Promoters Cannot Split Adjoining Land Parcels to Avoid RERA Registration: Rajasthan REAT also ubpheld by Rajastahan High court

 

Promoters Cannot Split Adjoining Land Parcels to Avoid RERA Registration: Rajasthan REAT

Case Title: Harish Jasuja v. Rajasthan Real Estate Regulatory Authority & Anr.
Appeal No.: 66/2022 & Connected Appeals
Forum: Rajasthan Real Estate Appellate Tribunal (REAT)

The Rajasthan Real Estate Appellate Tribunal (REAT) has held that promoters cannot claim exemption from mandatory RERA registration by treating adjoining parcels of land as separate projects merely because the parcels are individually owned and each measures less than 500 square metres.

The Tribunal dismissed eight connected appeals filed by promoter Harish Jasuja in relation to the “City Trade Centre” project at Sri Ganganagar, holding that the project had been conceived, developed and marketed as a single integrated project and therefore required registration under the Real Estate (Regulation and Development) Act, 2016.

Dispute Over RERA Registration

The appeals arose from proceedings concerning the registration of the City Trade Centre project. The promoter sought to rely upon separate ownership of adjoining parcels of land to contend that the individual plots fell below the 500-square-metre threshold prescribed under Section 3 of the RERA Act.

Under Section 3(2)(a), certain projects are exempt from registration where the area of land proposed to be developed does not exceed 500 square metres or the number of apartments proposed to be developed does not exceed eight.

The promoter's case was that the relevant parcels should be considered independently for determining whether the exemption applied.

Tribunal Rejects Artificial Division of Project

The Rajasthan REAT rejected this approach.

The Tribunal examined the manner in which the properties were planned and developed and found that the adjoining parcels were not functioning as genuinely independent projects. Instead, the development had been designed and marketed as one integrated project with common amenities.

The Tribunal observed that allowing promoters to structure a project through separate land parcels, each falling below the statutory threshold, could defeat the very purpose of the RERA legislation.

It cautioned that if such an arrangement were permitted, multiple persons could acquire adjoining parcels through separate sale deeds and subsequently develop them collectively while claiming exemption from RERA registration.

Common Development Relevant to Determining Project Status

According to the Tribunal, the substance of the development rather than the manner in which the underlying parcels were individually held was relevant.

Where adjoining parcels are collectively planned, constructed and marketed as a single development, they cannot simply be treated as separate projects to obtain the benefit of the registration exemption.

The Tribunal therefore concluded that the City Trade Centre had been designed, constructed and marketed as a single project and was consequently required to be registered under Section 3 of the RERA Act.

Eight Appeals Dismissed

A Bench comprising Chairperson Justice Madan Gopal Vyas and Judicial Member Yudhisthir Sharma dismissed the connected appeals filed by Harish Jasuja.

The Rajasthan REAT's official judgment records show that Appeal No. 66/2022 and several connected appeals involving Harish Jasuja were dismissed on May 12, 2026.

Key Takeaway

The decision reinforces the principle that the RERA registration exemption cannot be defeated by artificially fragmenting an integrated real-estate development into smaller adjoining parcels.

For determining whether a project falls within the mandatory registration framework, the manner in which the development is actually conceived, constructed and marketed may be more significant than the formal division or separate ownership of the underlying land parcels.

The ruling therefore serves as an important reminder that promoters cannot rely solely on individual plot sizes where the evidence establishes that the properties form part of a single integrated real-estate project.

Rajasthan High Court Upholds RERA Direction to Register ‘City Trade Centre’ Project

Case Title: Harish Jasuja v. Rajasthan Real Estate Regulatory Authority & Anr.
Case No.: S.B. Civil Miscellaneous Appeal No. 2726/2026
Connected Appeals: S.B. Civil Miscellaneous Appeals Nos. 2723/2026, 2724/2026 and other connected matters

The Rajasthan High Court has upheld the direction requiring Harish Jasuja to register the “City Trade Centre” project under the Real Estate (Regulation and Development) Act, 2016 (RERA).

The Court dismissed the challenge against the orders passed by the Rajasthan Real Estate Regulatory Authority (RERA) and the Rajasthan Real Estate Appellate Tribunal, holding that the appeals did not raise any substantial question of law warranting interference under Section 58 of the RERA Act.

