Allahabad HC Dismisses Builder's Seventh Round of Litigation, Imposes Rs 2.5 Lakh Cost After 13-Year Flat Delivery Failure

Justice Prashant Kumar dismissed the RERA appeal of Aims Max Gardenia Developers and imposed Rs 2.5 lakh costs, finding seven successive proceedings an abuse of process against a flat buyer awaiting possession since 2013.

The Lucknow Bench of the Allahabad High Court on 31 July 2026 dismissed a statutory appeal filed by builder M/s Aims Max Gardenia Developers Pvt. Ltd. under Section 58 of the Real Estate (Regulation and Development) Act, 2016, arising from a flat-delivery dispute that has now run for over thirteen years. Justice Prashant Kumar, sitting singly, found that the builder had engaged in seven rounds of litigation to resist compliance with a 2018 order of the RERA, Gautam Budh Nagar, while still not obtaining an occupancy certificate for the project. The Court imposed costs of Rs 2,50,000 on the builder, payable to the flat buyer Mrs. Pratibha Gupta within four weeks, characterising the repeated proceedings as frivolous litigation that harassed a lady homebuyer who had paid nearly the entire sale consideration by the time possession was due in June 2013.

The Dispute Before the High Court

Mrs. Pratibha Gupta booked Flat No. C3-402, admeasuring 1,150 sq.ft., in the builder's project “Golf City” at Plot No. 7, Sector-75, Gautam Budh Nagar. A Builder-Buyer Agreement was executed on 9 April 2011. The agreed sale consideration was Rs 34,44,250, with possession promised by June 2013. On the builder's demand, Mrs. Gupta paid Rs 35,90,252 — more than the agreed amount — yet possession was not delivered.

Mrs. Gupta filed Complaint No. 320188450 before the RERA, Gautam Budh Nagar. By order dated 26 July 2018, more than seven years after the agreement, RERA directed the builder to hand over possession of Unit C-3/402 immediately and to pay interest at 24% per annum from 30 June 2013, the date on which possession was due.

The builder neither handed over possession nor paid the interest. On 30 October 2018, Mrs. Gupta initiated execution proceedings. A recovery certificate was issued on 6 March 2019 for Rs 41,21,411.88.

The Procedural Trail: Seven Proceedings

The builder's response to each adverse order was a fresh proceeding. The sequence, as traced by the Court, runs as follows.

First — Appeal before the Appellate Tribunal. The builder filed an appeal before the U.P. Real Estate Appellate Tribunal, Lucknow (the Tribunal) on 16 May 2019, with a delay of 234 days, registered as Misc. Case No. 170 of 2019. The matter was initially fixed for 24 October 2019, but on the builder's counsel's own request it was preponed to 5 September 2019. On that date, no one appeared for the builder, no adjournment application was filed, and no pass-over was sought. The Tribunal rejected the delay condonation application and dismissed the appeal for want of prosecution.

Second — Writ petition in the High Court. Simultaneously, the builder filed Writ-C No. 17549 of 2019 seeking a stay of the recovery proceedings. This was dismissed on 23 May 2019.

Third — Special Leave Petition before the Supreme Court. The builder challenged the High Court's dismissal by filing SLP (C) No. 14282 of 2019, which was dismissed as withdrawn on 8 July 2019.

Back before the Tribunal, the builder obtained a recall of the 5 September 2019 dismissal order. The restored appeal was again dismissed for want of prosecution on 7 February 2020 when no one appeared, and again recalled on the same date on the builder's counsel's belated appearance. The Tribunal then granted last opportunities to file replies to delay-condonation objections on 3 January 2020 and again on 10 January 2020. On 5 March 2020 the matter was listed, but Covid-19 lockdown supervened. The Tribunal resumed functioning from 8 June 2020, listed the matter on 15 June 2020, 25 June 2020 and 10 July 2020, and communicated dates by e-mail to parties. On 10 July 2020, with the builder again absent and without any adjournment request, the appeal was dismissed for want of prosecution. This was the fourth in the sequence of proceedings.

Fifth — Review application. Instead of seeking restoration of the Tribunal appeal, the builder filed C.M. Review Application No. 3 of 2019 in Writ-C No. 17549 of 2019 before this Court, seeking review of the 23 May 2019 order. It was dismissed for want of prosecution on 25 February 2022.

