Bombay High Court
Rare Townships Private Limited vs Mitul Gada on 30 March, 2026
Author: N. J. Jamadar
Bench: N. J. Jamadar
2026:BHC-AS:15223
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Santosh
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
SECOND APPEAL NO. 121 OF 2026
WITH
INTERIM APPLICATION NO. 1837 OF 2026
Rare Townships Private Limited ...Appellant
Versus
SANTOSH Mitul Gada ...Respondent
SUBHASH
KULKARNI WITH
Digitally signed by
SANTOSH SUBHASH
SECOND APPEAL NO. 122 OF 2026
KULKARNI
Date: 2026.03.30 WITH
22:26:17 +0530
INTERIM APPLICATION NO. 1838 OF 2026
Rare Townships Private Limited ...Appellant
Versus
Mitul Gada ...Respondent
Mr. Rubin Vakil, a/w Sonam Mhatre, Amit Mishra and Soham
Salunkhe, i/b Dhaval Vassonji and Associates, for the
Appellant in both SA.
Mr. Mithil Sampat, for the Respondent in both SA.
CORAM: N. J. JAMADAR, J.
Reserved On: 11th MARCH, 2026
Pronounced On: 30th MARCH, 2026
ORDER:
–
1. These appeals under Section 43 of the Real Estate
(Regulation and Development) Act, 2016 (“RERA, 2016”) are
directed against a common order dated 6 th January, 2026
passed by the Maharashtra Real Estate Appellate Tribunal,
Mumbai, (“Appellate Tribunal”), in Misc. Application
No.925/2025 in Appeal No.AT06/01019/2025 and Misc.
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Application No.923/2025 in Appeal No.AT06/01020/2025,
preferred by appellant for stay to the execution and operation of
the order dated 9th September, 2025 passed by the Maharashtra
Real Estate Regulatory Authority (“the Authority”) in the
complaints filed by the respondent – allottee, to the extent the
Appellate Tribunal permitted the allottee to withdraw the
amounts deposited by the appellant.
2. Shorn of superfluities, the background facts necessary for
the determination of these appeals can be summarized as
under:
2.1 The appellants are the promoters in relation to a project,
“North Sea Heights (A1), 19th floor, registered with MahaRERA.
The respondent – allottee claimed that on the basis of the
representations and assurances of the appellant, he had
agreed to purchase Flat Nos.1503 and 1504 in the said project.
Agreements for Sale were executed on 2 nd November, 2015. The
total consideration for Flat No.1504 was at Rs.1,60,61,350/- and
for Flat No.1503 the agreed consideration was Rs.1,56,37,500/-.
The allottee had paid an amount of Rs.98,92,960/- towards the
consideration for Flat No.1504 and Rs.69,66,437/- towards Flat
No.1503.
2.2 Under the terms of the said agreements the appellant
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agreed to deliver the possession of the subject flats by 31 st
December, 2018. Asserting that the promoter committed default
in the performance of its obligations under the Agreements for
Sale, the promoter did not deliver the possession of the subject
flats within the stipulated period, the construction activity at
the project site had come to a standstill, and even the requisite
permissions from the Planning Authority were not in place, and
there was no reply to the legal notices addressed on behalf of
the allottee, the allottee filed the complaints before the
MahaRERA.
2.3 The allottee sought the refund of the amount paid by him
to the promoter alongwith interest and compensation on
account of delay in the completion of the project and the
delivery of the subject flats under Section 18 of RERA, 2016.
2.4 By an order dated 17th February, 2020 passed by the
Authority those complaints were referred to the Adjudicating
Officer for suitable decision under the provisions of the RERA,
2016 and the Rules made thereunder. By orders dated 19th
March, 2021, the Adjudicating Officer directed the refund of the
amount paid by the allottee alongwith interest and
compensation.
2.5 Being aggrieved by the order passed by the Adjudicating
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Officer dated 19th March, 2021, the promoter – appellant
preferred petitions, being WP/7636/2021 and WP/7637/2021,
before this court. During the pendency of those petitions, this
Court directed the petitioner – appellant to deposit the amounts
directed to be refunded by the Adjudicating Officer, in this
Court. Pursuant to the said direction dated 20 th March, 2025
the appellant deposited a sum of Rs.1,76,28,138/- in
WP/7636/2021 and Rs.1,50,09,055/- in WP/7637/2021.
