RERA has no Authority Over Projects Granted ‘Partial’ Occupancy Certificate Prior to Enforcement of RERA
Provident Housing Limited Vs Karnataka Real Estate Regulatory Authority Writ Petition No.18448 of 2021
Date of Judgement/Order : 02/01/2023
Brief Facts of the Case:
- The petitioner is engaged in the business of real estate development.
- On receiving respondent’s request to allot an apartment in the project, the petitioner entered into an agreement for sale and Construction with Respondent on 10/09/14.
- The proposed date of completion of project was 31/01/17.
- On 18/11/15– A partial occupancy certificate was granted by the competent authority i.e. BDA to the petitioner.
- On 27/04/17– Second partial occupancy certificate was issued in favour of petitioner.
- On 14/05/17– Respondent seeks to cancel the agreement on the ground that there was information to him that the land had not been legally acquired by the petitioner for construction of the Apartment complex.
- On 04/12/17– The contract between petitioner and respondent is concluded, petitioner refunds the amount after deducting the cancellation charges.
- In 2019– Respondent by invoking Section 31 of the RERA Act, files a complaint before RERA Authority seeking a refund of remaining amount.
- The authority passes the impugned order, directing the petitioner to refund the said amount.
- On receiving the authority’s order, Petitioner files a petition before Karnataka HC challenging the maintainability of the complaint filed by respondent before the authority.
Petitioner’s Contentions:
- The partial occupancy certificate was issued in favor of petitioner before the commencement of the Act.
- Therefore, the project of petitioner had already passed the stage of ‘ongoing project’ and is a ‘completed project’.
- Since the project was completed before the commencement of the RERA Act, the Act is not applicable to petitioner’s project and therefore any complaint filed before the authority by invoking the provisions of the Act is not maintainable.
Respondent’s Arguments:
- The project is still an ‘ongoing project’ as no ‘competition certificate’ was issued in favour of petitioner.
Issues:
- Whether the complaint filed by respondent before the Karnataka Real Estate Authority is maintainable?
- Whether ‘on-going’ project includes the project for which completion certificate has not been issued.
Court’s Decision:
- The court while taking into consideration the provisions of RERA Act (Section 2(q), 3, 18, 31, 43 and 84) and the rules made by Karnataka Government (Rule 3 and 4) under Section 84 of the Act, made following observations-
- Section 3 of the Act mandates the registration for all ongoing projects at the time of commencement of the Act.
- Section 3(2)(b) specifically excludes those projects to be registered under the act for which ‘completion certificate’ has been issued before the commencement of the Act.
- In the present case, partial occupancy certificates have been issued, the project would be considered to be not completed at the time of commencement of this Act.
- The explanation of ‘ongoing project’ under the Karnataka Government Rules (Rule 4) exempts the application of the Act to those projects for which partial occupancy certificate has been issued prior to coming into force of the Act.
- Therefore as per Rule 4 of the Karnataka Government Rules, the project is not an ongoing project as the explanation in Rule exempts such an ongoing project for which partial certificate has been obtained to the extent of the portion for which the partial occupancy certificate is obtained.
- Therefore, the provisions of the RERA Act are not applicable to the project and the order issued by the Authority is without jurisdiction and thus is not maintainable.
- Held: The order passed by Karnataka Real Estate Regulatory Authority is without jurisdiction. The project in question is a registered project in view of grant of partial occupancy certificates. In light of the same, the complaint filed before the authority by the respondent, itself is not maintainable.
