Rehabilitation Component Of Redevelopment Projects Outside RERA Jurisdiction, MahaRERA Dismisses Society Members’ Complaint
Pranav B Prem
The Maharashtra Real Estate Regulatory Authority (MahaRERA) has dismissed a complaint filed by members of a housing society against the developer of a redevelopment project in Pune, holding that disputes relating to the “rehabilitation component” of redevelopment projects fall outside the jurisdiction of the Real Estate (Regulation and Development) Act, 2016. The Authority clarified that since rehabilitation members are not “allottees” in the commercial sense contemplated under RERA, their grievances cannot be adjudicated under the Act.
The complaint was decided by Mahesh Pathak, Member–I, MahaRERA. The Authority reiterated that it is well settled that the rehabilitation component of redevelopment projects does not come within the scope of RERA in view of Section 3(2)(c) of the Act, and that MahaRERA has consistently declined jurisdiction in cases where disputes arise out of Development Agreements concerning the rights of original members or tenants.
The complainants, Girish Shrikant Lad and Tarang Girish Lad, were original members and occupants of a flat in Ratnaprabha Co-operative Housing Society, Pune. The society undertook redevelopment through the respondent developer, Ashwamedh Spaces Private Limited. In January 2021, the complainants entered into a Memorandum of Understanding and an individual arrangement with the developer, under which they were assured a new flat admeasuring 1,456 sq. ft. in lieu of their existing flat. Subsequently, owing to design constraints, it was agreed that they would be allotted two flats with an additional area of 280 sq. ft., for which additional consideration was to be paid.
The complainants alleged that despite handing over possession of their existing flat and shifting to rented accommodation, the developer unilaterally altered the agreed allotment, reduced the additional area, and re-allotted different flats. They further contended that one of the flats purportedly re-allotted to them was illegally sold to a third party. On this basis, the complainants approached MahaRERA seeking restoration of the flats, declaration that the sale to the third party was null and void, restraint on creation of third-party rights, compensation, interest, and imposition of penalties under RERA.
The developer raised a preliminary objection to the maintainability of the complaint, contending that the complainants were members of the rehabilitation component of a redevelopment project and not purchasers or “allottees” under Section 2(d) of RERA. It was argued that the complainants’ rights flowed from Development Agreements and Memoranda of Understanding executed as society members, and not from any registered agreement for sale involving a definite sale consideration. The developer also submitted that the dispute involved complex civil rights and title issues, that necessary parties such as the housing society and the third-party purchaser had not been impleaded, and that the Development Agreement contained an arbitration clause.
After examining the rival submissions, MahaRERA held that the complainants had participated in the redevelopment project as original members of the housing society and were entitled to a flat in the rehabilitation component under the Development Agreement, and not as independent allottees under a registered agreement for sale. The Authority observed that the complainants had not paid any sale consideration for allotment of the rehabilitation flat so as to qualify as “allottees” under RERA. It categorically held that “the rehabilitation component of redevelopment projects does not fall within the scope of RERA in terms of Section 3(2)(c) of the RERA.”
The Authority further noted that even otherwise, the nature of reliefs sought by the complainants—such as declaration of sale of a flat as null and void, restoration and allotment of flats, and restraint on creation of third-party rights—involved adjudication of civil rights, title disputes, and complex contractual issues. It held that such disputes cannot be decided in the summary proceedings contemplated under RERA, particularly when necessary parties, including the housing society and the third-party purchaser, were not properly impleaded. In view of these findings, MahaRERA concluded that the complaint did not disclose a cause of action maintainable under the provisions of RERA. Consequently, the complaint was dismissed as not maintainable. However, the Authority granted liberty to the complainants to pursue appropriate remedies before the competent civil forum in accordance with law.
Appearances: Amit Ghorpade (Representative) for Complainants; Adv. Dhawal Vidawns for Respondent.
Cause Title: Girish Shrikant Lad & Anr. v. Ashwamedh Spaces Private Limited
Complaint Number: CC12502725
Coram: Mahesh Pathak, Hon'ble Member - I, MahaRERA
