Karnataka High Court
Sri S P Chidanand vs The State Of Karnataka on 7 February, 2025
Author: B.M.Shyam Prasad
Bench: B.M.Shyam Prasad
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NC: 2025:KHC:5702
WP No. 22643 of 2024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 7TH DAY OF FEBRUARY, 2025
BEFORE
THE HON'BLE MR JUSTICE B M SHYAM PRASAD
WRIT PETITION NO. 22643 OF 2024 (LB-RES)
BETWEEN
SRI. S.P. CHIDANAND
S/O SRI. S.R. PUTTASWAMAIAH,
AGE. 52 YEARS,
R/AT. 'AMMA NILAYA',
BEHIND NALANDA CONVENT,
SRINIDHI LAYOUT,
SAPTHAGIRI LAYOUT,
TUMAKURU-572 102.
...PETITIONER
(BY SRI. DHANANJAY JOSHI, SENIOR COUNSEL FOR
SRI. DARSHAN H.V., ADVOCATE)
AND
1. THE STATE OF KARNATAKA
Digitally R/BY ITS SECRETARY TO GOVERNMENT,
signed by
VISHAL
NINGAPPA
DEPARTMENT OF PARLIAMENTARY
PATTIHAL AFFAIRS AND LEGISLATION,
Location: High
Court of
Karnataka,
VIDHANA SOUDHA,
Dharwad
Bench BENGALURU-560 001.
2. THE DIRECTOR,
DIRECTORATE OF TOWN AND
COUNTRY PLANNING,
GPO PB #5257, PHASE IV,
M.S. BUILDING,
DR.B.R. AMBEDKAR VEEDHI,
BENGALURU-560 001.
3. THE TUMKUR URBAN
DEVELOPMENT AUTHORITY,
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WP No. 22643 of 2024
REPRESENTED BY ITS COMMISSIONER,
BELAGUMBA ROAD,
BEHIND THAMMIAH HOSPITAL,
TUMAKURU-572 103.
4. KARNATAKA REAL ESTATE
REGULATORY AUTHORITY,
REPRESENTED BY ITS CHAIRMAN,
NO.1/4, GROUND FLOOR,
SILVER JUBILEE BLOCK,
UNITY BUILDING,
CSI COMPOUND,
3RD CROSS MISSION ROAD,
BENGALURU-560 027.
...RESPONDENTS
(BY SRI. B.S. GURUSWAMY, AGA FOR R1 AND R2;
SRI. T.P. VIVEKANANDA, ADVOCATE FOR R3;
SRI. I.S. DEVAIAH, ADVOCATE FOR R4)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO, ISSUE
WRIT OF CERTIORARI OR IN THE LIKE NATURE OF
CERTIORARI QUASHING THE IMPUGNED ENDORSEMENT
DATED 02.08.2024 VIDE NO.TUDA/LAO-458/2022-23/969,
ISSUED BY RESPONDENT NO.3, VIDE ANNEXURE-G & ETC.,
THIS PETITION COMING ON FOR PRONOUNCEMENT OF
ORDERS, THIS DAY, THROUGH VIDEO CONFERENCING AT
DHARWAD BENCH, THE COURT MADE THE FOLLOWING:
CORAM: HON'BLE MR JUSTICE B M SHYAM PRASAD
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NC: 2025:KHC:5702
WP No. 22643 of 2024
ORAL ORDER
The petitioner has commenced plotted development in an extent measuring 2 acres 09 guntas in Sy No. 46/5, 50/3, 46/1, 46/3 and 50/2 of Guluru Village and Hobli, Tumakuru Taluk. This development, for convenience, is referred to as 'the Project', and this extent of 2 acres and 09 guntas is referred to as the 'Subject Property'. The Second respondent - the Tumakuru Urban Development Authority ['the Planning Authority'] has accorded Provisional Approval under section 17 [2-A] of the Karnataka Town and Country Planning Act,1961 [the KTCP Act] and then issued the Work Order dated 21.08.2023 [Annexure - B] permitting commencement of the Project. However, the Planning Authority has not issued the Final Approval under section 17 [2-B] of the Karnataka Town and Country Planning Act, 1961 [the KTCP Act].
2. The Planning Authority has issued the impugned Endorsement dated 28.02.2024 [Annexure - G] calling upon the petitioner to register the Project with the -4- NC: 2025:KHC:5702 WP No. 22643 of 2024 Karnataka Real Estate Regulatory Authority [the fourth respondent and referred to as 'the Regulatory Authority'] and then apply for Final Approval under section 17 [2-B] of the KTCP Act. The Planning Authority has issued this Endorsement because the Regulatory Authority has addressed Communication dated 20.02.2024 [Annexure - H]. The Regulatory Authority, by this Communication, has informed the Planning Authority:
[a] that every Real estate project involving construction which is in excess of 500 square meters [or 8 units] and involves plot development must be compulsorily registered under the provisions of the Real Estate Regulation and Development Act, 2016 [for short, the Real Estate Act], and [b] that the condition that the Real estate project must be registered under the Real Estate Act must be incorporated in the Provisional Approval and the Final Approval -5- NC: 2025:KHC:5702 WP No. 22643 of 2024 should not be granted under unless a real estate project is registered.
The petitioner has called in question the Endorsement dated 28.2.2024 [Annexure - G] and the Communication dated 20.02.2024 [Annexure - H].
3. The petitioner's grievance with these impugned Endorsement and Communication is because of the stipulation that Final Approval under KTCP Act shall not be granted unless his Project is registered under the provisions of the Real Estate Act. This grievance is premised in the assertion that the Real Estate Act does not stipulate that a Planning Authority must withhold approval [Final Approval] under Section 17[2-B] of the KTCP Act for a project until the concerned real estate project is registered under Section 3 thereof even if the proponent has completed such project from out of its own funds without marketing/ selling [or offering to sell] any part of the Project and proposes to market/sell [or offer to sell] only after registering such project under the Real Estate Act.
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4. A brief statement of the facts: As first mentioned, the Planning Authority has accorded Provisional Approval for the Project under section 17[2-A] of the KTCP Act on 01.07.20231 stipulating, amongst others, that the petitioner must register the Project with the Regulatory Authority under the Real Estate Act. The Planning Authority has next issued the Work Order dated 21.08.2023 The petitioner has begun the execution of the Project and the completion of certain works in the Project is certified by the following authority.
[i] An Engineer with the concerned Zilla Panchayat: This Engineer has addressed the Communication dated 05.02.2024 to the Planning Authority confirming that the petitioner has completed the execution of laying water pipes and sewage lines [Annexure
- C].
1 The petitioner has not produced a copy of this Provisional Approval, but the Planning Authority has produced it as Annexure - R 1 to it Statement of objections.
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NC: 2025:KHC:5702 WP No. 22643 of 2024 [ii] The Development Officer of the concerned Town Panchayat. This Officer has issued Endorsement dated 07.02.2024 listing the works completed by the petitioner including the works such as constructing fence for areas reserved for Park and Civic Amenities [Annexure - D] [iii] Bangalore Electric Supply Company: This electricity company has confirmed that the petitioner has issued appropriate installations for the service of electricity [Annexure - E].
The Planning Authority has also confirmed that the petitioner has not applied for release of any site as contemplated under section 17 [2-C] of the KTCP Act.
5. It is at this stage that the Regulatory Authority has addressed the impugned Communication dated 20.02.2024 calling upon the Planning Authority to -8- NC: 2025:KHC:5702 WP No. 22643 of 2024 incorporate the condition in the Provisional Approvals2 that the real estate projects must be registered under the Real Estate Act and not to grant Final Approval3 unless a project is registered under the Real Estate Act, and consequentially, the Planning Authority has issued the next Endorsement dated 02.08.2024 informing the petitioner that unless the Project is registered with the Real Estate Act, the Final Approval cannot be granted under section 17 [2-B] of the KTCP Act.