 

RERA Registration Not Required Where Leasehold Developer Has No Right to Sell Units: Allahabad High Court

Case Title: U.P. Real Estate Regulatory Authority v. M/s Maa Bhagwati Commercial Reality N Resorts LLP
Case No.: RERA Appeal No. 169 of 2025
Court: Allahabad High Court, Lucknow Bench
Decision Date: May 8, 2026

The Allahabad High Court has held that a developer holding only leasehold rights in a property, without the legal authority to sell apartments, plots or buildings, does not fall within the definition of a "promoter" under the Real Estate (Regulation and Development) Act, 2016 (RERA).

Justice Syed Qamar Hasan Rizvi held that where the developer's rights are confined to developing the property and creating sub-leases, and it has no right to sell the units, the project does not qualify as a "real estate project" requiring registration under RERA.

Dispute Over Registration of 'Samrajya' Project

The case concerned the proposed "Samrajya" project in Ayodhya, being developed by M/s Maa Bhagwati Commercial Reality N Resorts LLP.

The land belonged to a public charitable trust, Udasin Sangat Rishi Aashram, Ranopali, Ayodhya. The trust had executed a registered lease dated September 29, 2023, in favour of the developer for a period of 29 years and 11 months.

The lease permitted construction of a commercial building and contained provisions permitting sub-leasing of the property.

The developer subsequently applied to U.P. RERA for registration of the project. However, the Authority raised objections concerning the nature of the leasehold rights and the developer's authority to create sub-leases in respect of the trust property.

U.P. RERA ultimately rejected the registration application.

RERA Appellate Tribunal Had Directed Registration

The developer challenged the rejection before the Real Estate Appellate Tribunal (REAT), Lucknow.

The Tribunal allowed the appeal and directed U.P. RERA to register the project and issue the registration number, Login ID and password within seven days.

U.P. RERA thereafter approached the Allahabad High Court under Section 58 of the RERA Act, challenging the Tribunal's decision.

High Court Examines Whether Leasehold Project Falls Under RERA

The High Court considered, among other issues, whether a real estate project could be developed and registered under RERA on land taken on lease for 29 years and 11 months when the developer did not possess the right to sell the apartments or buildings.

The Court examined the definitions of "promoter" under Section 2(zk) and "real estate project" under Section 2(zn) of the RERA Act.

It noted that the statutory definition of a real estate project contemplates development for the purpose of selling apartments, plots or buildings.

Right to Sell Held to Be Essential

The Court found that the lease deed did not confer upon the developer a right to sell the property. Instead, the relevant clauses permitted the developer to create sub-leases.

The Court therefore held that mere possession of leasehold rights is not sufficient to make a person a "promoter" under RERA.

The judgment observed that the status of a promoter is determined not merely by possession or a leasehold interest, but by the developer's role in developing and selling units in a real estate project.

According to the Court, a lessee who does not sell units to prospective allottees does not fall within the statutory definition of a promoter.

RERA Registration Not Mandatory

The Court concluded that the purpose of sale is a necessary element for attracting the provisions of RERA relating to real estate projects.

Since Maa Bhagwati Commercial Reality N Resorts LLP did not have the legal authority under its lease to sell the apartments, plots or buildings, the proposed project did not fall within the ambit of the RERA Act.

Consequently, the Court held that the developer was neither required to obtain RERA registration nor could it be compelled to obtain registration for the project.

Tribunal's Direction to Register Project Set Aside

The High Court consequently disposed of the appeal and held that U.P. RERA was under no obligation to issue a registration number, Login ID or password pursuant to the developer's application.

The Authority was also directed to withdraw the Form-D communication containing prohibitory and restrictive clauses issued in relation to the project.

The Court concluded that the RERA framework is attracted to projects undertaken for the purpose of sale to prospective allottees, and not to a development where the developer merely holds leasehold rights and can only create sub-leases.

Key Takeaway

The judgment draws an important distinction between leasehold development rights and the statutory concept of a promoter under RERA.

According to the High Court, possession of land under a long-term lease, by itself, does not trigger RERA registration. The crucial consideration is whether the developer has the legal authority to develop and sell apartments, plots or buildings to prospective allottees.

Where the developer has no right to sell and is limited to creating sub-leases, the project would not constitute a "real estate project" for the purposes of mandatory registration under RERA.

 

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.

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.

The commercial advertisement cannot have the same decree of constitutional protection as in case of social or political speeches.”

 The Apex Court in Hamdard Dawakhana (WAKF) Lal Kuan, Delhi v Union of India 1960 AIR 554, 1960 SCR (2) 671 held that an advertisement is no doubt a form of speech but its true character is reflected by the object for the promotion of which it is employed. In this judgment, the court primarily relied on the judgment of the United States Supreme Court in Valentine v Chrestensen for the proposition that "purely commercial advertising" is not protected by Article 19(1) (a) of the Constitution.

