# Lucknow Development Aurhority v. Smt. Upasana Duggal

- **Citation:** (2024) 1 ILRA 560
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2023-11-30
- **Case number:** Rera Appeal No. 266 of 2019
- **Bench:** Alok Mathur
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/lucknow-development-aurhority-v-smt-upasana-duggal-50933
- **Pages:** 9

## Headnote

the Real ESt. Appellate Tribunal's order dated
26.02.2019, directing payment of 15% per
annum interest for delayed possession under
Section 18 of the Real ESt. (Regulation and
Development) Act, 2016 - Held, the Tribunal's
order was upheld as it aligned with the Act's
provisions and Supreme Court precedent, with
no infirmity found. (Paras 12, 19, 28)

B.
Section
2(za)
of
RERA
Act
-
Reciprocal Interest Rate - The Tribunal
modified the RERA's order granting interest at
MCLR + 1% to 15% per annum, based on the
brochure's clause charging allottees 15%
interest for payment defaults - Held, as per
Section 2(za), the promoter is liable to pay
the same interest rate to the allottee for delay
in
possession,
justifying
the
Tribunal's
decision. (Paras 10, 11, 12, 27)

C. Retrospective Application of RERA Act
-
The
appellant
argued
that
pre-2016
contractual terms (4% interest for delay)
should override RERA's provisions - Held,
relying on M/s Newtech Promoters and
Developers Pvt. Ltd. Vs St. of U.P., the RERA
Act applies retroactively to ongoing projects
without
completion
certificates,
and
contractual terms do not override statutory
liabilities. (Paras 24, 25, 28)

D. Compensatory Nature of Interest
under Section 18 - The interest under
Section
18
for
delayed
possession
is
compensatory, not penal - Held, as per
Neelkamal Realtors Suburban Pvt. Ltd. Vs
U.O.I., the retrospective levy of interest for
delays prior to 2016 is valid and does not
violate constitutional rights. (Paras 24, 25)

E. Delay Beyond Promoter's Control - The
appellant cited delays due to farmers' agitation
and contractor issues - Held, the Tribunal noted
the appellant's failure to provide reasons for not
delivering possession within the stipulated 24
months, justifying the interest liability under the
RERA Act. (Paras 7, 26)

Appeal Dismissed.

List of Cases cited:

## Text

560 INDIAN LAW REPORTS ALLAHABAD SERIES
Punjabrao Gawande (2008) 3 SCC 613 के
प्रस्िर 36 में माननीय उच्चिम न्यायालय ने
यह िाररि ककया है ककः-

"36. Liberty of an individual has to be
subordinated, within reasonable bounds,
to the good of the people. The framers of
the Constitution were conscious of the
practical need of preventive detention
with a view to striking a just and delicate
balance between need and necessity to
preserve individual liberty and personal
freedom on the one hand and security
and safety of the country and interest of
the society on the other hand. Security of
State, maintenance of public order and
services essential to the community,
prevention
of
smuggling
and
blackmarketing activities, etc. demand
effective
safeguards
in
the
larger
interests of sustenance of a peaceful
democratic way of life."

61. हस्िर्ि प्रकरण में याची ने अपने
सहयोधर्यों के सार्थ, सािगजधनक स्र्थल पर, कदन
के प्रकाश में, समाज के बहुसिंख्यक िर्ग द्वारा
उनकी िाधमगक मान्यिाओिं ि आस्र्था के
अन्िर्गि आराधिि िर्िान राम के, जीिन के
घर्नाक्रम से सिंबिंधिि िमग ििंर्थ रामचररि मानस
का जजस प्रकार से अपमान ककया है, उससे
समाज में आक्रोश ि र्ुस्से का उत्पन्न होना
स्िािाविक है, समाज में िाधमगक उन्माद ि
आक्रोश र्ैलने की जस्र्थधि का पररदृश्य में आ
सकना, ििगमान जस्र्थधि में विशेषकर जहािं
मोबाइल फोन ि सोशल मीकर्या से समाज का
लर्िर् प्रत्येक व्यवक्त जुडा हुआ है, स्िािाविक
प्रिीि होिा है। अिः ऐसी जस्र्थधि में जबकक
आसन्न
खिरे
को
देखिे
हुए
कायगपाधलका/प्रशासन द्वारा याची को धनरुवद्ध
आदेश कदनािंक 16.02.2023 के जररए धनरुद्ध
ककया र्या है, इसे याची के व्यवक्तर्ि स्िििंत्रिा
का अयुवक्तयुक्त ि विधि विरुद्ध प्रधिबिंि नहीिं
माना जा सकिा है।

