RERA Cannot Demand 25-Year-Old Cooperative Society Records For Project Registration: Madhya Pradesh High Court

The Madhya Pradesh High Court recently has held that MP-RERA could not reject a real estate project registration application for non-production of a cooperative society's 25-year-old internal records when registered title documents and revenue records had already been produced.

A division bench of Acting Chief Justice Vivek Rusia and Justice Pradeep Mittal dismissed MP-RERA's appeal and upheld an earlier order directing the authority to process the registration application filed by Shri Ji Builders and Developers for its proposed "Krishna Orchid" project in Bhopal.

"To demand historical internal records of a cooperative from 1999, twenty-five years post-facto, is to impose an impossible burden of proof," the court observed.

The dispute arose from an application filed by Shri Ji Builders seeking registration of the project on land situated at Village Khajuri Kalan in Bhopal. MP-RERA rejected the application in June 2023 after identifying four deficiencies.

MP-RERA cited four shortcomings in the application. It noted that the diverted Khasra certificate had not been submitted. The authority also questioned a land transaction carried out by Shanti Grah Nirman Sahkari Samiti Maryadit in 1999, sought the cooperative society's original resolution register, and pointed to the non-uploading of income tax returns.

Shri Ji Builders challenged the rejection before the High Court. The matter resulted in a September 2024 order in the developer's favour, with a Single Judge setting aside MP-RERA's decision.

The Single Judge directed the authority to move ahead with the registration process after carrying out a prima facie verification of the title documents, including registered sale deeds and connected revenue records. At the same time, the developer was given 60 days to produce the diverted Khasra certificate

MP-RERA argued that the developer should have pursued the statutory appellate remedy before the Real Estate Appellate Tribunal rather than approaching the High Court directly.

The court rejected that contention. It noted that the tribunal was not effectively functioning because vacancies in the posts of Judicial Member and Technical Member had prevented it from hearing appeals.

Turning to the merits, the court held that the authority's role under the RERA framework is regulatory and facilitative. It does not extend to adjudicating disputed questions of title.

"The RERA Authority cannot undertake a 'collateral adjudication' of title disputes. To do so would transform it from a regulatory authority into a Civil Court, contrary to the statute's scheme," the bench observed.

The court noted that the sale transaction in question was executed on December 29, 1999. Mutation was completed on February 9, 2000.

It further noted that the land had remained in the possession and occupation of successors-in-interest without interruption or challenge for more than two decades.

"The doctrine of 'settlement of title' recognizes that after a sufficiently long period of unchallenged possession coupled with registered title, the transaction cannot be reopened or collaterally attacked," the court held.

The bench found that the alleged defects arising from the 1999 transaction did not justify rejection of the application.

"As discussed extensively above, the alleged title defects arising from the 1999 transaction constitute no deficiency at all. The Authority had no jurisdiction to re-adjudicate a settled transaction of twenty-five years' standing. This 'deficiency' should not have been raised in the first instance," it observed.

Addressing the authority's insistence on the original resolution register of the cooperative society, the court noted that the document related to a transaction that took place 25 years ago and could no longer be traceable.

"However, registered sale deeds, which are conclusive proof of title under the Registration Act, have already been produced. A registered deed is prima facie proof of ownership," the court observed.

The bench also held that the failure to upload income tax returns was a procedural deficiency. It observed that such a defect could be cured and did not warrant rejection of the application when substantive requirements were otherwise satisfied.

Finding no error in the Single Judge's reasoning, the court affirmed the earlier order. It directed MP-RERA to proceed with registration of the project after verifying necessary documents within the stipulated period.

For Appellant (M.P. Real Estate Regulatory Authority, Bhopal): Advocate Aryan Gupta.

For Respondent (Shri Ji Builders and Developers): Senior Advocate Sanjay Agrawal with Advocates Tanishka Ajmani and Arpit Agrawal.