384 October 20 To October 26, 2018 u Taxmann’s Corporate Professionals Today u Vol. 43 u^26
regulations and uniform guidelines was also
being felt by the industry which continued
to be perceived negatively by consumers
because of unscrupulous activities of a few.
The Act paves the way for empowering all
stakeholders engaged in the business and
consumption of real estate, be it consumers,
real estate developers, brokers/intermediaries
amongst others. One important point to note
here is that the Act doesn’t cover the rental
arrangements and agreements in any form.
However, all commercial and residential real
estate including plots, apartments, shops,
offices and such other properties are all
covered under the Act. While consumer interest
seems to have been finally addressed by the
adoption of the Act it can’t be ignored that
the Government has codified best practices
for the first time in this sector and these
will go a long way in defining growth from
here onwards.
Applicability of RERA
- As per section 3(1) of the Act, ongoing/
existing projects, which have not received
occupation or completion certificate, shall
be covered under the Act. Essentially almost
all large projects which have not obtained
completion certificate will immediately come
under the purview of the Act, thereby
consumers of under construction projects
can seek protection under the Act. The
word used in Section 3(1) and the Proviso
to Section 3 in respect of ‘ongoing project’ is
“shall”, thereby making the intention of the
legislature very clear that, in respect of those
ongoing projects also the registration has to
be sought within a period of three months
from the date of commencement of the Act.
Further, sub-clause (2) of Section 3 provides
for some exceptions, where registration of real
estate project shall not be required and those
exceptions are pertaining to the projects, where
the area of land proposed to be developed
does not exceed 500 sq. mtrs., or, the number
of apartments proposed to be developed
does not exceed 8, inclusive of all phases, or
where the Promoter has received Completion
Certificate prior to commencement of the Act.
One more exception laid down in clause (c)
of sub-section(2) of Section 3 is that, when
the project undertaken is for the purpose of
renovation or repair or re-development, which
does not involve marketing, advertising, selling
or new allotment of any apartment, plot or
building, as the case may be; otherwise for
all other Development Projects, the registration
under the RERA is mandatory.- Court’s stand on long Term Lease
in lieu of Recent Judgment in the case
of Lavasa Corporation Ltd. v. Jitendra
Jagdish Tulsiani
3.1 Factual Matrix of the case - The Respondents
in the present case claimed themselves to be
the bona fide purchasers of their respective
apartments in the projects/buildings known as
“Brook View”, which was being constructed
in Pune by the Appellant. In pursuance of
the negotiations between the parties, the
‘Agreements of Lease’ was executed between
the Parties. As per the said ‘Agreements’, the
Respondents had booked the apartments on the
basis of lease for the period of 999 years in
the Township Scheme of the Appellant. They
had paid most of the amount, which was,
approximately, to the extent of 80% of the sale
price. They had also paid substantial amount
towards the stamp duty and the registration
charges. As per the ‘Agreements of Lease’
executed between the parties, the project was
to be completed and the possession of the
apartments was to be handed over to the
Respondents within a period of 24 months.
After waiting bonafidely for all these six to
seven years for getting the project completed,
the Respondents found that there were no
chances of the project being completed in
a near future. Hence, after the Appellant
registered itself with the RERA, Respondents
approached the ‘Adjudicating Authority’ under
the Maha RERA with an application, under
Section 18 of the RERA, for compensation
with interest for every month of the delay
in handing over possession of the apartments
and for various other reliefs, to which they
were entitled to under the RERA.
aPPliCabiliTy OF rera aCT On lOng Term lease