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HIGH COURT OF KERALA
M.R.ANITHA, J
M/S. SHWAS HOMES PRIVATE LTD., REPRESENTED BY MANAGING DIRECTOR MR.SREENI PARAMESWARAN – Appellant
Versus
P.G. UNNIKRISHNAN – Respondent
MSA 6 2023
RealEstate - Appeals - Real Estate (Regulation and Development) Act, 2016 - Sections 3, 4(2)(c), 34, 35, 36, 37 - The court held that the K-RERA has jurisdiction to initiate suo moto proceedings and that previous interlocutory orders must be followed unless fresh facts emerge, thus impacting the registrability of projects under the Act.
Fact of the Case:
The dispute arose from the non-registration of the Aqua City township project under the Real Estate (Regulation and Development) Act, 2016. The Kerala Real Estate Regulatory Authority (K-RERA) had passed an interim order declaring the project registrable, which was later challenged by the promoters. K-RERA subsequently initiated suo moto proceedings to exclude certain projects from registration, leading to a legal challenge.
Finding of the Court:
The court found that K-RERA did not have the authority to review its earlier order regarding the registration of the Aqua City project. The court held that the suo moto order issued by K-RERA was non-est and lacked legal effect, as it conflicted with prior findings.
Issues: Whether K-RERA's suo moto order regarding project registration was valid and whether previous K-RERA orders precluded further action on registration.
Ratio Decidendi: The court determined that the principle of res judicata applied and that K-RERA could not re-evaluate the registration issue previously settled unless new facts emerged. The court upheld the legality of K-RERA’s power to initiate suo moto proceedings under specific circumstances.
Final Decision: The appeals were allowed, and the tribunal's orders were set aside, directing a fresh hearing of the matters.
JUDGMENT
Dated this the 29th day of May, 2023 The above MSAs were filed against the common judgment in REFA Nos.17, 18, 27 & 30 of 2022 of the Kerala State Real Estate Appellate Tribunal, Ernakulam.
2. Heard both sides.
3. M.S.A. No.1/2023 admitted on the following substantial questions of law:
(a) Whether section 3 the Real Estate regulation and Development Act, 2016 contemplates registration when the completion of the project and issue of occupancy certificate under the relevant local law with reference to a period long before the Act?
(b) Whether standalone project means and has to be reckoned along with the sanction plan, lay out, agreement of construction advertisement of the project?
(c) Whether the certification of occupancy issued by the statutory authority can be brushed aside and ignored and required to be that complying with the Real Estate regulation and Development Act, 2016?
(d) Whether registration of the project can be directed when sanction plan, layout plan etc has expired and no declaration as contemplated under Section 4 (2)(i) could be obtained for want no new constructions being commenced or advertised and when already substantial units have been sold out years back?
(e) Whether an inquiry under section 35 is mandatory before considering and adjudicating the question as to whether a project is ongoing or not for the purpose of registration? (f) Whether interim order survives and is binding for other proceedings before the same forum in the same subject matter, when final order is pronounced?
(g) Is the finding that the whole Acquacity township project is registrable under section 3 the Real Estate regulation and Development Act, 2016 is correct?
4. M.S.A. Nos.4 & 6 of 2023 admitted on the following substantial questions of law:
1. Whether order dated 28.04.2021 preclude K-RERA from reconsidering the question of registration of the project in the final stage?
2. Whether there is any illegality in initiating suo moto proceedings by K-RERA regarding the registration of the project, after the proceedings initiated against the appellant/promoter in the complaints and passing of order dated 28.04.2021?
5. When the appeals came up for hearing, the learned counsel for the appellants would submit that MSA Nos.4 & 6 of 2023 arouse out of the suo moto proceedings initiated by the Kerala Real Estate Regulatory Authority (in short ‘K-RERA’). While disposing the common judgment in REFA Nos.17, 18, 27 & 30 of 2022 of the Kerala Real Estate Appellate Tribunal (in short ‘the Tribunal’) found that K- RERA has no power to review its earlier order dated 28.04.2021 and hence, the suo moto order dated 21.12.2021 is without authority and is non-est in the eye of law and it has no legal effect or consequence. Hence, no argument was advanced in MSA Nos.4 & 6 of 2023 which in turn arouse out of the order in REFA Nos.17/2022 and
18/2022.
6. In REFA No.27/2022 appellants are the promoters and the respondents 1 & 2 are the associations in a tower by name Moon Waters Association and Aqua City Palm Bay Villas Owners Residence Association and respondent Nos.3 and 4 are two allotees in Moon Waters in the township called ‘Aqua City’. Three complaints 115, 116, 117 of 2020 were filed seeking registration of Aqua City township project comprising ten apartment towers and 68 Villas and other reliefs before K-RERA. K-RERA passed two interim orders issuing show cause notices to the promoters for not registering the projects on 07.11.2020 and 30.11.2020 respectively. Against which W.P.(C) No.27217/2020 was filed and this Court directed K-RERA to consider the question of maintainability of complaints and competency of complainants on hearing both sides. Thereafter, an interim order was passed on 28.04.2021 to the effect that the entire project is registrable under Section 3 of the Real Estate (Regulation and development) Act, 2016 (in short ‘the Act’). The question of maintainability was found in favour of the respondents. Against which the appellants filed
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