6. Initially, it was presented to this Court that, apart from the legal contentions raised as against the insistence on registering with Regulatory Authority under the said Act as a condition for grant of Final Approval to the Project under Section 17[2-B] of the KTCP Act though the petitioner has completed the Project out of its own funds without marketing, the petitioner's difficulty could be resolved if the Regulatory Authority did not insist upon the petitioner opening an Escrow Account as envisaged under 2 The Provisional Approval under Section 17 [2-A] of the KTCP Act 3 The Final Approval under Section 17 [2-B] of the KTCP Act. -9-
NC: 2025:KHC:5702 WP No. 22643 of 2024 section 4[2][l][D] of the Real Estate Act. It was reiterated that the petitioner, even if Final Approval is granted under Section 17[2-B] of the KPTCL Act by the Planning Authority, it will not market any portion of the Project unless it is registered with the Regulatory Authority under the Real Estate Act.
7. This Court therefore has permitted both the Planning Authority and the Regulatory Authority to make submissions. On 02.12.2024, it is placed on record that the Regulatory Authority has enabled certain changes in its portal and that there would be no insistence on opening an Escrow Account as in the petitioner's circumstances. This however has not brought about a closure with the petitioner asserting that, even if the requirement of an Escrow Account is addressed, it will have to, for registration of its Project under the Real Estate Act, furnish details and undertake processes that would not be necessary for a Completed Project.
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8. This Court has permitted the petitioner to file an affidavit on the requirements that would be unnecessary. The petitioner has indeed filed an affidavit with certain details, and the Planning Authority and Regulatory Authority have filed their respective Statements of Objection which show that the issue between the petitioner and the Planning Authority/ Regulatory Authority cannot be resolved thus. As such, this Court has observed that the Planning Authority and the Regulatory Authority will have to answer Why, in the peculiarities of this case where the salient are not disputed, there should not be a direction to the Planning Authority to grant Final Approval4 for the Project on verification of compliance and payment and on the condition that unless the petitioner registers the Project with the Regulatory Authority it shall not sell or market any portion of the Project as is proscribed under Section 3 of the Real Estate Act.
9. If Sri. Dhananjaya Joshi, the learned senior counsel for the petitioner, has canvassed in support of the petitioners' case for quashing the Endorsement dated 4 The Final Approval under Section 17[2-B] of the KTCP Act.
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NC: 2025:KHC:5702 WP No. 22643 of 2024 02.08.2024 issued by the Planning Authority and the petitioner's grievance as against the Regulatory Authority's communication dated 20.02.2024, Sri. T.P. Vivekananda, the learned counsel for the Planning Authority, and Sri. I.S. Devaiah, the learned counsel for the Regulatory Authority, refute such canvass. The details of the respective submissions are as follows.
The submissions on behalf of the petitioner:
10. A promoter of a Real estate project, in view of Section 3 of the Real Estate Act, shall not advertise or market or book or sell or offer for sale or invite a person to purchase [for short, 'for marketing or to sell'] any plot or apartment or building in a real estate project unless the project is registered with the Regulatory Authority upon an application under Section 4 of the Real Estate Act. The concomitant position would be that there is no embargo against a promoter undertaking the development of a real estate project upon securing all approvals from the competent authority, and the insistence upon registration of the project under the Real Estate Act can only be when the
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NC: 2025:KHC:5702 WP No. 22643 of 2024 project, or a portion thereof, is brought for marketing or to sell.
10.1 The scheme under Section 17 of the KTCP Act, especially after the amendment by Act 34 of 2020, is that a project proponent cannot bring any portion of the project to market or to sell unless the Final Approval is issued under Section 17[2-B] and this permission is on the condition that the project must be registered with the Regulatory Authority before any portion is brought for marketing or to sell. Additionally, a proponent may apply with the Planning Authority, as envisaged under Section 17[2-C] of the KTCP Act, for approval in phases, and if approval in phases is permitted with release of certain sites/units for sale in the first trance, these released plots/units cannot be sold unless the project is registered with the Regulatory Authority.
10.2 The Planning Authority, after a Real estate project is developed completely as is required in terms of a Work Order, and when an application is filed for Final
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NC: 2025:KHC:5702 WP No. 22643 of 2024 Approval under Section 17[2][B] of the Act, insists upon registering the project under the Real Estate Act. This is seen not just in the Planning Authority issuing work order to the petitioner without stipulation on registering the project under the Real Estate Act, but also where the stipulation that the project must be registered is stipulated in the Final Approval. In fact, a copy of the Final Approval dated 12.08.2024 issued by the Planning Authority in favour of a third-party proponent under Section 17[2-B] is placed on record to vindicate this stand.
