Provisional Flat Allotment Given as Loan Security Does Not Establish Allottee Rights: MahaRERA

Case Title: Naresh Moturam Bhojwani v. Shree Tirupati Greenfield
Case No.: Complaint No. CC006000000591428

The Maharashtra Real Estate Regulatory Authority (MahaRERA) has held that a provisional reservation or allotment letter issued merely as security for a loan does not, by itself, establish a promoter-allottee relationship under the Real Estate (Regulation and Development) Act, 2016.

The Authority accordingly dismissed a complaint filed by Naresh Moturam Bhojwani, who had sought possession or refund in relation to a flat in Shree Tirupati Greenfield's “Siddheshwar Gardens” project.

Dispute Over Provisional Flat Reservation

The complaint arose from a Provisional Reservation Letter relied upon by Bhojwani as evidence of his allotment in the project.

MahaRERA Member Ravindra Deshpande examined the document and held that it had to be read as a whole rather than by relying selectively on portions that appeared to support the complainant's claim.

A material term of the document, particularly Clause 6(3), indicated that the transaction was intended to operate as security against a loan.

Document Must Be Read as a Whole

The Authority observed that a party who signs and accepts a document is presumed to have read and understood its terms and conditions.

It therefore rejected the attempt to rely on the portions of the reservation letter referring to the flat while disregarding the specific clause describing the transaction as security for a loan.

MahaRERA observed:

“Once a party signs and accepts a document, such party is presumed to have read, understood and accepted all the terms and conditions contained therein.”

The Authority further held that the complainant could not selectively rely upon the recitals concerning allotment while ignoring the specific contractual provision dealing with the nature of the transaction.

Promoter-Allottee Relationship Not Established

On an examination of the relevant documents and circumstances, MahaRERA concluded that the provisional allotment did not conclusively establish the existence of a promoter-allottee relationship of the nature contemplated under the RERA Act.

Consequently, the complainant could not claim the statutory remedies of possession or refund merely on the basis of the provisional reservation document.

The complaint was therefore dismissed.

Key Takeaway

The decision highlights the importance of examining the substance and complete terms of an allotment or reservation document before invoking remedies under RERA.

A document describing a flat reservation or allotment will not necessarily confer statutory allottee rights where its terms expressly establish that the transaction was undertaken as security for a loan rather than as a conventional sale or allotment of a residential unit.

Punjab RERA Orders PUDA to Refund ₹21 Lakh to Allottee Despite Payment Defaults

Rajesh Verma v. Punjab Urban Planning and Development Authority (PUDA)
GC No. 0512/2022

The Punjab Real Estate Regulatory Authority (Punjab RERA) has held that where both the allottee and the developer are found to have breached their respective obligations, neither party can ordinarily claim equitable relief such as specific performance or forfeiture of earnest money.

The Authority, chaired by Rakesh Kumar Goyal, accordingly directed the Punjab Urban Planning and Development Authority (PUDA) to refund ₹21 lakh deposited by allottee Rajesh Verma, along with interest. The total amount payable was assessed at ₹43.68 lakh as on August 31, 2026.

Dispute Over 400-Square-Yard Plot in Mohali

The case concerned a 400-square-yard residential plot in Gateway City, Sector 118-119, SAS Nagar, Mohali.

PUDA issued a Letter of Intent to Verma on July 10, 2015, for a tentative consideration of ₹84 lakh. An allotment letter was subsequently issued on August 16, 2016, pursuant to which Verma deposited ₹21 lakh towards the plot.

Verma thereafter failed to pay instalments due on August 17, 2017, February 17, 2018 and August 17, 2018.

He contended that the project had not been adequately developed and sought possession without interest on the outstanding dues. Alternatively, he sought a refund of the amount deposited along with interest.

Allottee's Payment Defaults Not Justified

PUDA informed Verma in February 2019 that possession was available and called upon him to clear the outstanding amount along with interest. Verma, however, did not act upon the offer.

Punjab RERA noted that the payment schedule under the allotment was not linked to the progress of development. It therefore rejected the contention that Verma was justified in withholding the instalments and held that he had defaulted on his payment obligations.

PUDA Also Found at Fault

At the same time, the Authority found shortcomings on PUDA's part concerning the timely offer of possession.

Punjab RERA noted that PUDA had the power under Section 45(3) of the Punjab Regional and Town Planning and Development Act, 1995, to cancel the allotment and forfeit the amount in the event of a breach. However, PUDA did not exercise that power and continued to retain the amount deposited by Verma.

The Authority observed that PUDA's conduct did not extinguish its obligation to deal with the money retained by it in accordance with law.

Neither Party Entitled to Equitable Relief

While considering the competing defaults, Punjab RERA relied on the established principle that a person seeking equitable relief must approach the forum with clean hands.

The Authority observed that while the allottee had defaulted in making payments, the developer had also failed to fulfil its obligations relating to timely handover. In such circumstances, neither party could ordinarily claim specific performance or forfeiture of earnest money.

The Authority therefore declined to grant Verma possession under Section 18 of the Real Estate (Regulation and Development) Act, 2016.

₹43.68 Lakh Payable to Allottee

Despite finding Verma in default of the payment schedule, Punjab RERA held that the circumstances justified a refund of the ₹21 lakh deposited by him, together with interest.

The complaint was accordingly partly allowed, with PUDA directed to pay:

• ₹21 lakh towards the principal amount;

• ₹22.68 lakh towards interest; and

• ₹43.68 lakh in total as on August 31, 2026.

PUDA was further directed to pay ₹18,900 per month from September 1, 2026, until the amount was actually paid.

The Authority also directed that the amount would be recoverable as land revenue and that a Debt Recovery Certificate would be issued in the event of non-compliance.

Ruling Highlights Importance of Mutual Compliance

The decision highlights that a party's own contractual default does not automatically entitle the opposite party to the relief of forfeiture or specific performance. Where defaults are attributable to both sides, the regulatory authority may examine the conduct of each party and mould the relief to ensure that neither side derives an unfair advantage from the other's breach.

Absence of Written Allotment Letter or Agreement Does Not, By Itself, Bar RERA Jurisdiction: Chhattisgarh High Court

Absence of Written Allotment Letter or Agreement Does Not, By Itself, Bar RERA Jurisdiction: Chhattisgarh High Court

Case Title: Fortune Resources and Properties LLP v. M/s Y.P. Goel and Associates & Anr.
Case No.: MA No. 105 of 2025
Court: Chhattisgarh High Court
Coram: Justice Parth Prateem Sahu and Justice Sachin Singh Rajput

The Chhattisgarh High Court has held that the mere absence of a written allotment letter or agreement for sale does not, by itself, oust the jurisdiction of the Real Estate Regulatory Authority (RERA) where the complaint discloses a transaction relating to the alleged allotment or sale of a real estate asset.