Meanwhile, Mrs. Gupta had filed Writ-C No. 27934 of 2021 to compel execution of the recovery certificate. A coordinate bench on 10 November 2021 directed the District Magistrate, Gautam Budh Nagar to execute the recovery certificate dated 6 March 2019 for Rs 41,21,411.88 as expeditiously as possible, preferably within one month. The order was not complied with, prompting Mrs. Gupta to file Contempt Application (Civil) No. 6481 of 2022, which remained pending.

Only after a fresh recovery certificate was issued on 8 April 2022, and a recovery amin appeared at the builder's office on 22 July 2022, did the builder's counsel seek recall before the Tribunal. Sixth — a recall application filed on 28 August 2022 with a delay of 721 days was rejected by the Tribunal on 14 September 2022. The Tribunal noted that the only explanation given was that the appeal had remained “out of sight and unnoticed” until 22 July 2022, which did not constitute sufficient cause, especially since the portal showed all case updates and an e-mail containing the dismissal order had been sent to the parties on 14 July 2020. The Tribunal also held that Section 43(5) compliance had not been completed.

The builder paid Rs 67,77,518 by demand draft dated 13 December 2022 in favour of the Tehsildar, Dadri, after its bank accounts were attached under threat of contempt. It then filed the present RERA Appeal No. 1 of 2023 — the seventh proceeding — on 23 December 2022 under Section 58 of the Act, challenging the Tribunal's orders dated 14 September 2022 and 10 July 2020, and also the original RERA order of 26 July 2018.

The Three Substantial Questions of Law

When this Court admitted the appeal on 5 January 2023, it framed three substantial questions of law:

1. Whether the Tribunal erred in not treating Covid-19 disruptions as “sufficient cause” for condoning the delay in the restoration application against the 10 July 2020 order.
2. Whether the Tribunal was justified in dismissing the statutory appeal for non-prosecution during the Covid-19 pandemic.
3. Whether the Tribunal erred in rejecting the recall application without considering Section 44(4) of the Act.

The builder's counsel argued that the dismissal on 10 July 2020 occurred during the pandemic, that the delay in the restoration application was neither intentional nor deliberate, and that Section 43(5) had already been complied with — pointing to an order dated 7 November 2019 in which the Tribunal had taken a demand draft for Rs 12,36,423 on record as partial compliance. Counsel also challenged the 24% interest rate, contending that under Section 18 read with Section 2(za) of the Act, a builder's liability is capped at MCLR plus 1%.

Mrs. Gupta's counsel countered that the appeal could not reach the merits because the Tribunal had never decided the case on merits; it was dismissed for non-prosecution. She relied on Chandi Prasad v. Jagdish Prasad, (2004) 8 SCC 724, to argue that the doctrine of merger does not apply where a lower court has not decided on merits, so the interest-rate challenge was not open. She further argued that possession had never been handed over, that no occupancy certificate existed, and that the 8 July 2017 “possession” letter was a pre-formatted document the buyer was compelled to sign under duress, relying on Pioneer Urban Land and Infrastructure Limited v. Govindan Raghavan, (2019) 5 SCC 725.

How the Bench Reasoned

Questions 1 and 2 — Covid-19 and sufficient cause. Justice Prashant Kumar addressed the first two questions together. He reproduced Section 5 of the Limitation Act and surveyed the Supreme Court's consistent position: the burden of proving “sufficient cause” lies on the applicant; the expression cannot be construed liberally where negligence, inaction or lack of bona fides is evident; and even where sufficient cause is made out, condonation remains discretionary.

The Court drew on Ramlal v. Rewa Coalfields Ltd., AIR 1962 SC 361, for the proposition that an accrued right in favour of the decree-holder to treat the decree as final should not be lightly disturbed. It cited Maniben Devraj Shah v. Municipal Corporation of Brihan, Mumbai, (2012) 5 SCC 157, for the test that if the explanation is concocted or the party is thoroughly negligent, refusal to condone is legitimate. It also relied on Chennai Metropolitan Water Supply & Sewerage Board v. T.T. Murali Babu, (2014) 4 SCC 108, and Union of India v. Jahangir Byramji Jeejeebhoy, 2024 SCC OnLine SC 489, for the view that limitation rules reflect public policy and should not be treated as merely technical.

