Meenu Purohit v. Govind Kripa Infratech Pvt. Ltd. & Ors.
Rajasthan Real Estate Regulatory Authority (Rajasthan RERA)
Case No.: RAJ-RERA-C-N-2025-7847 and 19 connected complaints
Project: GKB's GRACE, Jaipur
Authority: Member Sudhir Kumar Sharma
This is a significant Rajasthan RERA decision on whether a former shareholder/director of a promoter company can subsequently qualify as an “allottee” under Section 2(d) of RERA, particularly where flats are allotted to him as part of an exit/settlement arrangement. The Authority held that he was an allottee, and not merely an investor, and granted substantial relief against cancellation of his 20 flats.
1. Background and facts
Meenu Purohit, an NRI, had initially acquired a 10% equity stake in Govind Kripa Infratech Pvt. Ltd. under a shareholders' agreement dated 28 September 2015. He was also associated with the company as a shareholder and director.
The project involved was “GKB's GRACE” in Jaipur.
The project remained incomplete, and the parties subsequently agreed that Purohit would exit the business relationship. On 20 February 2019, an MoU was executed under which he agreed to relinquish his shareholding and directorship in favour of Subhash Agarwal and Surekha Agarwal.
The company was reportedly unable to repay Purohit's investment of approximately ₹3.18 crore, including interest. Instead, the parties agreed that flats would be allotted to him in his individual capacity as a buyer.
2. Allotment of 20 flats
Following the exit arrangement, the company allotted 20 flats to Purohit.
Separate Agreements to Sell were executed between March and May 2019.
This subsequent documentation became crucial to the case.
Purohit's argument was essentially:
His earlier relationship with the company as shareholder/director had ended, and the subsequent Agreements to Sell created a new and independent promoter–allottee relationship.
The promoter, on the other hand, argued that the flats formed part of a commercial exit arrangement connected with his earlier investment and therefore he should be treated as an investor, rather than an allottee under RERA.
3. Subsequent events
The company executed an indemnity-cum-undertaking dated 31 July 2021 concerning the flats.
It subsequently offered possession on 1 July 2023 and issued reminders concerning alleged outstanding payments.
The dispute escalated when the company issued cancellation letters dated 29 August 2024, cancelling all 20 allotments on the ground of alleged non-payment.
Purohit challenged the cancellation before Rajasthan RERA.
4. Central legal issue
The principal question was:
Whether a former shareholder/director of a promoter company, who subsequently receives flats in his individual capacity under Agreements to Sell after exiting the company, qualifies as an “allottee” under Section 2(d) of RERA?
Rajasthan RERA answered: Yes.
The Authority held that the subsequent transactions established a distinct legal relationship between Purohit and the promoter.
5. Section 2(d) — Who is an “allottee”?
Section 2(d) of RERA defines an “allottee” broadly as a person to whom a plot, apartment or building has been allotted, sold or otherwise transferred by the promoter.
The Authority focused on the legal relationship existing at the time of the disputed transaction, rather than simply relying upon Purohit's historical association with the company.
Thus, the important sequence was:
Former shareholder/director
↓
Exit from company/project
↓
MoU dated 20 February 2019
↓
20 flats allotted in individual capacity
↓
Separate Agreements to Sell
↓
Promoter–allottee relationship
This distinction was central to the decision.
6. Why the Authority rejected the “investor” argument
Govind Kripa argued that Purohit was essentially an investor because the flats were provided as part of an arrangement to settle his investment.
The Authority rejected this characterisation.
It found that the subsequent Agreements to Sell demonstrated an independent transaction concerning identified flats.
The fact that Purohit received 20 units did not, by itself, transform him into an investor.
The Authority specifically held that:
The purchase of 20 units by itself does not make the complainant an investor; he remained an allottee within Section 2(d). (
Important principle
The number of units purchased is not the decisive test.
The relevant question is:
What is the legal nature of the transaction between the person and the promoter?
7. Purohit's status at the relevant time
The Authority also noted that Purohit was not among the four promoters/directors disclosed when the project was registered in 2017.
This supported his argument that, by the time the disputed flat transactions were executed, he was no longer acting in the capacity of promoter/director.
The Authority therefore treated the 2019 Agreements to Sell as creating a subsequent legal relationship between:
Govind Kripa Infratech → Promoter
and
Meenu Purohit → Allottee.
8. The payment default issue
The promoter had cancelled the 20 allotments on the allegation that Purohit had failed to make the required payments.
The Authority examined the actual payment position.
For 18 flats, Purohit had paid between approximately 94.77% and 97.76% of the basic sale consideration.
For the remaining two flats, the payments were approximately:
100.24%, and
100.70%
of the basic sale consideration.
Thus, in relation to most of the flats, the alleged outstanding amount represented only a relatively small portion of the basic consideration.
9. Failure to establish service of payment reminders
The promoter produced payment reminders alleging outstanding dues.
However, the Authority noted that the promoter did not produce proof that those reminders had actually been received by Purohit.
This weakened the promoter's case that the cancellation was justified on the basis of a continuing payment default.