10.3 The Real Estate Act in Section 4 has detailed the documents/sanctions that will have to be furnished for registration with the Regulatory Authority. These documents/sanctions will be relevant only when a Real estate project is an Ongoing Project and will not be relevant where the projects are completed [Completed Project]. The reliance is upon provisions such as Section 4[2][e], 4[2][k], 4[2][l] of the Real Estate Act. The same reads a under:
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NC: 2025:KHC:5702 WP No. 22643 of 2024 "4[2][e] The plan of development works to be executed in the proposed project and the proposed facilities to be provided thereof including fire fighting facilities, drinking water facilities, emergency evacuation services, use of renewable energy."
"4[2][k] the names and addresses of the contractors, architect, structural engineer, if any and other persons concerned with the development of the proposed project."
"4[2][l] a declaration, supported by an affidavit, which shall be signed by the promoter or any person authorised by the promoter, stating:--
[A] xxx [B] xxx [C] XXX [D] that seventy per cent. of the amounts realised for the real estate project from the allottees, from time to time, shall be deposited in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost and shall be used only for that purpose: Provided that the promoter shall withdraw the amounts from the separate account, to cover the cost of the project, in proportion to the percentage of completion of the project: Provided further that the amounts from the separate account shall be withdrawn by the promoter after it is certified by an engineer, an architect and a chartered accountant in
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NC: 2025:KHC:5702 WP No. 22643 of 2024 practice that the withdrawal is in proportion to the percentage of completion of the project: Provided also that the promoter shall get his accounts audited within six months after the end of every financial year by a chartered accountant in practice, and shall produce a statement of accounts duly certified and signed by such chartered accountant and it shall be verified during the audit that the amounts collected for a particular project have been utilised for that project and the withdrawal has been in compliance with the proportion to the percentage of completion of the project."
10.4 If the proponent of a Completed Project [such as the petitioner] is called upon to furnish these documents, it would only be onerous, and given the object for which is Real Estate Act is promulgated, neither the Planning authority nor the Regulatory Authority can insist upon such compliances.
10.5 The provisions of Section 4[2][l] of the Real Estate Act requires the proponent of a project to deposit 70% of the amounts realized from the project from time to time in a separate amount to be maintained in a schedule bank to cover the cost of construction and cost of land and to be
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NC: 2025:KHC:5702 WP No. 22643 of 2024 used only for such purposes. This requirement, even for a Completed Project, will be onerous. As such, the Planning Authority cannot withhold Final Approval under Section 17[2-B] of the KTCP Act on the ground that the project is not registered especially with the Regulatory Authority [under the Real Estate Act] when the proponent is categorical that no part of the project will be brought for marketing or to sell unless registered with the Regulatory Authority even if Final Approval is granted.
On behalf of the Planning Authority and Regulatory Authority.
11. The Planning Authority has issued Provisional Approval under section 17 [2-A] of the KTCP Act even in the petitioner's case stipulating that the Project must be registered with the Regulatory Authority. The petitioner's case that the Work Order dated 21.08.2023 is issued without stipulation in this regard is contrary to the records.
11.1 The Real Estate Act is promulgated to law to regulate and promote the real estate sector to ensure that
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NC: 2025:KHC:5702 WP No. 22643 of 2024 the Real estate projects are executed and the plots and units are sold in an efficient and transparent manner which protects the consumers' interests in the real estate sector while providing for a speedier adjudicating mechanism. As such, registration of every Real estate project at the earliest is a requirement under the Real Estate Act. This will be the true import of the stipulation under Section 3 of this Act that no promoter shall market or sell any plot without registering the project with the Regulatory Authority.
11.2 The Real Estate Act, to ensure that even the real estate projects that were midway as of the date of the commencement of the Act are registered, stipulates that an Ongoing Project as of such date shall be registered under the Act. The petitioner, because of the scheme under the Real Estate Act, cannot, only because he contends that he has completed the Project, assert that he can be permitted to register the project after the Final Approval.