The Court applied Pathapati Subba Reddy v. Collector (LA), (2024) 12 SCC 336, which consolidates the principles: a right or remedy not availed for a long time must cease to exist after a fixed period; liberal and justice-oriented approaches cannot be used to defeat the substantive law of limitation in Section 3; and inordinate delay, negligence and want of due diligence can justify refusal to condone even where some cause is shown.

On the facts, the Court found the builder's explanation bare and unconvincing. The sole reason given for 720-plus days of inaction was that the appeal was “out of sight and unnoticed.” The Tribunal's portal carried all case updates; e-mail of the dismissal order had been sent on 14 July 2020 and its receipt acknowledged before the Tribunal. Even after extending the benefit of the Supreme Court's Covid-19 limitation exclusion in Suo Motu Writ (Civil) No. 3 of 2020 — which excluded the period from 15 March 2020 to 28 February 2022 and gave a fresh 90-day window from 1 March 2022 expiring 31 May 2022 — the restoration application filed on 28 August 2022 still suffered from delay. The Court held that the delay was “miserably barred by limitation” and that the Tribunal had rightly rejected it. Both questions were answered against the builder.

Question 3 — Section 44(4) compliance. Section 44(4) of the Act mandates the Appellate Tribunal to send a copy of every order to the parties. The Court found, on the face of the Tribunal's own record, that a public notice dated 1 June 2020 had been issued and uploaded on the website when the Tribunal resumed post-lockdown, information was sent via WhatsApp to advocates, cause lists were posted on the portal, and the dismissal order was e-mailed to the parties on 14 July 2020. The Court held that Section 44(4) had been fully complied with, and the third question was also answered against the builder.

Occupancy certificate and possession. Addressing the builder's claim that possession had been handed over on 8 July 2017, the Court found that no occupancy certificate had been obtained even at the time of the judgment. It held that without an occupancy certificate, possession cannot lawfully be handed over to an allottee. The so-called possession offer was through a pre-formatted letter in which the buyer was made to sign on the dotted line, which the Court characterised as void, relying on Pioneer Urban Land and Infrastructure Limited v. Govindan Raghavan and the coordinate bench's ruling in Lucknow Development Authority v. Sushma Shukla, 2026:AHC-LKO:4610.

The 24% interest rate. The builder had contested the RERA's direction to pay 24% interest, arguing the applicable rate under Section 18 of the Act is MCLR plus 1%. Justice Prashant Kumar noted that Clause 19 of the Builder-Buyer Agreement dated 9 April 2011 itself provided for penal interest at 24% per annum on delayed payments by the allottee. Section 2(za) of the Act defines interest to mean the rate equal to what the builder charges the allottee in case of default. Accordingly, the Court held that 24% was the contractually and statutorily applicable rate, consistent with the Supreme Court's ruling in Newtech Promoters & Developers (P) Ltd. v. State of U.P., (2021) 18 SCC 1.

Pattern of Repetitive Litigation

Justice Prashant Kumar catalogued all seven proceedings initiated by the builder, contrasting them with the four rounds of proceedings Mrs. Gupta was forced to pursue — before RERA, in execution, in a writ petition, and in contempt — merely to secure enforcement of an order already passed in her favour. The Court observed that despite the matter having attained finality at various stages, the builder had continued to initiate repetitive proceedings, thereby delaying the enforcement of the respondent's lawful entitlement.

The Court quoted from Subrata Roy Sahara v. Union of India, (2014) 8 SCC 470, and Phool Chandra v. State of Uttar Pradesh, (2014) 13 SCC 112, for the principle that High Courts should curb frivolous litigation by imposing heavy costs, and that wrongdoers must be denied profit from such proceedings. It noted that the respondent — described as a lady who had invested her lifetime savings — had been harassed for thirteen years through no fault of her own and had been compelled to run from pillar to post even after securing favourable orders at every level.

Order

RERA Appeal No. 1 of 2023 was dismissed. All three substantial questions of law were answered against the appellant. Costs of Rs 2,50,000 (Rupees Two Lakh and Fifty Thousand) were imposed on M/s Aims Max Gardenia Developers Pvt. Ltd., payable to Mrs. Pratibha Gupta within four weeks of the order dated 31 July 2026.