RERA Cannot Examine Municipal Completion Certificates Issued Before It Came Into Force: Chhattisgarh High Court

The Chhattisgarh High Court has recently held that the Real Estate Regulatory Authority has no jurisdiction to examine or question completion certificates issued by municipal authorities before May 1, 2017, when the substantive provisions of the Real Estate (Regulation and Development) Act, 2016, came into force.

"Prima facie, a real estate project which has been certified as complete under the applicable municipal law prior to the enforcement of the RERA regime in the State of Chhattisgarh would fall outside the regulatory fold of RERA.,” the court said.

The ruling was delivered by a Division Bench of Justice Rajani Dubey and Justice Amitendra Kishore Prasad, which set aside an order of the Chhattisgarh Real Estate Appellate Tribunal that had refused to dismiss an appeal at the threshold despite objections on jurisdiction.

The case arose from a complaint filed by the Jeevan Vihar Residents Welfare Society before RERA, alleging that the project developers, Ralas and Chopda Builders and its partners, had failed to provide basic amenities and infrastructure promised in the project brochure.

The developers objected to the complaint, pointing out that the project had received a municipal completion certificate on March 22, 2017, before the RERA regime became operational on May 1, 2017. They also relied on a second certificate dated February 20, 2018, issued by the Nagar Panchayat to correct clerical errors in the earlier certificate.

RERA, however, rejected the objection by an order dated January 11, 2023, directed the developers to address alleged deficiencies, and asked the Collector to enquire into the issuance of the two certificates. After remand proceedings, and after the Chief Municipal Officer confirmed that the 2018 certificate was only a clerical correction, RERA passed a fresh order on December 15, 2023.

When the residents challenged this order, the Appellate Tribunal declined to dismiss the appeal on April 24, 2024, leading the developers to approach the High Court.

Allowing the appeal, the High Court held that “ At the threshold, and for the limited purpose of determining the maintainability of proceedings under the RERA Act, the Authority does not possess jurisdiction to scrutinize, test, or pronounce upon the issuance, validity, correctness, or legal effect of Completion Certificates granted under the Chhattisgarh Municipalities Act, 1961, read with the Rules of 2013, so long as such certificates remain in force and have not been declared illegal by a competent forum.”

On the second completion certificate, the bench accepted the explanation of municipal authorities that it was clarificatory in nature, observing that such an act “relates back to the original certificate” and does not create a fresh cause of action or new legal obligations.

The court clarified that if the municipal completion certificates are later declared illegal or invalid by a competent authority under municipal law, the affected parties would then be free to approach RERA in accordance with law.

For the Appellants (Builders): Advocates B.P. Sharma, Vivek Chopda, Pushp Kumar Gupta

For the Respondent (Residents' Welfare Society): Senior Advocate Manoj Paranjpe, assisted by Shivangi Agrawal, Surya Kawalkar Dangi