इस प्रकार से प्रकरण के िथ्य ि
पररजस्र्थधियों एििं पत्रािली में उपलब्ि साक्ष्य
की विधि के प्रावििानों ि मा० उच्चिम
न्यायालय द्वारा प्रधिपाकदि विधिक धसद्धािंिों के
पररपेक्ष्य में उपरोक्तानुसार वििेचना के उपरािंि
इस न्यायालय के सुविचाररि धनष्कषागनुसार
हस्िर्ि याधचका बलहीन होने के कारण
धनरस्ि होने योग्य है।

62. िदनुसार, याधचका धनरस्ि की जािी
है
----------
(2024) 1 ILRA 560
APPELLATE JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 30.11.2023

BEFORE

THE HON'BLE ALOK MATHUR, J.

Rera Appeal No. 266 of 2019

Lucknow Development Aurhority
 ...Appellant
Versus
Smt. Upasana Duggal ...Respondent

Counsel for the Appellant:
Ratnesh Chandra

Counsel for the Respondent:
Ashish Chaturvedi
1 All. Lucknow Development Aurhority Vs. Smt. Upasana Duggal
561
A. RERA Appeal - Dismissal of Challenge
to Interest Award - The appellant challenged
the Real ESt. Appellate Tribunal's order dated
26.02.2019, directing payment of 15% per
annum interest for delayed possession under
Section 18 of the Real ESt. (Regulation and
Development) Act, 2016 - Held, the Tribunal's
order was upheld as it aligned with the Act's
provisions and Supreme Court precedent, with
no infirmity found. (Paras 12, 19, 28)

B.
Section
2(za)
of
RERA
Act
-
Reciprocal Interest Rate - The Tribunal
modified the RERA's order granting interest at
MCLR + 1% to 15% per annum, based on the
brochure's clause charging allottees 15%
interest for payment defaults - Held, as per
Section 2(za), the promoter is liable to pay
the same interest rate to the allottee for delay
in
possession,
justifying
the
Tribunal's
decision. (Paras 10, 11, 12, 27)

C. Retrospective Application of RERA Act
-
The
appellant
argued
that
pre-2016
contractual terms (4% interest for delay)
should override RERA's provisions - Held,
relying on M/s Newtech Promoters and
Developers Pvt. Ltd. Vs St. of U.P., the RERA
Act applies retroactively to ongoing projects
without
completion
certificates,
and
contractual terms do not override statutory
liabilities. (Paras 24, 25, 28)

D. Compensatory Nature of Interest
under Section 18 - The interest under
Section
18
for
delayed
possession
is
compensatory, not penal - Held, as per
Neelkamal Realtors Suburban Pvt. Ltd. Vs
U.O.I., the retrospective levy of interest for
delays prior to 2016 is valid and does not
violate constitutional rights. (Paras 24, 25)

E. Delay Beyond Promoter's Control - The
appellant cited delays due to farmers' agitation
and contractor issues - Held, the Tribunal noted
the appellant's failure to provide reasons for not
delivering possession within the stipulated 24
months, justifying the interest liability under the
RERA Act. (Paras 7, 26)

Appeal Dismissed.

List of Cases cited:
1. M/s Newtech Promoters & Developers Pvt.
Ltd. Vs St. of U.P., Civil Appeal No. 6745-6749
of 2021, decided on 11.11.2021

2. Neelkamal Realtors Suburban Pvt. Ltd. Vs
U.O.I., 2017 SCC OnLine Bom 9302

3.
Abati Bezbaruah Vs Director General,
Geological Survey of India, (2003) 3 SCC 148

4.Alok Shanker Pandey Vs U.O.I., (2007) 3 SCC
545

5. Jay Mahakali Rolling Mills Vs U.O.I. (not fully
cited in the judgment)

6. Shanti Conductors Pvt. Ltd. Vs Assam St.
Electricity Board, (2016) 15 SCC 13

7. Vineeta Sharma Vs Rakesh Sharma (not fully
cited in the judgment)

8. Vijay Vs St. of Maharashtra, (2006) 6 SCC
289

9. Virender Singh Hooda Vs St. of Haryana,
(2004) 12 SCC 588

(Delivered by Hon'ble Alok Mathur, J.)

