Balaji Infracare Pvt. Ltd. v. Vikas Sharma
Allahabad High Court
RERA Appeal No. 160 of 2025
Decision: September 2026
Judge: Justice Syed Qamar Hasan Rizvi
The Allahabad High Court examined an important question concerning the scope of an appeal under Section 58 of the Real Estate (Regulation and Development) Act, 2016 (RERA). The Court held that such an appeal can be entertained only where a substantial question of law arises. An order of the RERA Appellate Tribunal remanding a matter to the Regulatory Authority, without finally deciding the parties' rights, ordinarily does not itself create such a question.
1. Background and facts
The respondent, Vikas Sharma, had booked Flat No. 602 in the registered group-housing project Lav Kush Apartment in 2014.
The total sale consideration was approximately ₹1.1597 crore, against which the allottee deposited approximately ₹72.30 lakh.
According to the developer, the allottee subsequently:
failed to clear the outstanding dues; and
failed to provide the requisite stamp papers for execution of the agreement.
The developer consequently cancelled the allotment on 26 October 2019.
The allottee approached the RERA Authority.
The Regulatory Authority directed the developer to refund the amount deposited by the allottee within 45 days, and the refund was subsequently made.
The allottee, however, was aggrieved by the Authority's refusal to grant interest on the deposited amount and appealed before the RERA Appellate Tribunal. (Live Law Biz)
2. What happened before the Appellate Tribunal?
Before the Tribunal, the issue was essentially whether the allottee could claim interest on the amount deposited despite cancellation of the allotment on account of alleged default.
However, instead of finally determining the entitlement to interest, the Tribunal passed an order dated 14 August 2025.
The Tribunal:
set aside the Regulatory Authority's order;
restored the complaint to its original number; and
directed the Authority to examine the legality and validity of the cancellation under Section 11(5) of RERA.
This remand order was challenged before the Allahabad High Court by the developer.
3. Developer's arguments before the High Court
The developer argued that the Tribunal had gone beyond the controversy before it.
According to the developer:
the original dispute before the Tribunal concerned interest;
the Tribunal should not have reopened the entire cancellation issue;
the allottee had not challenged the cancellation for almost six years;
limitation was attracted;
the flat had subsequently been transferred to another purchaser; and
the Tribunal had granted relief which, according to the developer, had not been properly sought.
The developer therefore sought interference by the High Court under Section 58 of RERA.
4. What does Section 58 of RERA provide?
This is the central legal issue.
Section 58 permits an aggrieved person to appeal from an order of the Real Estate Appellate Tribunal to the High Court.
However, the appeal is not equivalent to an unrestricted second appeal on facts.
Section 58 specifically connects the High Court's jurisdiction with the grounds specified in Section 100 of the Code of Civil Procedure, 1908.
Section 100 CPC permits a second appeal only where the case involves a substantial question of law.
Therefore, the statutory scheme is:
RERA Appellate Tribunal → High Court
⬇
Section 58 RERA
⬇
Section 100 CPC principles
⬇
Substantial Question of Law
The Court described the existence of a substantial question of law as the “sine qua non” for exercising jurisdiction under Section 58.
5. What is a “substantial question of law”?
The judgment makes an important distinction between:
Question of fact
A dispute concerning:
what happened;
whether payment was made;
whether a document was executed;
whether a party defaulted;
what the evidence establishes.
and
Substantial question of law
A significant legal question concerning the interpretation or application of law which satisfies the threshold under Section 100 CPC.
The Court made an important observation:
A disputed question of fact does not become a substantial question of law merely because the parties contest it strongly.
This is particularly relevant in RERA appeals because parties cannot ordinarily convert factual disagreements into Section 58 appeals merely by describing them as questions of law.
6. Why did the High Court examine the cancellation issue?
Interestingly, although the High Court ultimately dismissed the appeal, it examined whether the Tribunal's remand was legally justified.
The Court found that the question of cancellation was not completely extraneous to the original complaint.
The allottee had questioned the cancellation before the Authority and had alleged that it was:
unilateral; and
without sufficient cause.
The Court referred to the proviso to Section 11(5).
That provision gives an aggrieved allottee a remedy where cancellation by the promoter is:
not in accordance with the agreement for sale;
unilateral; or
without sufficient cause.
Therefore, according to the High Court, determining whether the cancellation was legally valid was necessary before deciding the consequential question of interest under Section 18.
7. An important fact concerning the developer's subsequent conduct
The Court also noticed an interesting aspect of the developer's conduct.
After issuing the cancellation letter, the developer sent a reply dated 5 December 2019 calling upon the allottee to:
deposit the balance consideration of approximately ₹43.67 lakh;
pay the applicable charges; and
execute the sale deed in his favour.
This correspondence created a live issue concerning the legal effect of the earlier cancellation.
The High Court did not decide whether this conduct amounted to:
waiver of cancellation;
revocation of cancellation; or
something else.
Instead, it left that issue for determination by the Regulatory Authority.
8. Was the remand order itself appealable?
The High Court ultimately held that there was no substantial question of law warranting interference.
The Court relied upon the general principle that appellate courts do not ordinarily interfere with a remand order, particularly where the remand:
does not finally determine the rights of the parties; and
does not cause grave injustice or prejudice.
Here, the Tribunal had essentially sent the matter back to the Regulatory Authority for proper examination of the cancellation issue.
The parties remained free to raise their respective arguments before the Authority.
9. Final decision
The Allahabad High Court:
dismissed the RERA appeal.
The Court held that none of the grounds raised by the developer constituted a substantial question of law within the meaning of Section 58 RERA read with Section 100 CPC.
The Court therefore declined to adjudicate the other substantive grounds raised in the appeal.
Importantly, the Court left the parties free to raise their available pleas before the Regulatory Authority.
10. Ratio Decidendi
The principal ratio can be stated as follows:
An appeal under Section 58 of RERA before the High Court is maintainable only when a substantial question of law arises. A mere disagreement with a remand order, particularly where the Appellate Tribunal has not finally determined the rights of the parties, does not ordinarily give rise to such a question.
The judgment therefore reinforces the limited appellate jurisdiction of the High Court under Section 58.
11. Important RERA provisions
Section 11(5) — Cancellation of allotment
This provision is important because it governs cancellation of allotment by the promoter.
An allottee can challenge cancellation where it is, among other things:
contrary to the Agreement for Sale;
unilateral; or
without sufficient cause.
Section 18 — Return/interest
Section 18 becomes relevant where the promoter fails to perform its obligations, including circumstances involving the allottee's entitlement to refund and interest.
In the present case, the question of interest could not be appropriately considered without first examining the legality of the cancellation.
Section 58 — Appeal to High Court
This was the principal provision before the High Court.
Its significance is that a Tribunal order cannot automatically be challenged before the High Court merely because one party is dissatisfied with it.
The appeal must involve a substantial question of law.
12. Practical implications for RERA litigation
For promoters
A promoter challenging an REAT order under Section 58 should clearly formulate the substantial question of law.
Simply arguing that the Tribunal:
reached the wrong factual conclusion;
should have appreciated evidence differently; or
should have adopted a different factual interpretation
may not be sufficient.
For homebuyers
The decision also demonstrates that a remand is not necessarily adverse to the allottee or promoter.
If the Tribunal sends the matter back so that an important statutory question—such as the validity of cancellation—can be properly decided, the parties ordinarily get an opportunity to establish their respective cases before the Authority.
For RERA practitioners
The judgment reinforces the need to distinguish between:
Question of fact → ordinarily insufficient for Section 58 appeal
Question of law → potentially relevant
Substantial question of law → statutory threshold for Section 58 appeal
