The Karnataka Real Estate Appellate Tribunal (KREAT) gave a huge relief to a 75-year-old senior citizen by ordering the builder to hand over the Villa to the septuagenarian within one month. The Tribunal set aside the order of the Karnataka Real Estate Regulatory Authority (KRERA). Before approaching the Tribunal the aggrieved party had approached the KRERA seeking possession of the Villa, but the case was rejected.
The KREAT order reads, “Taking note of the nefarious act of some of the Promoters, the Parliament in its wisdom was generous in promulgating the Real Estate (Regulation and Development) Act, 2016 with an objective to protect the interests of genuine home buyers. But ignoring the basic principles of the said legislation, the Authority has straight away dismissed the complaint.”
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What Is The Case?
The complainant (Devki Nandan) purchased a villa in 2012 in a project named ‘Sterling Villa Grande Phase-II of the Sterling Urban Developments Private Limited (the Promoter) for Rs 3.2 crore. The registered sale deed was also executed on January 27, 2014, on the pretext of saving taxes, without handing over the physical possession of the Villa.
Nandan kept following up with the promoters between 2014 and 2019 but to no avail.
Meanwhile, in 2015, the Promoter sent emails to Nandan stating that the Villa was ready for possession. On June 26, 2020, they sent another email to Nandan asking him to pay arrears of the maintenance charge and take possession.
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On January 6, 2021, Nandan filed a complaint with KRERA, seeking possession of the property, compensation for delay, and waiver of maintenance charges.
KRERA Judgement:
KRERA dismissed the complaint as not maintainable because the Promoter had applied for the partial occupation certificate (OC) on January 20, 2017, and completed the project on March 27, 2017. The Authority also said that the completion happened before the commencement date of the RERA Act, so it is not applicable.
However, the complainant argued that the development work was not completed yet and some statutory clearance was also pending till the date of commencement of the Act.
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The Promoter refused the claims and argued that the conditions mentioned in the ‘user manual’ are applicable to high rise, not Villa. The promoter side also argued that the completion certificate was applied on time, but the Bangalore Development Authority took five months to issue the certificate.
Complainant then approached the Tribunal.
Tribunal Observation:
The Tribunal noted that the Promoter obtained partial OC before completing the developmental work and the project was ongoing when the Act was commenced.
The Tribunal stated, “As per proviso contained in Sec.3(1) of RERA Act, if the projects are ongoing as on the date of commencement of the Act and for which the Completion Certificate has not been issued, the Promoter shall make an application to the Authority for registration of said project. The said provision makes it clear that, even if the project work was not completed as and when the Act and Rules came into force, it is obligatory on the part of the Promoter to register his project before RERA.”
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It said, “It is clear that the Authority also erred in hurriedly taking an U-turn and to dismiss the complaint on the premise of jurisdiction.”
KREAT Order:
It held, “There is no merit in the contention taken by the Promoter. Hence, the impugned order is liable to be set aside with a direction to the Promoter to hand over the physical possession of the Villa with immediate effect after complying with all legal formalities. Even if there is any due towards maintenance, it is the duty of the Promoter to incur all such expenses.”
It also directed the Promoter to pay 9 per cent interest per annum for every delayed month in handing over the possession till April 2017, as per Section-8 of the Karnataka Ownership Flats (Regulation, Sale, Management and Transfer) Act, 1972.
