Interpretation of 'allottee' and 'promoter' under real estate laws in relation to a joint venture development agreement.

JUDGMENT :

This Miscellaneous Second Appeal has been filed under Section 58 of the Real Estate (Regulation and Development) Act, 2016 read with Section 100 of the Code of Civil Procedure, 1908 ('the Act’ hereinafter for convenience). The appellants herein are the respondents in complaint No.235/2022 on the files of the Kerala Real Estate Regulatory Authority, Thiruvananthapuram and the appellants in REFA No.1/2023 on the files of the Kerala Real Estate Appellate Tribunal, Ernakulam. The appellants impugn order in complaint No.235/2022 dated 15.12.2022 and the order of the Kerala Real Estate Appellate Tribunal in REFA No.1/2023 dated 15.09.2023. The respondent is the petitioner before the Regulatory Authority.

2. Heard the learned counsel for the appellants as well as the respondent in detail and the following substantial questions of law have been raised for consideration:

(i) Whether the landowner, who executed an agreement to effect constructions in his property along with the property of the builder with covenant to share the built up area is an “allottee” as defined in Section 2(d) of the Act?

(ii) Whether the landowner who executed an agreement with the builder to construct building in the property owned by both and has no direct involvement in the construction activities with the builder, falls under the definition of “promoter” as defined in Section 2(zk) of the Act?

(iii) Whether builder in pursuance of such agreement is required to execute registered deed of conveyance in favour of the landowner whose property also partly given for such construction as defined in Section 17(1) of the Act, on completion of the project?

3. It is submitted by the learned Senior Counsel for the appellants that a joint venture development agreement was executed in between the appellants and the respondent and the copy of the same is Annexure-A. It is pointed out by the learned Senior Counsel appearing for the appellants that as per the terms of Annexure-A, it was agreed between the parties as to how the built area would be shared and the appellants are ready to give the built area as agreed. However, the contention raised by the respondent before the Regulatory Authority while seeking transfer of ownership of the commercial place and the apartments as per allotment letter, viz., a letter dated 18.02.2021 given by M/s.Cordial Foundation Private Limited to the respondent, is bad in law. It is also submitted that the appellate authority also not properly applied its mind while confirming the said order in the appeal preferred.

4. According to the learned counsel for the appellants, since the respondent, who had surrendered 30 cents of property as part of a joint venture agreement which has profit sharing conditions for the landowner, has direct involvement in the construction activities, who is a builder, would not fall within the category of 'allottee’, as defined under Section 2(d) of the Act and the builder thereof would not fall within the category of 'promoter’, as defined under Section 2(zk) of the Act. Therefore, the builder is not required to execute a registered deed of conveyance in favour of the landowner defined under Section 17(1) of the Act on completion of the said project.

5. Refuting this contention, the learned counsel for the respondent submitted that the appellants are duty bound to perform the terms of the agreement entered into between the appellants as well as the respondent and the sharing of built area as detailed in Annexure-A as such to be complied. It is submitted by the learned counsel for the respondent further that even though the construction overlaps to an extent of 85 cents of property, where 30 cents is owned by the respondent and the remaining property by the builder, with liberty to the builder to carry out the construction at the apartment with an agreement to share built up area of the apartment, defined under Section 2(d) of the Act and in such case, the builder occupies the status of 'promoter' and the