1. Heard Shri Ratnesh Chandra,
learned counsel for the appellant as well as
Shri Ashish Chaturvedi, learned counsel
appearing on behalf of respondents.

2. The controversy in brief is with
regard to the delay in handing over the
possession of the flat which was sought to
be constructed by the petitioner while
developing apartments known as Smriti
Apartments, Sector J Extension, Sitapur
Raod Scheme, Jankipuram, Lucknow.

3. In the brochure published by the
petitioner it was stated that the flats would
be handed over within a period of 24
months as per clause 2.4 of the said
brochure and as per clause 11.1 it was
provided that in case possession is not
562 INDIAN LAW REPORTS ALLAHABAD SERIES
given then the allottee shall be at liberty to
seek refund of the entire money along with
interest at the rate of 4% per annum.

4. It is stated that for certain reasons
beyond the control of the petitioner
construction activities could not commence
and, hence, there was delay in completion
of the said project. In the meanwhile the
Real Estate Regulation & Development
Act, 2016 came into operation and the said
project was registered by the petitioner
with the concerned authorities and further
the date of delivery of possession was
extended till 31.12.2019.

5. In light of the fact that the
petitioner did not complete the project
within the stipulated time, the respondent
filed a complaint before the Real Estate
Regulatory
Authority,
Uttar
Pradesh
seeking interest on the delay in completion
of the said project as provided under
Section 18 and also sought a direction to
the petitioner for expediting the possession
of the said flat.

6. In the application it was stated that
in pursuance to the application made by the
respondent he was allotted a flat no.
D/1407/C
which
was
valued
at
Rs.13,00000/- and by 13.12.2013 he had
paid an amount of Rs.14,18,886/-. It was
further stated by him that as per the
registration booklet the possession was to
be
given
within
24
months
and,
accordingly, he should have got possession
by 01.10.2013 and till filing of the said
application before authority, i.e., some time
in 2018 the possession had not been given
to the respondent/ allottee and hence
prayed for quahing the order dated
26.2.2019 passed by Chairman, Real Estate
Appellate Tribubnal, U.P., Lucknow in
Appeal No.87 of 2018 (Smt. Upasand
Duggal
Vs.
Lucknow
Development
Authority).

7. The petitioner had put in
appearance before the Authority and
objected to the claim made by the
respondent/ allottee. The petitioner had
admitted that the possession was to be
handed over by 01.10.2013 but due to
certain
dispute
and
delay
by
the
construction agency who was given the
contract of constructing the said flats there
was delay in completion of the said project.
It was further stated that there was
difficulty and delay in obtaining the
possession of the said land due to farmers'
agitation and it is only when settlement was
arrived at, the possession was given to the
petitioners and, accordingly, submitted that
the delay was beyond the control of the
petitioners and, consequently, prayed that
the interest as claimed by the petitioner
does not deserve to be granted in peculiar
facts of the present case.

8. Another objection made with
regard to the claim of the allottee was that
as per the brochure he was entitled only for
refund of the entire amount with interest @
4% and as per the settled terms and
conditions there was no provision for grant
of interest on the delay in completion of the
said project and, consequently, stated that
the prayer made by the allottee before the
Authority could not be admitted/ allowed.

9. Considering the arguments the Real
Estate Regulatory Authority was of the
considered view that the petitioner had
delayed in handing over the possession of
the said flat despite there being agreement
in this regard and once there is a breach of
the said agreement the allottee was entitled
for interest for the delay in completion of
the said project, and, accordingly, awarded
1 All. Lucknow Development Aurhority Vs. Smt. Upasana Duggal
563
interest @ MCLR +1% per year for the
delayed
period
commencing
from
01.12.2013. The said amount was directed
to be paid within 45 days and further the
petitioner was directed to hand over the
possession expeditiously.

