‘Projects hav­ing com­ple­tion cer­tifi­cate af­ter July 2017 un­der am­bit of Rera’

JU­RIS­DIC­TION MAT­TERS Haryana Rera (Panchkula) has held that on­go­ing projects where com­ple­tion cer­tifi­cate was granted af­ter pub­li­ca­tion of state rera rules come un­der the Rera ju­ris­dic­tion

Hindustan Times (Chandigarh) - Estates - - ESTATES - Mu­niesh­wer A Sa­gar mu­niesh­wer.sa­gar@hin­dus­tan­times.com

De­vel­op­ers will no longer be able to keep them­selves out of the purview of the real estate (reg­u­la­tory and devel­op­ment) act on the pre­text of hav­ing got the com­ple­tion cer­tifi­cate.

In a land­mark or­der, the Haryana real estate reg­u­la­tory au­thor­ity (Panchkula) com­pris­ing Ra­jan Gupta (chair­man), Anil Ku­mar Pan­war (mem­ber) and Dil­bag Singh Si­hag (mem­ber), held that only de­vel­op­ers who got com­ple­tion or oc­cu­pa­tion cer­tifi­cate be­fore the pub­li­ca­tion of the state real estate (reg­u­la­tory and devel­op­ment) rules 2017 are ex­empted from the purview of the Act.

The au­thor­ity held, “An oc­cu­pa­tion cer­tifi­cate granted af­ter July 28, 2017 will be of no con­se­quence for claim­ing ex­emp­tion in re­spect of reg­is­tra­tion of a project.”

The state real estate reg­u­la­tory au­thor­ity has full ju­ris­dic­tion over de­vel­op­ers who ap­plied for and got com­ple­tion cer­tifi­cate af­ter the pub­li­ca­tion of the Rera rules; and in such cases, ag­grieved al­lot­tees can ap­proach the au­thor­ity against de­fault­ing de­vel­op­ers.

THECASE

The or­der came in the case, ‘Madh uS are en ver­sus B PT P Ltd and oth­ers’.

Com­plainants in the case were al­lot­tees of flats in a BPTP real estate project and the de­vel­oper of­fered them pos­ses­sion, but only on pay­ment to es­ca­lated price, en­hanced area cost and GST, etc.

Ac­cord­ing to com­plainants, de­vel­oper in­creased the su­per area of the flats uni­lat­er­ally with­out in­form­ing them and with­out seek­ing their con­sent.

They fur­ther al­leged that de­vel­oper was re­quired to de­liver pos­ses­sion be­fore com­ing into force of GST law in terms of agree­ment en­tered with them.

And since the de­vel­oper him­self is re­spon­si­ble for de­lay­ing the com­ple­tion of the project, they are not li­able to pay the en­hanced cost or even the GST. So, the com­plainants prayed for grant of in­terim re­lief re­strain­ing the de­vel­oper from charg­ing es­ca­lated price and GST, till the fi­nal de­ci­sion of their com­plaint.

DE­VEL­OPER CON­TENTION

The de­vel­oper in his re­ply ques­tioned the very main­tain­abil­ity of the com­plaints aver­ring that he has been al­ready granted oc­cu­pa­tion cer­tifi­cate on Fe­bru­ary 26, 2018 in re­spect of a part of his project and that his project, af­ter is­suance of such oc­cu­pa­tion cer­tifi­cate, has been ex­cluded from the purview of the Rera Act, 2016. So, the Au­thor­ity has no ju­ris­dic­tion to deal with the com­plaints.

Com­plainants, while re­fer­ring to the Sec­tion 3(2) (b) of the Act, ar­gued that only such project which has re­ceived com­ple­tion cer­tifi­cate will not re­quire reg­is­tra­tion and the project in ques­tion was an ‘on­go­ing project’ re­quir­ing a manda­tory reg­is­tra­tion un­der Sec­tion 3 of the Act for the rea­son that no com­ple­tion cer­tifi­cate for it was re­ceived on or be­fore the date of com­mence­ment of the Act, that is, May 1, 2017. So, the de­vel­oper can­not claim that his project does not fall within the ju­ris­dic­tion of the au­thor­ity.

The re­spon­dent ar­gued that the project in ques­tion does not fall in the cat­e­gory of “on­go­ing project” as de­fined in Rule 2(1) (o) of the Rules be­cause oc­cu­pa­tion cer­tifi­cate in re­spect of a part of the project has been granted by the com­pe­tent au­thor­ity.