A Division Bench comprising Justice Parth Prateem Sahu and Justice Sachin Singh Rajput observed that the expression “aggrieved person” occurring in Section 31 of the Real Estate (Regulation and Development) Act, 2016 and Rule 35 of the Chhattisgarh RERA Rules, 2017, is of wide amplitude. The Court held that merely because there is no written document evidencing the allotment of a real estate property or an agreement between the parties, RERA's jurisdiction cannot automatically be excluded.

The dispute arose out of a complaint filed by Y.P. Goel and Associates, alleging that Fortune Resources and Properties LLP had entered into an oral arrangement for allotment and sale of Shop No. J-03, measuring 1,280 sq. ft., at Rama World, High Street, Swarn Bhoomi, Raipur, for a consideration of ₹75 lakh.

The complainant alleged that it had paid ₹5 lakh on December 31, 2020, ₹10 lakh on February 3, 2021 and a further ₹10 lakh on September 6, 2022 towards the proposed transaction. It was further alleged that despite the payments, possession of the shop was not handed over and no sale deed was executed. According to the complainant, the amount of ₹25 lakh was ultimately returned after approximately three years.

After a legal notice was issued on April 5, 2024, Fortune Resources denied the existence of any oral agreement and disputed the alleged allotment of the shop.

RERA, by its order dated July 31, 2024, dismissed the complaint, primarily on the ground that there was no written agreement between the parties and that the material on record did not clearly establish payment of sale consideration in respect of the alleged transaction. RERA consequently held that the complaint did not fall within its jurisdiction under the RERA Act.

The complainant thereafter approached the Real Estate Appellate Tribunal (REAT). By order dated April 4, 2025, the Tribunal set aside RERA's order and remanded the matter for fresh consideration, observing that an oral agreement could be examined within the RERA framework and that the complainant could fall within the expression “aggrieved person”.

Fortune Resources challenged the REAT's order before the High Court under Section 58 of the RERA Act. It contended that mere payment or deposit of money could not confer the status of an “allottee” under Section 2(d) of the Act. According to the appellant, there had to be an application or request for allotment, its acceptance by the promoter and a consequential allotment.

The High Court, however, found that RERA had considered the matter primarily from the perspective of the definition of “allottee” under Section 2(d) without adequately considering the scope of Section 31, which enables an aggrieved person to approach the Authority in respect of a violation or contravention of the Act, rules or regulations.

The Court noted that the pleadings disclosed a transaction involving payment of money in connection with the alleged allotment and sale of the shop. It observed that the existence and nature of such transaction required appropriate consideration and could not be rejected merely because there was no written allotment document or agreement.

The Court also noted that RERA's order did not indicate whether the procedure contemplated under Rule 35(3) of the Chhattisgarh RERA Rules, 2017, including the calling for relevant documents or evidence, had been followed. According to the Court, the Authority ought to have undertaken the requisite enquiry before reaching a conclusion on the complaint.

The High Court accordingly dismissed the appeal, finding no substantial question of law warranting admission of the appeal. It directed RERA to reconsider and decide the complaint in accordance with the directions contained in paragraph 55 of the REAT's order and in accordance with law.

Key Takeaway

The judgment reiterates that the absence of a written allotment letter or agreement for sale is not, by itself, sufficient to exclude RERA's jurisdiction. Where the pleadings disclose a transaction relating to the alleged allotment or sale of a real estate asset, the Authority must examine the material and conduct the appropriate enquiry before determining whether the complainant is entitled to relief under the RERA Act.

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.

NCLAT - Creditors of a class for amended Section 7(1) threshold of 10% or 100 whichever is Lower must be from a particular project registered with RERA

Pankaj Mehta V/s M/s. Ansal Hi-tech Township Limited 

Company Appeal (AT) (INS) No. 248 of 2023 

(Arising out of the `Impugned Order’ dated 06.01.2023 in CP (IB) No. 596 (PB) / 2021)

NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI  

Time line of the Matter :-

1. The ‘Appellant / Financial Creditor / Applicant’, along with106 other ‘Financial Creditors / Applicants’, had preferred petition ,under Section 7 of the I & B Code, 2016 before NCLT PB New Delhi.
2.  Wherein, M/s. Ansal Hi-Tech Township Limited, was described as the ‘Corporate Debtor’ and the Total Amount of Debt, was mentioned as Rs.41,81,90,116/- 
3. On Date 06/01/2023, NCLT,  dismissed the main Company Petition as `Not Maintainable’ terming that the `Allottees’, belong to different Sub Projects.

Fact of the Case:- 

1. A Project by the name of  'Sushant Megapolis near Dadri Town, adjoining Greater Noida, Uttar Pradesh.  by Corporate Debtor M/s Ansal comprises of Plots / Built-up Plots/ Row Houses/ Flats / Floors /  Villas / High-rise Apartments, under various allocated Sites.
2. License for developing the Township, was granted  in Year2006, by the UP Government with the instruction of Entire Construction be completed by year 2016.
3. By 2016 the Project was incomplete and M/s Ansal registered 25 separate projects having separate `RERA Registrations’ in this Township with RERA.
4.  Appellants are 107 different Allottee  who purchased different types of Units such as Plots / Flats/ Apartments /EWS unit , in the Project.
5. The Possession date of all the allottees  was from 36 months to 42 months, from the date of sanction of the `Layout Plan’ of the `Allotted Unit’. 

Submissions by Appellant

1.  All the Applicants had entered into respective BBAs, much before the RERA Act,2016 came into force.
2.  The said `Agreements’, specifically, defines that `Sushant Megapolis’, as one complete `Project’.
3. The `Single Layout Plan of this project reflects Group Housing/ Plots and EWS Units as part of `One Project’, comprising of 2504 Acres of Property.
4. A Single  Application for Environmental Clearance, was filed for the entire project. 
5.  The Project in question, is a `Single Real Estate Project’, for the purposes of Section 7 of the IB Code, 2016.
6. It therefore, falls under the requisite ambit of the provisos of the amended Section 7(1) of the IB Code 2016 pertaining to the minimum threshold requirement of 100 Allottees or 10% of the Total Allottees, whichever is less, belonging to the `same Real Estate project’. 
7. The NCLT, Passed the impugned Judgment without considering the decision of Hon’ble Supreme Court in Manish Kumar v. Union of India & Ors  (2021) 5 SCC OnLine SCC 1, wherein, it is observed that a Real estate project can be a composite one for Plots and Apartments or for Plots & Buildings.
8. Further, the definition of `Allottee’, is split into broadly three Categories Plot, Apartment and Building and the `Purchasers’ of all these are covered under the term `Allottee’ 
9.  The interpretation, laid down by the was incorrect  that 100 or 10% of the `Allottees’, must be from the `same Building’, and `not from the same `Real Estate Project’.

