The court upheld the authority's decision to allow a housing society to take over a lapsed real estate project, prioritizing home buyers' interests over private disputes.

ORDER :

M. NAGAPRASANNA, J.

The petitioner-M/s Nestoya Homes Private Limited is before this Court calling in question an order dated 03-08-2023 passed by the Karnataka Real Estate Regulatory Authority, Bengaluru (‘the Authority’ for short) in CMP/201224/0007319 allowing the complaint filed by the 2nd respondent/Hanging Gardens Nagawara Flat Owner’s Co-operative Societies Limited (hereinafter referred to as ‘the Society’ for short).

2. Heard Sri Anil Ramachandra, learned counsel appearing for petitioner, Sri K.R. Krishnamurthy, learned counsel appearing for respondent No.1 and Sri Arjun Rao, learned counsel appearing for respondent No.2.

3. Facts, in brief, germane are as follows:-

The petitioner claims to be a Company registered under the provisions of the Companies Act, 2013. M/s Orchids Elite Developers Private Limited (hereinafter referred to as ‘the Developer’ for short) is the 1st respondent and the 2nd respondent is the Society. The issue commences from a project that was sought to be initiated by the Developer for an apartment complex by name ‘Hanging Gardens’. The project was initiated by the Developer on 10-03-2011 and commencement certificate was issued on 3-07-2014. Since the project was incomplete as on the date of commencement of the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as ‘the Act’ for short), the target completion of the project was restructured to 30-06-2020 pursuant to registration of the project before the Authority. The project was required to be developed into a residential apartment unit consisting of 120 flats which was revised to 132 flats. There was no progress in the project since mid 2016 and the overall project was only complete up to 50%.

4. The Developer, in order to facilitate entire control of the project, proposed to the petitioner to take over the project in the name of partnership firm consisting of the petitioner and the Developer as partners. Induced by the offer made by the Developer to the petitioner, the petitioner sought to take over the project. But the project did not get complete. The Society then knocks at the doors of the Authority by filing the impugned proceedings against the Developer. An order is made on 03-08-2023 permitting remainder of the construction to be taken over by the 2nd respondent/Society in terms the Act. This has driven the petitioner before this Court in the subject petition.

5. The learned counsel appearing for the petitioner would vehemently contend that the petitioner has invested several crores in the subject project, as there is an agreement between the Developer and the petitioner. It had filed an application before the Authority to implead itself as a party respondent. The Authority without answering the said application, has permitted the 2nd respondent to continue with the construction. Therefore, the petitioner becomes an aggrieved party to challenge the order of the Authority before this Court. He would submit that if 4 to 6 months time is granted, the petitioner would complete the project and hand it over to the Society. Even the Society has to take up the construction which the petitioner itself will do. He would seek quashment of the order of the Authority and permit completion of the project by the petitioner.

6. Per contra, the learned counsel for the 1st respondent/Developer would submit that there is a dispute between the petitioner and the Developer. The very agreement between the two is a product of forgery. Criminal case is registered against the petitioner by the Developer alleging cheating and forgery. Therefore, the Developer is in the same