The Chhattisgarh High Court has reaffirmed the mandatory nature of depositing the full amount awarded by the Real Estate Regulatory Authority under Section 43(5) of the Chhattisgarh Real Estate (Regulation and Development) Act, 2016. Failure to comply results in automatic dismissal of the appeal, leaving no room for judicial discretion. This ruling underscores the legislature’s intent to ensure prompt redressal and deterrence against non-compliance by developers.
Background & Facts
The Dispute
The respondent, Shri Bhuneshwar Prasad Verma, entered into an agreement with the appellants - M/s Parthivi Construction Pvt. Ltd. and its directors - for the purchase of two commercial shops (Shop No. 21 and 22, Level-1) in the ‘White Symphony’ project located in Sector 15, Naya Raipur. The agreement was executed on 16.05.2016, and the respondent paid a total consideration of Rs. 83,60,000 in installments. He alleged that the appellants failed to deliver possession, delayed construction, and misrepresented project timelines, constituting deficiency in service under the Act, 2016.
Key Facts
- The agreement for allotment was signed on 16.05.2016
- Total payment made by respondent: Rs. 83,60,000 on multiple dates between 2016 and 2018
- The project, ‘White Symphony’, was promoted by the appellants as a mixed-use commercial-residential development
- The respondent filed a complaint before the Chhattisgarh Real Estate Regulatory Authority (RERA) on grounds of delay, non-delivery, and fraudulent representation
- The appellants contested the complaint, alleging the agreement was forged and the payments were not genuine
- RERA, after recording evidence and hearing both parties, passed an order on 27.06.2025 directing the appellants to pay Rs. 1,06,79,900 as compensation, including interest and damages
Procedural History
- 16.05.2016: Agreement for allotment of Shop No. 21 and 22 executed
- 2025 (exact date not specified): Complaint filed before Chhattisgarh RERA
- 27.06.2025: RERA order passed directing payment of Rs. 1,06,79,900 to respondent
- 05.07.2025: Appellants filed Appeal No. (un-registered)/2025 before Chhattisgarh RERA Appellate Tribunal under Section 44 of the Act, 2016
- 10.08.2025: Appellants filed Application I.A. No. 1 seeking exemption from depositing 30% of the awarded amount
- 20.08.2025: Appellate Tribunal rejected the application and directed deposit of the full amount of Rs. 1,06,79,900 by the next hearing date, warning that failure would result in automatic dismissal of the appeal
- 26.09.2025: Appeal dismissed for non-compliance with the deposit order
- 02.01.2026: Appeal filed before the High Court under Section 58 of the Act, 2016
- 23.03.2026: High Court heard the matter on admission
Relief Sought
The appellants sought to set aside the order dated 26.09.2025 dismissing their appeal and requested the Appellate Tribunal to reconsider their application for partial deposit. They also sought stay on the enforcement of the RERA award pending final adjudication.
The Legal Issue
The central question was whether the Chhattisgarh Real Estate Appellate Tribunal was legally empowered to dismiss an appeal under Section 44 of the Act, 2016 for non-compliance with the mandatory deposit requirement under Section 43(5), and whether such dismissal without adjudication on merits violates principles of natural justice.
Arguments Presented
For the Appellant
The appellants contended that the dismissal of the appeal without hearing on merits was harsh and contrary to the spirit of the Act, which aims to protect homebuyers while ensuring fair adjudication. They argued that the Tribunal should have granted a reasonable time for deposit or allowed partial deposit with security, citing judicial precedents on proportionality. They further submitted that the order dated 20.08.2025 was vague as it did not specify the exact date for deposit, rendering compliance impossible.
For the Respondent
The respondent argued that Section 43(5) of the Act, 2016 is a clear statutory mandate requiring full deposit of the awarded amount as a condition precedent to hearing the appeal. He emphasized that the Tribunal’s order was explicit and gave sufficient opportunity to comply. The failure to deposit was a deliberate act of defiance, and the dismissal was a lawful consequence under the statute. He relied on the Supreme Court’s consistent stance that statutory conditions must be strictly followed.
The Court's Analysis
The High Court examined the language of Section 43(5) of the Chhattisgarh RERA Act, 2016, which provides: "...the Appellate Tribunal may, by order, direct the appellant to deposit the whole or any part of the amount awarded by the Regulatory Authority, and if the appellant fails to deposit the amount so directed, the appeal shall stand dismissed automatically."
The Court noted that the Appellate Tribunal’s order dated 20.08.2025 was unambiguous: it directed the deposit of the full amount of Rs. 1,06,79,900 and explicitly warned that failure would result in automatic dismissal. The appellants were given a clear opportunity to comply and chose not to.
"The provision is not a procedural formality but a substantive condition precedent to the entertainability of the appeal. The legislature intended to prevent delay tactics by developers who file appeals without any financial commitment to the aggrieved buyer."
The Court rejected the appellants’ argument that the order was vague, holding that the direction to deposit "the amount ordered by RERA" was sufficiently specific. It further held that the Tribunal was not obligated to grant additional time or consider partial deposit when the statute mandates full deposit. The Court distinguished this from cases involving bail or interim relief, where equity may temper strictness. Here, the statutory scheme is designed to prioritize the rights of homebuyers and ensure swift enforcement.
The Court also observed that the appellants had not challenged the validity of Section 43(5) itself, nor sought a stay on the RERA award. Their silence on these remedies further weakened their position.
The Verdict
The appeal was dismissed at the admission stage. The High Court upheld the Appellate Tribunal’s order dated 26.09.2025 dismissing the appeal for non-compliance with the mandatory deposit of Rs. 1,06,79,900 under Section 43(5) of the Chhattisgarh RERA Act, 2016. The RERA award remains enforceable, and the appellants are liable to pay the full amount to the respondent without further delay.
What This Means For Similar Cases
Deposit Is Not Optional - It Is Jurisdictional
- Practitioners must advise clients that filing an appeal under Section 44 without depositing the full RERA award amount will result in automatic dismissal
- No judicial discretion exists to waive or reduce the deposit requirement under Section 43(5)
- Applications for partial deposit or extension of time are legally untenable unless the statute explicitly permits it
Strategic Implications for Developers
- Developers must treat RERA awards as immediate liabilities and plan for liquidity to meet deposit obligations
- Delaying tactics through appeals without deposit will now be futile and costly
- Legal counsel must prioritize compliance with RERA deposit orders before filing appeals
Protection for Homebuyers Reinforced
- The judgment strengthens the enforcement mechanism for RERA awards
- Buyers can now rely on the automatic dismissal provision as a deterrent against frivolous appeals
- Developers cannot use procedural delays to evade payment obligations
