Bihar RERA Directs Redbrick Infrabuild To Refund ₹16 Lakh For Failure To Convey Marketable Title

The Bihar Real Estate Regulatory Authority (Bihar RERA) on 19 June directed Redbrick Infrabuild Pvt. Ltd. to refund Rs 16 lakh to a homebuyer after it found that the developer failed to convey a clear, marketable and legally transferable title in respect of a plot sold under its “Redbrick Empire” project.

Inquiry Commissioner Sanjaya Kumar Singh held that Redbrick Infrabuild failed to discharge its obligation to transfer valid title, and observed that the buyer's inability to obtain mutation due to the land being recorded as “Gairmajarua Malik land” resulted in deprivation of proprietary rights. He observed:

“Article 300A of the Constitution of India mandates that no person shall be deprived of his or her property save by authority of law. In the present case, although the sale deed in respect of the subject property has been duly executed and registered in favour of the Complainant upon payment of the entire sale consideration and fulfilment of all contractual obligations, the subsequent rejection of the mutation application by the competent revenue authority on the ground that the land is recorded as Gairmajarua Malik land has effectively deprived the Complainant of the true enjoyment and recognition of her proprietary rights.”

The dispute concerned Plot No. 682, measuring about 2,000 sq. ft., situated in Mauza Baghakol, forming part of the “Redbrick Empire” project. Madhu Mishra purchased the plot under an absolute sale deed dated 24 January 2023 for Rs 16 lakh and paid Rs 1.23 lakh towards registration charges.

The Circle Officer, Bikram, rejected her mutation application on 17 June 2024 after he found that the land was recorded as Gairmajarua Malik land, which is not ordinarily treated as privately transferable without proper conversion or establishment of title. Following the rejection, Madhu Mishra approached Bihar RERA and sought a refund of the amount paid.

Redbrick Infrabuild contended that it purchased the land under a registered sale deed dated 1 June 2018 and obtained mutation in its favour. It also argued that Section 54 of the Transfer of Property Act, 1882 shifted the obligation of mutation to the purchaser after execution of the sale deed. It further claimed that a government resolution had converted the land from Gairmajarua Malik to raiyati land and relied on Upendra Singh v. State of Bihar to support its claim that no defect in title existed.

Bihar RERA rejected these submissions and held that Redbrick Infrabuild failed to prove that it held a valid and marketable title over the land. It held that the developer misapplied Section 54 of the Transfer of Property Act and failed to discharge its continuing obligation to transfer lawful title. It also observed that a registered sale deed does not cure defects in title or misrepresentation, and held the developer responsible for ensuring that it transfers a legally transferable interest in the property.

Further, it found that Redbrick Infrabuild failed to produce any documentary evidence showing conversion of the land from Gairmajarua Malik to raiyati land or establishing a lawful chain of title. It further held that the Patna High Court ruling cited by the developer did not relate to the subject property and did not support the alleged conversion.

Accordingly, Bihar RERA directed Redbrick Infrabuild to refund Rs 16 lakh along with interest at 2% above SBI's MCLR from the date of booking until refund, within 60 days, after holding that the developer failed to convey a valid and marketable title.

Appearances for complainant (Madhu Mishra): Mr Chandra Shekhar, authorised representative of the complainant.