Allahabad High Court Imposes ₹2.5 Lakh Costs on Builder for Frivolous Litigation
The Allahabad High Court has imposed exemplary costs of ₹2.5 lakh on a real estate developer for forcing a homebuyer to endure more than thirteen years of delay and repeated rounds of litigation despite clear regulatory orders in her favour.
Justice Prashant Kumar observed that the builder had engaged in frivolous and vexatious proceedings with the apparent objective of delaying compliance with its statutory obligations under the Real Estate (Regulation and Development) Act, 2016 (RERA). The Court noted that such conduct undermines the very purpose of the legislation, which was enacted to ensure transparency, accountability, and speedy redressal of grievances in the real estate sector.
The dispute arose from a builder-buyer agreement executed in April 2011 for a residential flat in the builder’s “Golf City” project in Uttar Pradesh. Under the agreement, possession was promised by June 2013. The homebuyer paid nearly the entire sale consideration amounting to approximately ₹35.9 lakh. However, possession of the flat was not delivered within the stipulated period.
After waiting for several years, the buyer approached the Real Estate Regulatory Authority (RERA), Gautam Budh Nagar. In July 2018, the Authority directed the builder to immediately hand over possession and pay interest on account of the delay. The builder failed to comply with the order, prompting execution proceedings and the issuance of a recovery certificate.
Instead of satisfying the regulatory directions, the builder challenged the orders before the Uttar Pradesh Real Estate Appellate Tribunal. The appeal was repeatedly dismissed for non-prosecution. Subsequent restoration applications were also rejected. The matter ultimately reached the High Court through further proceedings initiated by the builder.
Before the High Court, the builder argued that possession had already been handed over to the allottee and that the buyer had failed to disclose this fact before the regulatory authorities. The Court, however, found that no valid occupancy certificate had been obtained for the project. It reiterated that lawful possession cannot be considered complete in the absence of an occupancy certificate.
The Court further observed that the homebuyer had been compelled to engage in multiple legal battles merely to enforce orders already passed in her favour. Such conduct, the Court held, amounted to an abuse of the judicial process and caused significant hardship, financial loss, and mental distress to the allottee.
Emphasizing the need to deter misuse of legal remedies, the Court dismissed the builder’s challenge and imposed costs of ₹2.5 lakh, directing that the amount be paid to the homebuyer. The judgment reinforces the judiciary’s commitment to protecting homebuyers and discouraging litigants from using court proceedings as a tool for delaying statutory obligations.