Pranav B Prem

The Karnataka Real Estate Regulatory Authority (K-RERA) has recalled its earlier orders permitting transfer of decrees to the civil court, holding that such orders were void for violation of principles of natural justice and lack of jurisdiction. The Authority clarified that decree holders must first seek execution before RERA itself and cannot bypass the statutory mechanism by directly approaching the civil court.

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A coram comprising Chairman Rakesh Singh and Member Gurijala Ravindranadha Reddy, in an order dated November 17, 2025, held that “failure to hear a necessary party renders the order void for violation of natural justice,” and reiterated that any such order would fall within the category of decisions passed without jurisdiction. The Authority emphasised that orders passed without notice to an affected party strike at the very root of adjudication and cannot be sustained in law.

The dispute arose from complaints filed by allottees of the “Nitesh Long Island” residential project in Bengaluru, alleging that the developer had failed to complete the agreed infrastructure and common facilities. The matter was resolved through a Joint Memo recorded before the Lok Adalat on February 11, 2023, which attained the status of a civil court decree.

Subsequently, the allottees filed Decree Transfer Petitions under Sections 40 and 57 of the Real Estate (Regulation and Development) Act, 2016, seeking transfer of the Lok Adalat decree to the competent civil court for execution. These petitions were allowed by K-RERA without issuing notice to the developer and without granting an opportunity of hearing.

Aggrieved by the ex parte orders, the developer approached the Authority contending that the decree transfer orders were legally unsustainable as they had been passed in breach of principles of natural justice. It was argued that the developer was not heard at all and that the Authority had mechanically permitted transfer of the decree without examining whether there was any non-compliance warranting execution. The developer also asserted that it had substantially complied with the obligations undertaken under the Joint Memo.

During the proceedings, K-RERA directed a technical committee headed by an Assistant Executive Engineer of the Authority to conduct a spot inspection of the project. In its report dated May 23, 2025, the Committee found that while some components had deteriorated due to poor maintenance, the major infrastructure and common facilities envisaged under the Joint Memo had been completed. Both parties accepted the Committee’s assessment that the remaining deficiencies were “minor, incidental and technical in nature and not attributable to deliberate non-compliance by the Developer.”

On examining the legal position, the Authority held that permitting transfer of a decree to the civil court without first undertaking execution proceedings before RERA was contrary to Section 38(2) of the Act, which mandates that the Authority shall be guided by the principles of natural justice. It observed that execution proceedings necessarily require issuance of notice to the judgment debtor and an opportunity of hearing to determine whether there has been non-compliance with the decree.

The Authority also examined its power to recall its own orders. Relying on judicial precedents including Asit Kumar Kar, Budhia Swain, and Indian Bank, it held that tribunals and quasi-judicial authorities possess inherent power to recall orders passed without jurisdiction, in violation of natural justice, or due to procedural irregularities that go to the root of the matter. It observed that recall in such cases is not a review on merits but a corrective measure to undo orders that are void in law.

Rejecting the contention that decree holders could directly seek transfer of decrees to civil courts, the Authority held that execution must first be sought before RERA. It clarified that only after establishing non-compliance in execution proceedings, following due notice and hearing, could further steps be taken in accordance with law.

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In view of these findings, K-RERA recalled its earlier Decree Transfer Petition orders. However, it granted liberty to the complainant allottees to initiate execution proceedings before the Authority in accordance with law. The decision thus reaffirmed the primacy of natural justice in RERA proceedings and clarified that statutory execution mechanisms cannot be bypassed by resorting to ex parte decree transfers.

For the Respondent : Advocate Ahaan Mohan

Cause Title: MG Ashok Rao & Ors. v. Nitesh Estates Limited & Ors.

Case No: CMP/00001/2023, CMP/00204/2023

Coram: Chairman Rakesh Singh, Member Gurijala Ravindranadha Reddy