The Supreme Court has held that a real estate promoter challenging a Real Estate Regulatory Authority (RERA) order directing payment of compensation to a homebuyer must deposit the entire awarded amount, including interest and compensation, before the appeal can be heard.
A Bench of Justices Prashant Kumar Mishra and Augustine George Masih clarified that the requirement under the proviso to Section 43(5) of the Real Estate (Regulation and Development) Act, 2016 is mandatory when the impugned order directs the promoter to pay compensation to an allottee. The appellate tribunal cannot grant an exemption from depositing the full amount in such cases.
The ruling came in an appeal filed by M/s Parthivi Construction Pvt Ltd & Ors v. Shri Bhuneshwar Prasad Verma & Anr., in which the promoter challenged the rejection of its request for exemption from the pre-deposit requirement.
Supreme Court Upholds Mandatory Pre-Deposit Requirement Under Section 43(5) of RERA
The Supreme Court reiterated that the proviso to Section 43(5) of the RERA Act prescribes a mandatory condition for a promoter seeking to appeal against a RERA order directing payment of compensation to a homebuyer.
The Court clarified that where the order under challenge directs payment of compensation, the promoter must deposit the total amount payable to the allottee, including interest and compensation, with the Real Estate Appellate Tribunal before its appeal can be entertained.
The Bench rejected the promoter’s contention that the tribunal had discretion to restrict the deposit to 30% of the awarded amount or another amount deemed appropriate.
The Court observed that the legal position had already been settled in its earlier judgment in Newtech Promoters and Developers Private Limited v. State of Uttar Pradesh (2021).
Background of the Dispute
The dispute arose from an order passed by the Chhattisgarh Real Estate Regulatory Authority, Raipur, on June 27, 2025, allowing a complaint filed by Bhuneshwar Prasad Verma against the promoter, M/s Parthivi Construction Pvt Ltd.
The RERA Authority directed the promoter to pay ₹1,06,79,900 to the homebuyer.
Aggrieved by the order, the promoter approached the Chhattisgarh Real Estate Appellate Tribunal under Section 44 of the RERA Act and sought exemption from depositing the full awarded amount, contending that it should be required to deposit only 30% of the amount.
However, on August 20, 2025, the appellate tribunal directed the promoter to deposit the entire amount.
As the promoter failed to comply with this direction, the tribunal dismissed its appeal on September 26, 2025.
The promoter subsequently challenged the tribunal’s decision before the Chhattisgarh High Court under Section 58 of the RERA Act. The High Court rejected its plea, following which the promoter approached the Supreme Court.
Promoter Relies on the Newtech Promoters Judgment
Before the Supreme Court, the promoter relied on the Court’s 2021 judgment in Newtech Promoters and Developers Private Limited v. State of Uttar Pradesh.
The promoter argued that the judgment did not make the deposit of the entire compensation amount mandatory in every case. According to its submission, the appellate tribunal had the discretion to direct the deposit of 30% of the awarded amount or a higher percentage, including the entire amount wherever appropriate.
It contended that the tribunal had failed to exercise this discretion and had instead directed the deposit of 100% of the awarded amount without granting the requested exemption.
The respondents opposed this interpretation, arguing that the Newtech Promoters judgment clearly established that a promoter challenging an order directing payment of compensation to a consumer must deposit the entire amount before its appeal can be heard.
Supreme Court Relies on Its 2021 Judgment in Newtech Promoters
The Bench held that the issue was no longer open for consideration because the Supreme Court had already interpreted the proviso to Section 43(5) of the RERA Act in Newtech Promoters and Developers Private Limited v. State of Uttar Pradesh.
The Court clarified that where a promoter challenges an order directing payment of compensation to an allottee, the promoter is required to deposit the total amount payable, including interest and compensation, with the appellate tribunal.
The Court did not accept the promoter’s argument that the appellate tribunal could grant an exemption from this mandatory requirement in the circumstances of the case.
Consumer Protection Is a Key Objective of the RERA Act
The Supreme Court also referred to the broader objectives of the Real Estate (Regulation and Development) Act, 2016.
These objectives include protecting homebuyers, improving accountability among promoters, reducing fraud and delays, ensuring transparency in contractual arrangements, balancing the interests of consumers and promoters, and establishing an effective mechanism for dispute resolution.
Emphasising the consumer-protection purpose of the legislation, the Bench observed:
“The basic object for the enactment of the Act, 2016, is the protection of the interests of the consumers and to ensure greater accountability and liability upon the promoter.”
The Court explained that requiring promoters to deposit the entire compensation and interest before pursuing an appeal supports these legislative objectives.
The requirement ensures that a promoter cannot avoid the statutory pre-deposit obligation when challenging an order directing payment of compensation to a homebuyer.
Supreme Court Dismisses the Appeal
In view of the legal position laid down in Newtech Promoters, the Supreme Court held that the appellate tribunal was justified in rejecting the promoter’s request for exemption from depositing the full awarded amount.
The Court accordingly dismissed the appeal filed by M/s Parthivi Construction Pvt Ltd and upheld the decision requiring compliance with the mandatory pre-deposit condition.
Key Takeaway for Real Estate Promoters and Homebuyers
The judgment reinforces the importance of complying with the statutory pre-deposit requirement under Section 43(5) of the RERA Act.
Where a RERA order directs a promoter to pay compensation to an allottee, the promoter cannot ordinarily seek to pursue the appeal by depositing only 30% of the awarded amount. The entire amount payable, including interest and compensation, must be deposited in accordance with the statutory requirement.
For homebuyers, the ruling strengthens the enforcement framework under RERA by confirming that promoters must comply with the prescribed financial condition before challenging compensation orders through the appellate process.
The ruling also highlights the Supreme Court’s continued emphasis on consumer protection, promoter accountability and effective enforcement of RERA orders.
Case Details
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Case Title: M/s Parthivi Construction Pvt Ltd & Ors v. Shri Bhuneshwar Prasad Verma & Anr.
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Court: Supreme Court of India
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Bench: Justice Prashant Kumar Mishra and Justice Augustine George Masih
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Date of Judgment: September 22, 2026
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Relevant Provision: Proviso to Section 43(5) of the Real Estate (Regulation and Development) Act, 2016
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RERA Authority Order: June 27, 2025
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Amount Awarded: ₹1,06,79,900
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Decision: Appeal dismissed