10. The allottee/ respondent being
aggrieved of the said order has moved an
appeal before the Real Estate Appellate
Tribunal. He was aggrieved only with
regard to the interest granted by the RERA
on the delay in handing over the said
possession. It was contended that as per
provision of Section 2 (za) of the Act of
2016 it was provided that 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.

11. In this regard it was submitted that
as per the agreement between the petitioner
and allottee the rate of interest prescribed
for delay in payment of the consideration of
the said flat was determined at 15% by the
petitioner himself. It was stated that in the
brochure published by the petitioner in
Clause 2.1 it has been specifically stated
that in case allottee does not pay the
amount of consideration for the flat or the
instalments, the same shall be payable
along with interest @ 15% per annum.

12. The Appellate Tribunal considered
the contention of the allottee as well as of
the petitioner and also the provisions of
Section 2 (za) of the Act of 2016 and,
accordingly, was of the considered view
that the order of the Authority cannot be
said to have been passed in accordance
with the provision of the Act of 2016 and,
accordingly,
modified
the
order
and
directed the petitioner to make payment of
interest @ 15% per annum on the deposited
amount with effect from 01.12.2013 within
a period of 45 days and continue to make
payment till the date of handing over of
actual physical possession of the flat in
question.

13. It has been submitted by learned
counsel for the petitioner that the Authority
under the Act of 2016 can pass orders and
give benefit to the allottees only in case
there is violation of the terms and
conditions stated before the Authority
itself. He states that in the application for
registration the petitioner himself has stated
the date of completion of the project was
till 31.12.2019, and, accordingly, any
modification of the order would be
impermissible.

14. I have heard the learned counsel
for the parties and perused the record.

15. Undisputed facts of the case are
that the respondent is an allottee who had
made application to the petitioner for
allotment of the flat in the Smriti
Apartments being constructed by the
petitioner.

16. The brochure was published by
the petitioners some time in the year 2011
pursuant to which the respondent had made
an application and he was allotted Flat
No.D/1407/C
on
26.11.2011.
His
contention that the flat was not delivered to
him till 2018 and, accordingly, he moved
an application before the RERA seeking
compensation for the delay in handing over
the possession as provided for under
Section 18 of the Act of 2016.

17. The Authority considered the
claim of the petitioner as well as the
respondent and was of the view that in light
564 INDIAN LAW REPORTS ALLAHABAD SERIES
of the fact that the petitioner/ promoter had
not fulfilled his promise and did not deliver
the possession over the said flat within the
time prescribed by him as per the
agreement between the parties he was
liable to pay interest @ MCLR + 1% w.e.f.
01.12.2013 till the date of possession of the
said apartments.

18. At this stage it is relevant to
consider the fact that no appeal against the
said order dated 11.7.2018 was filed by the
petitioner but an appeal was filed only by
the allottee before the Real Estate Appellate
Tribunal.

19. The only ground raised was with
regard to the rate of interest awarded by the
Authority. It was the case of the allottee
that as per the definition of interest
provided for under Section 2 (za) of the Act
of 2016 he was entitled to same rate of
interest which is chargeable by the
promoter on delay in payment of the
instalments or consideration of the said flat.
In the present case he was able to
demonstrate that as per the brochure and
specially in terms of the Clause 2.1, the
petitioner was charging 15% interest from
the allottees for the delay in payment of
their instalment/ sale consideration towards
the apartments/ flats and, consequently, any
interest which is payable under Section 18
will commensurate with the rate of interest
chargeable
by
the
promoter
and,
accordingly, prayed that the order of the
Authority requires interference and the
promoter should be directed to pay interest
at the rate of 15 %.

20. By means of the impugned order
dated 26.02.2019 the appellate tribunal has
allowed the appeal preferred by the allottee.

21. The order of the Appellate
Tribunal
dated
26.02.2019
has
been
impugned in the present appeal on the
ground that once the Act of 2016 has come
into operation, then only the conditions
prescribed in the said Act or any
declaration made before the Authority can
be implemented, and the terms and
conditions stated in the brochure which was
published in 2011, cannot be implemented
after coming of the Act of 2016.

