Co-operative Society Without Land or Layout for Real Estate Project Not a Promoter Under RERA: Karnataka REAT
Case Title: V. Suresh Kumar v. BSNL Employee Welfare House Building Co-operative Society Ltd. & Anr.
Case No.: Appeal No. (K-REAT) 3/2026
The Karnataka Real Estate Appellate Tribunal (Karnataka REAT) has held that a housing co-operative society that had neither acquired land for development nor undertaken any real estate project could not be treated as a “Promoter” under the Real Estate (Regulation and Development) Act, 2016 (RERA Act).
The Tribunal consequently held that a complaint seeking relief under RERA was not maintainable before the Karnataka Real Estate Regulatory Authority, as the complainant could not be treated as an “Allottee” and the society did not fall within the statutory definition of a “Promoter.”
A Bench comprising Chairperson Justice J.M. Khazi and Judicial Member Santhosh Kumar Shetty N. dismissed an appeal filed against the BSNL Employee Welfare House Building Co-operative Society Ltd. and upheld the order of Karnataka RERA dismissing the complaint.
No Land Acquired, No Real Estate Project
The Tribunal observed:
“Undisputedly, the Respondent No.1/Co-operative Society has not acquired any land for development and consequently it does not fall into the definition of Promoter and there is no project in existence let alone Complainant could be called as an Allottee.”
The appellant had worked with BSNL for more than 18 years and had become a member of the society, which was formed by BSNL employees with the objective of providing houses or residential plots to its members at relatively lower rates.
According to the appellant, the society represented that sites were available at Madhavanagara and accepted payments towards the proposed BSNL Madhavanagara Project Phase-II, situated off Nelamangala Road.
The appellant paid an aggregate amount of ₹7,66,800 in 2013 and 2014 towards the proposed purchase of a site. However, the site was not delivered or registered in his favour. Despite repeated follow-ups seeking a refund, the amount was allegedly neither refunded nor was the promised site registered.
Society Contended RERA Had No Jurisdiction
Before Karnataka RERA, the society contended that the complaint was not maintainable under the RERA Act.
It submitted that the alleged project was not registered with the Authority and that the receipts issued to the appellant did not constitute allotment letters. According to the society, the amounts were not collected towards any identified or specific plot and no Agreement for Sale had been executed between the parties.
The society further maintained that it had not acquired any land for development. Consequently, there was no real estate project within the meaning of the RERA Act and the society could not be regarded as a Promoter.
It also disputed the appellant's status as an Allottee, contending that no plot or apartment had been allotted or transferred to him.
Karnataka RERA accepted these submissions and dismissed the complaint.
Sections 2(d), 2(zk) and 2(zn) of RERA Examined
Challenging the RERA order, the appellant contended before the Tribunal that the Authority had failed to properly appreciate the evidence and relevant provisions of the Act.
He also argued that since the project remained incomplete, he was entitled to relief under Section 18 of the RERA Act.
The Tribunal examined the statutory framework governing the relationship between a Promoter and an Allottee.
Section 18 provides remedies to an Allottee where a Promoter fails to complete a project or give possession in accordance with the Agreement for Sale. Where an Allottee wishes to withdraw from the project, the provision contemplates refund of the amount paid, together with interest and compensation in accordance with the Act.
The Tribunal noted that:
Section 2(zn) defines a “Real Estate Project” to include development of land into plots or apartments;
Section 2(zk) defines a “Promoter” to include a person who develops land into plots or apartments; and
Section 2(d) defines an “Allottee” as a person to whom a plot, apartment or building has been allotted, sold or otherwise transferred by the Promoter.
Applying these provisions, the Tribunal found that the society had not acquired any land for development and no real estate project was in existence.
Consequently, the society could not be treated as a Promoter and the appellant could not be regarded as an Allottee under the Act.
Membership and Collection of Money Not Sufficient
The Tribunal noted that the society had enrolled members and collected various amounts towards the proposed purchase of sites, which were to be allotted if and when the society developed the requisite project or layout.
However, the mere fact that money had been collected from members towards prospective sites did not, in the circumstances of the case, bring the transaction within the statutory framework of RERA.
The Tribunal therefore agreed with Karnataka RERA that the RERA Act had no application to the dispute and that the complaint was not maintainable before the Authority.
Registration Requirement Cannot Arise Where No Project Exists
The Tribunal also referred to the Supreme Court's decision in Newtech and the Bombay High Court's judgment in Macrotech while considering the jurisdictional issue.
It observed that where a project has not been registered, the Authority must first determine whether the project was one that was required to be registered under Section 3 or was exempt from registration. If registration was not required, the Authority could not assume jurisdiction over the complaint merely on the basis of the alleged transaction.
Section 3 generally requires prior registration of a real estate project before a Promoter can advertise, market, book, sell or offer for sale any plot, apartment or building, subject to the statutory exemptions and provisions applicable to ongoing projects.
In the present case, however, the issue was more fundamental. The Tribunal found that no project had come into existence at all, since the society had not acquired land for development.
Accordingly, the statutory obligations imposed upon a Promoter and the remedies available to an Allottee could not be invoked against the society.
Alternative Remedies Available
While dismissing the appeal, the Tribunal observed that the appellant was not without a remedy. He was free to approach the Registrar of Co-operative Societies or the Consumer Forum for recovery of the amount paid.
The Tribunal also took note of the fact that counsel appearing for the society had made an offer to refund the amount with 6% interest. The appellant, however, did not accept the offer.
Finding no justifiable ground to interfere with the order passed by Karnataka RERA on September 2, 2025, the Tribunal dismissed the appeal.
There was no order as to costs.
Key Takeaway
The Karnataka REAT's decision highlights that the applicability of RERA depends upon the existence of the statutory ingredients of a real estate project, Promoter and Allottee. Mere membership of a housing co-operative society and payment of money towards a proposed future site do not, by themselves, establish the existence of a real estate project or confer the status of an Allottee under RERA where the society has neither acquired land nor undertaken development of the project.