2.6 Eventually, by an order dated 22nd April, 2025, those writ
petitions were disposed by this Court with a direction that the
complaints filed by the allottee be determined afresh by the
Regulatory Authority under RERA 2016. It was held that the
Adjudicating Officer had assumed jurisdiction not vested in him
by law as the complaints pertaining to the refund of the
principal amount alongwith interest were required to be
determined by the Regulatory Authority and not the
Adjudicating Officer, whose remit of jurisdiction was confined to
claim for compensation and interest in specified cases.
2.7 This Court further directed that the amounts deposited by
the appellant – promoter shall be transferred to the account of
the Regulatory Authority and the said amount shall abide the
final outcome of the complaints and further order to be passed
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by that Authority. It was also made clear that, it would be open
for the Authority to appropriate or disburse the amount so
transmitted if the Authority found merit in the respondent’s
complaints and passed orders in favor of the respondent –
allottee.
2.8 Pursuant to the aforesaid directions, by an order dated 9 th
September, 2025, the Authority determined both the
complaints. The Authority, inter alia, returned the finding that
the promoter – appellant committed default in its obligation to
deliver the possession of the subject flat within the stipulated
period. The Authority did not find any substance in the defences
sought to be raised by the appellant. The promoter was, thus,
directed to refund the entire amount paid by the complainant
towards the consideration of the subject flats alongwith interest
at the rate of SBI’s highest marginal cost of lending rate plus
2%, as prescribed under the provisions of Section 18 of the
RERA 2016 and the Rules made thereunder, from the date of the
payment till actual realization. The promoter was, however, held
entitled to claim the benefit of the moratorium period as
mentioned in the Notification/orders in the wake of the COVID-
19 pandemic. The allottee was, in turn, directed to execute the
cancellation deeds upon the receipt of the payment from the
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promoter.
2.9 Being aggrieved, the promoter – appellant preferred
appeals before the Appellate Tribunal. In those appeals, the
appellant preferred applications for stay to the execution and
operation of the aforesaid order passed by the Authority.
2.10 By the impugned common order, while granting stay to
the execution and operation of the order passed by the
Authority in regard to future recovery of the amount exceeding
the amount deposited by the appellant before the Authority, the
Appellate Tribunal permitted the complainant – allottee to
withdraw the amounts deposited by the appellant – promoter
with the Authority subject to an undertaking to bring back the
said amount alongwith interest as may be directed to be paid, in
the event the appellant – promoter succeeds in those appeals.
3. Being aggrieved by and dissatisfied with the permission for
withdrawal granted by the Appellate Tribunal to the respondent
– allottee, the promoter has preferred these appeals.
4. I have heard Mr. Rubin Vakil, the learned Counsel for the
appellant, and Mr. Mithil Sampat, the learned counsel for the
respondents, in both the appeals. The learned Counsel took the
Court through the relevant pleadings and the documents on
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record.
5. Mr. Vakil, the learned Counsel for the appellant, would
submit that the impugned permission for withdrawal of the
amount deposited by the appellant with the Authority, during
the pendency of the appeals, was clearly in transgression of the
jurisdiction vested in the Appellate Tribunal. Amplifying this
submission, Mr. Vakil would urge that, the grant of permission
to withdraw the amount deposited by the promoter in terms of
the provisions contained in the proviso to Section 43(5) of
RERA, 2016, during the pendency of the appeal, is legally
impermissible. The Appellate Tribunal has, thus, committed a
grave error in law in permitting the withdrawal of the amount by
virtually pre-judging the case of the promoter.
6. Mr. Vakil strenuously submitted that once the allottee is
permitted to withdraw the amount deposited by the promoter,
the appeals would be rendered virtually infructuous as the
appellant would be left in the lurch even if it succeeds in the
appeal. Mr. Vakil would urge that, the amount which the
promoter is obligated to deposit under the proviso to Section
43(5), being only to safeguard the interest of the allottee, cannot
be permitted to be released in favor of the allottee while the
challenge to the order directing such payment remains
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sub-judice. Thus, the substantial questions of jurisdictional
competence of the Appellate Tribunal to release the amount and
the legality of such course, during the pendency of the appeal,
in the context of the provisions of Section 43 of the RERA 2016,
arise for consideration, submitted Mr. Vakil.
