Non-compliance with regulatory requirements justifies classification as an 'ongoing project' under applicable law.

JUDGMENT

Heard Sri. Sreehari Indukaladharan, the learned Counsel for the appellants and Sri. Jithin Paul Varghese for the respondents.

2. This appeal is directed against the Order of the Kerala Real Estate Appellate Tribunal, Ernakulam, affirming an order of the Kerala Real Estate Regulatory Authority (K-RERA) dismissing an appeal directing the appellants to take out registration of a project.

2.1. It is the contention of the appellants that only 6 allottees have approached the K-RERA with complaints of non-completion of the project whereas the Sale Agreement as well as the Sale Deeds were executed prior to the cutoff date i.e. 01.05.2017. But it is an admitted case that the appellants did not have the Completion Certificate before the cutoff date. It is case of the appellants that the Completion Certificate was delayed not due to any fault on the part of the appellants but due to certain administrative exigencies at the hands of the local authorities. It is also contended that the local authorities had imposed certain penalty on the appellants for not having a requisite space for entry of fire engines and thus they could not produce a valid NOC from the Fire Department. Aggrieved by the stand of the Municipality, the matter went up to the Government and by Order dated 08.03.2022, the said objection was overruled.

2.2. In spite of the above Order, the appellants still could not obtain any Completion Certificate because the Municipality had revoked the building permit since the construction was unauthorized and the appellants were asked to remit certain amount for regularization of the unauthorized construction. Since the amount demanded was not remitted, the project as on today does not have a valid building permit. In these circumstances, the regulatory authority formed an opinion that the project requires registration in terms of Section 3 of the Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as the ‘Act’ for short), and accordingly passed an order on 20.06.2024. Aggrieved, the appellants preferred REFA No. 110 of 2024. The Appellate Tribunal concurred with the views of the Regulatory Authority and held that the project will come within the purview of ‘ongoing project’. Accordingly, the appeal was dismissed. Hence, the present appeal.

3. In the present appeal, the appellants contend that the project cannot be construed as one within the definition of ‘ongoing project’ under Section 3 of the Act especially when all the flats were handed over to the allottees, and they have started occupation therein. The local authority had in fact denied the Completion Certificate without proper application of mind and also without adverting to various provisions of law. The appellants also refer to the Building Permit issued to them by the Municipality at that point of distance, which did not oblige them to provide sufficient parking space.

4. On the other hand, the allottees who appeared before this Court contended that, as on today, the project in question does not have a valid Building Permit, a proper electricity connection nor a water connection. In fact, the allottees who are occupying in the flats in the project are being provided with electricity through Generator. It is also pointed out that inasmuch as the completion certificate is not issued, necessarily the project will come within the ambit of Section 3 of the Act.

5. The appellants further rely on the decisions of the Supreme Court in Newtech Promoters and Developers Pvt. Ltd. v. State of U.P. and Others [2021 KHC 6692] and in Union of India and Another v. Suhrid Geigy Ltd. [ 1997 KHC 3933 ] to contend that the project cannot come within the purview of the Act.

6. On considering