In the Matter of Secretary, Ministry of Information and Broadcasting v. Cricket Association of Bengal reported in (1995) 5 SCC 161 The Supreme Court held that “commercial advertisement no doubt is a form of speech but its true character is reflected by the object for promotion of which it is employed. Only when an advertisement is concerned with the expression or prorogation of ideas that it can be said to be related to freedom of expression and speech. The object and purpose for which advertisement is published is the determining factor. When propagation of ideas and thoughts is inconsequential, but the real purpose and object is the promotion of sales of goods and services and personal benefit without any social purpose, the commercial advertisement cannot have the same decree of constitutional protection as in case of social or political speeches.”

In the Matter of Real Estate Authority, Punjab on its own motion Vs. Singla Builders and Promoters limited, 6 0f 2018 Decided on 08.02.2018 the Authority Penalised the promoter for Rs. 10,000/- for not displaying the registration number in the advertisements.

In the suo moto Matter of Maharashtra Real Estate Regulatory Authority Vs. Sai Estate Consultant Chembur (P) Ltd.(Case No. 1 of 2017) the MahaRERA Authority directed the respondent who is  a registered Real Estate Agent, to withhold the advertisements with immediate effect and rectify all the hoardings by putting MahaRERA registration number on the same. The respondent was directed to  pay a fine Rs.10000/- per day of the violation and accordingly for a violation of 12 days he was directed to pay Rs.120000/-

As per Gujarat Real Estate Regulatory Authority Circular number GujRERA/ Circular/18/2020 of date 04.01.2020 , “The font size of RERA registration number and website address in the advertisements should be mandatorily equal to or larger than the contact details of the proposed project.”  

As per the  Karnataka Rera Circular “The length and breadth of the “RERA REGISTERED'' information must not be less than 10% of the length and breadth (whichever is higher ) of the advertisement issued in print media”

In the Matter of Chandra Shekhar singh Vs. Kul Developers (P) Ltd. Complaint no. AT00500000000004, The Maharashtra appellate tribunal held that when the developer has made a promise of providing 30 Feet road through its brochure and advertisement,though it was the obligation of Municipal corporation,it would become the responsibility of the promoter to provide that.

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.

The Authority is not bound by the declaration of the Promoter under section 4(2)(1)(c),Authority is not powerless if the promoter’s declaration is arbitrary and unreasonable.Promoter cannot be given free run in deciding time for completion of a project thereby adversely impacting the interest of the prospective Allottees.

 In the Matter of M/s. Parador Promoters Amritsar Private Limited vs. Real Estate Regulatory Authority Complaint no.Appeal no. 113 of 2019 decided on 03.07.2020 before Punjab Real Estate Appellate Tribunal

Facts of the case: 

• The Promoter obtained license on 13.06.2019 to develop a residential colony within a period of 5 years. 

• The period commenced from 13.06.2019 and ended on 12.06.2024 with a stipulation that the development work must be completed within the said period. 

• The Promoter applied to the Real Estate Regulatory Authority, Punjab for registration of the project. Order passed by Punjab Authority: 

• The Authority accepted the registration of the project but allowed the timeline for completion of the project up to 12.06.2023 i.e a period of 4 years instead of 5 years. 

• The Punjab Authority observed that even though the license to develop the colony is valid up to 12.06.2024, the license of the Promoter is valid only up to 19.12.2022 . Secondly, though Change of land use is for 93.265 Acres, only 70.264 Acres is proposed to be developed in Phase I. Balance 23.001 Acre is proposed in Phase 2. Since the Promoter is not taking up the entire Group Housing in one phase, the date of completion should be 12.06.2023.

• Aggrieved by the said order of the Authority, the Promoter filed appeal before the Punjab RERA Appellate Tribunal. 

Issue before Appellate Tribunal: 

•     Whether the Act entitles the Authority to reduce the completion period of the project while registering the project? 

Promoter’s contentions: 

1. Promoter relied on section 5(3) of the Real Estate (Regulation and Development) Act, 2016. It challenged the ability of the RERA authority to vary the period applied by the promoter in the application. 

2. Reference was also made to section 6 of the RERA Act stating that a license granted to the Promoter for 5 years could not have been varied to its disadvantage while registering the project. It necessarily had to be commensurate with the period prescribed in the license. Any other interpretation would render the provision of section 6 of the Act illusory. 