Submissions by Respondent

1. The Township, consists of Multiple Residential  and Commercial Real Estate Project, and all the sub-projects, are independent of each other and are being developed and sold as separate Projects.
2. Each and Every phase, is registered as a stand-alone Real Estate Project under RERA with separate `RERA Registration Numbers’
3. As per Hon’ble Supreme Court of India, that the task of ascertaining who will be Allottees and therefore, what would constitute 10% of total number of Allottees must depend upon the nature of the `Real Estate Project’.
4.  The Petitioners do not satisfy the required threshold limit of 10% or 100 persons’, whichever is lower, in none of the Project / Project categories, 
5. Approximately 50 Petitioners are either Co-Applicants or Third Applicants for a Single Unit just to fulfill the requisite number of 100 Allottees. whereas in the matter of Manish Kumar v. Union of India, wherein, it is held that `one unit equals to one Allottees’, even though, the said Unit is jointly held. 
6. The NCLT  made ‘inquiry’ and considered all the records pertaining to the Project.

Observations made by the Hon’ble Court.

1. The Corporate Debtor, had executed, at least Three different kinds of Agreements, namely  (a) `Plot Allottee Agreement’ (b) `Built-up Unit Allottee Agreement’ and (c) `Apartment Allottee Agreement as the projects were of `different character’ with `different type of developments with independent, RERA Registrations. ’
2. In none of the Projects / Project Categories, the Applicants  fulfil the requirement of Threshold Limit’ of 10% or 100 persons, whichever is less. 
3. the Appellant are from different numerous projects, and they have not established their case, as `Creditors of a class’, concerning any `particular project’, registered with RERA, with a view to fulfil the requirement of  Section 7 (1) of the IBC in regards to 10% or 100 Allottees’
4. In the present case on hand, the foremost aspect to be taken into account is the RERA Registration of the Projects, of the Corporate Debtor, for ensuring the Initial limit for pressing into service of the ingredients of Section 7 of the Code. 
5. The `Impugned Order’ and the views expressed in dismissing the CP (IB) No. 596 (PB) / 2021, is free from any `legal flaws’. 

Court’s Order

Accordingly the instant `Appeal’ sans merits is `Dismissed’ with no costs.

BOMBAY HIGH COURT - The liability of refund falls upon all the listed promoters even if they may not have received the amount in consideration.

BOMBAY HIGH COURT - The liability of refund falls upon all the listed promoters even if they may not have received the amount in consideration.

Wadhwa Group Housing Private Ltd vs Vijay Choksi & SSS Escatics Pvt. Ltd

SECOND APPEAL (Stamp) NO. 21842 OF 2023

Decided on 26 February 2024

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

Time line of the Matter :-

1. Allottee approached MahaRERA U/s 12 and 18 of the RERA act and sought refund of amount of Rs.2,62,35,056/- along with interest as well as compensation and costs.
2. On 24/09/2021 MahaRERA passed the Order holding that Allottee could not claim any equity under the provisions of act and his prayer for refund was rejected, and directed parties to execute registered agreement for sale within 30 day failing which the entire amount was directed to be refunded to the Allottee within six months.
3. Allottee filed Appeal U/s 43 of the RERA Act before the Appellate Tribunal.
4. On 18/10/2022 Appellate Tribunal partly allowed the appeal and set aside the Order directing both the Builders to Jointly refund the amount paid by the Allottee with interest.
5. Aggrieved by the Appellate Tribunal’s Order to put the liability to refund the amount received by SSS Escatics Pvt. Ltd the other Builder Wadhwa Group Housing Private Ltd chose to file this appeal.

Question of Law Framed in Second Appeal

"Whether a promoter who has not received any consideration from an allottee can be made liable for giving refund with interest under Section 18 of the Real Estate (Regulation and Development) Act, 2016?"

Fact of the Case:-

1. Builder SSS Escatics Pvt. Ltd, launched a project called “The Nest” as a Slum Rehabilitation Scheme.
2. On 05/09/2012 A JDA (Joint Development Agreement) came to be executed between both the Builders SSS Escatics Pvt. Ltd and Wadhwa Group Housing Private Ltd.
3. Under the said JDA Wadhwa and SSS segregated the constructed area amongst themselves for being sold to customers.
4. On 19/07/2013, Allottee booked a 3BHK Flat bearing B-502 admeasuring 2385 sq.ft in the said project for agreed consideration of Rs.2,65,35,000/-
5. Allottee paid an amount of Rs.1,20,00,000/- towards part consideration.
6.  On 24/07/2013 SSS issued allotment letter to Allottee.
7. The project remained incomplete on the date of coming into force of RERA Act, 2016.
8. The project was accordingly registered as ongoing project under Section 3 of the RERA by SSS in which the Wadhwa was declared as a Promoter (Investor).

Submissions by Appellant

1. Wadhwa cannot be held responsible for refund of any amount to the Allottee as he has not paid any amount to the Wadhwa and that therefore there is no question of refunding any amount to him.
2. As per the JDA both builders identified their respective entitlements in constructed portion of the building and the flat in question falls in the share of SSS, and it  alone received the entire consideration from the Allottee thereby no question of Wadhwa refunding the amount which it did not receive.
3. Mere a change in law requiring reflection of name of wadhwa as Promoter does not create its liability, which did not exist prior to introduction of RERA.  

Submissions by Respondent

1. Wadhwa is undoubtedly covered by definition of the term ‘Promoter’ per se Section 2(zk) of RERA.
2. Definition U/s 2(zk) makes it clear that all promoters are jointly liable under the Act.
3. That a promoter cannot be permitted to defeat the rights of the flat purchasers by making internal arrangements with investors, land owners, etc 

observations made by the Hon’ble Court

1. There appears to be no dispute that the payments were made by the Allottee to the SSS.
2. it is necessary to determine whether Wadhwa falls in the definition of the term ‘promoter’.
3. While registering the project as ongoing project under Section 3 of the RERA, Wadhwa’s name has been included in the list of Promoters. Therefore, Wadhwa cannot run away from the fact that it is the promoter in respect of the project ‘The Nest’
4. Mere falling of flat in the share of the SSS under the JDA would not excuse the Wadhwa from the responsibilities and liabilities under the RERA, Rules and Regulations made thereunder qua that flat. 
5. RERA does not demarcate or restrict liabilities of different promoters in different areas and the liability is joint for all purposes under the Act, Rules and Regulations
6.  Since the Wadhwa is covered by definition of the term ‘Promoter’, it is also jointly liable to refund the amount along with the SSS.
7. Distinction between projects launched before and after coming into force of RERA cannot be a ruse to escape the liabilities as promoter under RERA.
8. The Wadhwa’s contention about absence of privity of contract between it and the Complainant is totally misplaced as it is a matter of indoor management between the Promoters and the flat purchaser who is not supposed to know the intricacies of the arrangements made between several promoters amongst themselves.

