Case at a Glance
A homebuyer paid a booking amount of Rs. 1,85,000 to the Lucknow Development Authority in January 2012 for a flat in a scheme estimated to take 24 months, but the completion certificate came only in February 2020. The U.P. Real Estate Appellate Tribunal ordered LDA to refund the booking amount after a 20% deduction, with interest at MCLR plus 1%. Dismissing LDA’s appeal, the Allahabad High Court held that the brochure clause LDA relied on was “ex-facie one sided, unfair and unreasonable,” that LDA never cancelled the allotment, and that retaining the buyer’s money amounted to unjust enrichment.
The respondent paid Rs. 1,85,000 as booking amount on 31 January 2012 for a flat in Sopan Enclave, Priyadarshini Yojana, Sitapur Road, Lucknow. LDA allotted Flat No. C-401 on 11 July 2014; the scheme was estimated at 24 months. On 4 August 2019 LDA asked the allottee to pay pending dues and take possession, and the completion certificate was issued on 17 February 2020. In the meantime, because the flat was not provided within a reasonable time, the allottee’s wife had bought another flat in Gomti Nagar Extension from a different allottee in 2014.
The allottee’s refund claim under the U.P. Real Estate (Regulation and Development) Act, 2016 was dismissed by the Regulatory Authority on 24 February 2020. On appeal, the U.P. Real Estate Appellate Tribunal on 12 August 2026 directed LDA to refund the booking amount after a 20% deduction, with interest at MCLR plus 1% until payment, within 45 days. LDA appealed to the High Court, relying on Clause 8.2 of its brochure, which provides for a 20% deduction on withdrawal after allotment and refund of the balance without interest.
The Key Question Before the Court
Can a development authority rely on a standard brochure clause to deny interest on a homebuyer’s booking amount, when it never cancelled the allotment and failed to complete the project within the promised time?
Standard-Form Clauses Cannot Defeat a Buyer’s Claim
Justice Saurabh Lavania found no error of law in the Tribunal’s order and hence no substantial question of law. The Court held that Clause 8.2 is “ex-facie one sided, unfair and unreasonable”, so LDA could not rely on it. It drew on Pioneer Urban Land & Infrastructure Ltd. v. Govindan Raghavan, (2019) 04 SC CK 0173, (2019) 5 SCC 725, Central Inland Water Transport Corporation Ltd. v. Brojo Nath Ganguly, (1986) 04 SC CK 0038, (1986) 3 SCC 156 and LIC of India v. Consumer Education & Research Centre, (1995) 5 SCC 482 on one-sided, dotted-line contracts and unequal bargaining power.
The Court noted that the project was not completed within the estimated 24 months, that LDA never cancelled the allotment, and that “80% of the booking amount i.e. Rs. 1,85,000/- was utilized by the Appellant-L.D.A.” Explaining that “Unjust enrichment occurs when a person retains money or benefits” belonging to another, it relied on Poornima Advani v. State (NCT of Delhi), (2025) 7 SCC 269, Mafatlal Industries Ltd. v. Union of India, (1996) 12 SC CK 0138, (1997) 5 SCC 536 and other authorities, along with compensation precedents such as Lucknow Development Authority v. M.K. Gupta, (1993) 11 SC CK 0040, (1994) 1 SCC 243, Ghaziabad Development Authority v. Balbir Singh, (2004) 03 SC CK 0111, (2004) 5 SCC 65 and Parsvnath Developers Ltd. v. Mohit Khirbat, (2026) 02 SC CK 1791, (2026) 5 SCC 535.
What the Court Actually Held
- No substantial question of law arose from the Appellate Tribunal’s order, which contained no error of law.
- Clause 8.2 of LDA’s brochure is ex-facie one-sided, unfair and unreasonable, and LDA cannot rely on it to deny interest.
- LDA did not complete the project within the estimated time, never cancelled the allotment, and used the buyer’s money; retaining it amounts to unjust enrichment.
- LDA’s appeal was dismissed, leaving the Tribunal’s refund order with interest at MCLR plus 1% intact.
Why This Judgment Matters
- Public development authorities are held to the same standards of fairness as private builders under RERA.
- Brochure clauses that allow the authority to keep the buyer’s money without interest are vulnerable as one-sided terms.
- Long delays in completion strengthen the buyer’s claim to refund with interest.
What Should Advocates Take Away From the Judgment?
For Homebuyers
- If a development authority delays your project far beyond the promised period, you can seek refund with interest under RERA.
- A brochure clause denying interest is not the last word; courts can strike down one-sided terms.
For Counsel
- Rely on Pioneer Urban Land v. Govindan Raghavan to challenge standard-form brochure terms.
- Note that RERA second appeals to the High Court lie only on a substantial question of law; frame findings of fact carefully at the Tribunal stage.
Key Takeaways
- LDA’s Clause 8.2 was held ex-facie one-sided and unreasonable.
- A buyer’s money retained without cancellation or delivery is unjust enrichment.
- Delay beyond the 24-month estimate weighed against the authority.
- The Tribunal’s refund with MCLR plus 1% interest stands.
Frequently Asked Questions
Can I get interest on my refund from a development authority under RERA?
In this case, yes. The Allahabad High Court upheld the Appellate Tribunal’s order directing LDA to refund the booking amount, after a 20% deduction, with interest at MCLR plus 1%.
What is wrong with brochure clauses that deny interest?
The Court held LDA’s Clause 8.2 to be ex-facie one-sided, unfair and unreasonable, following Supreme Court decisions on standard-form contracts with unequal bargaining power.
Why did the High Court not interfere?
A RERA appeal to the High Court requires a substantial question of law. The Court found no error of law in the Tribunal’s order and dismissed LDA’s appeal.
Conclusion
The ruling sends a clear message to public housing bodies: a delayed project and an uncancelled allotment do not entitle the authority to keep a homebuyer’s money interest-free on the strength of its own printed terms.
Practical takeaway: Homebuyers stuck in delayed government housing schemes should pursue refund with interest under RERA and challenge one-sided brochure clauses as unfair terms.
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