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.

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.

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