7. Per contra, Mr. Sampat, the learned Counsel for the
respondent, would urge that the impugned order is in
consonance with the order passed by this Court in
WP/7636/2021 and WP/7637/2021, which expressly gave
liberty to the Authority to appropriate or disburse the said
amount deposited by the appellant. Mr. Sampat submitted that,
the release of the said amount cannot be said to be without any
safeguard as the allottee has been directed to furnish an
undertaking to bring back the said amount alongwith such
interest as may be directed.
8. Mr. Sampat submitted with tenacity that, the beneficial
object of the provisions contained in RERA 2016, needs to be
kept in view. The impugned order, according to Mr. Sampat, is
in tune with the legislative object behind enacting RERA 2016.
The promoter, who has committed flagrant violation of the
contractual obligations and the provisions of RERA 2016 and
the Rules thereunder cannot be heard to say that the allottee be
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deprived of the amount of refund and the interest thereon while
he continues to bear the brunt of the liability to pay interest on
the amount which he has borrowed to finance the acquisition of
the subject flat. If the facts of the case are appraised in correct
perspective, especially in the context of the time that has
elapsed from the date of the execution of the agreement for sale,
the impugned order cannot be faulted at. The impugned order is
thus equitable and, therefore, does not warrant any
interference, submitted Mr. Sampat.
9. At any rate, Mr. Sampat would urge, no question of law
much less a substantial question of law arises for consideration,
as the impugned order is an interim arrangement made by the
Appellate Tribunal in exercise of its discretionary jurisdiction.
10. Before appreciating the aforesaid rival submissions
canvassed across the bar, it may be apposite to note that there
is not much controversy over the facts necessary for the
determination of these appeals. The execution of registered
agreements for sale between the promoter and allottee is
incontestable. The payment of consideration by the respective
allottee is also not much in contest. Under the terms of the
contract between the parties, the promoter – appellant was to
deliver the possession of the subject flat to the allottee by 31 st
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December, 2018. Indisputably, the possession of the subject
flats could not be delivered by the promoter to the allottee by 31 st
December, 2018. Nay, under the disclosure filed with RERA the
revised date for the delivery of possession was shown 30 th
December, 2025. The facts that the promoter –
appellant deposited Rs.1,76,28,138/- in WP/7636/2021 and
Rs.1,50,09,055/- in WP/7637/2021 in this Court and those
amounts were further transmitted to the Authority are mattes of
record.
11. At the outset, it is necessary to note that, since the
appeals against the orders passed by the Authority directing the
refund of the amount alongwith the interest at the specified rate
are sub-judice before the Appellate Tribunal, it may not be
appropriate for this Court to delve deep into the merits of the
matter in regard to the legality and justifiability of the said
direction to refund the amount alongwith interest, passed by the
Authority. The only question that wrenches to the fore is,
whether the Appellate Tribunal has the power to permit the
allottee to withdraw the amount deposited by the promoter
under the proviso to Section 43(5) of RERA, 2016, during the
pendency of the appeal?
12. The thrust of the submission of Mr. Vakil was that, under
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the provisions of RERA 2016, there is no power in the Appellate
Tribunal to release the amount deposited by the promoter
during the pendency of appeal. Elaborating the submission,
Mr. Vakil would urge, the only power which the Appellate
Tribunal has under Section 43 of the RERA 2016 is to direct the
promoter to deposit with the Appellate Tribunal at least 30% of
the penalty or such higher percentage as may be determined or
the total amount to be paid to the allottee including interest and
compensation imposed on him. The said power flowing from the
proviso to sub-section (5) of Section 43 does not confer any
jurisdiction on the Appellate Tribunal to release the amount so
deposited in favour of the allottee during the pendency of the
appeal. Lest, the very purpose of providing an appeal against
the order passed by the Authority would be defeated.