3. Promoter claimed that it has now been deprived of the right to seek extension which had it not been restricted to 4 years 1 2018 (1) ABR 558 by the Authority, would have given the Promoter 6 years by including the extended period of one year. 

4. Referring to Neelkamal Realtors Suburban Pvt. Ltd. and Ors v. Union Of India 1 , it stated that the observations of this judgment can only be applied to ongoing projects. 

5. Promoter lastly contended that no reasoning was given by the Authority while reducing the period and hence decision has to be revisited. Authority’s contentions: 

The Authority opposed the Promoter’s appeal stating: 

1. Under Section 18 of the Act the Authority may, based on facts of each case and for reasons recorded in writing, extend the registration granted to a project. 

2. That extension of registration is not a matter of right but it is dependent on circumstances that the Promoter has to establish to be beyond his control i.e due to force majeure.

3. Reliance was placed on the judgement of Neelkamal Realtors Suburban Pvt. Ltd. and Ors v. Union Of India (supra) holding that in case the promoter mentions unreasonable period to complete construction, certainly the authority would not register such an application of the promoter, taking into consideration the facts of each case. 

Verdict of Appellate Tribunal: 

The Appellate Tribunal upheld the order of Authority in reducing the period of completion of project and dismissed the appeal of the Promoter. It observed that:

(i) The Authority is not bound by the declaration of the Promoter under section 4(2)(1)(c). It placed reliance on Neelkamal Realtors Suburban Pvt. Ltd. and Ors v. Union Of India (Supra) and stated that Authority is not powerless if the promoter’s declaration is arbitrary and unreasonable. Promoter cannot be given free run in deciding time for completion of a project thereby adversely impacting the interest of the prospective Allottees. 

(ii) The Tribunal rejected the Promoter’s contention that the observation of the judgement of Neelkamal case is only applicable to the ongoing project. The tribunal stated that no such distinction manifests from the provisions of Act or the observation of the judgment. 

(iii) The RERA Act does not specifically say that the period of license and the declaration made by the Promoter in terms of section 4(2)(1)(c) have to be coterminous. 

(iv) The Tribunal held that the one-line reason given by the authority for reducing the time period is sufficient. Merely because it is not set out in detail cannot ipso facto be a ground to hold it a non-speaking order.

x

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.

Authority is competent only to deal with violations or contraventions of the Act.,Authority is not the appropriate forum for settlement of disputes between the land owner and the promoter or between partners in business

 In the Matter of Raghunath Prasad Jain Vs Arihant Dream Infra Projects Ltd. Complaint no.RAJ-RERA-C-2017-2105 decided on 12.06.2019 before Rajasthan Real Estate Regulatory Authority.

• The Rajasthan Real Estate Authority presided by Shri Nihal Chand Goel and Shri Rakesh Jain held that the promoter has no obligation towards the land owner or his partners in business. 

• All the obligations of the promoter enumerated under the Act are either towards the allottees or towards the Authority, but there is no obligation the promoter has towards the land owner or his partners in business. And, the Authority is competent only to deal with violations or contraventions of the Act. 

• Thus, the Authority is not the appropriate forum for settlement of disputes between the land owner and the promoter or between partners in business;and this complaint of the land owner against the promoter is not maintainable under the Act.

• In this case, the agreement for sale executed between the allottees and the non-complainant, it was promised to deliver the possession of the project by October, 2016. Promoters challenged the maintainability of the complainant as it has been wrongly invoked under RERA as the complainant is not an allottee, but the land owner and business partner, who has been duly shown as a co-promoter in the application for registration filed before the Authority, under his consent. 

• The Act provides for remedial action for the allottees or customers being buyers of the developed property; and the disputes inter-se between the developer and the owner of land are not under the ambit and jurisdiction of RERA.

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Even when the Agreement does not contain the Date of Possession the Complaint is maintainable for refund. when no date of possession is mentioned in the agreement the Promoter is expected to hand over the possession within reasonable time.