11.3 The KTCP Act may not specifically provide that the applicant who applies for permission under Section
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NC: 2025:KHC:5702 WP No. 22643 of 2024 17[2-B] thereof will have to register the project under the Real Estate Act before any portion of the project is brought to sale as is expressly provided when an application is made under Section 17 [2-C] thereof for phase development, but it is settled that every prevailing enactment must be read harmoniously with the new enactment to achieve the purpose of the later enactment.
11.4 The Regulatory Authority has addressed the Communication dated 20.02.2024 because it is noticed that from the year 2016-17 only 15 projects within the Planning Authority's jurisdiction is registered under the Real Estate Act and that such a number is unimaginable given the real estate projects approved by the Planning Authority during this period. The Regulatory Authority is of the opinion that the promoters of the real estate projects are evading the provisions of the Real Estate Act refusing to register their projects under the Real Estate Act because the Planning Authority is granting Final Approval without insisting on registration under Real Estate Act.
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NC: 2025:KHC:5702 WP No. 22643 of 2024 11.5 If the Regulatory Authority has detailed the changes made to address the petitioner's concern on Escrow Account for a Completed Project, the Planning Authority has stated that it will not have any issue if it is directed to examine the petitioner's request for Final Approval under Section 17[2-B] of the KTCP Act subject to the registration of the project under Real Estate Act before any part of the project is brought for marketing or to sell but emphasizing that the distinction made between a Completed Project and an Ongoing Project is totally extraneous to the scheme under the Real Estate Act
12. The question framed for consideration must be examined in the light of the rival submissions and the provisions of both the KTCP Act and the Real Estate Act. It cannot be gainsaid that the provisions of these enactments regulate real estate sector, and in that sense there is overlapping, but then it is now settled that the Real Estate Act is not intended to oust or upset the enactments by the State Legislature for regulating real estate development. In this regard immediate reference could be made to the
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NC: 2025:KHC:5702 WP No. 22643 of 2024 decision of the Apex Court in Forum For Peoples Collective Efforts [FPCE] and another vs. State of West Bengal and another5. Further, this Court must observe that when two enactments overlap each other in some areas but there is no repugnancy, the Courts must harmoniously interpret the relevant provisions in the enactments.
12.1 A Planning Authority, under the KTCP Act, is vested with the jurisdiction to regulate development of the real estate projects. The Planning Authority decides on the contours for the development within a Planning Area, and based on such decision, the State Government publishes Master Plans / Interim Master Plans. Every development must be in accord with these plans, and to ensure the same, the Planning Authority is invested with the jurisdiction to sanction plans for development. The State Government, as contemplated under Section 17[1] of the KTCP Act, prescribes the standards to be considered for grant of approvals for layouts. After Act No.34 of 2020 amending 5 [2021] 8 SCC 599
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NC: 2025:KHC:5702 WP No. 22643 of 2024 Section 17 of the KTCP Act, the Planning Authority grants approval for a layout is granted in two stages.
12.2 The Provisional Approval is granted under Section 17[2-A] of the KTCP Act, and on completion of all the development works and upon relinquishment of a certain areas earmarked, the Final Approval is granted under Section 17[2-B]. The provisions of Sections 17[2-A] and 17[2- B] of the KTCP Act reads as under:
17[2-A] If the Authority decides to sanction the layout plans under sub-section [2], it shall sanction provisional layout plan in accordance with such rules as may be prescribed for demarcation and development purposes showing the sites, street alignment, 3 [park and play ground] 3 and civic amenity area and any other infrastructure facility including the arrangement to be made for leveling, paving, metalling, flagging, channeling, sewering, draining, street lighting and water supply to the satisfaction of the Planning Authority and local authority. One copy of such plan shall be marked to the jurisdictional local authority. The owner shall relinquish the roads, 3 [parks and play ground] 3 to the local authority and Civic Amenity areas to the Planning Authority through registered relinquishment deed free of cost without claiming any compensation.
