The Bombay High Court has asserted that an application for condonation of delay in filing an appeal does not have a distinct and separate existence apart from the appeal itself; rather, it constitutes a composite proceeding of appeal. Consequently, the bar under the proviso to Section 43(5) of RERA 2016, mandating pre-deposit by the promoter, applies even at the stage of hearing the application for condonation of delay.
The expression “before the said appeal is heard” in Section 43(5) encompasses the hearing of the condonation application, as the term “appeal” subsumes the condonation application within its fold. A promoter who belatedly invokes the jurisdiction of the Appellate Tribunal is bound by the same pre-deposit requirement as a promoter who files within the limitation period, applying the principle of a fortiori, added the Court.
A Single Judge Bench of Justice N. J. Jamadar examined the proviso to Section 43(5) of RERA 2016, which mandates that an appeal by a promoter shall not be entertained without the promoter first depositing at least thirty per cent of the penalty, or the total amount to be paid to the allottee including interest and compensation, before the appeal is heard. The Court noted that the word “entertain” carries a definite juridical connotation meaning “adjudicate upon or proceed to consider on merits”, as held by the Supreme Court in Lakshmi Rattan Engineering Works Ltd. v. Asst. Commissioner, Sales Tax [1967 SCC OnLine SC 140] and Hindustan Commercial Bank Ltd. v. Punnu Sahu [1971 (3) SCC 124].
The Court observed that the expression “before the said appeal is heard” appearing in Section 43(5) is significant and distinguishes it from Section 21 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (“RDB Act”). The Court placed heavy reliance on the Division Bench judgment in Deluxe Cotton Corporation vs. Bank of Baroda [2016 SCC OnLine Bom 2629], which held that an appeal accompanied by an application for condonation of delay is nevertheless an appeal in the eyes of law, and the bar under Section 21 applies even at the stage of considering the condonation application.
The Court further observed that the object of the pre-deposit requirement, as explained by the Supreme Court in M/s. Newtech Promoters and Developers Private Limited vs. State of Uttar Pradesh [(2021) 18 SCC 1], is to safeguard the allottee’s money and prevent unscrupulous litigation by promoters. The Court noted that allowing a promoter to delay the appeal and have the condonation application heard without pre-deposit would defeat the object of RERA 2016 and lead to absurd consequences, as it would enable promoters to keep matters sub judice to the grave prejudice of successful allottees.
Briefly, the dispute arises from a Slum Rehabilitation Scheme project developed by M/s Neumec Developers and Builders at Wadala (East), Mumbai, which was registered with the Maharashtra Real Estate Regulatory Authority (MahaRERA) under the name “Shreeji Towers”. On 24 September 2021, the respondent-allottees booked a flat for a total consideration of Rs. 2.13 crores with possession promised on or before 31 December 2021. The allottees paid Rs. 1.64 crores towards the consideration. Alleging breach by the promoter and demand for additional amounts beyond the agreed consideration, the allottees filed a complaint before MahaRERA.
Thereafter, MahaRERA allowed the complaint, directing the promoter to hand over possession along with an Occupation Certificate upon receipt of the balance Rs. 27.60 lakhs, and to pay simple interest on Rs. 1.64 crores from 1 January 2022 till delivery of possession. On appeal, the Maharashtra Real Estate Appellate Tribunal directed the promoter to deposit the entire amount directed by MahaRERA along with accrued interest, as pre-deposit under the proviso to Section 43(5) of the Real Estate (Regulation and Development) Act, 2016 (“RERA 2016”). The promoter contended that pre-deposit was not required at the condonation stage. On 6 May 2026, noting non-compliance with the pre-deposit order, the Tribunal rejected the condonation application, causing the appeal to stand dismissed.