22. In the brochure published by the
promoter it was provided that the rate of
interest chargeable from the allottee for the
delay in payment of the consideration for
the flat/apartment would be 15%, while the
regulatory authority had allowed the
application of the allottee granting him
interest for the delay in giving of
possession
at
MCLR+1%,
while
the
appellate Tribunal has bound the promoter
to pay interest for the delay in giving of the
possession @ 15% per annum.

23. The promoter has questioned the
judgement of the appellate tribunal stating
that the Tribunal committed error by
binding the promoter to pay the rate of
interest which was as per the agreement
which was entered prior to coming into
force of the act of 2016 and, hence, the
order is without jurisdiction.

24. This aspect of the matter has been
duly considered by the Supreme Court in
the case of M/S Newtech Promoters and
Developers Private Limited Vs State of
U.P (civil appeal No. 6745 - 6749 of 2021
decided on 11/11/2021). Supreme Court
after due analysis has laid down the
following:-

"45. At the given time, there was
no law regulating the real estate sector,
development works/obligations of promoter
and allottee, it was badly felt that such of
1 All. Lucknow Development Aurhority Vs. Smt. Upasana Duggal
565
the ongoing projects to which completion
certificate has not been issued must be
brought within the fold of the Act 2016 in
securing
the
interests
of
allottees,
promoters, real estate agents in its best
possible
way
obviously,
within
the
parameters
of
law.
Merely
because
enactment as prayed is made retroactive in
its operation, it cannot be said to be either
violative of Articles 14 or 19(1)(g) of the
Constitution of India. To the contrary, the
Parliament indeed has the power to
legislate even retrospectively to take into its
fold the pre-existing contract and rights
executed between the parties in the larger
public interest."

46. The consequences for breach
of such obligations under the Act are
prospective in operation and in case
ongoing project, of which completion
certificate is not obtained, are not to be
covered under the Act, there is every
likelihood of classifications in respect of
underdeveloped ongoing project and the
new project to be commenced.

47. The legislative power to make
the law with prospective/retrospective effect
is well recognized and it would not be
permissible for the appellants/promoters to
say that they have any vested right in
dealing with the completion of the project
by leaving the allottees in lurch, in a
helpless and miserable condition that at
least may not be acceptable within the four
corners of law.

48.
The
distinction
between
retrospective and retroactive has been
explained by this Court inJay Mahakali
Rolling Mills v. Union of India, which reads
as under:-

"8.
"Retrospective"
means
looking backward, contemplating what is
past, having reference to a statute or things
existing before the statute in question.
Retrospective law means a law which looks
backward or contemplates the past; one,
which is made to affect acts or facts
occurring, or rights occurring, before it
comes into force. Retroactive statute means
a statute, which creates a new obligation
on transactions or considerations or
destroys or impairs vested rights."

49. Further, this Court in Shanti
Conductors Private Limited v. Assam State
Electricity Board, held as under:-

"67. Retroactivity in the context
of the statute consists of application of new
rule of law to an act or transaction which
has been completed before the rule was
promulgated.

68. In the present case, the
liability of buyer to make payment and day
from which payment and interest become
payable under Sections 3 and 4 does not
relate to any event which took place prior
to the 1993 Act, it is not even necessary for
us to say that the 1993 Act is retroactive in
operation. The 1993 Act is
clearly
prospective in operation and it is not
necessary to term it as retroactive in
operation. We, thus, do not subscribe to the
opinion
dated
31-8-2016
[Shanti
Conductors (P) Ltd. v. Assam SEB, (2016)
15 SCC 13] of one of the Hon'ble Judges
holding that the 1993 Act is retroactive."

50. In the recent judgment of this
Court rendered in the case of Vineeta
Sharma v. Rakesh Sharma wherein, this
Court has interpreted the scope of Section
6(1) of the Hindu Succession Act, 1956, the
law of retroactive statute held as under:-

"61.
The
prospective
statute
operates from the date of its enactment
conferring new rights. The retrospective
statute operates backwards and takes away
or impairs vested rights acquired under
existing laws. A retroactive statute is the
one that does not operate retrospectively. It
operates in futuro. However, its operation
is based upon the character or status that
566 INDIAN LAW REPORTS ALLAHABAD SERIES
arose earlier. Characteristic or event which
happened in the past or requisites which
had been drawn from antecedent events.
Under the amended Section 6, since the
right is given by birth, that is, an
antecedent event, and the provisions
operate concerning claiming rights on
and from the date of the Amendment Act."