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NC: 2025:KHC:5702 WP No. 22643 of 2024 17[2B] The Planning Authority shall ensure the completion of all development works including all infrastructure facilities as mentioned in sub-section [2A] under the supervision of the concerned Authority/ Agency/Department. On obtaining the certificate of completion from the concerned Authority/Agency/Department on having completed all the development works and on relinquishment of the roads, parks to the local authority and Civic Amenity areas to the Planning Authority and handing over the same, the Planning Authority may issue the final layout plan affixing the seal of the Planning Authority for registration purpose. Provided that no Commencement Certificate or licence shall be sanctioned or issued for buildings on sites in the layout unless the final layout plan is issued.
12.3 These two provisions do not specifically refer to the requirement of registration of a real estate project with the Regulatory Authority under Section 3 of the Real Estate Act. However, it remains indisputable that a proponent cannot sell any part of a project only with the Provisional Approval under Section 17[2-A] of the KTCP Act even in the absence of the Real Estate Act and the proponent can bring the project [or any portion thereof] for
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NC: 2025:KHC:5702 WP No. 22643 of 2024 marketing or to sell only when the Final Approval is accorded under Section 17[2-B] of the KTCP Act.
12.4 The provisions of Section 17[2-C] of the KTCP Act, which empowers a Planning Authority to grant approval for development of a real estate project in phases, stipulates that the sites that are part of approval for development in phases can be released for sale only after the registration of the project under the Real Estate Act. The provisions of Section 17[2-C][v] of the KTCP Act reads as under:
"17[2-C][v] The building sites mentioned in sub-clause (ii) of sub-section (2-C) shall be released only after registration of the project under the Real Estate (Regulation and Development) Act 2016 (Central Act 16 of 2016)."
It is this difference in stipulation in Section 17[2-A] / 17[2- B] and 17[2-C] of the KTCP Act that gives some leg to the petitioner to contend that when a project is completed, a planning authority cannot insist upon registration of a
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NC: 2025:KHC:5702 WP No. 22643 of 2024 project under the Real Estate Act for issuance of Final Approval under Section 17[2-B] of the KTCP Act.
12.5 This Court must observe that the Planning Authority in issuing the Provisional Approval for the petitioner's Project under Section 17[2-A] of the KTCP Act has stipulated that the petitioner must register the Project with the Regulatory Authority. The petitioner cannot succeed in his grievance against the impugned Endorsement dated 02.08.2024 if it could be opined that the Planning Authority, in continuation of this stipulation in the Provisional Approval, is justified in calling upon the petitioner to register the Project with the Regulatory Authority given the object of the Real Estate Act and the interplay between this enactment and the KTCP Act.
12.6 It will be apposite to refer to the object of the Real Estate Act as exposited by the Apex Court in Newtech Promoters and Developers Private Limited vs. State of Uttar Pradesh and others6 as this exposition is in 6 [2021] 18 SCC 1
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NC: 2025:KHC:5702 WP No. 22643 of 2024 the context of the requirement of registering a real estate project with the Regulatory Authority under the Real Estate Act in the context of the arguments against the compliance with this requirement for an Ongoing Project. The Supreme Court has stated thus after referring to the scheme under the Real Estate Act "31. The issue concerns the retroactive application of the provisions of the 2016 Act particularly, with reference to the ongoing projects. If we take note of the objects and reasons and the scheme of the Act, it manifests that the Parliament in its wisdom after holding extensive deliberation on the subject thought it necessary to have a central legislation in the paramount interest for effective consumer protection, uniformity and standardisation of business practices and transactions in the real estate sector, to ensure greater accountability towards consumers, to overcome frauds and delays and also the higher transaction costs, and accordingly intended to balance the interests of consumers and promoters by imposing certain duties and responsibilities on both. The deliberation on the subject was going on since 2013 but finally the Act was enacted in the year 2016 with effect from 25-3-2016.
32. Under Chapter II of the 2016 Act, registration of real estate projects became mandatory and to make the statute applicable and to take its place
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NC: 2025:KHC:5702 WP No. 22643 of 2024 under sub-Section (1) of Section 3, it was made statutory that without registering the real estate project with a real estate regulatory authority established under the Act, no promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner a plot, apartment or building, as the case may be in any real estate project but with the aid of proviso to Section 3(1), it was mandated that such of the projects which are ongoing on the date of commencement of the Act and more specifically the projects to which the completion certificate has not been issued, such promoters shall be under obligation to make an application to the authority for registration of the said project within a period of three months from the date of commencement of the Act. With certain exemptions being granted to such of the projects covered by subsection (2) of Section 3 of the Act, as a consequence, all such home buyers agreements which has been executed by the parties inter se have to abide the legislative mandate in completion of their ongoing running projects."
