The Real Estate (Regulation and Development) Act mandates registration for ongoing projects, where completion certificates are absent, emphasizing consumer protection in real estate transactions.

JUDGMENT :

M.A. ABDUL HAKHIM, J.

1. The respondents 1 to 4 in Complaint No.37/2023 of the Kerala Real Estate Regulatory Authority (the K-RERA) are the appellants in the Miscellaneous Second Appeal filed under Section 58 of the Real Estate (Regulation and Development Act, 2006 (the RERA). The respondent is the complainant in the said complaint.

2. The parties are referred to according to their status before the K-RERA.

3. The complainant is an allottee in the Villa Project by name ‘Epcot County’ launched by the 1^st respondent. The 1^st respondent is a private limited company engaged in the business of development and construction of real estate projects. The respondents 2 to 4 are its Directors. The 4^th respondent is the landowner of the Project also. The 5^th respondent is another private limited company, which is a sister concern of the 1^st respondent.

4. The complainant filed the complaint claiming amounts under various heads from the respondents alleging various defects, deficiency and delay from the part of the respondents with respect to the real estate project.

5. When the complaint was taken on file, the K-RERA found that the Real Estate Project of the 1^st respondent requires registration under S.3 of the RERA and accordingly issued Show Cause Notice dt 06.03.2023 in the Complaint itself calling upon the respondents to explain why action should not be initiated for violation of S.3 of the RERA.

6. The Respondents did not file a Reply to the Show Cause Notice. The K-RERA found that the Building Permit was issued on 28.11.2015 and since no documents were produced by the respondents to prove that the villas and common areas in the real estate project were completed before 01.05.2017, the K-RERA issued Interim Order dt 25.04.2023 directing the respondents to appear in person on 30.05.2023 at 11.00 a.m. at its Head Office along with all the relevant documents to explain as to why penalty as per S.59(1) of the RERA shall not be imposed. The respondents filed a Reply to the Show Cause Notice on 29.05.2023.

7. After considering the contentions of the respondents the K-RERA passed interim order dt 05.07.2023 ordering the respondents to register the real estate project within 30 days from the date of receipt of the said order, imposing a penalty of Rs.2.59 lakhs, being 0.5% of the estimated cost of the real estate project and further ordering that if the promoter fails to pay the penalty and continue to violate S.3 even after 30 days from the date of receipt of the said order, proceedings under S.59(2) shall be initiated.

8. The respondents filed Appeal before the Kerala Real EstateAppellate Tribunal (the Tribunal) as REFA No. 48/2023 challenging the said order dt 05.07.2023 of the K-RERA. The Tribunal vide its order dt 28.06.2024 allowed the appeal in part confirming the order with respect to the registration of the real estate project, setting aside the imposition of penalty and exonerating the 5^th respondent. It is also ordered that K-RERA shall take appropriate steps under S.59(1) of the K-RERA at the appropriate stage if the contravention is brought to its notice. The respondents are given one month’s time from the date of the Appellate Order to register the real estate project with the K-RERA. The penalty was set aside on the ground that penalty could not be imposed simultaneously with the direction for registration. The 5^th respondent was exonerated from the liability on the ground that it has no connection whatsoever with the real estate project launched by the 1^st resp