51. Thus, it is clear that the
statute
is
not
retrospective
merely
because it affects existing rights or its
retrospection because a part of the
requisites for its action is drawn from a
time antecedent to its passing, at the
same time, retroactive statute means a
statute which creates a new obligation on
transactions or considerations already
passed or destroys or impairs vested
rights.

52. The Parliament intended to
bring within the fold of the statute the
ongoing real estate projects in its wide
amplitude used the term "converting and
existing building or a part thereof into
apartments" including every kind of
developmental activity either existing or
upcoming in future under Section 3(1) of
the Act, the intention of the legislature by
necessary implication and without any
ambiguity is to include those projects
which were ongoing and in cases where
completion certificate has not been issued
within fold of the Act.

53. That even the terms of the
agreement to sale or home buyers
agreement
invariably
indicates
the
intention of the developer that any
subsequent
legislation,
rules
and
regulations etc. issued by competent
authorities will be binding on the parties.
The clauses have imposed the applicability
of subsequent legislations to be applicable
and binding on the flat buyer/allottee and
either of the parties, promoters/home
buyers or allottees, cannot shirk from their
responsibilities/liabilities under the Act and
implies their challenge to the violation of
the provisions of the Act and it negates the
contention advanced by the appellants
regarding contractual terms having an
overriding effect to the retrospective
applicability of the Authority under the
provisions of the Act which is completely
misplaced and deserves rejection.

54. From the scheme of the Act
2016, its application is retroactive in
character and it can safely be observed that
the projects already completed or to which
the completion certificate has been granted
are not under its fold and therefore, vested
or accrued rights, if any, in no manner are
affected. At the same time, it will apply
after getting the on-going projects and
future projects registered under Section 3 to
prospectively follow the mandate of the Act
2016.

The quantum of interest payable
by the promoter when there is a delay in
handing over the possession is the bone of
contention in the present appeal. Do so the
said controversy we will have to advert to
the definition of "Interest" as per section 2
(za) of the act of 2016 which is as under:-

(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 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
1 All. Lucknow Development Aurhority Vs. Smt. Upasana Duggal
567
allottee defaults in payment to the promoter
till the date it is paid;

The issue pertaining to payment
of interest for the past contractual rights
was also duly considered by the Bombay
High Court in the case of Neelkamal
Realtors Suburban Pvt Ltd vs Union of
India and others 2017 SCC Online Bom
9302 wherein paragraph No. 137-142 of
the said judgement it was observed:-

137. The another plea raised is as
to why a promoter shall pay interest for the
past contractual rights, in case of failure to
complete the project after registration
under RERA, till the possession is handed
over. Under the scheme of the RERA it is
clear by now that a promoter has to self
assess and declare time period during
which he would complete the project. But in
case, inspite of making genuine efforts, a
promoter fails to complete the project, then
the concerned authorities, adjudicators,
forums, tribunals would certainly look into
genuine cases and mould their reliefs
accordingly. We do not find that on that
count the provisions of Section 18(1)(a) are
to be declared as contrary and violative of
Articles 14 and 19(1)(g). Considering the
scheme of the RERA and the provisions of
Section 18(1)(b), we are of the view that the
same are not contrary to Articles 14 and
19(1)(g) of the Constitution. The provisions
cannot be struck down on the ground of
challenge that its operation is retroactive in
nature. Neither the provisions of Section
18(1)(a) and (b) violate Article 20 of the
Constitution. The payment of interest under
Section 18 is compensatory in nature
[Abati Bezbaruah v. Director General,
Geological Survey of India-(2003) 3 SCC
148 (para 18) and Alok Shanker Pandey
v.UOI-(2007) 3 SCC 545(para 9)].

138.The provisions of Section 18
must be read with Sections 71 and 72. The
adjudicator would consider each case on
its merits and unless such cases emerge and
decisions are taken by the authority, it
would not be appropriate at this stage to
hypothetically consider a situation and
decide constitutional validity of statutory
provisions.