13. To buttress this submission Mr. Vakil placed a very strong
reliance on the judgment of the Supreme Court in the case of
Newtech Promoters and Developers Prt. Ltd. vs. State of UP and
others1. Mr. Vakil would urge that, in the said case, the
Supreme Court, inter alia, considered the question, whether the
condition of pre-deposit under the proviso to Section 43(5) of the
Act, 2016 for entertaining substantive right of appeal is
1 2021 SCC Online SC 1044.
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sustainable in law. The Supreme Court, while upholding the
constitutionality of the said provision, has expounded the object
of the said provision. Mr. Vakil would urge that, the Supreme
Court has enunciated in no uncertain terms that the object of
the said proviso was to safeguard the interest of the allottee by
directing the deposit of the amount of penalty or the amount
ordered to be refunded to the allottee. However, the provisions
contained in Section 43 of RERA 2016 can never be the
repository of the power to release the amount, which is required
to be secured to protect the interest of the allottee, during the
pendency of the appeal. Mr. Vakil laid emphasis on the
following observations of the Supreme Court in paragraphs 128
and 129:
“128. It may further be noticed that under the present real
estate sector which is now being regulated under the
provisions of the Act 2016, the complaint for refund of the
amount of payment which the allottee/consumer has
deposited with the promoter and at a later stage, when the
promoter is unable to hand over possession in breach of the
conditions of the agreement between the parties, are being
instituted at the instance of the consumer/allottee
demanding for refund of the amount deposited by them and
after the scrutiny of facts being made based on the
contemporaneous documentary evidence on record made
available by the respective parties, the legislature in its
wisdom has intended to ensure that the money which has
been computed by the Authority at least must be safeguarded
if the promoter intends to prefer an appeal before the
tribunal and in case, the appeal fails at a later stage, it
becomes difficult for the consumer/allottee to get the amount
recovered which has been determined by the Authority and to
avoid the consumer/allottee to go from pillar to post for
recovery of the amount that has been determined by the
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be saved from all the miseries which come forward against
him.
129. At the same time, it will avoid unscrupulous and
uncalled for litigation at the appellate stage and restrict the
promoter if feels that there is some manifest material
irregularity being committed or his defence has not been
properly appreciated at the first stage, would prefer an appeal
for reappraisal of the evidence on record provided substantive
compliance of the condition of predeposit is made over, the
rights of the parties inter se could easily be saved for
adjudication at the appellate stage.”
(emphasis supplied)
14. To appreciate the aforesaid submissions, it may be
necessary to retain emphasis on the text of Sub-section (5) of
Section 43 of the RERA 2016. It reads as under:
“43 (5) Any person aggrieved by any direction or decision or
order made by the Authority or by an adjudicating officer
under this Act may prefer an appeal before the Appellate
Tribunal having jurisdiction over the matter:
Provided that where a promoter files an appeal with the
Appellate Tribunal, it shall not be entertained, without the
promoter first having deposited with the Appellate Tribunal
atleast thirty per cent. of the penalty, or such higher
percentage as may be determined by the Appellate Tribunal,
or the total amount to be paid to the allottee including
interest and compensation imposed on him, if any, or with
both, as the case may be, before the said appeal is heard.
Explanation.– For the purpose of this sub-section
“person” shall include the association of allottees or any
voluntary consumer association registered under any law for
the time being in force.”
15. A plain textual meaning of the aforesaid provision
indicates that, the proviso contains an interdict against the very
entertainment of an appeal against the order passed by the
Authority or an adjudicating officer, if the appeal is at the
instance of the promoter, without the promoter first having
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deposited with the Appellate Tribunal at least 30% of the
penalty or such higher percentage as may be determined by the
Appellate Tribunal or the total amount to be paid to the allottee
including interest and compensation imposed on him, before the
said appeal is heard.
