MahaREAT: Project Without Completion Certificate Deemed Ongoing—Builder Directed to Register Under RERA
Pranav B Prem
The Maharashtra Real Estate Appellate Tribunal (MahaREAT), comprising Justice Shriram R. Jagtap (Judicial Member) and Dr. K. Shivaji (Member), held that any project that has not received a completion certificate (CC) from the competent authority as on 1st May 2017—the date of commencement of the Real Estate (Regulation and Development) Act, 2016 (RERA)—will be deemed as an ongoing project requiring mandatory registration under RERA. Accordingly, the Tribunal allowed the appeal filed by the society of flat buyers and directed Wadhwa Constructions and Developers to register Building No. 18 of the Trade Centre Project under RERA.
Factual Background
The Appellants, members of the Trade Centre CHS Ltd., had purchased premises in Building No. 18 of a project located on land leased under a tripartite agreement among the Mumbai Metropolitan Region Development Authority (MMRDA), Slum Rehabilitation Authority (SRA), and HDIL. Wadhwa Constructions had acquired development rights through an agreement with HDIL and entered into sale agreements with flat purchasers around 2005-06.
Although part occupancy certificates were obtained for the building in 2008, no full completion certificate was issued by the competent authority. In October 2017, the builder gave a written undertaking to secure the full occupation certificate. However, the builder failed to obtain the final certification. Aggrieved, the society filed a complaint before MahaRERA seeking direction to the builder to obtain the full OC.
The builder argued before the Authority that the project was completed much before RERA came into force, and therefore it was not required to register. Accepting this contention, MahaRERA dismissed the complaint on 9th November 2020. The society challenged this order before MahaREAT, seeking a direction to register the project and fulfil the commitment to obtain the final OC.
Builder’s Contentions
Before the Tribunal, the builder maintained that the entire construction was completed as per sanctioned plans and partial occupation certificates had been received for all floors except a small part of the second floor. The members had been in possession of their premises for more than a decade before RERA became operative.
It further contended that HDIL, being the original lessee and party to the tripartite agreement, was responsible for obtaining the final OC. Hence, HDIL’s non-joinder was fatal to the complaint. Additionally, the builder argued that as there was no ongoing construction or sale activity, the project did not fall within the definition of an "ongoing project" under Section 3 of RERA.
Tribunal’s Observations
The Tribunal, relying on Section 3(1) of RERA, held that any real estate project without a completion certificate as of 1st May 2017 must be registered under RERA. It reiterated that partial OCs or possession are not sufficient to exclude a project from registration. It emphasized that a completion certificate must be issued by the competent planning authority, which was absent in the present case.
The Tribunal relied on the Supreme Court’s decision in Newtech Promoters and Developers Pvt. Ltd. vs. State of UP & Ors [LL 2021 SC 641], which clearly laid down that such projects fall within the scope of ongoing projects. It also cited Neelkamal Realtors Suburban Pvt. Ltd. vs. Union of India [(2017) SCC Online Bom 9302], to hold that the RERA provisions apply prospectively but registration is a pre-condition for any claim under the statute.
Refuting the builder’s claim regarding HDIL, the Tribunal held that non-joinder of HDIL did not absolve the builder from its obligation to register the project. The builder had stepped into the shoes of HDIL and dealt with allottees directly, hence bore the full statutory responsibility under the Act.
Verdict
The Tribunal set aside the MahaRERA Authority’s order dated 9th November 2020, which had rejected the society’s complaint on the grounds of non-applicability of RERA. It directed Wadhwa Constructions and Developers to register Building No. 18 of the Trade Centre Project under RERA within 30 days and imposed a penalty of ₹5,00,000 for violation of Sections 3 and 4 of the Act. The Tribunal clarified that the appellant society's prayer for direction to obtain the full occupation certificate could not be granted until the builder registered the project under RERA. Once registration is completed, the society is at liberty to pursue further remedies under the Act. Thus, the appeal was allowed in part, modifying the order of MahaRERA and upholding the appellant society’s claim to the extent of directing RERA registration and penalizing the builder for non-compliance.
Appearance
For the Appellant(s): Adv. Mr. Bhuvan Singh, Adv. Mr. Mustafa Kachwala
For the Respondent(s): Adv. Mr. Rubin Vakil, Adv. Mr. Dinesh Rane
Cause Title: Trade Centre Premises Co-operative Housing Society Ltd. V. Wadhwa Constructions
Case No: Appeal No. U-4 Of 2021 in Source Complaint No: SC10002135
Coram: Shri. Shriram R. Jagtap [Member (J)], Dr. K. Shivaji [Member (A)]
[Read/Download order]