Court’s Order

Accordingly the Second Appeal is accordingly dismissed with costs.

In the Second Appeal , BOMBAY HIGH COURT upheld the Condonation of Delay granted by the MAHAREAT Stating that It is not unnatural for a flat purchaser, who had book the flat in 2011 and was yet to receive possession in 2018, to feel anxious especially when he was not permitted to inspect the flat.

In the Second Appeal , BOMBAY HIGH COURT  upheld the Condonation of Delay granted by the MAHAREAT Stating that It is not unnatural for a flat purchaser, who had book the flat in 2011 and was yet to receive possession in 2018, to feel anxious especially when he was not permitted to inspect the flat.

Lucina Land Developers Limited V/s Navin Kumar

SECOND APPEAL NO.585 OF 2020

Decided on 27 MARCH 2024

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

Question of Law framed in 2nd Appeal :-

“Whether the Appellate Tribunal was justified in condoning the delay of 395 days in filing the appeal by the original complainant (Respondent herein)?

Time line of the Matter :-

1. Respondent (Allottee) filed Complaint before the Maharashtra Real Estate Regulatory Authority, (Maharera) complaining non-delivery of possession within the agreed period and claimed interest under provisions of section 18 of the Maharashtra Real Estate (Regulation and Development) Act, 2016 (RERA).
2. On 13/12/2017 Maharera disposed of the complaint holding that the Allottee failed to establish that the Appellant did not complete the project or was unable to deliver possession of the Apartment in accordance with the Agreement and directed the Appellant to handover possession of the Apartment with occupancy certificate to Allottee before 31 December 2018, failing which the Appellant was directed to pay interest as per Rule 18 with effect from 1 January 2019 till the actual date of possession on the entire amount paid by the Allottee. 
3. On 11/01/2019 Allottee filed Appeal before the Maharashtra Real Estate Appellate Tribunal (Appellate Tribunal)  challenging the order along with an application seeking condonation delay in filing the appeal. 
4. On 19/08/2019 the Appellate Tribunal  allowed the application for condonation of delay.
5. The Appellant has filed this Second Appeal challenging the judgment and order dated 19th August 2019 passed by the Appellate Tribunal.

Fact of the Case :-

1. Allottee  purchased an apartment bearing No.203 in the project India bulls Greens-II situated at Panvel and Entered into Flat Buyer's Agreement on 18/10/2011.
2. As per the Flat Buyer's Agreement, possession was to be handed over within 60 months with grace period of 9 months.

Contentions of Appellant :-

1.  The Appellate Tribunal has committed a manifest error in condoning inordinate delay of 395 days in filing the Appeal.
2. Allottee  was not prevented by any disability or cause from filing the Appeal within the period of limitation.
3. Allottee took a false plea of heart disease, which was relatable to the year 2016.

Contentions of Respondent :- 

1. No substantial question of law is involved in the present Appeal as the impugned order merely condones delay of 395 days in filing the Appeal.
2. That Condonation of delay is the discretionary power exercised by the Appellate Court in which this Court cannot interfere in exercise of jurisdiction under Section 100 of the Code of Civil Procedure (Code).
3.  Technicalities cannot be permitted to overtake the substantive rights sought to be agitated by a flat purchaser.
4. That Allottee suffers from serious cardiac ailments for prolonged time, which is evidenced in various certificates produced before the Appellate Tribunal. 
5. That Allottee also faced financial distress on account of health issues suffered by him
6. The Allottee has excellent case on merits, and the same cannot be thrown out on the ground of limitation without considering the merits involved in the Appeal.

Observations of the High Court:-

1. The short issue that requires consideration in the present Appeal is about correctness of the order passed by the Appellate Tribunal in condoning delay of 395 days in filing the Appeal.
2. Condonation of delay is a matter of discretion to be exercised by a Court. So long as exercise of discretion is sound, the Appellate Court shall not substitute its discretion with the discretion exercised by the Court condoning the delay 
3. it cannot be stated that there is complete absence of any cause in the application. Respondent, in his capacity as a flat purchaser first made an attempt to prosecute his complaint personally considering the ease of access provided to parties-in-person before Regulatory Authority.
4. There is sound exercise of discretion by the Appellate Tribunal in condoning the delay. So long as the exercise of discretion by the Appellate Tribunal is not arbitrary, interference by this Court in exercise of discretion is clearly unwarranted.
5.  the Respondent repeatedly pursued various issues with Appellant after passing of the order by the Regulatory Authority. The email correspondence started from 24 February 2018 and went on till 4 December 2018. Most of the emails were in respect of permission to visit the flat, since the Respondent believed that the same was not habitable
6. It is not unnatural for a flat purchaser, who had book the flat in 2011 and was yet to receive possession, to feel anxious especially when he was not permitted to inspect the flat.

Order of the High Court:-

1. the Appellate Tribunal was justified in condoning the delay in filing the Appeal by Respondent.
2. The Second Appeal is accordingly dismissed without any orders as to costs. 

TSRERA :- The Allottee has an obligation to adhere to the payment schedule as agreed in its Agreement of Sale as per Section 19(6) and non procurement of the Home loan amount cannot put the Builder under financial distress.

The Allottee has an obligation to adhere to the payment schedule as agreed in its Agreement of Sale as per Section 19(6) and non procurement of the  Home loan amount cannot put the  Builder under financial distress. 

