To answer this query let us understand the provisions of RERA,2016
2(d) “allottee” in relation to a real estate project means the person to whom a plot, apartment or building, as ,he case may be, has been allotted, sold (whether as freehold or leasehold) or otherwise transferred by the promoter, and includes the person who subsequently acquires the said allotment through sale, transfer or otherwise but does not include a person to whom such plot, apartment or building, as the case may be, is given on rent.
- 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 a complaint under sub-section (1) shall be such as may be specified by regulations.
The first of such complaint was filed before Maharashtra RERA authority in COMPLAINT NO: CC006000000000789 Mahesh Parian vs Monarch Solitaire
Facts: The Complainant has invested some amount in the residential Project known as ‘monarch Solitaire’ and reserved four apartments in the said Project in 2014. The said project is registered under MahaRERA registration No. P51700012008. The Complainant stated that after reservation of four apartments, Respondent neither gave his invested money back with interest nor is giving the possession of the apartments earmarked for him. Therefore, he prayed that MahaRERA pass an appropriate order for recovery of the principal amount with interest.
Observation: documents entered into between parties Tribunal observed that the Complainant and Respondent have signed a ‘Memorandum of Understanding’ on 12s March 2014 from which it is seen that the Complainant is an investor in the said Project and not an allottee. The ‘Memorandum of Understanding’ mentions that when the complainant sells his apartments in the market then the profit from such a sale will be shared between the complainant and respondent in the ratio of 70:3O”. It means that the Complainant has the status of a ‘Co-promoter’ of the Project, as clarified in MahaRERA circular.
As per records of Maha-RERA this matter was subsequently withdrawn before Appellate Authority. Can draw a hypothesis that it was settled.
Next came was M/s. Srushti Sangam Developers Pvt. Ltd vs Sarvapriya Leasing (P) Ltd. APPEAL NO. 000600000001 0557
The Promoter was developing a project namely Maulick Enclave at Chembur, Mumbai. lt is a redevelopment project consisting of residential premises and shops and offices. promoter and owner of the land had executed registered agreements of redevelopment in the year 2003. As the project was incomplete on 11 May 2017 i.e. on the day of application of RERA Act 2016. promoter has registered a project with [MahaRERA and it bears registration No. P518000J2986.]
The investor cum allottee had paid a total sum of Rs.4,53,71,1001 towards price to the promoter and promoter executed in all Eight separate registered agreements for sale on 29 January, 2OO7 in respect of Six shops and Two offices.
Cause of Action:
Allottee cum Investor could not get possession of the commercial units as the project remained incomplete till the date of filing of a complaint before MahaRERA Authority. investor Allottee had prayed in the complaint that directions are given to the promoter for early completion of the project along with occupancy certificate and to hand over early possession of the commercial units and to execute Conveyance Deed as per the terms and conditions of the registered agreements for sale in respect of commercial units.
Admittedly registered agreement of redevelopment of the project was executed between Promoter and the Owner in the year 2003. lt is not in dispute that Promoter executed a registered agreement for the sale of Six shops and Two offices in the said project in favour of the complainant on 29 January 2007 after accepting the total price of all the commercial units to the extent of Rs.4,53,71 ,1001. lt is not in dispute that the redevelopment project remained incomplete till the complaint is filed before MahaRERA Authority. So Promoter had registered the said ongoing project with MahaRERA Authority as per Section 3 and Section 4 of RERA Act 2016.
perused the contents of registered agreements for sale. It is true that the complainant is styled as an investor in the said registered agreements. However, if we carefully perused all the terms and conditions in registered agreements for sale, it is revealed that the complainant is a buyer and the complainant had paid a total price of Rs.4,53,71,1001 to the Promoter towards the purchase of Six shops and Two offices in the project of the Promoter. ln fact the promoter agreed to transfer and assign all ownership rights, title, and interest in favour of the investor i.e. complainant in respect of commercial units in the project. ln order to ascertain the intention of the parties and the nature of the transaction between them only nomenclature is not sufficient. It is necessary to read the agreement as a whole. Thus, from the entire agreement for sale along with all contents therein, it is evident that it is a transaction of sale. Apart from registered agreements for sale, there is no reliable and authentic documentary evidence to support the case made out by Promoter that it is the transaction of security for amount. So contents of registered agreements are quite manifest and clear to show that complainant is purchasing the commercial units and he is a buyer though he is shown with the nomenclature of investor in the said registered agreements
In view of the above-mentioned definition of “Allottee” as well as all the contents of registered agreements for sale executed between promoter and complainant, it is crystal clear that the complainant is Allottee.
CC006000000001312 Ketan Gajaria vs JVPD Properties Pvt Ltd
the complainants complain that by relying on respondents’ false representations contained in allotment letters, false advertisements that respondents shall complete the project, they booked their flats. However, the respondents by issuing a letter dated 24 July 2017 expressed their inability to complete the project, and even thereafter the respondents have not refunded their money and thus the respondents are guilty of practicing unfair practice and indulging in a fraudulent act. Hence, the complainants seek a refund of their amount with interest. The complainants further allege that the respondents have changed the plan without the previous written consent of at least 2/3rd allottees
Promoters /Respondents Defense :
The respondents have taken a stand that the complainants are the investors, therefore, they are not entitled to file the complaints under Section 31 of RERA.
