RERA remand orders warrant interference under Section 58 only upon a substantial question of law.

The appellant-developer was constructing the registered group housing project “Lav Kush Apartment.” The respondent-allottee booked Flat No. 602 on 8 September 2014, and an allotment letter was issued on 18 September 2014.

Against the total sale consideration of ₹1,15,97,000, the respondent paid ₹72,30,000 but allegedly failed to pay the balance despite repeated demands. The appellant cancelled the allotment on 26 October 2019. However, in its subsequent reply dated 5 December 2019, the appellant called upon the respondent to pay the balance consideration and execute the sale deed.

The Regulatory Authority directed the appellant to refund ₹72,30,000, without awarding interest, by order dated 26 November 2020; the amount was refunded on 8 January 2021.

The respondent appealed before the Uttar Pradesh Real Estate Appellate Tribunal seeking interest under Section 18 of the Real Estate (Regulation and Development) Act, 2016. The Tribunal set aside the Regulatory Authority’s order and remanded the complaint for determination of the legality and validity of the cancellation dated 26 October 2019 under Section 11(5) of the Act.

The developer challenged the remand order before the High Court under Section 58 of the Act.

Whether the appeal under Section 58 of the Act was maintainable in the absence of a substantial question of law under Section 100 of the Code of Civil Procedure, 1908.

Whether the Tribunal exceeded the pleadings and the relief sought by remanding the matter for determination of the legality and validity of the cancellation dated 26 October 2019.

Whether the Tribunal was justified in remanding the complaint to determine the effect of the cancellation and the appellant’s subsequent offer to permit payment of the balance consideration and execution of the sale deed.

Whether the appellant’s grounds concerning limitation, alleged prejudice arising from subsequent transfer of the unit, and the alleged delay in filing the respondent’s appeal raised a substantial question of law warranting interference.

Section 58 of the Real Estate (Regulation and Development) Act, 2016 permits an appeal to the High Court only on one or more grounds specified in Section 100 CPC; therefore, the existence of a substantial question of law is essential, and Section 58(2) bars an appeal from an order made with the consent of the parties.

Under Sir Chunilal Mehta & Sons Ltd. v. Century Spinning & Manufacturing Co. Ltd. , a substantial question of law must be substantial, debatable, and materially affect the parties’ rights; a settled legal principle applied to the facts ordinarily does not qualify.

Hero Vinoth v. Seshammal similarly holds that the question must be real, important, and open to debate, rather than technical or merely factual.

Order XLI Rule 23 CPC, as amended in Uttar Pradesh, permits remand where the appellate court considers it necessary in the interest of justice; appellate courts also possess power to remand where a complete and proper adjudication requires it.

Section 11(5) of the Act permits an allottee to challenge a unilateral, unjustified, or contractually impermissible cancellation, while Section 18 governs the allottee’s entitlement to refund, interest, or compensation in cases covered by the statute.

The High Court held that the legality of the cancellation was not an extraneous issue but went to the root of the respondent’s claim for interest under Section 18.

The Regulatory Authority had ordered refund without deciding whether the cancellation dated 26 October 2019 was valid, final, or affected by the appellant’s subsequent communication dated 5 December 2019 offering the respondent an opportunity to pay the balance and execute the sale deed.

Since the respondent had questioned the cancellation in the proceedings and Section 11(5) expressly contemplated such a challenge, the Tribunal did not travel beyond the pleadings by directing adjudication of that issue.

The remand did not finally determine the parties’ rights and caused no irreversible prejudice because the appellant remained free to raise all available objections before the Regulatory Authority.

The questions raised regarding limitation, alleged prejudice, and the merits of cancellation either remained factual or were matters for determination after remand; they did not constitute substantial questions of law under Section 58.

The Regulatory Authority was directed to decide the matter on merits after affording both parties an opportunity of hearing.

The High Court declined to adjudicate the parties’ other contentions, including limitation and the ultimate effect of the appellant’s subsequent communication, leaving those issues open for consideration upon remand.

No order as to costs was made.