Sri Umesh Choudhary Vs/ M/s Alpine Infratech 

COMPLAINT NO.519 OF 2023 decided on 12th Day of March, 2024 

BEFORE TELANGANA STATE REAL ESTATE REGULATORY AUTHORITY

Facts :-

1. The Complainant booked a flat in August 2021 in the project of the Respondent Builder.
2. Application Form/Terms and Conditions of Allotment was signed by him.
3. The Agreement of Sale was executed in the month of January 2022.
4. Complainant paid 20% of the cost and the balance 80% amount was to be arranged in form of Home loan.
5. The Project was approved from many nationalized bank but as the Complainant was a Central Government employee so he wanted the Home Loan in the form of House Building Allowance (HBA) from his concerned department. 
6. That vide e-mail dated 15.04.2022, the Complainant sought for several documents ( a list of 19 documents) from the Respondent Builder to avail HBA loan.
7. The complete documents were finally given by the builder on 20.02.2023.
8.  The Builder directed the Complainant to pay the Final due amount by 28.03.2023 else base price will be increased by Rs.200 per sft.
9. The Complainant offered an interim payment of Rs.5,00,000/-  by first week of May 2023 and the full payment by July 2023.
10. In May 2023, the Complainant requested the builder to accept the due amount of Rs.25,00,000/-
11. The Builder refused to accept the amount and stated that they will only accept if the Complainant agreed to make the payment with the revised base rate by Rs. 1000 per sft an increase of  Rs.11,20,000 in total price. 

Complainants Contentions :-

1. The delay in making payment occurred due to non-handing over of documents in time. hence, management is responsible for such delays.
2.  The revised increased rate is not acceptable as the delay in making payment did not occur on default of the Complainant. 
3. Prayed to take needful action against the Respondent Builder as per the applicable rules and regulations and to get the flat at the original agreed rate.

Respondent Builder's Contentions :-

1. The Complainant in spite of availing discount did not pay the agreed amount on time.
2. The Complainant initially agreed orally to take loan from various nationalized banks but later in the month of July 2022, started requesting various documents from the Respondent Company
3. The Complainant made one or the other request for the documents and that too after a lapse of one year and also which were beyond the purview of the Respondent Company and evaded the payments due to the Respondent Company. 
4. The Respondent Company sent several mails requesting the Complainant to visit the office of the Respondent Company to sort the issue. 
5. The Complainant failed to perform his part of contractual obligation and did not make the payment as per schedule, that's why the Company is justified in cancelling the booking 

Observations of the Authority :-

1. In Clause 1.3 of the BBA, the Complainant agreed to make payment as per payment plan set out in Schedule C (Payment Plan).
2. As per the Payment Schedule annexed to the said Agreement of Sale, the Complainant categorically agreed to payment of the schedule therein. which is not disputed by either party 
3. in the annexure to the said Payment Schedule, Point No.4 stipulates that prices are subject to change without prior notice upon non confirmation of sale.  
4.  the Complainant is bound by the same and failure of the Complainant in complying with the payment schedule is derogation of his duty under Section 19(6) of the Act.
5. the delay in procuring the documents cannot be attributed to the Respondent Builder as the said documents may not readily available with him and he may not be in a position to produce documents such as 
1. government pleader's certificate, 
2. estimates, 
3. permission under Conduct Rules for purchase of site and for construction of the house,
4.  Notice under Section 26(1) of the Urban Land (Ceiling & Regulation) Act, 1976, etc
6. Clause 9.3 (ii) of the undated Agreement of Sale executed between the parties clearly stipulates In case of Default by Allottee under the condition listed above continues for a period beyond 2 (two) consecutive months after notice from the Promoter in this regard, the Promoter may cancel the allotment of the [Apartment/Plot] in favor of the Allottee and refund the money paid to him by the allottee by deducting the booking amount and the interest liabilities and this Agreement shall thereupon stand terminated

Order of Authority:-

1. The Complainant is directed to pay the remaining amounts which is pending as on date as per the payment schedule agreed upon by both the parties within 60 (sixty) days, along with interest of 10.65%.
2. In the event the Complainant fails to complete such payment, the Respondent is to initiate measures in accordance with the provisions of the Act and Rules thereunder.

the allottees will not lose their right to claim interest for delayed possession merely on the ground that the conveyance deed had already been executed

 Amit Gupta Vs. Athena Infrastructure Ltd.Appeal No.79 of 2020 in Haryana Real Estate Appellate Tribunal,

The complaint filed by the appellant-allottee for grant of interest for delayed possession was dismissed by Ld. Haryana Real Estate Regulatory Authority, Gurugram The only ground taken in the order is that as the conveyance deed had already been executed, so the complaint was not maintainable.

It was held by the Appellate tribunal that 

"In our view the approach of the Ld. Authority is erroneous. The Hon'ble Apex Court in case Wg. Cdr. Arifur Rahman Khan and Aleya Sultana and others vs. DLF Southern Homes Pvt. Ltd. (now known as BEGUR OMR Homes Pvt. Ltd.) and others 2020(3) R.C.R.(Civil) 544 has laid down as under:-

“The developer in the present case has undertaken to provide a service in the nature of developing residential flats with certain amenities and remains amenable to the jurisdiction of the Consumer Fora. Consequently, we are unable to subscribe to the view of the NCDRC that flat purchasers who obtained possession or executed Deeds of Conveyance have lost their right to make a claim for compensation for the delayed handing over of the flats.”

In view of the aforesaid ratio of law laid down by the Hon'ble Apex Court, the allottees will not lose their right to claim interest for delayed possession merely on the ground that the conveyance deed had already been executed. The execution of the conveyance deed cannot extinguish the cause of action which had already accrued to the allottee due to delay in delivery of possession. Thus, the impugned order passed by the Ld. Authority is not sustainable. Consequently, the present appeal is hereby allowed. The impugned order dated 19.12.2019 is hereby set aside.

Cancellation of allotment after taking 90% of the total sales consideration is unsustainable in the eyes of law

 In the Matter of Gautam Bhatla V/s Vatika limited Complaint no.1208 of 2019 decided on 17.02.2021 before Haryana Real Estate regulatory authority, Panchkula.

it was held that " The Authority is prima facia of the view that Cancellation of allotment after taking 90% of the total sales consideration and without remitting the amount payable to the allottees after deducting earnest money, is unsustainable in the eyes of law"

Supreme Court - an allottee does not obtain a vested right of allotment on a draw of lots.

 In the Matter of Delhi Development Authority vs Pushpendra Kumar Jain, Appeal (civil) 6205 of 1994 Decided on 23 September, 1994 before Supreme Court of India

Their Lordships have laid down the following principles:

(i) an allottee does not obtain a vested right of allotment on a draw of lots. The system of drawing of lots is only a mode, a method, a process to identify the allottee i.e. it is a process of selection. It is not allotment by itself. Mere identification or selection of allottee does not clothe the person selected with the legal right to allotment at the price prevailing on the date of draw of lots;

(ii) since the right to flat arises only on the communication of the letter of allotment the price or rate prevailing on the date of such communication is applicable unless otherwise provided in the scheme;

(iii) the scheme does not prescribe the period within which allotment has to be communicated from the date of draw of lots. It has of course to be done within a reasonable period

MahaRERA Appellate Tribunal: There can be no forfeiture on withdrawal before sale agreement

 The Maharashtra Real Estate Appellate Tribunal, Mumbai, on March 17, 2021 set aside the order dated October 3, 2019 (“impugned order”) passed in Complaint No. CC006000000089770 in the matter of Mr. Dinesh R. Humane and Mrs. Ranjana D. Humane (“Appellants/Allottees”) v. Piramal Estate Private Limited (“Respondent/Promoter”) by the Maharashtra Real Estate Regulatory Authority (“MahaRERA”). The order dated March 17, 2021 directed the Promoter to refund the total amount paid by Allottees on the cancellation of flat reservation.

