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Kerala High Court Denies AWHO Exemption: Army Housing Project Must Comply with RERA

In a significant judicial development for real estate regulation in Kerala, the High Court has dismissed a string of writ petitions filed by the Army Welfare Housing Organisation (AWHO) challenging a move to bring its "Chanderkunj Army Towers" project under the purview of the Real Estate (Regulation and Development) Act (RERA), 2016.

Presiding over the case, Mr. Justice Ziyad Rahman A.A. reaffirmed that the housing complex constitutes an "ongoing project" and must meet statutory registration requirements, rejecting the developer's request for exemption under Section 3(2)(c) of the Act.

The Backdrop: A Structural and Legal Dispute

The project at the center of the controversy, Chanderkunj Army Towers, has faced protracted litigation. While AWHO argued against the necessity of RERA registration, the Kerala Real Estate Regulatory Authority (KRERA) held that because the occupancy certificate was only issued on February 21, 2018—well after the RERA cut-off date of May 1, 2017—the project is legally obligated to register under the statute.

The petitioners, represented by Senior Counsel M. Ramesh Chander, attempted to pivot the argument by invoking Section 3(2)(c) of the RERA Act. They contended that since several towers required demolition and reconstruction due to serious structural defects (a directive previously issued by the Court), the project should be classified as a "renovation or repair" effort, thereby qualifying for a regulatory exemption.

The Court’s Reasoning: Upholding the Spirit of the Law

In its judgment, the Court remained unmoved by the plea for exemption. Justice Ziyad Rahman A.A. emphasized that the criteria for exemption under Section 3(2)(c) are meant for projects that were never subject to the Act at their inception.

"This is particularly because, as far as the original project envisaged by the petitioners are concerned, statutory authorities came to a categorical finding that... the project requires registration," the Court observed.

The Bench noted that allowing an exemption for repair work on a project that already failed to meet the initial registration deadline would effectively undermine the core purpose of the RERA Act. By maintaining that the project was "ongoing" on the cut-off date, the Court reinforced that cosmetic or restorative repairs do not absolve a developer of the original obligation to register under the 2016 Act.

Key Observations

The judgment provides clear guidance on the interpretative limits of RERA exemptions:

• "The project has to be treated as an ongoing project and, therefore, is required to be registered under the Act."
• "When the original project itself is found to be mandatorily registrable under Section 3, the question of exemption as contemplated under Section 3(2)(c) would not arise."
• "The purpose of Section 3(2)(c) is only to grant exemption in respect of the projects, wherein original project never required registration... but the renovation, repair or re-development was necessitated after the cut off date."
• "If any other interpretation as proposed by the learned Senior counsel is adopted, the purpose of insisting for the registration of the original project itself would be defeated."

Implications and Moving Forward

By dismissing this challenge, the High Court has sent a stern message regarding compliance standards for developers of large-scale residential projects. The decision ensures that even in the face of structural challenges and reconstruction efforts, the fundamental oversight provided by RERA cannot be bypassed.

The Court has granted the petitioners the liberty to pursue other statutory remedies available to them regarding the merits of the findings, but the requirement for registration remains firmly in place. This ruling serves as a vital precedent for future real estate disputes, clarifying that "ongoing project" status remains the primary determinant for regulatory oversight, regardless of subsequent modifications or remedial construction.