M/S Cambrian Technologies Private ... vs Karnataka Real Estate Regulatory ... on 15 February, 2023

[Cites 47, Cited by 0]

Karnataka High Court

M/S Cambrian Technologies Private ... vs Karnataka Real Estate Regulatory ... on 15 February, 2023

Bench: M.Nagaprasanna

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                                                      WP No. 18843 of 2022




                        IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                          DATED THIS THE 15TH DAY OF FEBRUARY, 2023

                                           BEFORE

                          THE HON'BLE MR JUSTICE M.NAGAPRASANNA

                          WRIT PETITION NO. 18843 OF 2022 (GM-RES)

                   BETWEEN:

                   1.    M/S CAMBRIAN TECHNOLOGIES PRIVATE LIMITED
                         A PVT FIRM REGISTERED UNDER
                         THE INDIAN PARTNERSHIP ACT 1932
                         HAVING ITS OFFICE AT 4TH FLOOR
                         PSR NIVAS, 39/7-1, FZ3,
                         7TH MAIN, APPAREDDYPALYA
                         INDIRANAGAR, BANGALORE - 38
                         REPRESENTED BY ITS
                         AUTHORISED SIGNATOYR
                         MR. NAMAN MANISH KABRA
                         DIRETOR
                                                              ...PETITIONER

                   (BY SMT SHIRIVIDYA ZIRALI, ADVOCATE)

Digitally signed   AND:
by PADMAVATHI
BK
Location: HIGH
COURT OF           1.    KARNATAKA REAL ESTATE REGULATORY AUTHORITY
KARNATAKA                ADDRESS: 2ND FLOOR SILVE JUBILEE BLOCK
                         UNITY BUILDING, CSI COMPOUND
                         3RD CROSS, MISSION ROAD,
                         BENGALURU, KARNATAKA 560027
                         REPRESENTED BY ITS SECRETARY


                   2.    MIRAYA ROSE BY UKN
                         RESIDENTS WELFARE ASSOCIATION
                         A WELFARE ASSOCIATION REGISTERED UNDER
                         THE KARNATAKA SOCIETIES
                         REGISTRATION ACT 1960
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                                   WP No. 18843 of 2022




     HAVING ITS REGISTERED OFFICE AT
     SY. NO. 66/1, SIDDAPURA VILLAGE
     VARTHUR HOBLI,
     BANGLAORE EAST TALUK
     BANGALORE ZONE 3 MAHADEVAPURA
     HAGADURU 560066
     REPRESENTED BY ITS PRESIDENT
     MR. SAROSH J. GANDHI


3.   M/S WATERLINE HOTELS PRIVATE LTD
     A COMPANY INCORPORATED UNDER THE
     PROVISIONS OF COMPANIES ACT 1956
     HAVING ITS REGISTERED OFFICE AT
     MIRAYA ROSE BY UKN
     SY.NO. 66/1, SIDDAPURA VILLAGE
     VARTHUR HOBI,
     BANGALORE EAST TALUK
     BANGALORE ZONE 3 MAHADEVAPURA
     HAGADURU 560066
     REPRESENTED BY ITS DIRECTORS
     GAUTAM UNNIKRISHNAN NAMBISAN
     AND KUSH DORAB MEDHORA
                                         ...RESPONDENTS

(BY SRI GOWTHAMDEV C ULLAL., ADV. FOR R1
    SRI R.V.ANAND, ADV. FOR R2
    SRI ABHISHEK PATIL, ADV. FOR R3)


      THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO
QUASH THE ORDER DTD.20.7.2022 AT ANNEXURE-K AND
ORDER DTD.23.8.2022 AT ANNEXURE-L PASSED BY TH R-1 IN
COMPLAINT NO.CMP/UR/220614/0009627 AND ETC.


      THIS   PETITION,   COMING   ON   FOR   PRELIMINARY
HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:
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                                         WP No. 18843 of 2022




                            ORDER

Heard the learned counsel Smt. Shirividya Zirali for the petitioner, the learned counsel Sri Gowthamdev C Ullal for respondent No.1, the learned counsel Sri R.V.Anand for respondent No.2 and the learned counsel Sri Abhishek Patil for respondent No.3.

2. The petitioner is before this Court calling in question the orders dated 20.07.2022 and 23.08.2022 passed by respondent No.1 on a complaint so registered by the petitioner before the Real Estate Regulatory Authority (RERA).

3. The learned counsel appearing for the petitioner submits that the issue in the lis stands covered by the order passed by this Court in W.P.No.18448/2021 as this Court has considered the entire spectrum of the Real Estate (Regulation and Development) Act, 2016 and the Real estate (Regulations and Development) Rules, 2017 (for short 'the Rules') and held that if RERA has no jurisdiction to entertain the petition, no order of it would become binding on the petitioner therein.

