Gujarat REAT Sets Aside RERA Order, Says No Jurisdiction Over Project Phase Completed Before RERA Act

The Gujarat Real Estate Appellate Tribunal (REAT) has quashed an order of the Gujarat Real Estate Regulatory Authority (RERA), holding that even though the Real Estate (Regulation and Development) Act, 2016, is consumer-centric, the Authority had no jurisdiction to entertain a complaint relating to a project phase that had obtained a completion certificate before the Act came into force on May 1, 2017.

A coram of Chairman Justice R.M. Chhaya and members Ram Kumar (Technical & Administrative) and Hemant A. Dave (Judicial) set aside the direction requiring Ahmedabad-based developer Galaxy Mall Private Limited to execute a registered sale deed in favour of Bharat Nagjibhai Ramani and to pay costs of Rs 10,000 in relation to Flat No. H-502 in Block “H” of the “Keshav Galaxy” project at Nikol, Ahmedabad.

The tribunal observed that although the provisions of the Act are meant to protect homebuyers, they cannot be applied to a phase of a project that stood completed before the law came into force.

“It is no doubt true that the provisions of the RERA Act are 'consumer centric', however, as the completion certificate for Block 'H' was granted by the competent authority i.e. Ahmedabad Municipal Corporation before the commencement of the Act, the provisions of the Act would not be applicable to that phase of the real estate project,” the tribunal held.

The dispute arose from the “Keshav Galaxy” residential project at Nikol in Ahmedabad. Ramani had booked Flat No. H-502 and paid Rs 33,50,000, but alleged that possession was not given on or before April 2018 as promised.

He filed a complaint under Section 31 of the 2016 Act before the Gujarat RERA seeking possession of the flat and interest for delayed possession under the Act.

By an order dated September 3, 2020, the Authority directed the promoter to execute a registered conveyance deed within 45 days and to pay costs of Rs 10,000, holding that full consideration had been received but the conveyance had not been executed.

Challenging the order, Galaxy Mall Private Limited filed an appeal under Section 44 of the Act. The developer argued that the project was constructed in phases and that Block “H” had been completed before the Act came into force. It relied on a completion certificate issued by the Ahmedabad Municipal Corporation on July 11, 2016.

It was further submitted that only Blocks “E”, “F” and “G” were registered as ongoing projects under RERA on November 6, 2017, and that each phase of the project was required to be treated as a separate real estate project.

Accepting the contention, the Tribunal noted that the completion certificate for Block “H” had been issued prior to the commencement of the Act and therefore the phase was not required to be registered as an ongoing project.

“It is an admitted position that the phase of Block 'H' was complete and the completion certificate was issued on 11th July 2016, before the commencement of the Act, and therefore the said phase was not registered as an ongoing project,” the tribunal held.

The Tribunal allowed the appeal and set aside the RERA order, holding that the authority had acted without jurisdiction.

It also directed that any amount deposited by the appellant under Section 43(5) of the Act be refunded after due verification and ordered that the record and proceedings be transmitted back to the RERA Authority.

For Appellant (Galaxy Mall Private Limited): Advocates Lokesh Shah, J.S. Rajpurohit.

For Respondent (Bharat Nagjibhai Ramani): Advocate Manthan Rathod.

For Respondent (Gujarat RERA): Advocate Ambika Sharma.