The Karnataka Real Estate Appellate Tribunal (Karnataka REAT) has ruled that merely attaching a revised sanctioned plan to a sale deed does not amount to informed consent from homebuyers for commercial development within a residential project.
“Mere enclosing of copy of the Revised Plan to the Sale Deed cannot be taken as informed consent. Therefore, at the least the Promoter ought to have taken prior written consent of at least 2/3rd of the Allottees before venturing into commercial development in 'A' Schedule,” the tribunal held.
A bench comprising Chairperson Justice J.M. Khazi and Judicial Member Santhosh Kumar Shetty N. partly allowed homebuyer Amit Garg's appeal against SJR Prime Corporation Private Limited. It directed the developer to obtain written consent from at least two-thirds of the homebuyers within 60 days before proceeding under the revised sanctioned plan.
The dispute concerns Palazza City, a residential project spread across 11 acres and 33 guntas in Bengaluru.
Garg entered into an agreement for sale and a construction agreement on June 24, 2013, based on the original sanctioned plan dated April 2, 2013. He took possession of his apartment in July 2020.
Garg alleged that the developer began construction in September 2020 without informing homebuyers in advance. He learnt of a revised sanctioned plan dated May 22, 2019, in February 2024, after the homeowners' association circulated it. The homeowners subsequently asked the Bangalore Development Authority (BDA) to revoke the plan.
The tribunal found that the original plan did not provide for a commercial establishment. The revised plan, however, showed one in an area earmarked for a park.
“In other words, while in the Approved Plan, the place where park was supposed to be developed, in the Revised plan, it is shown to be the place for commercial establishment. Certainly, it is violation of the rights of the Allottee to enjoy the amenities provided to them as per the sanction plan, layout, plans and specifications as approved by the competent authority, disclosed or furnished to them at the time of Agreement for Sale and Sale Deed,” the tribunal observed.
The proposed complex measured 9,006.17 square metres and comprised two basement levels, a ground floor, nine upper floors and terrace floors. The tribunal distinguished it from clubhouse amenities such as a daycare centre, food court, beauty parlour and laundry.
Rejecting the developer's reliance on general consent clauses in the sale documents, the tribunal held that homebuyers had not been adequately informed about the commercial development or its location. It found a violation of Section 14 of the Real Estate (Regulation and Development) Act, 2016.
The tribunal also ruled that Karnataka RERA had wrongly dismissed Garg's complaint for lack of jurisdiction.
It restrained further construction deviating from the original plan until the required written consent is obtained and submitted to the sanctioning authority. If the developer fails to secure consent within 60 days, it must follow the original plan dated April 2, 2013. The BDA may then cancel the revised plan.
For Appellant (Amit Garg): Advocates M/s Keystone Partners.
For Respondent (SJR Prime Corporation Private Limited): Advocate J.P. Darshan.