4. She also submits that the issue in the lis akin to what has been ordered by this Court in the aforesaid writ -4- WP No. 18843 of 2022 petition. She would further submit that an application was filed before the Joint Directior, Town Planning (North), BBMP on 12.06.2017 seeking occupancy certificate contending that the building of the petitioner was complete and an occupancy certificate was needed for such occupation. The said occupancy certificate was approved and issued on 14.12.2017.

5. The learned counsel Sri. Gawtham Dev C.Ullal appearing for respondent No.1-RERA would refute the submissions to contend that it is the date on which the occupancy certificate is issued is what has to be taken into consideration and if that is taken, it is after the Rules coming into force. Therefore, the order of the RERA cannot be said to be without jurisdiction.

6. The learned counsel appearing for respondent No.2 would also toe the lines of the learned counsel appearing for respondent No.1.

7. Therefore, what is germane to be noticed is the date on which the application was filed for grant of occupancy certificate. The records would reveal that the application is made 12.06.2017 and the Rules came into force on -5- WP No. 18843 of 2022 10.07.2017. Therefore, the application is filed long before the Rules having come into force. Rule 4 of the Rules read as follows:

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.

Explanation: For the purpose of this rule "Ongoing project" means a project where development is going on and for which completion certificate has not been issued but excludes such projects which fulfill any of the following criteria on the date of notification of these rules, namely:--

(i) in respect of layouts where the streets and civic amenities sites and other services have been handed over to the Local Authority and Planning Authority for maintenance;

(ii) in respect of apartments where common areas and facilities have been handed over to the registered Association consisting of majority of allottees;

(iii) where all development works have been completed as per the Act and certified by the competent agency and sale/lease deeds of sixty percent of the apartments/houses/plots have been registered and executed;

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(iv) where all development works have been completed as per the Act and certified by the competent agency and application has been filed with the competent authority for issue of completion certificate/occupation certificate; and

(v) where Partial occupancy certificate is obtained to the extent of the portion for which the partial Occupancy Certificate is obtained.

(Emphasis supplied) (2) The promoter shall in addition to disclosures provided in Rule 3 disclose the following information, namely:--

(a) the original sanctioned plan, layout plan and specifications and the subsequent modifications carried out, if any, including the existing sanctioned plan, layout plan and specifications;

Explanation:--For the purpose of clause (ii) of sub-section (2) of Section 14 of the Act, the Prior written consent of at least two third of the allottees would not be required if,--

(i) implementation of the proposed plan has already been disclosed to the allottees under the agreement prior to registration, or

(ii) modification is required to be made in compliance of any order or direction issued by competent authority or statutory authority, under the agreement for sale, the promoter is not required to obtain the consent of allottee in case of any alteration or -7- WP No. 18843 of 2022 addition to the apartment required by Government authorities or due to change in any law.

(b) the total amount of money collected from the allottees and the total amount of money used for development of the project including the total amount of balance money lying with the promoter; and

(c) status of the project (extent of development carried out till date and the extent of development pending) including the original time period disclosed to the allottee for completion of the project at the time of sale including the delay and the time period within which he undertakes to complete the pending project, which shall be commensurate with the extent of development already completed, and this information shall be certified by an engineer, an architect and a chartered accountant in practice.

(3) The promoter shall disclose the size of the apartment based on carpet area even if earlier sold on any other basis such as super area, super built up area, built up area etc. which shall not affect the validity of the agreement entered into between the promoter and the allottee to that extent.

(4) In case of plotted development, the promoter shall disclose the area of the plot being sold to the allottees as per the layout plan.

(5) For projects that are ongoing and have not received completion certificate on the date of commencement of the Act, the promoter shall, within a period of three months of the application for registration of the project with the Authority, deposit in the separate bank account, seventy per cent, of the amounts already realized from the allottees, which have not been utilized for -8- WP No. 18843 of 2022 construction of the project or the land cost for the project as required under sub-clause (D) of clause

(l) of sub-section (2) of Section 4, which shall be used for the purposes specified therein:

Provided that if the receivable of the ongoing project is less than the estimated cost of balance construction, then the promoter shall deposit 100 per cent of the amounts to be realised in the separate account."

8. In terms of sub Rule IV of Rule 4 of the Rules, those properties to which the applications are filed before the Competent Authority seeking occupancy certificate either partial or complete need not be registered with RERA. If no registration is required with RERA, the RERA would not get any authority to entertain any complaint against any property to which occupancy certificate is sought for either partial or complete.

