The definition of 'promoter' under real estate law requires clear agreement for liability; mere directorship does not impose such liability without consent.

JUDGMENT

This appeal arises out of the order passed by the Kerala Real Estate Appellate Tribunal, Ernakulam, on 13.08.2025, in rejecting an appeal preferred by the appellants against an order dated 10.03.2023 passed by the Kerala Real Estate Regulatory Authority, Thiruvananthapuram, on a complaint preferred by the

1^st respondent.

2. The brief facts necessary for the disposal of the appeal are as follows:

A complaint was instituted by the 1^st respondent seeking for return of the amount which he has deposited for the purpose of purchase of a flat in the project undertaken by respondents 2 to 6. Various disputes stemmed out of the operation of the project. Inter se disputes also cropped up between the directors of the company. The appellants claim that they were not permitted to participate in the various affairs of the company and there was a civil litigation between the directors and an order of injunction was also passed restraining the appellants from interfering with the affairs of the company. Later, the company was struck off from the register of the companies in the year 2017 and thereafter, there was another agreement between the company and respondents 2 and 3 undertaking the liabilities and also taking up the task of completing the project in question. Later, the respondents 2 and 3 also could not fulfil their obligation and subsequently, the 6^th respondent – association themselves have now taken up the task of completing the project. By order dated 10.03.2023, on a complaint preferred by the 1^st respondent, the Kerala Real Estate Regulatory Authority, Thiruvananthapuram, directed the appellants as well as respondents 2 to 5 herein to pay the amount collected from the 1^st respondent together with interest. The said order was impugned before the Kerala Real Estate Appellate Tribunal, Ernakulam, by the appellants and an application was filed seeking to pass an order of waiver of the requirement of pre-deposit. The request was rejected on 29.05.2024 by the appellate tribunal. The said order was impugned by the appellants herein in M.S.A No.15/2024 and by judgment dated 11.06.2025, the said order was set aside by this Court directing the appellate tribunal to consider the question as to whether the appellants are promoters or not for the purpose of deciding the question on pre-deposit. On remand, the appellate tribunal, by order dated 29.07.2025, found that the judgment rendered by this Court on 11.03.2025 in M.S.A No.23/2024 would apply to all directors. It was further held by the appellate tribunal that, going by the decision of the Supreme Court in Anjali Rathi & Ors. v. Today Homes and Infrastructure Pvt. Ltd & Ors. [(2021) SCC OnLine SC 729] and also in P.Mohanraj v. Sha Bros. Ispat (P) Ltd. [ (2021) 6 SCC 258 ], the appellants will fall within the definition of ‘promoter’. Surprisingly, the tribunal also left the issue open and decided at the final stage of the appeal and thereby directed the appellants to pay the pre-deposit. Unfortunately, the appellants could not make the pre-deposit and by separate order dated 13.08.2025, the appeal was rejected and hence, the present appeal.

3. On 25.08.2025, this Court admitted the appeal. The substantial questions of law framed in the memorandum of appeal reads as follows:

(i) Is a director / ex-director of a promoter company also a `promoter' under Section 2 (zk) of the Real Estate (Regulation and Development) Act, 2016 ;

(ii) Is the director / ex-director of a builder company also a `promoter' under Section 2 (zk) of the Real Estate (Regulation and Development) Act, 2016 ;

(iii) Does the Real Estate (R