This is an important evidentiary point:
Sending a demand letter
is not necessarily the same as
proving its service/receipt.
10. Cancellation of all 20 flats
The Authority found that the outstanding amounts, generally in the range of 2%–5%, did not justify cancellation of all 20 allotments in the circumstances of the case.
The Authority therefore quashed and set aside the cancellation letters dated 29 August 2024.
This restored Purohit's entitlement under the allotments, subject to payment of legitimate outstanding amounts.
11. The “win-win” observation
The Authority made a particularly important observation concerning the consequences of the promoter's position.
The promoter's position effectively meant that:
Purohit could not cancel the allotments and seek refund; while
the promoter could cancel the flats and retain the money already paid.
The Authority considered such an outcome impermissible.
It observed that this would effectively create a “win-win” situation for the promoter, leaving the purchaser with neither possession nor refund.
The Authority held that the promoter could not evade both of its statutory obligations under RERA—namely, providing possession or providing the appropriate refund/relief where legally warranted.
12. Delay in possession
The case also involved a substantial delay in handing over possession.
The Authority determined that the extended possession due date was 30 June 2022.
The Occupancy Certificate, however, was obtained only on 11 June 2024.
Accordingly, Purohit was held entitled to interest for the period:
1 July 2022 to 11 June 2024
on the amount deposited with the promoter.
13. Rate of interest
Rajasthan RERA awarded interest at:
10.80% per annum
on the amount deposited for the delay period.
The interest was directed to be adjusted against any balance consideration payable by Purohit, with any remaining amount payable to him.
This is important because the Authority did not merely restore the allotments; it also recognised the consequences of the delayed possession.
14. Additional charges — area and amenities
The Authority also dealt with the promoter's claim for additional amounts arising from changes in:
carpet area;
built-up area;
saleable super built-up area;
amenities; and
common-area facilities.
The Authority held that Purohit was not liable for additional charges covered by the July 2021 undertaking relating to such changes.
This provides another layer of contractual protection to the allottee.
15. Final directions
Rajasthan RERA ultimately:
Quashed the cancellation letters dated 29 August 2024 concerning all 20 flats.
Directed the promoter to execute sale deeds in favour of Purohit, subject to payment of legitimate balance charges.
Awarded 10.80% annual interest for the delay period from 1 July 2022 to 11 June 2024.
Directed adjustment of the interest against outstanding consideration, with any balance payable to Purohit.
Held that the promoter could not demand additional amounts arising from changes in area, amenities or common-area facilities covered by the relevant undertaking.
Directed compliance within 45 days of uploading the order on the Authority's website.
16. Ratio Decidendi
The principal ratio can be stated as:
A former shareholder or director of a promoter company can subsequently qualify as an “allottee” under Section 2(d) of RERA where, after exiting the company, the promoter independently allots apartments to that person in his individual capacity under Agreements to Sell. The person's previous association with the promoter does not by itself deprive him of allottee status.
A second important principle is:
The mere fact that a purchaser receives multiple units as part of a settlement does not automatically make the purchaser an “investor” rather than an allottee. The substance and legal documentation of the subsequent transaction are determinative.
17. Important RERA provisions
Section 2(d) — Allottee
This was the central provision.
The decision expands upon the practical application of the definition where the purchaser has a previous commercial relationship with the promoter.
Section 31 — Filing of complaint
Once Purohit was found to be an allottee, he could invoke the RERA complaint mechanism as an aggrieved person.
Section 18 — Delay in possession
The Authority relied upon the statutory framework concerning the allottee's entitlement arising from delayed possession and awarded 10.80% interest for the relevant delay period.
18. Why this decision is important
This decision is particularly relevant to cases involving:
former directors;
former shareholders;
investors exiting real-estate projects;
settlement of investment obligations through allotment of flats;
multiple-unit purchasers;
developer-investor disputes;
cancellation of allotments;
delayed possession; and
disputes over whether a purchaser is an “investor” or “allottee.”
The key test is not:
“How many flats did the person receive?”
Nor is it simply:
“Was the person previously connected with the promoter?”
The more relevant inquiry is:
“What was the legal relationship between the parties when the flats were subsequently allotted?”
19. Practical legal takeaway
For a person who was formerly associated with a developer but subsequently received flats under individual Agreements to Sell, the documentation establishing the transition is extremely important.
In this case, the Authority placed substantial significance on:
MoU dated 20.02.2019
→ exit from shareholding/directorship
Agreements to Sell, March–May 2019
→ individual allotment of 20 flats
Indemnity-cum-undertaking dated 31.07.2021
→ subsequent acknowledgment concerning the flats
These documents collectively established the allottee–promoter relationship.
One-line takeaway
Meenu Purohit v. Govind Kripa Infratech Pvt. Ltd. & Ors. establishes that a former shareholder/director who subsequently receives flats in his individual capacity under Agreements to Sell can invoke RERA as an “allottee”; the earlier investment relationship does not automatically convert the subsequent homebuyer relationship into an investor relationship.
