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RERA No Bar on Civil Suits for Title Disputes Between Allottees, Rules Bombay High Court

Mumbai: The Bombay High Court, in a significant ruling, has clarified that the jurisdiction of a Civil Court is not barred by the Real Estate (Regulation and Development) Act, 2016 (RERA) in cases involving a title dispute between two different purchasers of the same property. Justice N. J. Jamadar held that RERA authorities are not empowered to adjudicate complex questions of title and grant declaratory reliefs, which remain within the exclusive domain of Civil Courts.

The Court dismissed a civil revision application filed by Sana Hospitality Services Pvt. Ltd., which sought the rejection of a suit filed by Madan Kishan Gurow and others over the ownership of a flat in the "Green World" project.

Background of the Dispute

The case revolves around a single flat, No. 1703, which was sold by the promoter, M/s. Mount Mary Builders, to two different parties. 1. First Sale: The promoter executed a Sale Deed in favour of Sana Hospitality Services Pvt. Ltd. (Defendant No. 2) on March 23, 2016. 2. Second Sale: Subsequently, the same promoter executed an Agreement for Sale for the same flat in favour of Madan Kishan Gurow and another individual (the Plaintiffs) on August 7, 2017. The Plaintiffs were also put in possession of the flat in 2019.

When Sana Hospitality did not receive possession, it approached the Maharashtra Real Estate Regulatory Authority (MahaRERA) and later the Appellate Tribunal. The Tribunal, on December 10, 2021, directed the promoter to hand over possession to Sana Hospitality. During the execution proceedings for this order, the Plaintiffs were impleaded, prompting them to file a suit in the Civil Court at Belapur.

The Plaintiffs sought a declaration that their agreement was valid, they were bona fide purchasers without notice of the prior sale, and the sale deed in favour of Sana Hospitality was null and void.

Arguments Before the Court

Sana Hospitality (Applicant): The applicant argued that the dispute was essentially between two "allottees" and the promoter, placing it squarely within the jurisdiction of RERA. They contended that Section 79 of the RERA Act expressly bars Civil Courts from entertaining any matter which the RERA authorities are empowered to determine. They further submitted that the RERA Appellate Tribunal, having the powers of a Civil Court for execution under Section 57, could decide the Plaintiffs' claims.

The Gurows (Respondents/Plaintiffs): The plaintiffs countered that the core issue was a title dispute between two competing claimants, which RERA authorities are not equipped or empowered to decide. They argued that the declaratory reliefs they sought—to validate their agreement and nullify the other—could only be granted by a Civil Court, which has plenary jurisdiction over such matters.

High Court's Analysis and Ruling

Justice Jamadar undertook a detailed examination of the RERA Act's scheme, particularly the interplay between the bar on jurisdiction under Section 79 and the provision in Section 88, which states that RERA's provisions are in addition to, and not in derogation of, other laws.

The Court relied on the principles established by the Supreme Court in landmark cases like Dhulabhai v. State of Madhya Pradesh , which hold that the exclusion of a Civil Court's jurisdiction is not to be readily inferred. Jurisdiction can only be considered excluded if the special statute provides an adequate and sufficient remedy to do what a Civil Court would normally do.

The judgment emphasized that the central question in the suit was not merely about possession but about the validity of competing titles.

> "The core issue that arises for determination as to whether the Plaintiffs are bonafide purchasers for value without notice of the prior instrument between Defendant Nos.1 and 2, would warrant investigation into a host of facts. Dispute would, thus, partakes the character of a lis between the two sets of allottees. Such a dispute between the allottees, nay which of the two instruments is legal and valid, is not a matter which the authorities under the RERA are empowered to adjudicate."

The Court further clarified the scope of the RERA Appellate Tribunal's powers under Section 57.

> "Undoubtedly, Section 57 cloths the order passed by the Appellate Tribunal with the status of a decree... However, that by itself, does not make the Appellate Tribunal a Civil Court... it cannot be called a Civil Court, in the sense that, it can grant reliefs which can be granted by the Civil Court as the court of plenary and residuary jurisdiction."

The Final Verdict

Concluding that the reliefs sought by the plaintiffs could not be granted by RERA authorities, the High Court found no illegality in the Civil Judge's order refusing to reject the plaint. The revision application was dismissed, allowing the civil suit for declaration of title to proceed. This judgment reinforces the distinct jurisdictional boundaries between RERA authorities and Civil Courts, ensuring that complex title disputes are adjudicated by the appropriate forum.