9. In the case at hand, the occupancy certificate was sought for on 12.06.2017. It is immaterial when the occupancy certificate would be granted as sub Rule IV of Rule 4 (supra) mandates that it is the date on which the occupancy certificate has been applied for and not the date on which it has been granted. The issue is considered at length by this Court in the aforesaid writ petition, where this Court has held as follows:

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10. I have given my anxious consideration to the submissions made by the respective learned counsel and have perused the material on record. In furtherance whereof, the issues that fall for my consideration are:

"(i) Whether the complaint of the 2nd respondent before the Authority was maintainable?

(ii) Whether the order passed by the Authority is tenable in law?"

Issue No.1:

(i) Whether the complaint of the 2nd respondent before the Authority was maintainable?

11. The Real Estate (Regulation and Development) Act, 2016 (Act 16 of 2016) came into effect from 01-05-2016 vide Notification dated 26- 04-2016 published in the official gazette. The Act was to establish a Real Estate Regulatory Authority for regulation and promotion of the real estate sector and to ensure sale of plot, apartment or building, as the case may be, in an efficient and transparent manner and for establishment of adjudicating mechanism for speedy dispute redressal and also to establish a Tribunal to hear appeals from the decisions of the Authority and for other matters incidental and connected thereto. Certain sections of the Act which are germane are 2(g), 2(q), 2(zn), 2(zk), 3, 18, 31, 43 and 84 and they read as follows:

"2(g) "appropriate Government" means in respect of matters relating to,--

(i) the Union Territory without Legislature, the Central Government;

(ii) the Union Territory of Puducherry, the Union Territory Government;

(iii) the Union Territory of Delhi, the Central Ministry of Urban Development;

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(iv) the State, the State Government;

2(q) "completion certificate" means the completion certificate, or such other certificate, by whatever name called, issued by the competent authority certifying that the real estate project has been developed according to the sanctioned plan, layout plan and specifications, as approved by the competent authority under the local laws;

2(zk) "promoter" means,--

(i) a person who constructs or causes to be constructed an independent building or a building consisting of apartments, or converts an existing building or a part thereof into apartments, for the purpose of selling all or some of the apartments to other persons and includes his assignees; or

(ii) a person who develops land into a project, whether or not the person also constructs structures on any of the plots, for the purpose of selling to other persons all or some of the plots in the said project, whether with or without structures thereon; or

(iii) any development authority or any other public body in respect of allottees of--

(a) buildings or apartments, as the case may be, constructed by such authority or body on lands owned by them or placed at their disposal by the Government; or

(b) plots owned by such authority or body or placed at their disposal by the Government, for the purpose of selling all or some of the apartments or plots; or

(iv) an apex State level co-operative housing finance society and a primary co-operative housing society which constructs apartments or buildings for its Members or in respect of the allottees of such apartments or buildings; or

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(v) any other person who acts himself as a builder, coloniser, contractor, developer, estate developer or by any other name or claims to be acting as the holder of a power of attorney from the owner of the land on which the building or apartment is constructed or plot is developed for sale; or

(vi) such other person who constructs any building or apartment for sale to the general public.

Explanation.--For the purposes of this clause, where the person who constructs or converts a building into apartments or develops a plot for sale and the person who sells apartments or plots are different persons, both of them shall be deemed to be the promoters and shall be jointly liable as such for the functions and responsibilities specified, under this Act or the rules and regulations made thereunder;

2(zn) "real estate project" means the development of a building or a building consisting of apartments, or converting an existing building or a part thereof into apartments, or the development of land into plots or apartments, as the case may be, for the purpose of selling all or some of the said apartments or plots or buildings, as the case may be, and includes the common areas, the development works, all improvements and structures thereon, and all easement, rights and appurtenances belonging thereto;

3. Prior registration of real estate project with Real Estate Regulatory Authority.--(1) No promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project or part of it, in any planning area, without registering the real estate project with the Real Estate Regulatory Authority established under this Act:

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Provided that projects that are ongoing on the date of commencement of this Act and for which the completion certificate has not been issued, the promoter shall make an application to the Authority for registration of the said project within a period of three months from the date of commencement of this Act:

Provided further that if the Authority thinks necessary, in the interest of allottees, for projects which are developed beyond the planning area but with the requisite permission of the local authority, it may, by order, direct the promoter of such project to register with the Authority, and the provisions of this Act or the rules and regulations made thereunder, shall apply to such projects from that stage of registration.

(2) Notwithstanding anything contained in sub-

section (1), no registration of the real estate project shall be required--

(a) where the area of land proposed to be developed does not exceed five hundred square meters or the number of apartments proposed to be developed does not exceed eight inclusive of all phases:

Provided that, if the appropriate Government considers it necessary, it may, reduce the threshold below five hundred square meters or eight apartments, as the case may be, inclusive of all phases, for exemption from registration under this Act;

(b) where the promoter has received completion certificate for a real estate project prior to commencement of this Act;

(c) for the purpose of renovation or repair or re-

development which does not involve marketing, advertising selling or new allotment of any apartment, plot or building, as the case may be, under the real estate project. Explanation.--For the purpose of this section, where the real estate project is to be developed in phases, every such phase shall be considered a stand alone real estate project, and the promoter

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shall obtain registration under this Act for each phase separately.