I do not agree with him, because he booked the Flats in the year 2014, the respondents themselves have contended that they received IOD on 06.04.201.6. IOD was required for the registration of the agreement. The respondents delayed the IOD and avoided executing the agreement for sale. They cannot take undue advantage of their own wrong to say that the complainants are investors.
All the terms and conditions of the allotment letters clearly indicate that the complainants agreed to purchase the flats for consideration to be paid by them in installments depending upon the stages of the construction and the last installment payable was at the time of handing over the possession. Therefore, merely because it is mentioned in Clause 10 of the allotment letters that the complainants are investors that will not make them the investors in the real sense. A person who pays money to the promoter in anticipation of buying a flat, in fact, invests his money for a house, and therefore, Section 12 of RERA also refers to such amount as investment. Only because the complainants have deposited their amount with the respondents, it does not mean that they become the investors interested in earning profits. The respondents have not produced any evidence to prove that the complainants are in habit of investing their funds for earning profit. Therefore, I hold that in the facts and circumstances of the cases, the complainants do not appear to be investors, but they are allottees.
RERA and IBC and INVESTOR
Pioneer Urban Land vs Union Of India on 9 August 2019
The fact that RERA is in addition to and not in derogation of the provisions of any other law for the time being in force, also makes it clear that the remedies under RERA to allottees were intended to be additional and not exclusive remedies. Also, it is important to remember that as the authorities under RERA were to be set up within one year from 1st May, 2016, remedies before those authorities would come into effect only on and from 1st May 2017 making it clear that the provisions of the Code, which came into force on 1st December 2016, would apply in addition to the RERA.
It is clear, therefore, that even by a process of harmonious construction, RERA and the Code must be held to co-exist, and, in the event of a clash, RERA must give way to the Code. RERA, therefore, cannot be held to be a special statute which, in the case of a conflict, would override the general statute, viz. the Code ( IBC ).
As a matter of fact, the Code and RERA operate in completely different spheres. The Code deals with a proceeding in rem in which the focus is the rehabilitation of the corporate debtor. This is to take place by replacing the management of the corporate debtor by means of a resolution plan which must be accepted by 66% of the Committee of Creditors, which is now put at the helm of affairs, in deciding the fate of the corporate debtor.
Such a resolution plan then puts the same or another management in the saddle, subject to the provisions of the Code, so that the corporate debtor may be pulled out of the woods and may continue as a going concern, thus benefitting all stakeholders involved. It is only as a last resort that the winding up of the corporate debtor is resorted to, so that its assets may be liquidated and paid out in the manner provided by Section 53 of the Code. On the other hand, RERA protects the interests of the individual investor in real estate projects by requiring the promoter to strictly adhere to its provisions. The object of RERA is to see that real estate projects come to fruition within the stated period and to see that allottees of such projects are not left in the lurch and are finally able to realize their dream of a home or be paid compensation if such dream is shattered, or at least get back monies that they had advanced towards the project with interest. At the same time, recalcitrant allottees are not to be tolerated, as they must also perform their part of the bargain, namely, to pay installments as and when they become due and payable. Given the different spheres within which these two enactments operate, different parallel remedies are given to allottees – under RERA to see that their flat/apartment is constructed and delivered to them in time, barring which compensation for the same and/or refund of amounts paid together with interest at the very least comes their way. If, however, the allottee wants that the corporate debtor’s management itself be removed and replaced, so that the corporate debtor can be rehabilitated, he may prefer a Section 7 application under the Code. That another parallel remedy is available is recognised by RERA itself in the proviso to Section 71(1), by which an allottee may continue with an application already filed before the Consumer Protection fora, he being given the choice to withdraw such complaint and file an application before the adjudicating officer under RERA read with Section 88.
The RERA is to be read harmoniously with the Code, as amended by the Amendment Act. It is only in the event of a conflict that the Code will prevail over the RERA. Remedies that are given to allottees of flats/apartments are therefore concurrent remedies, such allottees of flats/apartments being in a position to avail of remedies under the Consumer Protection Act, 1986, RERA as well as the triggering of the Code.
the legislation is directed to practical problems, that the economic mechanism is highly sensitive and complex, that many problems are singular and contingent that laws are not abstract propositions and do not relate to abstract units and are not to be measured by abstract symmetry, that exact wisdom and nice adaption of remedies cannot be required, that judgment is largely a prophecy based on meager and uninterpreted experience, should stand as a reminder that in this area the Court does not take the equal protection requirement in a pedagogic manner [ See “General Theory of Law and State”, p. 161] .
The evolution and development of RERA is continual. Have seen in proceedings and complaints if one order rejecting an investor is passed every allottee was termed by promoters/builders as investor. This hampered the interest of the flat buyers. The Supreme Court and MahaRERA have clarified the status. But still, if legislature feels in its wisdom may put explanation under the definition of the allottee.