Maharashtra REAT Rejects Plea For Promoter Substitution In Lapsed RERA Project; Fresh Registration Only Remedy

The Maharashtra Real Estate Appellate Tribunal (MahaREAT) has dismissed a plea seeking substitution of a promoter in a Goa-based real estate project, holding that such substitution cannot be permitted once the project's registration has expired and that the only remedy available is to seek fresh registration under the Act.

A coram of Judicial Member Shriram R. Jagtap and Administrative Member Dr. Rajagopal Devara dismissed an appeal filed by Deepa R., proprietor of Engineers Club and purchaser of the project land, against developer Rajiv Raghavan Pillai, who was recorded as the promoter of the “Engineer's Club” project in Goa. It uphled the Goa Real Estate Regulatory Authority's order rejecting her plea for substitution of promoter.

The tribunal observed, “Substitution of promoter presupposes the existence of a valid and subsisting registration of a real estate project. In the instant case, the project registration has expired and the project is nonoperational. Accordingly, there exists no valid registration in which substitution can be effected. Therefore, the prayer of the appellant to replace her name with that of developer has no merit and invalid.”

The dispute concerned a project titled “Engineer's Club” in Goa. Deepa R., proprietor of Engineers Club, had purchased the project land through a registered sale deed dated December 18, 2019. Prior to this, the original landowners had entered into a development agreement dated January 18, 2019 with Rajiv Raghavan Pillai, who was recorded as the promoter in the project's RERA registration.

Deepa R. applied on January 9, 2020 seeking substitution of her name as promoter. The Goa RERA initially allowed the request on March 16, 2020, but subsequently reconsidered the matter pursuant to directions issued in a writ petition.

The Authority rejected the request by its order dated September 8, 2021. The material on record showed that development activity had ceased in August 2019 and that the project registration expired in March 2022 without renewal.

Before the Tribunal, Deepa R. contended that the project registration had expired and that the development agreement relied upon by the respondent was neither registered nor notarized. She also contended that, as the landowner, she was entitled to be substituted as promoter.

Opposing the appeal, Rajiv Raghavan Pillai contended that the appellant was not a “promoter” under the Act and that there was no arrangement for sharing of revenue from the project. He also pointed to the pendency of a civil suit concerning the subject property.

The Tribunal framed issues on whether the impugned order warranted interference and whether substitution of promoter was permissible, answering both in the negative.

On facts, the tribunal noted that the project had been abandoned and that the development agreement had been terminated. It held that substitution cannot be effected in the absence of a valid and subsisting project registration.

Reiterating its conclusion, the Tribunal observed, “there exists no valid registration in which substitution can be effected.”

Dismissing the appeal, the Tribunal upheld the Goa RERA order and clarified that the appellant is at liberty to apply for fresh registration of the project in accordance with law.

For Petitioner (Smt. Deepa R.): Advocate Siddharth Sardesai.

For Respondent (Rajiv Raghavan Pillai): Advocate Yashvi Panchal.