18. Return of amount and compensation.--(1) If the promoter fails to complete or is unable to give possession of an apartment, plot or building,--

(a) in accordance with the terms of the agreement for sale or, as the case may be, duly completed by the date specified therein; or

(b) due to discontinuance of his business as a developer on account of suspension or revocation of the registration under this Act or for any other reason, he shall be liable on demand to the allottees, in case the allottee wishes to withdraw from the project, without prejudice to any other remedy available, to return the amount received by him in respect of that apartment, plot, building, as the case may be, with interest at such rate as may be prescribed in this behalf including compensation in the manner as provided under this Act:

Provided that where an allottee does not intend to withdraw from the project, he shall be paid, by the promoter, interest for every month of delay, till the handing over of the possession, at such rate as may be prescribed.

(2) The promoter shall compensate the allottees in case of any loss caused to him due to defective title of the land, on which the project is being developed or has been developed, in the manner as provided under this Act, and the claim for compensation under this sub-section shall not be barred by limitation provided under any law for the time being in force.

(3) If the promoter fails to discharge any other obligations imposed on him under this Act or the rules or regulations made thereunder or in accordance with the terms and conditions of the agreement for sale, he shall be liable to pay such

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compensation to the allottees, in the manner as provided under this Act.

31. Filing of complaints with the Authority or the adjudicating officer.--(1) Any aggrieved person may file a complaint with the Authority or the adjudicating officer, as the case may be, for any violation or contravention of the provisions of this Act or the rules and regulations made thereunder against any promoter allottee or real estate agent, as the case may be.

Explanation.--For the purpose of this sub- section "person" shall include the association of allottees or any voluntary consumer association registered under any law for the time being in force.

(2) The form, manner and fees for filing complaint under sub-section (1) shall be such as may be 6[prescribed].

43. Establishment of Real Estate Appellate Tribunal.--(1) The appropriate Government shall, within a period of one year from the date of coming into force of this Act, by notification, establish an Appellate Tribunal to be known as the ......................... (name of the State/Union Territory) Real Estate Appellate Tribunal.

(2) The appropriate Government may, if it deems necessary, establish one or more benches of the Appellate Tribunal, for various jurisdictions, in the State or Union Territory, as the case may be.

(3) Every Bench of the Appellate Tribunal shall consist of at least one Judicial Member and one Administrative or Technical Member.

(4) The appropriate Government of two or more States or Union Territories may, if it deems fit, establish one single Appellate Tribunal:

Provided that, until the establishment of an Appellate Tribunal under this section, the appropriate Government shall designate, by order, any Appellate Tribunal functioning under any law for the time being

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in force, to be the Appellate Tribunal to hear appeals under the Act:

Provided further that after the Appellate Tribunal under this section is established, all matters pending with the Appellate Tribunal designated to hear appeals, shall stand transferred to the Appellate Tribunal so established and shall be heard from the stage such appeal is transferred.

(5) Any person aggrieved by any direction or decision or order made by the Authority or by an adjudicating officer under this Act may prefer an appeal before the Appellate Tribunal having jurisdiction over the matter:

Provided that where a promoter files an appeal with the Appellate Tribunal, it shall not be entertained, without the promoter first having deposited with the Appellate Tribunal at least thirty per cent of the penalty, or such higher percentage as may be determined by the Appellate Tribunal, or the total amount to be paid to the allottee including interest and compensation imposed on him, if any, or with both, as the case may be, before the said appeal is heard.

Explanation.--For the purpose of this sub- section "person" shall include the association of allottees or any voluntary consumer association registered under any law for the time being in force.

84. Power of appropriate Government to make rules.--(1) The appropriate Government shall, within a period of six months of the commencement of this Act, by notification, make rules for carrying out the provisions of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely--

(a) the form, time and manner of making application and fees payable therewith under sub-section (1) of Section 4;

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(ab) information        and      documents        for
     application      to    the    Authority      for

registration under clause (m) of sub- section (2) of Section 4;

(ac) the form of application and the fees for extension of registration under Section 6;]

(b) the form and manner of making application and fee and documents to be accompanied with such application as under sub-section (2) of Section 9;

(d) the validity of the period of registration and the manner and fee for renewal under sub-section (6) of Section 9;

(e) the maintenance and preservation of books of account, records and documents under clause (b) of Section 10;

(f) the discharge of other functions by the real estate agent under clause (e) of Section 10;

