Aadrikaa Legal Services (ALS)- Law I Litigation I Arbitration
Date: 14.11.2026
RERA Orders Affecting Mortgaged Plots: Andhra Pradesh High Court Directs Contractor to Appellate Tribunal
This Short Article has been prepared & written by Advocate Narendra Singh. The views expressed are based on his interpretation of the law. He can be reached at his mob no- +91 8800860662 and email id amitnaren@outlook.com .
The Andhra Pradesh High Court has directed a development contractor to pursue the statutory appellate remedy under the Real Estate (Regulation and Development) Act, 2016, while ordering status quo over the disputed mortgaged plots for 10 days.
Dispute concerns an unfinished residential layout
The matter arose from a residential layout project in NTR district spread across about 84.29 acres and comprising 828 plots. The project was undertaken by a cooperative housing society after obtaining layout approval from the competent planning authority in July 2020.
The society initially engaged a development agency, which in turn appointed a contractor for execution of infrastructure works. The contractor was subsequently recognised by the society and, in October 2024, entered into a direct agreement with it to complete the remaining works for a contractual value of Rs.9 crore.
According to the court record, the contractor carried out substantial infrastructure work but alleged that Rs.2.15 crore remained unpaid. This resulted in civil and commercial proceedings concerning payment claims and possession-related issues.
Commercial court decree and settlement arrangement
During the dispute, the contractor instituted a commercial suit seeking recovery of Rs.9.12 crore. In June 2026, the Commercial Court partly decreed the claim for Rs.8.48 crore, with 9% annual interest on the principal amount of Rs.8.10 crore from the filing of the suit until full realisation.
Meanwhile, the contractor and the cooperative society entered into a memorandum of understanding in May 2026. Under that arrangement, the society agreed to register 23 identified residential plots, measuring about 6,137.29 square yards in total, toward settlement of the Rs.9 crore contractual consideration.
However, those plots formed part of a larger set of properties mortgaged to the planning authority under a registered mortgage deed. Their release therefore depended on regulatory and planning approvals.
Plot holdersβ complaints triggered RERA proceedings
The real estate regulatory authority had separately received complaints from members and plot holders about incomplete development works. In March 2026, it directed the cooperative society to finish the pending infrastructure within three months.
The required work included roads, drainage, water supply, electricity infrastructure and other amenities promised under the approved layout plan. The authority also required the society to ensure that plot holders could effectively enjoy their plots along with the promised facilities.
The regulator then initiated suo motu proceedings under Sections 8 and 35 of the RERA Act. In July 2026, it proposed alternative arrangements for completing the remaining development work and directed the society not to create third-party rights or alienate unsold plots without prior permission.
Regulatory order halted release of mortgaged plots
In September 2026, the regulatory authority issued a further order under Section 36 of the RERA Act. It directed the planning authority not to release, hand over, de-mortgage or otherwise permit the release of plots then under mortgage until further orders.
Following that direction, the planning authority informed the cooperative society that requests for final layout approval, LDCC and release or de-mortgaging of 106 plots could not be considered until further directions were issued by the real estate regulator.
The contractor challenged the July and September 2026 proceedings before the High Court. It contended that the orders affected the settlement involving the 23 plots and were passed without considering its written objections or giving it an opportunity to be heard.
High Court relies on statutory appellate remedy
The High Court did not examine the merits of the contractorβs objections to the regulatory orders. It noted that the contractorβs role was that of a sub-contractor in relation to the cooperative society and held that an aggrieved person could seek relief before the Real Estate Appellate Tribunal under Section 43(5) of the RERA Act.
Section 43(5) permits a person aggrieved by a direction, decision or order of the regulatory authority or an adjudicating officer to file an appeal before the jurisdictional appellate tribunal.
Accepting the request made during the hearing, the Court disposed of the writ petition and granted the contractor 10 days from 12 November 2026 to file an appeal before the Real Estate Appellate Tribunal.
Status quo ordered for limited period
To preserve the position while the appellate remedy is pursued, the Court directed all concerned respondents to maintain status quo regarding the proceedings connected with the subject property during the 10-day period.
The decision does not determine whether the 23 plots should be released, whether the proposed settlement should be implemented, or whether the regulatory directions were legally justified on their merits. Those issues may be considered by the Real Estate Appellate Tribunal if an appeal is filed. The order underscores that disputes arising from directions of a real estate regulatory authority are generally expected to follow the specialised appellate mechanism created under the RERA Act, rather than being decided directly in writ proceedings.
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Source: Andhra Pradesh High Court
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