16. It is well recognized that there is a subtle yet significant
distinction between the entertainability and maintainability of a
proceeding. Even if a proceeding may be maintainable, yet, the
Court may have the discretion to entertain or not to entertain
the proceeding. The issue of maintainability, thus, cannot be
confused with the entertainability of the proceeding. A useful
reference in this context can be made to the judgment of the
Supreme Court in the case of Godrej Sara Lee Ltd. vs. Excise
and Taxation Officer-cum-Assessing Authority and others.2
17. However, if a statutory right of appeal is provided, different
considerations come into play. If the appeal is maintainable, the
Appellate Authority may not have the discretion to refuse to
entertain the appeal, unless the statute prescribes condition
precedent to entertain the appeal. The proviso to Section 43(5)
of RERA 2016, incorporates such a condition for entertainability
of appeal though the main part of sub-section (5) confers a right
2 2023 SCC OnLine SC 95.
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of appeal.
18. In the case of Newtech Promoters (supra) the Supreme
Court, examined the constitutionality of the aforesaid condition
of pre-deposit. After analysing the provisions of Section 43(5)
and the provisions under other enactments which also
incorporate such condition of pre-deposit for exercise of the
right of appeal, which is a creature of statute, the Supreme
Court held that, the classification made by the Parliament in
the matter of the appeal at the instance of the allottee and
promoter was based on an intelligible differentia. The intention
of the legislature appeared to be that, the promoter ought to
show its bona fide by depositing the amount so computed. In
addition to the observations in paragraphs 127 and 128 of the
judgment (extracted above), in which the Supreme Court
emphasized that the legislature intended to ensure that the
money which has been computed by the Authority must be
safeguarded if the promoter intended to prefer an appeal before
the Tribunal, the observations of the Supreme Court in
paragraph 138 deserve to be noted. They read as under:
“138. In our considered view, the obligation cast upon the
promoter of predeposit under Section 43(5) of the Act, being
a class in itself, and the promoters who are in receipt of
money which is being claimed by the home buyers/allottees
for refund and determined in the first place by the competent
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money once determined by the Authority be saved if appeal
is to be preferred at the instance of the promoter after due
compliance of predeposit as envisaged under Section 43(5) of
the Act, in no circumstance can be said to be onerous as
prayed for or in violation of Articles 14 or 19(1)(g) of the
Constitution of India.”
(emphasis supplied)
19. The avowed object of the provisions contained in the
proviso to Section 43(5) of RERA 2016 is to obviate a situation
where the allottee, despite succeeding before the Authority as
well as the Appellate Tribunal is left in the lurch. Thus, to
ensure that the interest of the allottee is adequately protected
when the promoter prefers an appeal against an order passed by
the Authority or Adjudicating Officer directing the payment of
any amount to the allottee, the legislature has provided that the
promoter shall deposit the said amount.
20. To the extent, Mr. Vakil premised his submissions on the
aforesaid avowed object of the proviso, namely to safeguard the
interest of the allottee, the submission appears impeccable.
However, the further sequitur sought to be drawn by Mr. Vakil
that the Appellate Tribunal is empowered only to secure the
amount and, under no circumstances, the amount so secured
can be released during the pendency of the appeal, cannot be
acceded to unreservedly, for reasons more than one.
21. Firstly, it is pertinent to note that, the proviso to section
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43(5) contains an interdict against entertainability of the appeal.
Until, the said pre-deposit, wherever ordered by the Appellate
Tribunal, is made, the appeal cannot be heard. Nonetheless, the
pre-deposit under Section 43(5) cannot be equated with the
condition for stay to the execution and operation of the order
impugned before the Appellate Tribunal. The distinction
between these two concepts, if ignored, may lead to an
erroneous conclusion.
22. Secondly, the character of the amount which is ordered to
be refunded by the Authority under Section 18 of the RERA
2016 is of critical salience. Section 18(1) casts an obligation on
the promoter to return the amount received by him from the
allottee in the event of failure to perform his obligation, at the
prescribed rate. What is thus directed to be refunded is the
amount which was, in the first place, paid by the allottee to the
promoter, and, in a fair number of cases, like the case at hand,
years ago. What the promoter is often directed is to return the
very amount paid by the allottee, alongwith interest on the
amount so paid by the allottee to the promoter. It is this liability
to pay the interest that is, more often than not, at the heart of
the controversy. In law, interest whether statutory or
contractual, represents the profit the person deprived of the
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money, would have made if he had the use of the money to
which he was entitled to. (S.R.Y. Shivram vs. Commissioner of
Income Tax.3)
23. Thirdly, the Appellate Tribunal having secured the amount
of penalty or the money ordered to be paid to the allottee,
cannot be said to be completely denuded of the power to release
the said amount or a portion thereof, during the pendency of
the appeal. Albeit, the determination on the aspect of the
release of the amount would be governed by the attendant facts
and circumstances of the given case. The Appellate Tribunal in
a majority of cases may exercise the discretion not to release the
amount so secured during the pendency of the appeal.