12.7 The registration of a real estate project with the Regulatory Authority is for effective protection of consumers' interest and to establish a uniform and standardize business practices, transaction and compliances in the real estate sector to ensure greater accountability towards consumers. If this is the object, the crucial question
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NC: 2025:KHC:5702 WP No. 22643 of 2024 is should the registration of a Real estate project with the Regulatory Authority be at different points in the execution of the Project based on whether a project is 'a Completed Project' or 'an Ongoing Project' or a project being developed in phases or any other nature of development that could be found expedient by a promoter.
12.8 This question, insofar as a project developed in phases and an Ongoing Project, is answered by the provisions of Section 17[2-C] of the KTCP Act and Apex Court's decision in New Tech Promoters and Developers Private Limited [supra]. The first proviso to Section 3 of the Real Estate Act is also categorical on what must be construed as an Ongoing Project. This Court must opine that in view of the first proviso to Section 3 of the Real Estate Act, it is only those projects which were midway [ongoing] on the date of the commencement of this Act and for which the completion certificate has not been issued, will be considered as Ongoing Projects. This falls from the exposition by the Apex Court in the aforesaid decision and the pari
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NC: 2025:KHC:5702 WP No. 22643 of 2024 materia provisions in Rule 4 of the Karnataka Real Estate [Regulation and Development] Rules, 20177.
12.9 The Real Estate Act, insofar as an Ongoing Project as contemplated thereunder, mandates that the project must be registered with the Regulatory Authority within three months from the date of the commencement of the Act, and otherwise, every promoter must register a Real estate project under Section 3 of thereof and a promoter shall not bring any project [or a portion thereof] for marketing or to sell unless the project is registered. These provisions indicate that registration under this Act must be at the earliest, and this would only mean that the registration must immediately follow the Provisional Approval under Section 17[2-A] of the KTCP Act. 7 4. Additional disclosure by promoters of ongoing projects. (1) Upon the notification for commencement of sub-section (1) of section 3, promoters of all ongoing projects which have not received completion certificate shall, within the time specified in the said sub-section, make an application to the Regulatory Authority in the form and manner as specified in rule 3.
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NC: 2025:KHC:5702 WP No. 22643 of 2024 12.10 Further, if a promoter is permitted to obtain Final Approval under Section 17[2-B] of the KTCP because he/ it has not offered a project [or any portion thereof] for marketing or to sell, and then register the project with the Regulatory Authority under the Real Estate Act, the object of the Real Estate Act, which is also to ensure [apart from protecting the consumers' interest] that the consumers' interest is protected and that uniform and standard practices are established across the sector, will be violated. Furthermore, there is nothing in the KTCP Act which would do violence to this requirement. As such, the question for consideration is answered holding that the Planning Authority cannot be directed to issue Final Approval under Section 17[2-B] of the KTCP Act without the petitioner registering the Project under the Real Estate Act.
12.11 This Court in disposing of this writ petition must conclude that the Regulatory Authority cannot insist upon the petitioner to comply with the requirement of establishing an Escrow Account under Section 4[2][l][D] of the Real Estate Act as it has made alterations in its portal
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NC: 2025:KHC:5702 WP No. 22643 of 2024 recognizing that this requirement need not be insisted upon if a project is completed without marketing / selling and is so finally approved by the Planning Authority under Section 17[2-B] of the KTCP Act. In the light of the afore, the following:
ORDER The petition is disposed of with liberty to the petitioner to apply with the Planning Authority for Final Approval under Section 17[2-B] of the Karnataka Town and Country Planning Act, 1961 once his Project is registered under Section 3 of the Real Estate [Regulation and Development] Act, 2016 directing the Regulatory Authority not to insist on the requirement of setting up an Escrow Account under Section 4[2][l][D] of the aforesaid Act for the purposes of such registration.
Sd/-
(B M SHYAM PRASAD) JUDGE Rsh CT: vp LIST NO.: 19 SL NO.: 6