(g) the rate of interest payable under Section 12;

(h) the form and particulars of agreement for sale under sub-section (2) of Section 13;

(i) the rate of interest payable under clause (b) of sub-section (1) of Section 18;

(j) the rate of interest payable under sub-section (4) of Section 19;

(k) the rate of interest payable under sub-section (7) of Section 19;

(l) the manner of selection of Chairperson and Members of Authority under Section 22;

(m) the salaries and allowances payable to, and the other terms and conditions of service of, the Chairperson and other Members of the Authority under sub-section (1) of Section 24;

(n) the administrative powers of the Chairpersons under Section 25;

(o) the salaries and allowances payable to, and the other terms and conditions of service of, the

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officers and other employees of the Authority under sub-section (2) of Section 28; (oa) the form, manner and fees for filing of a complaint under sub-section (2) of Section 31;]

(p) the details to be published on the website as under clause (b) and under clause (d) of Section 34;

(q) the additional functions which may be performed by the Authority under clause (iv) of sub-section (2) of Section 35;

(r) the manner of recovery of interest, penalty and compensation under sub-section (1) of Section 40;

(s) the manner of implementation of the order, direction or decisions of the adjudicating officer, the Authority or the Appellate Tribunal under sub-section (2) of Section 40;

(t) recommendations received from the Central Advisory Council under sub-section (2) of Section 42;

(u) the form and manner and fee for filing of appeal under sub-section (2) of Section 44;

(v) the manner of selection of Members of the Tribunal under sub-section (3) of Section 46; (w) the salaries and allowances payable to, and the other terms and conditions of service of, the Chairperson and other Members of the Appellate Tribunal under sub-section (1) of Section 48;

(x) the procedure for inquiry of the charges against the Chairperson or Judicial Member of the Tribunal under sub-section (4) of Section 49;

(y) the salaries and allowances payable to, and the other terms and conditions of service of, the officers and employees of the Appellate Tribunal under sub-section (3) of Section 51; (z) any other powers of the Tribunal under clause

(g) of sub-section (4) of Section 53; (za) the powers of the Chairperson of the Appellate Tribunal under Section 54;

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(zb) the terms and conditions and the payment of such sum for compounding of the offences under Section 70;

(zc) the manner of inquiry under sub-section (1) of Section 71;

(zd) the form to be specified in which the Authority shall prepare a budget, maintain proper accounts and other relevant records and prepare an annual statement of accounts under sub-section (1) of Section 77; (ze) the form in which and time at which the Authority shall prepare an annual report under sub-section (1) of Section 78;

(zf) any other matter which is to be, or may be, prescribed, or in respect of which provision is to be made, by rules."

(Emphasis supplied) Section 2(q) defines what is completion certificate; Section 2(zk) defines who is a promoter; Section 2(zn) defines what is real estate project. Section 3 makes prior registration of a real estate project with the Real Estate Regulatory Authority and mandates several obligations while making such registration under sub-section (1) and (2) of Section

3. Section 18 deals with return of amount and compensation. It would spring into action, if the promoter fails to complete or unable to give possession of an apartment, floor or building in accordance with the terms of the agreement for sale; due discontinuance of business as a developer or several other circumstances projected in Section 18. Section 31 empowers aggrieved person to file a complaint before the Authority or the Adjudicating Officer for any violation or contravention of the provisions of the Act or the Rules and Regulations made there under against any promoter. The powers of the Authority are defined under Section 38. Section 43 deals with constitution of Real Estate Appellate Tribunal. Any order passed by the Authority in terms of the Act and the Rules is appealable under sub-section (5) of Section 43.

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Section 84 empowers appropriate Government to make Rules. The appropriate Government is also defined to be respective State Government.

12. In exercise of its powers under Section 84, the Government of Karnataka notifies the Rules. Rules 3 and 4 of the Rules read as follows:

"3. Information and documents to be furnished by the promoter for registration of project.-- (1) The promoter shall furnish the following additional information and documents, along with those specified in sub-section (2) of Section 4 of the Act for registration of the real estate project with the regulatory authority namely:--

(a) self attested copy of the PAN card of the promoter;

(b) annual report including audited profit and loss account, balance sheet, cash flow statement, directors report and the auditors report of the promoter for the immediately preceding three financial years; and where annual report is not available, the audited profit and loss account, balance sheet, cash flow statement and the auditor report of the promoter for the immediately preceding three financial years;

(c) the number of parking slots available in the said real estate project;

(d) authenticated copy of the legal title deed reflecting the title of the promoter to the land on which development of project is proposed along with legally valid documents for chain of the title;

