Real Estate Appellate Tribunal Can Remand Cases Despite No Express Power Under RERA: Kerala High Court

The Kerala High Court has recently held that the Real Estate Appellate Tribunal has the power to remand matters to the Real Estate Regulatory Authority for fresh consideration, even though the Real Estate (Regulation and Development) Act, 2016, does not expressly provide for such a power.

The court dismissed appeals challenging a remand order passed by the tribunal and upheld the direction for reconsideration.

Justice M.A. Abdul Hakhim said the tribunal's appellate powers are wide enough to permit a remand where reconsideration is required. The court noted that Section 44(3) of the Act empowers the Tribunal to pass such orders as it thinks fit and that this provision must be understood in light of the object of the legislation.

“In the light of the object of the enactment, viz., a fast-track dispute resolution mechanism, it could only be held that the Tribunal is having wide powers under the Act to mould reliefs for effective and complete adjudication of the matter,” the court said.

Addressing the issue at hand, the court said, 

“While setting aside the Order of the Adjudicating Officer or K-RERA, if the Tribunal finds that the matter requires reconsideration at the hands of the Adjudicating Officer or K-RERA, it is perfectly within the powers of the Tribunal to remand the matter back to the Adjudicating Officer or K-RERA, as the case may be,” the court said.

The case relates to a residential apartment project called Sparkle Spaces in Kochi. Thirteen complainants, including homeowners and occupants, had approached the RERA Adjudicating Officer alleging structural defects in the building.

The Adjudicating Officer awarded compensation for repairing defects in the building's common areas and split the amount among individual allottees.

The promoter took the matter to the Real Estate Appellate Tribunal, contending that compensation for common area defects could not be divided among individual allottees and that the Association of Allottees ought to have been made a party to the proceedings.

The tribunal accepted this objection. It set aside the compensation order and sent the matter back for reconsideration, directing that the Association of Allottees be impleaded.

Before the High Court, the developer argued that the Tribunal had no authority to remand the case, pointing out that the Civil Procedure Code does not apply under Section 53 of the Act and that neither the Act nor the Rules expressly confer such a power. The court, however, rejected this argument.

On compensation, the court clarified that while individual allottees may initiate proceedings, claims relating to defects in common areas must involve the Association of Allottees.

“The Allottee cannot claim compensation with reference to his proportionate undivided interest,” the court said. It added that compensation must be quantified for rectifying defects in common areas and utilised through the Association.

The appeals were dismissed. The Adjudicating Officer has been directed to dispose of the complaint afresh within four months.

Appearances: Advpcates Sunil Shanker, Vidya Gangadhara, Sandhra.S, Devayani Nair T.H. (for Promoters); Arun Babu and Aneeshraj (for home owners)