Facts of the Case:

The Allottees agreed to purchase, and the Promoter agreed to sell Flat No. 807 in the project namely Vaikunth Cluster- 2 at Thane. The Allottees submitted form of ‘request for reservation’ of Flat on 29th January 2019 and paid an amount of Rs. 1,12,393/- as booking amount to the Promoter. The Allottees  also paid Rs. 4,49,574/- on March 1, 2019 towards price of the Flat to Promoter. On account of medical emergency in the family of Allottees, they decided to cancel the flat booking. Accordingly, they sent an   e-mail to the Promoter requesting to cancel the flat booking and to refund the total amount of Rs.5,61,967/-. The Promoter replied vide e-mail dated May 20, 2019 that the amount paid by Allottees is forfeited on account of cancellation. The Allottees filed a Complaint before MahaRERA for recovery of amount of Rs. 5,61,967/- from the Promoter. The impugned order was passed by MahaRERA whereby the Promoter/ Respondent was directed to refund the booking amount in accordance with the booking form. The Allottees filed an appeal before MahaRERA Appellate Tribunal challenging the order passed by MahaRERA.

Issues:

Whether the MahaRERA order directing the Promoter to refund the booking amount to Allottees in accordance with booking form signed by both the parties is correct?

Analysis:

The MahaRERA Appellate Tribunal held that:

Form of ‘request for reservation’ is signed by Allottees only and not by the Promoter. The terms and conditions recited in Annexure “A” thereto are to be followed and observed by Allottees only. As per the impugned order, amount is to be refunded in accordance with the booking form signed by both the parties. Annexure “A” is not styled as booking form and there is no document having nomenclature as "booking form” which is signed by Allottees or by both the parties. Thus, the impugned order is passed based on such document which does not exist on record.

The only document signed by the Allottees is the printed form styled as ‘request for reservation’, which consists of 33 different terms and conditions to be observed by Allottees only. Clause 17 providing forfeiture of 10% amount of the total price of flat or the amount paid till the date, whichever is lesser, in case of withdrawal by Allottees is ex-facie unreasonable, unfair and inequitable. Existence of such a condition in the printed form of ‘request for reservation’ is against the object and purpose of Real Estate (Regulation and Development) Act, 2016 (“RERA”) and the same being against statute of RERA is not binding on the parties and such unreasonable and unfair transaction cannot be enforced.

The Supreme Court in the case of Pioneer Urban Land and Infrastructure v. Govindan Raghavan, [Appeal No. 12238 of 2018, decided on April 2, 2019] held that the court will not enforce an unreasonable, unfair contract or an unreasonable and unfair clause in a contract where contracting parties are not equal in bargaining power and where a man has no choice or rather a meaningful choice but to give his assent to a contract or to sign on the dotted line in a prescribed or standard form as a part of the contract, however unfair, unreasonable and unconscionable a clause in that contract or form or rule may be.

The agreement for sale was not executed between the parties. Parties never reached to the stage of executing agreement for sale. There was no attempt to execute the agreement on the part of either the Promoter or Allottees. The refund of amount paid to promoter can be demanded as per Section 18 of RERA on the ground that promoter fails to give possession on agreed date or fails to complete the project as per terms and conditions of agreement for sale. However, in this peculiar matter though the claim of refund is not governed by any specific provision of RERA, it cannot be ignored that the object of RERA is to protect the interest of the consumer.

Regulation 39 of Maharashtra Real Estate Regulatory Authority (General Regulation), 2017 and Regulation 25 of Maharashtra Real Estate Appellate Tribunal Regulation, 2019 are in respect of the inherent powers of the regulatory authority and the appellate tribunal to pass such orders which are necessary to meet the ends of justice.

The MahaRERA Appellate Tribunal, thus, set aside the impugned order and directed the Promoter to refund the full amount paid by Allottees.

Long term leases would amount to sale and hence lessees will also fall within the definition of "allottee”

 In the Matter of Manju Mahendra Joshi Vs. Lavasa Corporation ltd. Complaint no. AT006000000000096, decided on 17.04.2018 beforeThe Maharashtra Real Estate Appellate Tribunal

In the Matter of Manju Mahendra Joshi Vs. Lavasa Corporation ltd. Complaint no. AT006000000000096, decided on 17.04.2018 beforeThe Maharashtra Real Estate Appellate Tribunal ruled that “ Long term leases would amount to sale and hence lessees will also fall within the definition of allottee”

This Order was further upheld by the Order of Bombay high Court in Lavasa Corporation Limited v. Manju Narendra Joshi (C.A. No. 791 of 2018) decided on 07.08.2018.

On behalf of the lessor it was contended that since the impugned agreement was an 'agreement of lease' and not an ‘agreement for sale’, the provisions of RERA would not be applicable.

The definition of ‘promoter’ under section 2(zk) of RERA was relied upon by the lessor, as it contemplates a person, who constructs or caused to be constructed an apartment ‘for the purpose of selling’.

Reliance was also placed on the definition of 'allottee', under Section 2(d) of RERA, which specifically provides that allottee does not include a person to whom plot, apartment or building is ‘given on rent’.

Reliance was placed on the judgment of the Supreme Court in the case of R.K. Palshikar (HUF) v. CIT, M.P., Nagpur and Bhandara, 1988 (172) ITR 311, wherein it was held that lease for a period of 99 (ninety nine) years would amount to transfer of capital assets. A judgment of the Madras High Court was also relied upon, which held that a lease for a period of 99 (ninety nine) years is an alienation as a sale, and mere use of the word 'lease' or the fact that a long term is fixed would not by itself make the document in lease.

The intention of RERA, as highlighted by the Supreme Court in the case of R.S. Raghunath v. State of Karnataka, (1992) 1 SCC 335 was also looked at, which was to protect the interest of consumers who have invested substantial amounts in real estate projects. If they are excluded from the definition of 'Allottee' and thereby from the protection given under the Act, by giving restrictive meaning to the term 'Allottee', the very object of RERA would stand frustrated.