(e) the details of encumbrances on the land for which permission given under Section 109 of the Karnataka Land Reforms Act, 1961 if applicable, the Certified copy of the conversion order under Section 95 of the Karnataka Land Revenue Act, 1964 and permission of change

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in land use granted under Section 14 of the Karnataka Town and Country Planning Act, 1961, if applicable on which development is proposed including any rights, title, interest or name of any party in or over such land along with details;

(f) where the promoter is not the owner of the land on which development is proposed details of the consent of the owner of the land along with self attested the collaboration agreement, development agreement, joint development agreement or any other agreement, as the case may be, entered into between the promoter and such owner and copies of title and other documents reflecting the title of such owner on the land proposed to be developed; and

(g) name, photograph, contact details and address of the promoter if it is an individual and the name, photograph, contact details and address of the chairman, partners, directors, as the case may be, and the authorised person in case of other entities.

(2) An application to the Authority for registration of the real estate project shall be made in writing in Form 'A', in triplicate, until the procedure is made web based for filing of such application.

(3) The promoter shall pay a registration fee at the time of application for registration by way of a demand draft or a bankers cheque drawn on any scheduled bank or a Co-operative Bank or through online payment mode, as the case may be, for a sum calculated at the rate of,--

(a) in case of group housing project,-five rupees per square meter for projects where the area of land proposed to be developed does not exceed one thousand square meters; or rupees

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ten per square meter for projects where the area of land proposed to be developed exceeds one thousand square meters, but shall not be more than five lakhs rupees;

(b) in case of mixed development (residential and commercial) project,-ten rupees per square meter for projects where the area of land proposed to be developed does not exceed one thousand square meters; or fifteen rupees per square meter for projects where the area of land proposed to be developed exceeds one thousand square meters, but shall not be more than seven lakhs rupees;

(c) in case of commercial projects,-twenty rupees per square meter for projects where the area of land proposed to be developed does not exceed one thousand square meters; or twenty five rupees per square meter for projects where the area of land proposed to be developed exceeds one thousand square meters, but shall not be more than ten lakhs rupees; and

(d) in case of plotted development projects,-five rupees per square meter, but shall not be more than two lakhs rupees.

(4) The declaration to be submitted under clause (l) of sub-section (2) of Section 4, shall be in Form-B, which shall include a declaration stating that the promoter shall not discriminate against any allottee at the time of allotment of any apartment, plot or a building, as the case may be.

(5) In case the promoter applies for withdrawal of application for registration of the project before the expiry of the period of thirty days specified under sub-section (1) of Section 5, registration fee to the extent of ten percent paid under sub-rule (3), or rupees fifty thousand whichever is more, shall be

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retained as processing fee by the regulatory authority and the remaining amount shall be refunded to the promoter within thirty days from the date of such withdrawal.

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.

(i) in respect of layouts where the streets and civic amenities sites and other services have been handed over to the Local Authority and Planning Authority for maintenance;

(ii) in respect of apartments where common areas and facilities have been handed over to the registered Association consisting of majority of allottees;

(iii) where all development works have been completed as per the Act and certified by the competent agency and sale/lease deeds of sixty percent of the apartments/houses/plots have been registered and executed;

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(iv) where all development works have been completed as per the Act and certified by the competent agency and application has been filed with the competent authority for issue of completion certificate/occupation certificate; and

(v) where Partial occupancy certificate is obtained to the extent of the portion for which the partial Occupancy Certificate is obtained.

(2) The promoter shall in addition to disclosures provided in Rule 3 disclose the following information, namely:--

(a) the original sanctioned plan, layout plan and specifications and the subsequent modifications carried out, if any, including the existing sanctioned plan, layout plan and specifications;

Explanation:--For the purpose of clause

(ii) of sub-section (2) of Section 14 of the Act, the Prior written consent of at least two third of the allottees would not be required if,--

(i) implementation of the proposed plan has already been disclosed to the allottees under the agreement prior to registration, or

(ii) modification is required to be made in compliance of any order or direction issued by competent authority or statutory authority, under the agreement for sale, the promoter is not required to obtain the consent of allottee in case of any

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alteration or addition to the apartment required by Government authorities or due to change in any law.

(b) the total amount of money collected from the allottees and the total amount of money used for development of the project including the total amount of balance money lying with the promoter; and

(4) In case of plotted development, the promoter shall disclose the area of the plot being sold to the allottees as per the layout plan.

(5) For projects that are ongoing and have not received completion certificate on the date of commencement of the Act, the promoter shall, within a period of three months of the application for

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registration of the project with the Authority, deposit in the separate bank account, seventy per cent, of the amounts already realized from the allottees, which have not been utilized for construction of the project or the land cost for the project as required under sub-clause (D) of clause (l) of sub-section (2) of Section 4, which shall be used for the purposes specified therein:

Provided that if the receivable of the ongoing project is less than the estimated cost of balance construction, then the promoter shall deposit 100 per cent of the amounts to be realised in the separate account."

