Landowner Who Completed Stalled Project Is 'Promoter,' Liable To Homebuyers: Assam RERA

The Assam Real Estate Regulatory Authority has recently held that that a landowner who takes over and completes a stalled housing project becomes a “promoter” under the Real Estate (Regulation and Development) Act, 2016, and is jointly liable with the original promoter for obligations owed to homebuyers, including delivery of possession and refund with interest.

A bench of Member  B.K. Chetri, referring to landowner Saumik Sengupta, observed:

“When the Development Agreement dated: 12.01.2015 was entered, the respondent no. 2 was the land lord. But after taking over the project and completing construction, the land lord is no longer the landlord only but has entered into the shoes of promoter. The liability of the respondent no.2 (land lord) becomes joint and severable with the erstwhile promoter, even if he did not personally receive the original booking or advance amount from the complainant. In the changed circumstances the liability of the respondent no 2 (land lord) is to complete the project as per the original sanctioned plan and specifications and if the existing buyer or the allottee (here the complainant) wish to withdraw from the project, the respondent no. 2 (current promoter) is liable as per the Real Estate (Regulation and Development) Act, 2016 to refund the money with interest. Otherwise to handover the possession of the said flat to the complainant and receive the balance payment as per the agreement.”

The dispute arose from an agreement dated May 3, 2017, between Dinesh Chandra Deka and Hiran Deka and Vivek Developers for the purchase of a flat in a G+2 building at Ulubari, Guwahati, for Rs 30 lakh. The buyers paid Rs 17 lakh, and possession was to be delivered within 12 months, i.e., by May 3, 2018.

The developer carried out construction up to the stage of slab casting of the G+2 structure in 2017 but subsequently left the project midway following disputes with the landowner over construction quality. In January 2023, the buyers discovered that the developer had become untraceable.

After the developer exited, Sengupta stepped in and finished the remaining construction at his own expense. He began using the building, occupying some portions himself while renting out others, including spaces that corresponded to units originally earmarked for buyers.

Trouble arose when the allottees tried to take possession. Sengupta declined to hand over the flat, maintaining that he had no contractual relationship with them and had not received any part of the sale consideration. He also asserted independent rights over the property.

Left with no option, the buyers moved the Authority under Section 31 of the Act, seeking execution of the sale deed and possession. They pointed out that the investment represented their life savings.

In response, Sengupta described himself as a victim of the developer's actions. According to him, he had no knowledge of the agreement entered into with the buyers and had taken over the project only after it was abandoned, funding its completion through his own resources. He also relied on a pending civil suit in which he had sought cancellation of the development agreement.

The Authority was not persuaded. It found that Sengupta's role had shifted materially once he took control of the project and saw it through to completion. In those circumstances, he fell within the definition of a promoter under the Act, a provision wide enough to cover persons who effectively assume that role. The explanation to Section 2(zk), it noted, makes it clear that where construction and sale are handled by different entities, both are treated as promoters and share responsibility.

On that reasoning, the Authority held that the absence of direct payment from the buyers to Sengupta did not absolve him of liability. Nor could disputes between the landowner and the original developer be used to defeat the rights of allottees. It also underscored that Section 79 bars civil courts from intervening in matters that fall within the Authority's domain.

It also noted that the developer had completed the structural stage of the building before abandoning the project, and that Sengupta had benefited from the initial development before completing and occupying the building.

By its order dated March 31, 2026, the Authority directed Sengupta to hand over possession of the flat along with one car parking space and to pay interest under Section 18 at 10.70% per annum on Rs 17,00,000 from May 3, 2018 to March 31, 2026, quantified at Rs 12,85,141, after adjustment of the Rs 13 lakh balance amount payable by the buyers.

The order is to be complied with within two months..

For Complainants (Dinesh Chandra Deka & Hiran Deka): Advocate Mofidul Alom