Provisions of the RERA Act will prevail over the terms of the agreement for sale between Allottee and Developer.

 In the Matter of Sundeep Anand and Ors. vs. Kul Developers Private Limited and Anr. Complaint no. CC005000000022985 decided on 11.11.2019 before Maharashtra Real Estate Regulatory Authority

Laying down the controversy at rest, MahaRERA held that the provisions of the Act will prevail over the terms of the agreement for sale. 

In this case, MahaRERA was to determine whether the allottee would be entitled to get interest as provided under the Act or as per the agreement between the parties. MahaRERA observed that “The Act is a special enactment for protecting the interest of the allottees with a view to complete the project in a specific timeline. There is no phraseology such as ‘unless agreed to the contrary under Section 18’ which allows the terms of the agreement to prevail over the provisions of the Act.” MahaRERA held that interest is to be awarded at the rate as prescribed by the statute for the delayed possession.

MahaRERA - industrial units do not come under the definition of “real estate project” and the provisions of the Act are not applicable to industrial units.

 In the Matter of Techno Drive Engineer Pvt. Ltd. V/s Renaissance Indus Infra Pvt. Ltd. Complaint no. CC006000000078620 decided on 26.11.2019 before Maharashtra Real Estate Regulatory Authority.

In the instant case, the Allottee had filed a complaint against the developer on the ground that the developer failed to hand over an industrial unit booked by the Allottee in accordance with the agreed date of possession. The Allottee had booked the unit for setting up its industrial manufacturing unit. MahaRERA dismissed the complaint stating that industrial units do not come under the definition of “real estate project” and the provisions of the Act are not applicable to industrial units.

The judgement can be accessed at https://www.livelaw.in/pdf_upload/pdf_upload-367507.pdf

The Authority has Jurisdiction to decide the matters between the Allottee and promoter , though their agreement has an arbitration clause in it.

In the Matter of Sarita Bhairu Chandekar & oth Vs Prashant Bhandari Complaint number CC005000000022925 decided on 11.11.2019  before  Maharashtra Real Estate Regulatory Authority

The Authority Relied on the Judgment by Supreme Court in the matter of HDFC Bank Ltd-v/s-Satpal Singh Baxi (MANU/DE/5308/2012) in which the Supreme Court also held that if particular enactment creates special rights and obligations and gives special power to the Tribunal which are not in Civil Court such as tribunal constituted under Rent Control Act and the Industrial Disputes Act, the dispute arising under the said enactments cannot be arbitral otherwise other disputes are arbitral.

In Hemangi Enterprise-v/ s-Kamaljeet Singh Ahluwalia 2017 STPL 13227 SC, the Supreme Court found that the dispute between the parties was that of the tenant and landlord relating to leave and license agreement and therefore exciusive jurisdiction to deal with such dispute is conferred upon the Court of Small Causes and therefore, though there wasthe Arbitral Clause in the agreement, the Court held that the dispute was not arbitral. 

As per the Court

• Section 20 of RERA has special powers

• under Section 31 of it to adjudicate the dispute between the aggrieved person on one hand and the promoter, allottee, real estate agent on the other for violation or contravention of the provisions of RERA, Rules and Regulations made thereunder.

• Section 32,34,35 are the special provisions.

• Section 79 of RERA bars the jurisdiction of Civil Court from entertaining any matter which the Authority is empowered under the Act to determine.

• Section 59 lo 69 relates to the offences and penalties.

• A Special Forum of Adjudicating Officers whose qualification is that of District Judge has been set up by Section 71 of RERA to decide the matters arising out of Section 1.2, 74, 78 & 19.This case arises out of Section 18 of the Act for which a separate special forum has been provided by RERA and hence, the jurisdiction lies with the Authority and it cannot be delegated to the Arbitrator despite the provisions of the Arbitration and Conciliation Act and the Arbitration Clause of the agreement. Hence, Court did not find any force in the respondents' submission that this Authority has no jurisdiction. The Court finds that the Authority has jurisdiction to entertain this complaint.

x

If the tax amount is credited to the State Government in the name of the allottee the predominant role is of the allottee and for that the Promoter cannot be held responsible to refund the VAT payment.

  In the Matter of Ashutosh Suresh Bagh v/s. The Member & Adjudicating Officer & Ors. Complaint no. AT005000000000120 decided on 02.05.2018 before Maharashtra Real Estate Appellate Tribunal

The Appellate Authority Held that 

"While deciding claims between the allottees and meeting with controversies, or the difficulties faced by the Promoter, a harmonious approach is imperative to be adopted. This is moreso the cumulative effect of the Statute coupled with Sections 71(3), 72, 38, Preamble and impetus of Section 18 of

RERA Ad is to be coherently considered. Going by these provisions and reading the order under challenge, it is apparent that refund of VAT could not be from the Promoter as the tax amount is credited to the State Government at the credit ,/ in the name of the allottee. Whatever would be the refund, would be available subject to termination of existing agreement between the parties and on an application to the concerned authorities by the allottees. In both these situations, the predominant role is of the allottee and for that the Promoter cannot be held responsible to refund the VAT payment. 

Statutory payments like stamp duty, VAT, service tax are to be deducted and flat purchaser is not entitled for the same

In the Matter of Bhoomi And Arcade Associates vs Alistair Gomes, Appeal No. AT 005000010880

Mumbai Rera Authority ordered the promoter to refund the entire amount of Rs.3,40,491/- expended by the complainant with regard to the ancillary expenses borne towards registration, stamp duty, processing fees, and finance company charge.

The Mumbai RERA Tribunal overruling the order of the Authority held that in the proposition settled in the case of Ashutosh Suresh Bagh v/s. The Member & Adjudicating Officer & Ors. and conjunctive reading of clauses 6 and 10 of the Agreement entered between the parties, it is clear that statutory payments like stamp duty, VAT, service tax are to be deducted and flat purchaser is not entitled for the same.

MINIMUM 100 HOMEBUYERS or 10% of the total allottees are REQUIRED TO INITIATE IBC CASE:SUPREME COURT AFFIRMS THE AMENDMENT

 In Manish Kumar v. Union of India & Ors., the Supreme Court of India rejected a writ petition challenging the constitutional validity of Section 3, 4 and 10 of Insolvency and Bankruptcy Code (Amendment) Act, 2020 (“IBC Amendment”), which prescribes the requirement of a minimum of 100 or not less than ten per cent of allottees of a real estate project acting as creditors in the same class, whichever is less, for initiating corporate insolvency resolution process against the developer company.

 The Court held that the IBC Amendment protects the interest of the allotees across the board and allowing a single allottee to move an application under IBC may put the interest of all other allottees in peril. 