(Emphasis supplied) Rule 3 mandates information and documents to be furnished by the promoter for registration of a project under the Act. Rule 4 mandates additional disclosure by promoters of ongoing projects. The said Rule mandates that upon the notification for commencement under sub-section (1) of Section 3 of the Act, 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. The Rule places an explanation as to what is an 'ongoing project'. An ongoing project would mean where a development of a project is going on, for which completion certificate has not been issued, but excludes those projects which fulfill the criteria enumerated therein which are layouts where the streets and civic amenities and other services have been handed over to the Local Authority. Among other things clause (v) of Rule 4 therein exempts rigour of the Act and the Rules where partial occupancy certificate is obtained to the extent of the portion for which occupancy certificate is issued. Therefore, the Rule itself recognizes the situation of issuance of partial occupancy certificate on the exemption with the applicability of the Act and the Rules or the conditions stipulated therein. It is in the

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aforesaid statutory frame work the issue in the lis is to be considered. A little walk in history is needed for the said purpose.

13. Certain events are a matter of record. On 10- 09-2014 an agreement between the petitioner and the 2nd respondent which was an agreement of sale and construction agreement are signed. Prior to the said construction agreement, the BDA which was the Competent Authority had issued a commencement certificate for commencement of the project. The project was completed to certain extent and a partial completion certificate was issued by the BDA on 18-11-2015 accepting the application of the petitioner dated 21-10-2015. The partial occupancy certificate is appended to the petition. Another partial occupancy certificate is issued on 27-04-2017.

The 2nd respondent with whom agreement of sale was signed between the parties seeks to wriggle out of the project or the agreement, communicates to the petitioner that he is intending to cancel the agreement on some information that he received that the project is not on a legally acquired land.

14. The petitioner did not make a hue and cry over it; did refund an amount of Rs.17,85,212/- on 04-12-2017. This amount having been realized is also not in dispute. Therefore the contract between the parties had concluded on 04-12-2017 without the 2nd respondent making any grievance with regard to the refund. But on 14-02-2019, the 2nd respondent registers a complaint before the Authority, invoking Section 31 of the Act claiming that he is aggrieved that the entire refund is not received from the hands of the petitioner and an amount of Rs.6,84,494/- was still due. The petitioner filed its detailed objections before the Authority contending that the complaint itself was not maintainable as the project was not an ongoing project. Declining to accept the same, the Authority passes the order dated 30-09-2020 directing refund of the amount claimed along with

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interest under Section 18 of the Act. The order reads as follows:

"I failed to understand the stand taken by the developer who has said nothing about the plea taken by the complainant. In the present case only the issue regarding non-repayment of part of the amount which was withheld by the developer stating that he has withheld the same towards cancellation charges. In this regard I would say that the developer has transacted with the complainant even after coming into force of this Act. It means the cause of action to file this complaint was alive even after the coming into force of this Act. Hence, the question of maintainability as contended by the developer has no basis. Further he said nothing so far as allegations are made towards deduction of amount. In what way he is deducted the part of the amount is not explained. In the absence of specific defense, the contention of the complainant has to be honoured. When he has cancelled the booking then the developer ought to have returned the amount in full or he ought to have given reasons for deduction. But the developer has denied the case of the complainant on the ground of receipt of OC. It is not correct on his part why he has withheld the amount when his project was not on the free litigated land. He has returned major portion of the amount but withheld some portion without any reason. He failed to give reasons for the same. In his absence now I have to go to the same. The developer has received the amount in the year 2014 and he has utilized the same for his project. After cancellation of booking he has returned the money without any interest. The present amount was withheld as cancellation charges and towards tax. In this regard I would say that the developer will again collect the amount towards the tax from the new buyer. Hence, he has to return the same to the present complainant. The developer has already benefitted with the money and earned benefit out of the money when it was with him. The major portion of the money which has been returned to the complainant was without interest and hence

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the same is also to be returned. With this observation I allow this complaint in part.

13. Before passing the final order I would like to say that as per Section 71(2) of RERA the complaint shall be disposed off by the Authority within 60 days from the date of receipt of the complaint. This complaint was filed on 14.02.2019. Since this complaint was filed against the unregistered project, the file was with the Secretary who has taken necessary steps against the developer with regard to the registration of his project. Later the complaint has been transferred to this authority on 18.12.2019 for disposal in accordance with law. Afterwards this authority has issued notice to the parties. The developer has appeared and filed the objections. In the meanwhile on account of natural calamity COVID-19 the Government has declared lock down completely from 24.03.2020 till 17-05- 2010 and as such this judgment could not be passed and as such it is with some delay. With this observation, I proceed to pass the following:

ORDER a. The complaint filed by the complainant bearing No.CMP/UR/190214/0002137 is hereby allowed in part.

b. The developer shall return Rs.6,84,494/- to the complainant within 60 days from to-day. If not, it will carry interest @ 2% above the MCLR of SBI commencing from 61st day till the realization.

c. Intimate the parties regarding the order."

