1. Introduction

The case of Krishna Estate Developers Pvt. Ltd. v. P.C. Joshi adjudicated by the Real Estate Regulatory Authority (RERA) on March 26, 2021, stands as a significant benchmark in the enforcement of the Real Estate (Regulation and Development) Act, 2016 (RERA). This judgment primarily addresses the procedural compliance required under Section 43(5) of the Act, which mandates promoters to deposit a specified amount before their appeals can be entertained by the Appellate Tribunal. The appellant, Krishna Estate Developers Pvt. Ltd., challenged the RERA's order dated June 23, 2020, but failed to comply with the statutory pre-deposit requirements, leading to the dismissal of their appeals.

2. Summary of the Judgment

Krishna Estate Developers Pvt. Ltd. filed two defective appeals (D) 937/2020 & (D) 943/2020 on December 17, 2020, challenging a common order issued by the Uttar Pradesh Real Estate Regulatory Authority (RERA) on June 23, 2020. The orders mandated the promoter to hand over possession of units by September 30, 2020, and imposed interest and compensation penalties for delays. The appeals were deemed defective due to non-compliance with Section 43(5) of RERA Act, which requires promoters to deposit at least 30% of the penalty or the total amount payable to the allottee before the appeal can be heard. Despite multiple opportunities and extensions granted by the Tribunal to rectify the deficiencies, Krishna Estate Developers failed to comply. Consequently, on March 26, 2021, the Tribunal dismissed both appeals for non-compliance with Section 43(5).

3. Analysis

3.1 Precedents Cited

The Judgment extensively referenced several high-profile cases to substantiate its stance on the mandatory compliance of Section 43(5). Key cases include:

• Tecnimont Pvt. Ltd. v. State of Punjab: Affirmed that pre-deposit requirements are not onerous and are constitutionally valid.
• Radicon Infrastructure and Housing Pvt. Ltd. v. Karan Dhyani: Clarified that the Appellate Tribunal has no discretion to reduce the pre-deposit amount required under Section 43(5).
• Seth Nand Lal v. State of Haryana: Established that conditions imposed on statutory appeals do not infringe constitutional rights as long as they are not unreasonable.
• Lotus Realtech Pvt. Ltd. v. State of Haryana: Emphasized the non-discretionary nature of pre-deposit requirements and upheld their validity.

These precedents collectively reinforce the Tribunal's authority to enforce strict compliance with pre-deposit norms, ensuring that the appellate process is not misused or burdened by frivolous appeals.

3.2 Legal Reasoning

The core legal reasoning revolves around the interpretation and enforcement of Section 43(5) of the RERA Act. The Tribunal emphasized that:

• Statutory Mandate: Section 43(5) unequivocally requires promoters to deposit a minimum of 30% of the penalty or the total amount payable to the allottee before an appeal is entertained.
• Non-Discretionary Compliance: The Tribunal holds that there is no discretionary power vested in the Appellate Tribunal to waive or reduce the pre-deposit amount. This ensures uniformity and prevents arbitrary relaxation of procedural norms.
• Judicial Consistency: By aligning with established precedents, the Tribunal maintains consistency in its rulings, thereby upholding the integrity and objectives of the RERA Act.

The Tribunal concluded that Krishna Estate Developers' failure to comply with Section 43(5) despite multiple opportunities renders the appeals defective and subject to dismissal.

3.3 Impact

This Judgment has multifaceted implications for the real estate sector and regulatory framework:

• Strict Adherence to Procedural Norms: Promoters are now unequivocally aware of the necessity to comply with pre-deposit requirements, ensuring that only genuine and capable parties engage in the appellate process.
• Deterrence Against Frivolous Appeals: The stringent enforcement of Section 43(5) acts as a deterrent against baseless or economically burdensome appeals, promoting efficiency within the Tribunal.
• Enhanced Consumer Protection: By mandating financial accountability from promoters before they can challenge regulatory orders, the Judgment reinforces consumer protection mechanisms embedded within RERA.
• Clarification in Legal Practice: The detailed analysis of precedents provides clear jurisprudential guidance for future cases involving similar procedural compliance issues.

Overall, the Judgment strengthens the regulatory framework established by RERA, ensuring that its objectives of transparency, accountability, and consumer protection are effectively met.

4. Complex Concepts Simplified

5. Conclusion

The judgment in Krishna Estate Developers Pvt. Ltd. v. P.C. Joshi serves as a definitive affirmation of the mandatory pre-deposit requirements under Section 43(5) of the RERA Act, 2016. By dismissing the defective appeals due to non-compliance, the Tribunal underscored the importance of adhering to procedural norms designed to protect consumer interests and ensure regulatory efficiency.

This ruling not only reinforces the statutory mandates but also provides clear guidance to promoters and legal practitioners in navigating the appellate processes under RERA. The alignment with established precedents further solidifies the Tribunal's stance, ensuring that the objectives of transparency, accountability, and consumer protection within the real estate sector are upheld.

Moving forward, this Judgment is poised to influence future cases by setting a robust precedent that emphasizes the inviolable nature of procedural compliance, thereby fostering a more equitable and efficient real estate regulatory environment.