This can also result in some allottees approaching the real estate regulating authority (RERA) while other may resort to the consumer forum. The Court said that the group of allottees in a real estate project are a heterogenous group and a vast majority of allottees may see reason in giving time and reposing faith in the existing management of real estate project, rather than bringing a complete overhaul or replacement of the developer’s company management. 

Therefore, the amendments provided under the IBC Amendment are not arbitrary in nature and are constitutionally valid

Adjudicating Officer Under RERA is only Empowered to Adjudge Compensation Under Section 71 and Section 72 of the RERA and does not have Jurisdiction to decide Matters for Allowing Refund Under Section 18 of the RERA

The Maharashtra Real Estate Appellate Tribunal, Mumbai (“Appellate Tribunal”), in the matter of Xrbia Developers Ltd. v. Firoz Aziz Shaikh (“Appeal”), has, inter alia, held that the Adjudicating Officer (“AO”) under RERA is only empowered to adjudicate on the compensation to be granted under Section 71 and Section 72 of the RERA. 

The Hon’ble Appellate Tribunal has further held that the jurisdiction to adjudicate on the matters relating to refund with interest under Section 18 of RERA vests with Adjudicating Authority. 

The Hon’ble Appellate Tribunal, whilst deciding the issue of sustainability of the order passed by AO in the complaint preferred by the allottee seeking refund with interest along with other reliefs had held that, 

“11. Considering the legal position discussed and held as above, it is crystal clear that AO has powers only to adjudge compensation under Sections 71 read with 72 of RERA and has no jurisdiction to decide matters for allowing refund with interest under Section 18 which is vested with the Authority only. Consequently, the order passed by AO with regard to subject matter involved in the above complaint is obviously without jurisdiction as per provisions of RERA. It is a fundamental principle well established that an order passed by a forum having no jurisdiction over subject matter is a nullity. An objection to lts valldity can be raised at any time including the appeal proceedings. For the said reasons, the impugned order passed by AO cannot be sustained and therefore is liable to be quashed and set aside being a nulllty for lack of jurisdiction of subject matter as contended by Promoter, We answer the point accordingly.”

Consumer Protection Act: Entitlement of the Allottee / Homebuyer has to be reckoned in terms of the Date of the Agreement and not the RERA Registration date.

 IN THE MATTER OF: M/s. Imperia Structures Ltd. Vs. Anil Patni and Another (Decided by Hon’ble Supreme Court of India on 02.11.2020) 

Issues: 

    1. Whether the remedies available to the consumers under provisions of the Consumer Protection Act, 1986 (“CP Act”) would be additional remedies, not barred by the coming in force of the Real Estate (Regulation and Development) Act, 2016 (“RERA Act”)? 

2. Whether the provisions of the RERA Act have made any change in the legal position with regards to remedies available to the Allottees? 

3. Whether the entitlement of the Allottee has to be reckoned in terms of the date of Agreement or the RERA registration date? 

Facts: 

    1. A Housing Scheme called “The ESFERA” in Gurgaon, Haryana was launched by the Appellant in 2011. All the Complainants booked their respective apartments by paying the requisite booking amounts and thereafter executed the Builder Buyer Agreement towards their individual units. The Agreement provided for delay due to reasons beyond the control of the Developer (Appellant) and failure to deliver possession due to Govt. Rules/Notifications, etc under the Force Majeure clause and the compensation thereof. Even after four yearsthere was no sign of Project getting completed. Thereafter, in 2017, the Project was registered with Haryana Real Estate Regulatory Authority, Panchkula (“HRERA”). 

2. The Consumer Complaint was filed by the Complainants for the delay in handing over of the possession of their respective apartments. In response, the Appellant challenged the jurisdiction of the National Consumer Dispute Redressal Commission (“National Commission”) on the ground that the Complainants/Respondents would not come within the definition of consumers. After having heard the submissions, the Commission allowed the Complaint and granted relief of refund to the Complainants/Respondents. 

3. The Appellant aggrieved by the order of the National Commission, preferred an appeal under Section 23 of the CP Act before the Hon’ble Supreme Court. Court’s Observations: 

• The Counsel for Appellants submitted that once the RERA Act came into force, all questions concerning the Project including issues relating to construction and completion thereof, would be under the exclusive control and jurisdiction of the authorities under RERA Act. The National Commission, therefore, ought not to have entertained the Consumer Complaint. Further, the Registration Certificate being valid upto 31.12.2020, the Appellant could not be said to have delayed the construction and consequently, there could be no finding that there was deficiency on part of the Appellant. The Counsel for the Respondents submitted that whether the delay occurred due to force majeure was already dealt by the National Commission and no reasonable explanation was available on record to dislodge that finding. It was further submitted that the remedy afforded by the CP Act would be an additional remedy to a consumer and such legal position remained unchained even after the enactment of the RERA Act. 

• The Court noted that conclusions drawn by the National Commission that – i) all the Complainants were consumers within the meaning of the Act; and ii) there was delay on part of the Appellant in completion the construction within time, are absolutely correct and does not call for interference of this Hon’ble Court. • While discussing various precedents, the Court observed that the Hon’ble Apex Court has consistently held that the remedies available under the provisions of the CP Act are additional remedies over and above the other remedies including those made available under any special statutes;and that the availability of an alternate remedy is no bar in entertaining a complaint under the CP Act. The Hon’ble court further observed that insofar as cases where such proceedings under the CP Act are initiated after the provisions of the RERA Act came into force, there is nothing in the RERA Act which bars such initiation. The absence of bar under Section 79 to the initiation of proceedings before a fora which cannot be called a Civil Court and express saving under Section 88 of the RERA Act, make the position quite clear. Furthermore, Section 18 itself specifies that the remedy under said Section is "without prejudice to any other remedy available". Thus, the parliamentary intent is clear that a choice or discretion is given to the allottee whether he wishes to initiate appropriate proceedings under the CP Act or file an application under the RERA Act. 

• The Court held that in the present case the apartments were booked by the Complainants in 2011-2012 and the Builder Buyer Agreements were entered into in November, 2013. As promised, the construction should have been completed in 42 months. The period had expired well before the Project was registered under the provisions of the RERA Act. Merely because the registration under the RERA Act is valid till 31.12.2020 does not mean that the entitlement of the concerned Allottees to maintain an action stands deferred. It is relevant to note that even for the purposes of Section 18, the period has to be reckoned in terms of the agreement and not the registration. Therefore, the entitlement of the Complainants must be considered in the light of the terms of the Builder Buyer Agreements and was rightly dealt with by the Commission. 

The Hon’ble Court dismissed the appeal, affirming the view taken by the National Commission.