(Emphasis added)

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As observed hereinabove, against the said order in the normal circumstance an appeal would be maintainable. The issue here is whether the complaint before the Authority was itself maintainable or otherwise. If the complaint before the Authority was maintainable, the impugned order becomes appealable under sub-section (5) of Section

43. If the Authority had no jurisdiction to pass the order, the writ petition in the form that is presented becomes maintainable. In view of the preceding analysis, more particularly, with regard to the explanation of 'ongoing project' under the Rules which exempts application of the Act and the Rules since the project had commenced and partial occupancy certificate was issued prior to coming into force of the Act, the complaint itself was not maintainable before the Authority. Notwithstanding such exemption, the Adjudicating Authority appears to have been swayed by the grievance vented out by the 2nd respondent in entertaining the complaint.

15. The issuance of occupancy certificate prior to the Act coming into force, albeit partially, is not in dispute. Therefore, the project loses its character, as an ongoing project in terms of Rule 4 of the Rules, as the explanation in the Rule exempts such an ongoing project. Therefore, the determination by the Authority was without jurisdiction and if it is an act without jurisdiction, it is non est in the eye of law, and if it is non est in the eye of law, it is rendered unsustainable and requires to be obliterated. It is germane to notice at this juncture the judgment of the Apex Court in the case of NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD. v. STATE OF U.P.1 wherein the Apex Court considers the retroactivity and retrospectivity of the Act in the following paragraphs:

"40. Learned counsel further submits that the key word, i.e., "ongoing on the date of the 1 2021 SCC OnLine SC 1044

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commencement of this Act" by necessary implication, ex-facie and without any ambiguity, means and includes those projects which were ongoing and in cases where only issuance of completion certificate remained pending, legislature intended that even those projects have to be registered under the Act. Therefore, the ambit of Act is to bring all projects under its fold, provided that completion certificate has not been issued. The case of the appellant is based on "occupancy certificate" and not of "completion certificate". In this context, learned counsel submits that the said proviso ought to be read with Section 3(2)(b), which specifically excludes projects where completion certificate has been received prior to the commencement of the Act. Thus, those projects under Section 3(2) need not be registered under the Act and, therefore, the intent of the Act hinges on whether or not a project has received a completion certificate on the date of commencement of the Act.

... ... ...

51. Thus, it is clear that the statute is not retrospective merely because it affects existing rights or its retrospection because a part of the requisites for its action is drawn from a time antecedent to its passing, at the same time, retroactive statute means a statute which creates a new obligation on transactions or considerations already passed or destroys or impairs vested rights.

... ... ...

54. From the scheme of the Act 2016, its application is retroactive in character and it can safely be observed that the projects already completed or to which the completion certificate has been granted are not under its fold and therefore, vested or accrued rights, if any, in no manner are affected. At the same time, it will apply after getting the on-going projects and future projects registered under Section 3 to prospectively follow the mandate of the Act 2016."

(Emphasis supplied)

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The Apex Court at paragraph-40 considers what is an ongoing project and issuance of completion certificate interpreting the Act and the Rules made by the State of Uttar Pradesh. At paragraph-51 the Apex Court holds that the statute is not retrospective merely because it affects existing rights or its retrospection because of a part of the requisites for its action would destroy or impair the vested rights. At paragraph 54 the Apex Court holds that its action is retroactive in character and can safely be observed that the projects which are already completed or to which completion certificate has been granted are not under the fold of the Act and at the same time the Apex Court holds that it will apply after getting the ongoing projects and future projects registered under the Act. In the case at hand, it is Rule 4 which exempts the projects like the petitioners.

16. In the light of the judgment of the Apex Court and undisputed facts as narrated hereinabove, the order passed by the Authority is without jurisdiction and a nullity in law. The first issue being held in favour of the petitioner with regard to maintainability of the complaint itself before the Authority, no other issue need be considered with regard to tenability of the order passed by the Authority.

10. In view of the aforesaid undisputed facts and the issue standing covered by the order passed by this Court, I deem it appropriate to pass the following:

ORDER

(i) The Writ Petition is allowed.

(ii) The orders dated 20.07.2022 and 23.08.2022 passed by respondent

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No.1/Karnataka Real Estate Regulatory Authority, Bangalore stand quashed.

Sd/-

JUDGE VM List No.: 1 Sl No.: 20

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Karnataka High Court