 In the Matter of Vrajesh Hirjee v/s Skyline Construction Company Complaint number CC006000000057101 decided on 21.02.2019

the matter was before Maharashtra Real Estate Regulatory Authority

Parties have entered into agreement for sale but there is no mention of the date of possession. The learned advocate of the respondents therefore submits that  the date of possession is kept blank with the consent of the Parties and no date of possession was agreed upon The respondents have pleaded not guilty and have filed their reply to contend that the complaint is not maintainable because there is no agreed date of possession mentioned in the agreement

According to the Honorable court Section 13(2) of RERA  the promoter is liable to enter into a written agreement for sale and mention in it the date by which the possession of the flat is to be handed over to the Purchaser, Hence, the respondents cannot take disadvantage of their own wrong. In this case the Honorable court relied upon the matter of Fortune Infrastructure-v/s-Travor D'lima (2018) 5 SCC 442 so The respondents were directed to pay the aforesaid amount with simple interest at the rate of 10 55% per annum from the date of receipt till their repayment.

If the Redevelopment project involves the Sale of flats to outside parties, then the builder becomes promoter under the act and the project is to be registered

 In the Matter of Indira Nagar Kaveri Apartments Owners Welfare Association v/s Navin Housing & Properties Pvt. Ltd. Complaint number 433/2019 ,

The Hon’ble Tamil Nadu  Real Estate Regulatory Authority observed that 

• an Agreement between existing flat owners and Builder intending to do redevelopment of the Society where the sale of flat to outside parties are also involved., “Very much constitute the standard joint development agreement for redevelopment  which is entered into between the existing flat owners and the promoter builder for demolition of the existing flats and construction of new flats in the said property. Therefore the day existing flat owners sign the deed of agreement with the promoter builder, the existing flat owners become an allottee and the respondent builder becomes the promoter under this act.”

• The Hon’ble Tribunal further added that it is the responsibility of the promoter to get the consent from the remaining flat owners to take up the redevelopment project.

• The Hon’ble Tribunal further declined to transfer the matter for arbitration adding that  “after the commencement of the Real Estate (Regulation and Development) act, 2016 the real estate disputes and complaints will have to be adjudicated by the authority constituted under the act.” 

Land Owners can’t be Punished in Joint Ventures – Tamil Nadu RERA

 In a complaint filed by Shankari Sundararaman (“Complainant”) against Sree Vardhana Builders Private Limited (“Company”), 265 of 2020 its directors and landowners of the Project named ‘Vardhana Constellation’ in Coimbatore, for claiming refund of amounts paid towards the purchase of the flat under Real Estate (Regulation and Development) Act, 2016 (“Act”), the Tamil Nadu Real Estate Regulatory Authority, Chennai (“TNRERA”) stated that since directors are actively involved in the affairs of the Company and have received money and corresponded with the Complainant, they would be liable for violations under Section 69 the Act which deals with offences by companies and people responsible for the conduct/business of the company. 

However, with respect to landowners of the project site (being the other respondents), TNRERA stated that the landowners had just entered into joint venture agreements and had executed general power of attorney with the Company. The sale deeds for the undivided share of land was only executed by the Company and not the landowners. 

Further, it was stated that it was the Company that had launched the project and had entered into various agreements with the Complainant for construction and delivery of the constructed apartment on receiving consideration. 

Henceforth, the landowners would not come under the definition of “promoter” and only the Company would fall under the definition of “promoter” to be made liable for contravention under Section 31 read with Section 71 of the Act

Complaints can be instituted against promoters in relation to both projects which have been registered with the authority or which are not registered with the authority

Simmi Sikka V/s M/S EMAAR MGF LAND LTD Complaint number RERA-GRG-7-2018

Haryana Real Estate Regulatory Authority Gurugram 

The judgement contains the following conclusions

• The RERA Act, nowhere mentions anywhere that it is applicable only for the registered projects.

• The RERA Act, provides certain categories of projects which are not required to be registered but these are within the ambit of the Act. These projects mentioned in section 3(2) have been taken out of the registration requirement but not out of the purview of other provisions of the Act.

• The provisions regarding registration and obligation during registration are applicable only for the registered projects.

• The obligations of the promoter’s post expiry of the validity of the registration provided in the Act are applicable to even the real estate projects exempted from the registration.

• The projects which were completed and handed over during the last 5 years are 

covered for the purpose of workmanship and structural defect liability.  A complaint may be filed by the allottee in such matter in case the possession of the real estate was within 5 years prior to the date of the complaint.

• All real estate projects are covered for land title defect liability

• A complaint pertaining to violation of the provisions of RERA Act, Haryana RERA Rules, and regulations thereunder, may be filed by any aggrieved person in respect of any real estate project as per the definition given in section 2(zn) of RERA Act.

Based on the above judgment, it may be concluded that registration of project and filing RERA complaint, both are separate activities. A RERA case can be filed even against the non-registered projects.