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by Admin
19 December 2025 4:21 PM
"Deemed Occupancy Cannot Be Claimed Without Due Diligence—No OCC, No Exemption from RERA" — Delhi High Court delivered a firm and precedent-strengthening verdict, rejecting the plea of CJ Infrastructure Pvt Ltd, a prominent real estate promoter, against the dismissal of its appeals by the Real Estate Appellate Tribunal (REAT). The Tribunal had thrown out the appeals due to non-compliance with the mandatory pre-deposit clause under Section 43(5) of the Real Estate (Regulation and Development) Act, 2016. The High Court upheld the Tribunal’s interpretation, declaring that the right to appeal is conditional, and not an absolute entitlement.
The Division Bench comprising Justice Anil Kshetrapal and Justice Harish Vaidyanathan Shankar held that neither the plea of "deemed Occupancy Certificate (OCC)" nor the offer to furnish immovable property as a substitute for pre-deposit could override the legislative command. “This clearly shuts out even the presentation or physical filing of an appeal,” the Court underscored, reaffirming the constitutional validity and binding effect of the pre-deposit requirement.
The dispute arose from CJ Infrastructure’s commercial real estate project, “Metroplex East”, constructed at District Centre, Laxmi Nagar. The promoter claimed to have completed construction in 2013 and to have applied for an OCC. It was argued that due to non-response from Delhi Development Authority (DDA), the OCC stood “deemed approved”, insulating the project from RERA’s ambit, since the Act only applies to incomplete or ongoing projects after its enforcement in May 2017.
Multiple purchasers later filed complaints before RERA Authorities citing lack of a valid OCC. The Adjudicating Officer passed orders directing compensation and reliefs against the builder. Challenging those orders, the promoter approached REAT but failed to comply with Section 43(5) RERA, which mandates a minimum 30% deposit of adjudicated dues before appeal is entertained.
CJ Infrastructure’s appeals were dismissed by REAT on 27.03.2024, prompting the company to invoke the writ jurisdiction of the High Court, arguing that the OCC was deemed granted and that the pre-deposit was onerous, seeking acceptance of property title deeds as security instead of depositing funds.
The Delhi High Court dealt with three critical legal questions: First, whether the project could be excluded from the scope of RERA due to a “deemed OCC” under the erstwhile 1983 Building Bye-Laws.
Second, whether Section 43(5) of the RERA Act mandates a pre-deposit of monetary compensation as a condition precedent for entertaining an appeal.
Third, whether the offer to deposit immovable property in lieu of monetary pre-deposit could be considered a valid substitute.
On the first question, the Court found that the claim of deemed OCC lacked both factual and legal credibility. The developer’s reliance on applications dated February 2013 stood discredited due to multiple inconsistencies.
The Court observed: "To claim that the OCC was deemed granted, the Appellants should have done due diligence on their part. However, the conduct of the Appellants lacks in this regard."
Referring to the Fire Safety Certificate dated 30.10.2013—a post-facto document—and a fee receipt dated April 2017, the Court noted that these documents undermined the developer’s core argument. DDA had, in fact, rejected the OCC application on 08.09.2021, and the developer had failed to rectify the shortcomings despite repeated notices.
The Bench was clear: "In light of the rejection of the OCC, whether the OCC was deemed granted or not holds no value… at the time of the filing of the Appeal before the REAT, no OCC exists with the Appellants, therefore the RERA Act will be applicable."
On the second issue, the Court emphatically endorsed the legislative intent behind Section 43(5). The clause, the Bench said, is not merely procedural but a jurisdictional bar that conditions the very filing and hearing of an appeal.
"The words 'it shall not be entertained' occurring in the proviso to sub-section (5) of Section 43 is a preliminary injunction. This prevents even the presentation of an appeal."
The Court invoked the Supreme Court’s authoritative ruling in Newtech Promoters and Developers Pvt Ltd. v. State of Uttar Pradesh, (2021) 18 SCC 127, reiterating that the pre-deposit is constitutionally valid, not burdensome, and reflects a policy of protecting vulnerable allottees against financially stronger promoters.
Citing Para 136 of Newtech Promoters, the Court held:
"If legislature in its wisdom intended to ensure that money once determined by the Authority be saved if appeal is to be preferred at the instance of the promoter… it can in no circumstance be said to be onerous."
On the third issue, the Bench was unambiguous that substituting immovable property in lieu of deposit was legally impermissible.
"There is no provision in the RERA Act which may enable the Appellants to furnish the security of immovable property in lieu of pre-deposit."
The Tribunal, therefore, acted within its jurisdiction in refusing to accept land in place of liquid compensation, and the developer had no right to bypass the mandatory statutory obligation.
The High Court concluded with a strong reiteration of the legal position:
"The condition for pre-deposit has to be complied with by the Appellants for the Appeals to be heard and decided by the REAT."
The appeals were dismissed, and the petitioners were granted a narrow window of 30 days to seek revival of their appeals before REAT provided they fulfill the statutory pre-deposit condition.
In summation, this judgment is a decisive reaffirmation that regulatory compliance under RERA cannot be diluted by contractual presumptions or procedural shortcuts. The Delhi High Court has sent a clear message: promoters must come with clean hands, and with their statutory dues in hand, if they wish to contest RERA orders.
Date of Decision: 29 August 2025