139.It was submitted on behalf of
the Union that MOFA provides for interest
to be paid in certain cases (Section 8) and
the constitutional courts too had granted
interest to flat purchasers in case of
defaults by the promoters.

140.The
requirement
to
pay
interest under Section 18 is not penal since
payment of interest is compensatory in
nature due to delay suffered by the flat
purchasers (Alok Shanker Pandeyv.Union
of India (Supra). Even assuming that the
interest is penal in nature, levy of interest is
not retrospective but is only based on
antecedent facts; it operates prospectively.

141. The interest payable under
Section 18 is as per the definition of
"interest" under Section 2(za) Explanation
(ii), the same interest that would have been
payable by the flat purchaser for delay in
payment. Therefore, the payment of interest
payable cannot be said to be penal in
nature.

142. The legislature has power to
make
laws
with
retrospective
effect.
Therefore, even assuming that RERA or any
part thereof operates retrospectively, such
retrospective operation would not render it
unconstitutional, unless the retrospectivity
is shown to be excessive or harsh which
injuriously affects a substantive or vested
right. The inhibition against retrospective
construction of a statute is not a rigid rule
and has been held not to apply to a curative
statute or a law enacted for the benefit of
the community as a whole, which may be
held to be retrospective even in the absence
of any provision : (Vijay v. State of
Maharashtra-(2006) 6 SCC 289-paras 10,
568 INDIAN LAW REPORTS ALLAHABAD SERIES
12 and Virender Singh Hooda v.State of
Haryana-(2004) 12 SCC 588-para 35.
RERA is enacted to protect the interest of
consumer in the real estate sector. It was
enacted in the public interest."

25.

Considering
the
aforesaid
judgements it is clear that the levy of
interest as provided for in section 18 of the
Act of 2016 is compensatory in character,
and therefore can operate retrospectively,
and therefore if provisions of section 2(za)
of the Act of 2016 are deployed for levying
interest for the delay which occurred even
prior to coming into force of the said Act,
cannot be said to be illegal and arbitrary.
The levying of interest at the rate of 15%
per annum for the delay in handing over
possession has been made applicable from
2013 which is prior to coming into force of
Act of 2016 and in view the Newtech
Promoter's case, the promoter cannot shirk
from the responsibilities/ liabilities under
the Act and the contractual terms do not
have
an
overriding
effect
to
the
retrospective applicability of the authority
under the provisions of the Act.

26. The Tribunal while allowing the
appeal preferred by the respondent has duly
noticed the fact that the appellant had
admitted the entire cost of the flat in
question received from the allottee and also
admitted that the flat in question was to be
delivered by it within 24 months from the
date of allotment letter but no reason was
mentioned for not providing possession of
the flat in question within 24 months from
the date of allotment letter.

27. Tribunal also considered the fact
that as per the terms of the agreement, the
allottee has been made liable to make
payment of interest at the rate of 15% per
annum in default of payment of amount of
arrears to the appellant and, therefore, as
per section 2 (za) (ii) of the Act of 2016,
the appellant is also liable to make payment
of interest at the rate of 15% per annum to
the allottee if the appellant has defaulted in
providing possession of the flat in question
to the allottee in the stipulated period.

28. Considering the impugned order
of the Tribunal as well as the arguments of
the parties, this Court is of the considered
view that there was no infirmity in the
impugned order. The issues raised have
already been determined and answered by
the Supreme Court in the case of M/S
Newtech
Promoters
and
Developers
Private Limited Vs State of U.P (supra)
and, consequently, no substantial question
arises in the present appeal which is
accordingly dismissed.
----------
(2024) 1 ILRA 568
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 17.01.2024

BEFORE

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

Second Appeal No. 599 of 2023

Shrivatsa Goswami ...Appellant
Versus
Anand Prasad Singh & Anr.
 ...Respondents

Counsel for the Appellant:
Sri Tarun Agrawal

Counsel for the Respondents:
Sri Dinesh Kumar Misra, Anita Singh, Sri Ishir
Sripat, Sri Ajay Kumar Singh, Sri Rahul Sripat
(Sr. Advocate)

A. Civil Law - Civil Procedure Code,1908Section 100 - Order VII Rule 11-rejection
of plaint-where an order rejecting a plaint