THE AU­THOR­ITY OR­DER

The au­thor­ity af­ter hear­ing from both the par­ties and on ap­praisal of their sub­mis­sions, ar­rived at a prima fa­cie con­clu­sion that the ap­pli­ca­tion of the de­vel­oper for is­suance of com­ple­tion cer­tifi­cate was not filed with bona fide in­ten­tion and he can­not take the ben­e­fit of oc­cu­pa­tion cer­tifi­cate for claim­ing ex­emp­tion from the pro­vi­sions of Sec­tion 3 of the Act or even for de­feat­ing the present com­plaints.

The Au­thor­ity held that the pro­viso at­tached to Sec­tion 3 makes it manda­tory for a de­vel­oper even to get such a project reg­is­tered with the Au­thor­ity, which was ‘on­go­ing’ on the date of com­mence­ment of the Act and for which the com­ple­tion cer­tifi­cate has not been is­sued by the com­pe­tent au­thor­ity.

In its in­terim or­der, the au­thor­ity ob­served, “The first part of the Rule 2(1) (o) of the Haryana real estate (reg­u­la­tory and devel­op­ment) rules 2017 de­fines the ex­pres­sion ‘on­go­ing project’ THE RE­LIEF AWARDED TO A COM­PLAINANT CAN ALSO BE EX­TENDED TO OTHER AL­LOT­TEES IN A PROJECT WHO HAVEN’T AP­PROACHED THE AU­THOR­ITY FOR RE­LIEF as a project for the devel­op­ment of which a li­cense has been granted by the com­pe­tent au­thor­ity and devel­op­ment work of which were not yet com­pleted on May 1, 2017. Sec­ond part of Rule 2(1) (o) con­tem­plates that ex­pres­sion ‘on­go­ing project’ shall not in­clude any project which is cov­ered by the pro­vi­sions con­tained in clause (i) and clause (ii) of said rule. What de­serves to be spe­cially noted in these pro­vi­sions is that the last word sep­a­rat­ing clauses (i) and (ii) is not ‘or’ and the word used is rather ‘and’. So, any project or its part will qual­ify for ex­emp­tion from the def­i­ni­tion of ‘on­go­ing project’ only if all con­di­tions laid down in clauses (i) and (ii) are sat­is­fied. The con­di­tion laid down in clause (ii) of Rule 2 (1) (o) is that com­ple­tion/oc­cu­pa­tion cer­tifi­cate must have been granted on or be­fore the pub­li­ca­tion of the Rules.”

An oc­cu­pa­tion cer­tifi­cate granted af­ter July 28, 2017 will be of no con­se­quence for claim­ing ex­emp­tion in re­spect of reg­is­tra­tion of a project. “Un­de­ni­ably, the oc­cu­pa­tion cer­tifi­cate in the present case was granted to de­vel­oper on Fe­bru­ary 26, 2018, that is, af­ter the pub­li­ca­tion of Rules and there­fore, the de­vel­oper, on its ba­sis, can nei­ther claim that his project was not re­quir­ing reg­is­tra­tion nor he can le­git­i­mately ar­gue that the au­thor­ity has no ju­ris­dic­tion to deal with the com­plaints filed by the al­lot­tees of his project,” stated the au­thor­ity in the or­der.

WORK FIN­ISHED BE­FORE AP­PLY­ING FOR COM­PLE­TION CER­TIFI­CATE

Ver­i­fy­ing whether de­vel­oper com­pleted devel­op­ment work be­fore ap­ply­ing for com­ple­tion cer­tifi­cate: The au­thor­ity, be­fore giv­ing the in­terim re­lief to al­lot­tees, ver­i­fied with the depart­ment of town and coun­try plan­ning, Haryana (TCP) whether the de­vel­oper had bona fide in­ten­tions in ap­ply­ing for the com­ple­tion cer­tifi­cate or was the ap­pli­ca­tion made only to get ex­emp­tion from the Act.

Af­ter the ver­i­fi­ca­tion and re­ply filed by TCP, the au­thor­ity ob­served, “The project of the present de­vel­oper was not even qual­i­fy­ing the con­di­tions men­tioned in clause (i) of Rule 2(1) (o), for its ex­clu­sion from the def­i­ni­tion of ‘on­go­ing project’. Clause (i) clearly man­dates that ap­pli­ca­tion for grant of oc­cu­pa­tion cer­tifi­cate can be made to the com­pe­tent au­thor­ity only af­ter the com­ple­tion of devel­op­ment works.

The re­ply filed by the Di­rec­tor, Town and Coun­try Plan­ning, Haryana on April 9, 2018 re­veals that the district town plan­ner (DTP) and se­nior town plan­ner (STP) vide their let­ters dated July 4, 2017 and July 5, 2017 had pointed out de­fi­cien­cies in the com­ple­tion of devel­op­ment works and the de­vel­oper took more than 5 months to in­form the depart­ment that the short­com­ings pointed out by the above men­tioned of­fi­cers had been re­moved.