However, that does not imply that the Appellate Tribunal
cannot exercise the discretion to release the amount in a
deserving case.
24. If viewed through the aforesaid prism, in the considered
view of this Court, the provisions contained in Section 43(5)
especially the proviso thereto, cannot be so construed as to
preclude the appellate tribunal from excising the discretion in a
deserving case from releasing the amount in favor of the allottee
during the pendency of the appeal. Undoubtedly, whether the
3 (1971) 3 SCC 726.
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discretion is to be exercised or not is a matter governed by the
facts and circumstances of the given cases. Generally following
factors may bear upon the exercise of the discretion by the
Appellate Tribunal:
(i) Whether there is a dispute about the quantum of the
amount paid by the allottee to the promoter, of which the refund
is ordered?
(ii) What is the period of time that has elapsed since the
payment made by the allottee to the promoter?
(iii) What is the stage of the development of the project in
question?
(iv) Whether the project was complete when the Authority
passed the order of refund of the amount, paid by the allottee?
(v) Whether the promoter had offered the possession of the
subject apartment, and, if so, whether the refusal on the part of
the allottee to accept possession of the apartment is justifiable?
25. In a given case, one or more of the aforesaid factors may
influence the exercise of discretion one way or the other by the
Appellate Tribunal. However, it cannot be laid down as a
inviolable rule that, under no circumstances, the Appellate
Tribunal would be justified in directing the release of the
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amount in favor of the allottee, subject to conditions as it deems
appropriate in the facts of the case.
26. On the anvil of aforesaid considerations, re-adverting to
the facts of the case at hand, the most important factor which
exacerbates the situation is the failure on the part of the
promoter to complete the project, even after the lapse of a period
of seven years from the expiry of the agreed date of delivery of
possession. Over a period of 11 years has elapsed since the
execution of the agreement for sale. The allottee parted with
substantial consideration, much before the agreed date of
delivery of possession. The observations of the Appellate
Tribunal that the allottee boar the brunt of both the ends of the
stick, in the sense that, on the one hand, the allottee was
required to pay EMIs towards repayment of the loans availed by
him and, on the other hand, the amount which he had paid to
the promoter got blocked up, cannot be said to be
unsustainable.
27. In a situation of the present nature, it is no solace to an
allottee that, the amount ordered to be refunded is secured and
kept in a deposit. The release of the amount ameliorates the
situation of the allottee by relieving him of the financial
constraints and also the mental anguish caused by the breach
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of obligations by the promoter for over a decade. The promoter
and allottee cannot be placed on an equal footing. The capacity
to withstand the deprivation of the legitimate amount vastly
differs and the position of the allottee is generally very
vulnerable.
28. In the case at hand, the fact that in WP/7636/2021 and
WP/7637/2021 this Court had reserved the liberty to the
Authority to pass appropriate order for appropriation or
disbursement of the amount deposited by the appellant also
deserves to be appropriately considered. The attendant factors
were taken into account by this Court while granting the said
liberty to the Authority. The impugned order, thus, can also be
said to have been passed availing the said liberty granted by
this Court.
29. For the foregoing reasons, in the facts of the case at hand,
this Court finds that the Appellate Tribunal has exercised the
discretion in a judicious manner. A party, who has deprived the
adversary of his hard earned money for over a decade cannot be
heard to urge that, if the amount is released in favor of the
allottee, and, eventually, he succeeds, he would find it difficult
to recover the amount. Thus, in the considered view of this
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Court, no substantial question of law arises for consideration.
The appeals, therefore, deserve to be dismissed.
30. Hence, the following order:
:ORDER:
(i) The appeals stand dismissed with costs.
(ii) In view of the dismissal of the appeal, Interim Applications
also stand disposed.
[N. J. JAMADAR, J.]
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