Promoters who received Occupancy Certificate after Enactment of K-RERA Act liable for Compulsory Registration: Kerala HC dismisses Real Estate Appeal [Read Order]

A Single Bench of the Kerala High Court held that, promoters who received occupancy certificate after the enactment of the Kerala Real Estate ( Regulation & Development ) Act, 2016 are liable for registration of the project in tune with Section 3 of the K-RERA Act, 2016. M/s. IFCI Infrastructure Development Limited, the appellant/respondent was represented by Vinod Madhavan, Biju Varghese Erumala and Saniya C V and the Kerala Real Estate Regulatory Authority (K-RERA) along with several allottees as respondents/complainants was represented by M P Shameem Ahamed and Akhil Philip Manithottiyil. The case primarily debated whether the direction for registration by K-RERA was lawful and whether the promoter retained any rights over the project. The petitioner counsel submitted that since K-RERA Rules framed with effect from 14.06.2018 and the Authority came into force with effect from 17.04.2020, the promoter, who completed the work and obtained occupancy/completion certificate with effect from 29.12.2017, is not bound to register and such a course of action is an absolute impossibility. According to the counsel for the promoter, since the K-RERA Rules necessary to establish the K-RERA came into force with effect from 14.06.2018 and practically, the K-RERA came into force with effect from 17.04.2020, non-registration of the project by the promoter is an outright impossibility and therefore, the orders of the K-RERA and the Appellate Tribunal are illegal and the same would require interference. Adv.M.P.Shameem Ahamed, for the allottees countered this argument citing a Supreme Court decision affirming the retroactive nature of the K-RERA Act, 2016 in M/s Newtech Promoters. The Apex Court had considered whether the Act, 2016 is retrospective or retroactive in its operation and what will be its legal consequence if tested on the anvil of the Constitution of India and finally held, “The clear and unambiguous language of the statute is retroactive in operation and by applying purposive interpretation rule of statutory construction, only one result is possible, i.e., the legislature consciously enacted a retroactive statute to ensure sale of plot, apartment or building, real estate project is done in an efficient and transparent manner so that the interest of consumers in the real estate sector is protected by all means and Sections 13, 18(1) and 19(4) are all beneficial provisions for safeguarding the pecuniary interest of the consumers/allottees.” It was further observed by the bench that, “It is not in dispute that S.2(q) of the Act, 2016 deals with completion certificate. "Completion certificate" means the completion certificate, or such other certificate, by whatever name called, issued by the competent authority certifying that the real estate project has been developed according to the sanctioned plan, layout plan and specifications, as approved by the competent authority under the local laws. Since the law is laid down as above, merely because temporary Real Estate Regulatory Authority established with effect from 23.02.2018 and occupancy certificate/completion certificate obtained prior to 23.02.2018 would not exempt the promoter herein, who received occupancy certificate after 01.05.2017, from the purview of the K-RERA Act, 2016, and its mandatory registration as provided under Section 20(1) of the K-RERA, Act, 2016.” The Single Bench of Justice A Badharudeen upheld the K-RERA's order for registration, emphasizing the Act's retrospective applicability and the promoter's obligation to comply with its provisions. The verdict sets a precedent for ongoing real estate projects falling under the K-RERA Act, 2016, mandating timely registration to safeguard consumers' interests. It was also directed that the appellant/promoter is to register the project within one week from the date of order. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates