Point of Law: Enforcement of Act, 2016, comes under the purview of ‘promoter’, as defined under Section 2(zk) of Act, 2016, and necessary compliance of pre-deposit, as enshrined under Section 43(5) of Act, 2016

JUDGMENT :

1. This bunch of appeals filed under Section 58 of Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as “Act, 2016”) assails the orders passed by Uttar Pradesh Real Estate Appellate Tribunal (hereinafter referred to as “Appellate Tribunal”) as well as order passed by Uttar Pradesh Real Estate Regulatory Authority (hereinafter referred to as “Regulatory Authority”) directing the appellant to pay interest @ MCLR + 1 on the amount paid by the allottee from 01.7.2012 till obtaining of CC/offer of possession, whichever is later.

2. The present appeal has been preferred on the ground that the appeal filed before the Appellate Tribunal was dismissed on the ground of non compliance of Section 43(5) of the Act, 2016 and appellant not being a promoter is not required to comply condition of predeposit.

3. The present appeal was admitted by this Court on 22.12.2021 on the following question of law:

“Whether in the context of the objects clause and the Memorandum of Association of the present appellant and in the context of the activities engaged by it, the appellant is included in the meaning of the word "Promoter" as defined under Section 2(zk) of the U.P. Real Estate (Regulation and Development) Act 2016 as may enforce on the appellant the condition of pre deposit the entire disputed amount for the purpose of maintaining the appeal under Section 43(5) of the Act against the order dated 10.4.2019 passed by the Real Estate Regulatory Authority.”

4. Counsel for both the sides have jointly agreed to argue the matter on the question of law framed herein above, thus with the consent of counsel for the parties, all these connected appeals are being heard and decided today. Leading appeal being RERA Appeal No.1 of 2022 wherein challenge has been made to the order dated 10.04.2019 passed by Regulatory Authority and the order dated 28.02.2020 passed by Appellate Tribunal.

5. Facts in brief are that the appellant before this Court known as Air Force Naval Housing Board (hereinafter referred to as “AFNHB”) is a welfare organization formed with the efforts of Senior Officers of Air Force and Navy with an object to provide suitable and affordable houses to the Air Force and Naval personnel on ‘no profit no loss’ basis. The appellant formed a Society by serving senior officers of Air Force and Navy which was registered on 16.11.1979 under the Societies Registration Act, 1860 (hereinafter referred to as “Act, 1860”). The Board of Directors is comprised of serving officials of Air Force and Indian Navy on the ex officio basis. AFNHB, Meerut is a project launched in the year 2008. The land was allotted by Meerut Development Authority. Thereafter lay out was approved and contract for civil work for initial 5 towers were awarded on 05.05.2010. In the said project, 545 flats was to be constructed.

6. Act, 2016 came into force from 01.05.2016 after receiving presidential assent on 25.03.2016 and was made applicable in the State of U.P. as well. On the date of enforcement of the Act, 2016, the project launched by the appellant was going on, hence its registration under proviso to Section 3 was mandatory and the appellant registered the same with the RERA on 15.08.2017.

7. According to appellant, out of 545 flats, 523 flats have been sold and 418 allottees have already taken possession. Twenty-two flats are lying vacant. As there was delay in completion of project, some of the allottees approached RERA and were awarded interest on their deposited amount and in some cases refund of deposited amount with interest was awarded. RERA on 10.04.2019 on complaint being made by the contesting respondents, who are the allottees, passed following order :

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