.
L.S.N. Murthy reported in (2012) 1 SCC 718 has held that an agreement is void if carrying it out
requires breaking the law otherwise, courts should enforce it and not invalidate it unnecessarily.
The relevant extract of the judgement is as follows:-

19. We are, therefore, of the opinion that unless the effect of an agreement results in
performance of an unlawful act, an agreement which is otherwise legal cannot be held to be void
and if the effect of an agreement did not result in performance of an unlawful act, as a matter of
public policy, the court should refuse to declare the contract void with a view to save the bargain
entered into by the parties and the solemn promises made thereunder.
(emphasis added)

40. In view of the aforesaid facts and circumstances, the appellant cannot get the advantage of
the settlement entered into between the parties which are contrary to the statute. Any such
settlement cannot override the rights and obligations created by statutes. Here the statute clearly
lays down that if there is a delay in handing over the possession, the promoter will have to pay
compensation.

41. A contract/settlement term is not binding if purchasers were forced to accept a builderdrafted agreement just to take a possession of the property on time. In this case, the consumer, after
using his life-long savings to buy a flat or a house, or after taking out a loan, would have no other
option but to sign on the dotted line to take possession of the flat.

42. Hon'ble Supreme Court in the matter of IREO Grace Realtech (P) Ltd. v. Abhishek
Khanna, reported in (2021) 3 SCC 241, has held as under :-

28. The aforesaid clauses reflect the wholly one-sided terms of the apartment buyer's
Agreement, which are entirely loaded in favour of the developer, and against the allottee at every
step. The terms of the apartment buyer's Agreement are oppressive and wholly one-sided, and
would constitute an unfair trade practice under the Consumer Protection Act, 1986.
(emphasis added)

43. Hence it can be said that in case the clause of the agreement reflects that the agreement is
one-sided agreement and particulars of the parties are written on dotted lines. This reflects that
under compulsion parties have to made signature on the agreement, it cannot be binding.

44. In this case the settlement/agreement shows that it was cyclostyled agreement wherein the
parties have to enter the name and execute the settlement on a dotted lines. Undoubtedly the
person, who was investing a huge amount of money, signs any document to get possession of the
flat as early as possible. Such one-sided agreement, which has been executed under compulsion,
cannot be said to be a valid document.
1198 INDIAN LAW REPORTS ALLAHABAD SERIES

45. One-sided, unfair clauses in a contract or a agreement amount to an unfair trade practice
under Section 2(1)(r) of the Consumer Protection Act, 1986. Hon'ble Supreme Court in the matter
of Pioneer Urban Land & Infrastructure Ltd. v. Govindan Raghavan (supra) has held as under :-

"6.8. A term of a contract will not be final and binding if it is shown that the flat
purchasers had no option but to sign on the dotted line, on a contract framed by the builder. The
contractual terms of the agreement dated 8-5-2012 are ex facie one-sided, unfair and
unreasonable. The incorporation of such one-sided clauses in an agreement constitutes an unfair
trade practice as per Section 2(1)(r) of the Consumer Protection Act, 1986 since it adopts unfair
methods or practices for the purpose of selling the flats by the builder."
(emphasis added)

Conclusion

46. In view of the above discussions and considering the judgements referred above, this Court
has no hesitation in holding that the private settlement or an agreement cannot circumvent or
supersede the obligations imposed on the parties by the provisions of the statute and also hold that
an agreement or settlement arrived at any level of duress or is against the provisions of statute, such
agreement would be void.

47. In response to the question of law proposed above, it is found that no private
contract/settlement can have overriding effect on the rights and obligations created by statutory
provisions of law.

48. Considering the aforesaid facts and cirumstances, this Court does not find any illegality or
irregularity in the impugned order passed by the learned Tribunal.

49. Hence, the impugned judgement and order dated 01.04.2025 passed by learned Tribunal is
hereby upheld and affirmed.

50. Accordingly, the instant appeal sans merit and is dismissed at the admission stage.
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(2026) 1 ILRA 1198
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 12.01.2026

BEFORE

THE HON'BLE DR. YOGENDRA KUMAR SRIVASTAVA, J.

Transfer Application (Civil) No. 6 of 2026

Smt. Anjana Rana ...Appellant
Versus
Navin Singh ...Respondent