Case at a Glance
A residents’ welfare association obtained a Haryana RERA order directing the promoter to transfer ₹10 crore of Interest Free Maintenance Security (IFMS) to it. The Appellate Tribunal dismissed the promoter’s appeal because it had not made the pre-deposit required by the proviso to Section 43(5) of the Real Estate (Regulation and Development) Act, 2016. The High Court held that the proviso requires 100% pre-deposit of the amount payable to an “allottee”, and that under the plain words of Section 2(d) the “expression ‘allottee’ does not include residents’ welfare association/association of allottees.” It set aside the Tribunal’s order and sent the appeal back to be heard on merits, preferably within three months.
On 6 December 2018, Savana Welfare Association, claiming to be the residents’ welfare association of the promoter’s project, filed a complaint before the Haryana Real Estate Regulatory Authority seeking transfer of the IFMS collected by the promoter. The promoter questioned maintainability; in an earlier round, it withdrew an appeal with liberty to raise that objection before the Authority. On 13 July 2022, without framing a preliminary issue on maintainability, the Authority allowed the complaint and directed the promoter to refund IFMS of ₹10 crore to the Association.
The promoter appealed, but on 7 August 2026 the Real Estate Appellate Tribunal dismissed the appeal as not maintainable for non-compliance with the pre-deposit condition in the proviso to Section 43(5). The promoter then appealed to the High Court under Section 58, arguing that the proviso speaks of amounts payable to an “allottee”, not to an association. The Association replied that under Section 13(2) of the General Clauses Act, 1897 the singular includes the plural, that an association is a group of allottees, and that excluding associations would defeat the purpose of the provision.
The Key Question Before the Court
Does the proviso to Section 43(5) of RERA, which requires a promoter to pre-deposit the full amount payable to an “allottee” before its appeal is heard, apply when the amount is payable to a residents’ welfare association?
Plain words of the statute decide
The Court noted that Section 43(5) creates a statutory right of appeal for “any person” aggrieved, and that a statutory right of appeal can be made conditional, as the proviso does through pre-deposit. The Explanation to Section 43(5) treats an association of allottees as a “person”, but the proviso specifically uses the word “allottee”. Section 2(d) defines an allottee by reference to the person to whom a unit has been allotted, sold or transferred, and Section 11(4)(e) separately obliges the promoter to enable the formation of an association of allottees — showing that the Act treats associations as distinct from allottees. Hence the “expression ‘allottee’ does not include residents’ welfare association/association of allottees.”
Applying the plain-meaning rule, the Court said that “where plain language is clear, neither intention of the legislature is required to be seen nor Courts can add or subtract any word”, unless a plain reading is unworkable, which it was not. The proviso “does not provide that pre-deposit would be made where payment has to be made to association of allottees.” The Association’s argument that the IFMS is in substance the allottees’ money was left open for the main appeal, since it did not bear on the pre-deposit question.
What the Court Actually Held
- The proviso to Section 43(5) of RERA requires pre-deposit of the amount payable to an “allottee”; it does not extend to amounts payable to a residents’ welfare association or association of allottees.
- Under Section 2(d) read with Section 11(4)(e), an association of allottees is distinct from an “allottee”, even though the Explanation to Section 43(5) treats it as a “person”.
- Courts cannot add words to a clear statutory provision; the plain reading here is not unworkable.
- The Appellate Tribunal’s order of 7 August 2026 set aside; the appeal to be decided on merits, preferably within three months, with no adjournment sought by the promoter; parties to appear on 2 December 2026.
Why This Judgment Matters
- IFMS and maintenance-fund disputes between builders and RWAs are common in Haryana; this ruling changes how such appeals proceed.
- It narrows the reach of RERA’s pre-deposit rule, which normally ensures builders cannot delay refunds to homebuyers through appeals.
- It leaves open the merits — whether the IFMS must go to the RWA — for the Tribunal to decide quickly.
What Should Advocates Take Away From the Judgment?
For Homebuyers and RWAs
- An RWA can pursue IFMS and similar claims before RERA, but a builder’s appeal against such an order may not be conditioned on full pre-deposit.
- Press for early hearing — the High Court asked the Tribunal to decide within three months without adjournments by the builder.
For Counsel
- Distinguish between “person” (Explanation to Section 43(5)) and “allottee” (Section 2(d)) when computing pre-deposit.
- Argue the ‘allottees’ money’ point on merits, as the Court left it open.
Key Takeaways
- An RWA is not an ‘allottee’ under Section 2(d) RERA.
- 100% pre-deposit applies to amounts payable to allottees, not associations.
- Tribunal order dismissing appeal set aside.
- Appeal to be decided on merits within about three months.
Frequently Asked Questions
What is the pre-deposit rule in RERA appeals?
Under the proviso to Section 43(5), a promoter must pre-deposit a specified part of the penalty, or the total amount payable to the allottee, before its appeal is heard by the Appellate Tribunal.
Is a residents’ welfare association an ‘allottee’?
Not for this purpose, the High Court held. An association is a ‘person’ under the Explanation, but the definition of allottee in Section 2(d) does not include it.
Does the RWA lose the ₹10 crore IFMS?
No decision was given on that. The Court only held that pre-deposit was not required and sent the appeal back for decision on merits.
Conclusion
By reading the RERA proviso strictly, the High Court has opened the appellate door for the builder without a pre-deposit, while asking the Tribunal to decide the real dispute over the ₹10 crore IFMS swiftly.
Practical takeaway: When a RERA order is in favour of an association rather than individual allottees, the 100% pre-deposit condition does not apply to the promoter’s appeal — plan for a merits fight instead.
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