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2025 Supreme(Kar) 273

IN THE HIGH COURT OF KARNATAKA AT BENGALURU
SURAJ GOVINDARAJ
Akhilesh Anand S/o Anand N Kotian – Appellant
Versus
State Of Karnataka – Respondent


Advocates:
Advocate Appeared:
For the Appellant :SRI. RAJASHEKAR S., ADVOCATE
For the Respondent:SRI. YOGESH D. NAIK., AGA, SMT. PRADEEP KUMAR P.K., SRI. VENKATESH R BHAGATH., ADVOCATE SRI. GOWTHAMDEVE C ULLAL., ADVOCATE

Judgement Key Points

Certainly. Based on the provided legal document, here are the key legal points:

  1. The applicable law for registration and formation of associations in real estate projects depends on the stage of the project. During the construction phase, especially when the project is incomplete or delayed, the formation of an association is governed by the RERA 2016, which mandates that the promoter shall enable the formation of an association or cooperative society of allottees within a specified period after the majority of units are booked (!) (!) .

  2. An association formed under the KAOA 1972 can only be established after the conveyance of ownership in favor of the allottees, i.e., after the registration of sale deeds. Before such conveyance, the allottees are considered only as allottees or agreement holders, and cannot legally form an association under KAOA 1972 (!) (!) .

  3. The association contemplated under RERA 2016, often called the "Association of Allottees," does not include associations formed under KAOA 1972 or societies registered under the KSRA 1960 or KSCA 1959. The RERA 2016 emphasizes that such associations are to be formed by the allottees post-ownership transfer, and the law recognizes a cooperative society as a valid entity for managing and maintaining the project once formed (!) (!) .

  4. The law clearly states that associations under KAOA 1972 are not voluntary associations but are formed as a statutory requirement, which limits their scope for initiating proceedings under RERA 2016. Only voluntary consumer associations or associations of allottees formed after conveyance are recognized under RERA 2016 for filing complaints or initiating proceedings (!) (!) .

  5. The registration of a cooperative society under the relevant state law (KSCA 1959) cannot be used to carry out maintenance of the entire apartment complex if it is not formed as an association of owners under the applicable law. Such societies are restricted from undertaking maintenance activities related to the entire project unless formed in accordance with the prescribed laws and within the appropriate stage of the project lifecycle (!) (!) .

  6. There exists a clear hierarchy and precedence of laws: RERA 2016, being a central enactment with non-obstante provisions, overrides conflicting state laws such as KAOA 1972, KSRA 1960, and KSCA 1959, especially when these state laws attempt to regulate or restrict the formation of associations or the management of common areas contrary to RERA’s provisions (!) (!) .

  7. The law mandates that the association of allottees should be formed within a specified period after the majority of units are booked, which is different from the provisions under KAOA 1972 that require conveyance before such associations can be legally formed. This timing difference influences who can form associations and when (!) (!) .

  8. The law excludes associations formed under KAOA 1972 from having the capacity to initiate proceedings under RERA 2016 unless ownership has been transferred, i.e., sale deeds are executed, and ownership is registered in favor of the allottees (!) (!) .

  9. Associations under KAOA 1972 are not recognized as voluntary consumer associations and therefore cannot file complaints under the provisions of RERA 2016. Such associations are statutory and formed due to legal obligation, not voluntary association, which limits their standing under RERA (!) (!) .

  10. The law provides that once a cooperative society is duly registered under the relevant state law and formed in accordance with the law, it can undertake maintenance activities and represent the interests of the allottees in the project, including filing proceedings relating to the project’s completion and management (!) .

  11. The law emphasizes the importance of proper timing, registration procedures, and the legal standing of associations and societies, highlighting that associations formed prematurely or without proper ownership transfer may lack the legal capacity to act under RERA or related laws (!) (!) .

  12. The hierarchy of laws and the specific provisions of RERA 2016, including its overriding effect, establish that disputes, registration, and management of real estate projects are primarily governed by RERA, and state laws such as KAOA 1972 and KSRA 1960 are subordinate unless explicitly aligned with RERA’s provisions (!) (!) .

  13. The formation of associations or societies must comply with the relevant laws and be recognized as valid entities to exercise rights such as maintenance, dispute resolution, and complaint filing under RERA. Associations formed before ownership transfer or without proper registration are not recognized for such purposes (!) (!) .

  14. The law also underscores that the rights, obligations, and dispute mechanisms are to be exercised through the appropriate statutory entities, with RERA providing a comprehensive framework that supersedes conflicting state laws, especially concerning the formation and functioning of associations (!) (!) .

In summary, the legal framework prioritizes the formation of associations after ownership transfer, recognizes cooperative societies as valid entities for management, and affirms the supremacy of RERA 2016 over conflicting state laws regarding the regulation, registration, and management of real estate projects and associations of allottees.


ORDER :

SURAJ GOVINDARAJ, J.

1. The Petitioners in W.P.No.27341/2024 are before this Court seeking for the following reliefs:

a. Quash Registration certificate dated 20.11.2020 DRB3/SOR/378/2020-2021 issued by third Respondent District Registrar for Societies, Zone-3, Bengaluru Urban District at Annexure-B

(Deleted vide order dated 10.12.2024)

b. Quash order dated 05.07.2022 in Complaint No. (KRERA) 7613/2020 at Annexure-C and Order dated 03.01.2023 & 17.05.2024 in CMP 221116/0010348 clubbed with CMP 210223/0007613 at Annexure-U passed by Third Respondent Karnataka Real Estate Regulatory Authority (RERA);

(Deleted vide order dated 10.12.2024)

c. Quash Registration Certificate bearing No. AA.HA. HAAA.RE-50/REGISTRATION/06/54965/2023-24 dated 11.08.2023 issued by Second Respondent Registrar for Co-operative Societies, Zone-3, Bengaluru Urban District at Annexure-J.

d. To quash notice dated 15.07.2024 bearing No. DRB- 3/DIS/48/2024-25 at Annexure-W and order dated 31.08.2024 bearing No. DRB-3/DIS/48/2024-25 passed by Third Respondent District Registrar for Co- operative Societies at Annexure-Z by writ of Certiorari or by any other writ.

e. Issue necessary directions to second Respondent Regist

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