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of <h1>Appeals dismissed for failing to pay RERA pre-deposit under Section 43(5); security in property cannot substitute</h1> <h3>CJ Infrastructure Pvt Ltd & Anr. Versus Real Estate Appellate Tribunal For Nct Of Delhi And UT Chandigarh & Ors.</h3> Appeals dismissed by HC for failure to comply with the pre-deposit requirement under Section 43(5) of RERA; REAT conditioned continuation of appeals on ... Dismissal of Appeal of the Appellants on account of failure to make the pre-deposit in terms of Section 43(5) of the Real Estate (Regulation & Development) Act, 2016 - whether or not the Appellants are deemed to have completed the building before enforcement of the RERA Act? - HELD THAT:- In the present case, REAT has made the continuance of the Appeals contingent upon the Appellants fulfilling the condition of the pre-deposit in the Impugned Order. The Appeal has been dismissed by the REAT due to non-fulfilment of the condition pre-deposit. Hence, the condition for pre-deposit has to be complied with by the Appellants for the Appeals to be heard and decided by the REAT. Further, in relation to the rejection of security of immovable property by the REAT, it be noted that there is no provision in the RERA Act which may enable the Appellants to furnish the security of immovable property in lieu of pre-deposit. Therefore, this Court finds no merit in the contention as it is beyond the purview of the statute. There are no error in the judgment impugned in the instant Appeals. Consequently, both Appeals are dismissed. ISSUES PRESENTED AND CONSIDERED 1. Whether an occupancy-cum-completion certificate (OCC) can be deemed granted where the promoter alleges non-response by the sanctioning authority, and the effect of such deemed grant on applicability of the RERA Act. 2. Whether the Appellate Tribunal was correct in refusing to entertain appeals filed by a promoter without compliance with the pre-deposit requirement under Section 43(5) of the RERA Act. 3. Whether a promoter can furnish security in the form of immovable property in lieu of the statutory pre-deposit required under Section 43(5). ISSUE-WISE DETAILED ANALYSIS Issue 1 - Deemed grant of OCC and applicability of RERA Legal framework: Rule 8(ii) of the Building Bye-Laws, 1883 and bye-laws 2.7.10-2.7.12 of the Unified Building Bye-Laws (UBBL)-2016 set out the procedure and consequences for issue, deemed issue, rejection and conditions for release of an OCC; RERA applicability depends on whether a project falls within the Act's temporal and substantive scope. Precedent treatment: The Court considered the statutory scheme in the bye-laws and applied principles of statutory interpretation rather than relying on distinct precedent altering deemed sanction concepts. Interpretation and reasoning: The UBBL provisions qualify deemed OCC by requiring deposit of requisite fees and compliance with conditions; deemed OCC is not absolute and does not authorize acts contrary to lease, titles or development plans. The material on record (fire safety certificate dated after alleged application, fee receipt dated four years later, rejection of OCC by sanctioning authority in 2021, portal communications and deviations from sanctioned plan) demonstrated non-compliance with procedure and shortcomings not rectified by the promoter. Consequently, the prerequisites for a valid deemed OCC were not satisfied and the promoter failed to exercise due diligence. Ratio vs. Obiter: Ratio - where statutory conditions for deemed OCC are unmet and the sanctioning authority has rejected the application, the OCC cannot be held to be deemed granted for purposes of excluding statutory regimes like RERA. Obiter - observations on the general effect of deemed OCC not authorising acts contrary to title/MPD/bye-laws. Conclusions: The OCC was not deemed granted in the present facts; absence of a valid OCC meant the project remained within RERA's regulatory scope and the adjudicating authority's orders under RERA were capable of applying. Issue 2 - Mandatory pre-deposit under Section 43(5) of RERA and entertainability of appeals Legal framework: Section 43(5) RERA prescribes that an appeal by a promoter before the Appellate Tribunal shall not be entertained unless the promoter first deposits at least 30% (or higher percentage determined by the Tribunal) of the penalty or total amount payable to allottees including interest/compensation, as determined by the adjudicating authority. Precedent treatment: The Court relied on the Supreme Court's interpretation in Newtech (summarized and applied), which upholds the constitutionality and mandatory nature of pre-deposit and rejects claims that it is unconstitutionally onerous or violative of Articles 14/19(1)(g). Interpretation and reasoning: The proviso's language 'it shall not be entertained' and the qualifying phrase 'before the said appeal is heard' were interpreted as imposing a preliminary and final injunction: the Tribunal cannot even entertain or hear a promoter's appeal unless the statutory pre-deposit condition is complied with. The legislative purpose is protective of allottees who are financially vulnerable relative to promoters; the provision is designed to preserve amounts determined for allottees and prevent exploitation. The Court found the proviso to be a clear statutory mandate, not directory or permissive, and not arbitrary or unconstitutional in its effect. Ratio vs. Obiter: Ratio - Section 43(5) is mandatory and precludes entertaining an appeal by a promoter until the pre-deposit is made; the provision is constitutionally valid and not excessive. Obiter - policy observations on legislature's protective intent towards allottees. Conclusions: The Appellate Tribunal correctly made continuance of the appeals contingent on compliance with Section 43(5) and correctly dismissed the appeals for non-fulfillment of the pre-deposit condition; the promoter must comply with the statutory pre-deposit to have the appeal entertained. Issue 3 - Permissibility of furnishing immovable property as security in lieu of pre-deposit Legal framework: Section 43(5) prescribes monetary deposit of specified percentages/amounts; no provision in the RERA Act expressly permits substitution of immovable property as security in lieu of the deposit. Precedent treatment: The Court treated the statutory text as exhaustive on the point and applied the expressio unius/implicit exclusivity principle rather than invoking external remedial substitution doctrines. Interpretation and reasoning: Absent statutory authorization, an appellate tribunal has no jurisdiction to accept immovable property as a substitute for the prescribed monetary pre-deposit. Allowing non-statutory substitutes would circumvent the express legislative scheme designed to secure payable amounts for allottees. Ratio vs. Obiter: Ratio - promotor cannot furnish immovable property in lieu of the mandatory pre-deposit under Section 43(5) in the absence of statutory provision permitting such substitution. Obiter - none substantive beyond statutory interpretation. Conclusions: The Appellants' offer to furnish immovable property could not be accepted in lieu of the statutory pre-deposit; the Tribunal correctly rejected that offer as beyond the statute's purview. Ancillary procedural direction Where an appeal was dismissed for non-compliance with the pre-deposit, the Court allowed revival of the appeal before the Appellate Tribunal if the promoter applies within a specified period and complies with the pre-deposit, leaving evaluation of any such compliance and related determinations to the Tribunal on their merits in accordance with law (procedural/operative direction; not altering substantive ratio on mandatory pre-deposit).
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