The span of 5 months time taken by the de­vel­oper to re­move the short com­ings, by it­self, prove that sub­stan­tial amount of devel­op­ment work was in­com­plete on the date the de­vel­oper had filed ap­pli­ca­tion for grant of oc­cu­pa­tion cer­tifi­cate.”

The Au­thor­ity held that ap­pli­ca­tion of de­vel­op­ers for grant of oc­cu­pa­tion cer­tifi­cate was not bona fide be­cause he made the ap­pli­ca­tion with­out com­ple­tion of devel­op­ment works.

“So, grant of oc­cu­pa­tion cer­tifi­cate on the ba­sis of an ap­pli­ca­tion filed with­out com­ple­tion of devel­op­ment works was nei­ther per­mis­si­ble nor the cer­tifi­cate granted on the ba­sis of such ap­pli­ca­tion can save the de­vel­oper from seek­ing reg­is­tra­tion of his project as is manda­tory un­der Sec­tion 3 of the Act,” the or­der reads.

Re­spon­dent ar­gued that devel­op­ment work, for the pur­pose of fil­ing an ap­pli­ca­tion to ob­tain com­ple­tion/oc­cu­pa­tion cer­tifi­cate, needs to be com­plete only in the de­vel­oper’s own es­ti­ma­tion and not as per the mile­stones set by the com­pe­tent au­thor­ity grant­ing the cer­tifi­cate.

Re­ject­ing the de­vel­oper ar­gu­ment, the au­thor­ity held, “Up­hold­ing of such ar­gu­ment will not only un­der­mine the role of the au­thor­ity grant­ing the cer­tifi­cate but it could fur­ther war­ran­tevena chance­for un­scrupu­lous de­vel­op­ers to abuse the pro­vi­sions of Rule 2(1) (o) with the con­nivance of the of­fi­cials, who are re­quired to ver­ify the com­ple­tion of devel­op­ment work on the spot be­fore grant­ing com­ple­tion/oc­cu­pa­tion cer­tifi­cate. So, the afore­said ar­gu­ment of the de­vel­op­ers per­mis­sions learned coun­sel is re­jected be­ing wholly mis­con­ceived.”

VER­I­FY­ING IN­TEN­TION

The au­thor­ity also ob­served that the de­vel­oper was is­sued li­cense in 2010 and the va­lid­ity of said li­cense had lapsed on Au­gust 14, 2014. The li­cense was there­after re­newed only on Fe­bru­ary 26, 2018.

“So, the de­vel­oper on the day when he moved the ap­pli­ca­tion for grant of oc­cu­pa­tion cer­tifi­cate did not have a le­gal right ei­ther to carry out devel­op­ment works or to claim an oc­cu­pa­tion cer­tifi­cate. Con­strued from this per­spec­tive, the de­vel­oper’s ap­pli­ca­tion for grant of oc­cu­pa­tion cer­tifi­cate was not even main­tain­able hav­ing no sanc­tity in the eyes of the law,” held the au­thor­ity.

RE­LIEF EX­TEND­ABLE TO THOSEWHOHAVEN’T FILED COM­PLAINT

Re­spon­dent, ar­gued that the au­thor­ity, at the most, can only grant re­lief to the al­lot­tees who have filed com­plaints and not to all al­lot­tees who may be sim­i­larly placed but have not yet filled any com­plaint.

In re­sponse the au­thor­ity held, “The ar­gu­ment is again bereft of merit be­cause the au­thor­ity for achiev­ing the main ob­ject of the act, is duty bound to pro­tect the in­ter­est of all those al­lot­tees who had en­tered into dis­pute with the de­vel­oper and even af­ter pay­ing the amounts de­manded from time to time have not yet re­ceived the pos­ses­sion of their flats on time as per terms of the buyer’s agree­ment.”

The au­thor­ity thus deemed it be a fit case for grant­ing in­terim re­lief not merely to the com­plainants but also to all other sim­i­larly placed al­lot­tees of the project.

Con­se­quently, the de­vel­oper was re­strained from charg­ing in­creased price or en­hanced area cost or even the GST from the com­plainants and other sim­i­larly placed al­lot­tees of the project, till the fi­nal dis­posal of the com­plaints.

The state real estate reg­u­la­tory au­thor­ity has full ju­ris­dic­tion over de­vel­op­ers who ap­plied for and got com­ple­tion cer­tifi­cate af­ter the pub­li­ca­tion of the Rera rules. HT PHOTO

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