ALFA VENTURES (P) LTD. Vs. STATE OF KERALA

JUDGEMENT

(1.) The petitioner is a private limited company engaged in the development and construction of major infrastructure and residential projects. One such project is 'Alfa Horizon', a multistoried commercial complex in Mulavukad Village in Ernakulam District. During the course of construction of the building, the petitioner entered into agreements with prospective buyers for sale of undivided shares in the land and also for construction of the building. Accordingly, the purchasers made substantial payments. Construction of the building was completed by early 2017 and completion certificate submitted on 10/5/2017. Occupancy certificate was issued by the Mulavukad Panchayat on 24/5/2018, more than an year of submission of the completion certificate. In the meanwhile, the Central Government enacted the Real Estate [Regulation and Development] Act, 2016 ('the Act' for short). Various provisions of the Act were enforced from 1/5/2016 and 1/5/2017 onwards. Sec. 3 of the Act, providing for registration with the Real Estate Regulatory Authority was made applicable w.e.f. 1/5/2017. Sec. 84 of the Act makes it mandatory for the State Government to make rules for carrying out the provisions of the Act. Accordingly, the Kerala Real Estate [Regulation and Development] Rules, 2018 was introduced with effect from 14/6/2018 and the Kerala Real Estate Regulatory Authority [K-RERA] constituted on 5/10/2019. Thereafter, in exercise of the power under Sec. 20, the K-RERA issued public notice dtd. 26/12/2019, informing all promoters/ developers/ builders that, from 1/1/2020 onwards, they shall not advertise, market, book, sell or offer for sale or invite persons to purchase or transfer any plot, apartment or building in a real estate project as defined in Sec. 2(zn) of the Act. This was followed by another notice dtd. 26/12/2019 calling upon the allottees/buyers to verify whether the project is registered with the K-RERA. Yet another public notice dtd. 22/2/2020 was issued by the second respondent, clarifying the meaning of the term 'on going project'. While so, the third respondent, a prospective purchaser of undivided shares in the Alfa Horizon project, filed a complaint before the second respondent [K-RERA] seeking refund of Rs.86,41,871.00 paid to the petitioner towards sale consideration. Based on the complaint, the second respondent issued Ext.P10 notice, requiring the petitioner to appear for hearing on 31/3/2022. Accordingly, the petitioner appeared before the 2nd respondent and raised a contention that the Alfa Horizon project having been completed and occupancy certificate obtained prior to the introduction of the Rules, the project/building does not require registration under the Act and is therefore not amenable to the jurisdiction of the K-RERA. A few days later, the petitioner received Ext.P11 notice dtd. 29/3/2022, requiring the petitioner to register the project, Alfa Horizon or to produce occupancy certificate to prove that the project will not fall under the purview of the Act. There is a further direction not to sell or market the unsold units till the project is registered. This writ petition is filed challenging Ext.P11 notice and for a declaration that the project 'Alfa Horizon' is not liable to be registered with the K-RERA.

(2.) Learned Counsel for the petitioner drew attention to the 1st proviso to Sec. 3 of the Act to contend that only on going projects are liable for registration, which position has been clarified by the Authority itself, vide Ext.P6 notification dtd. 27/12/2019. Therein, it is stated that, real estate projects that have obtained occupancy certificate do not require registration under K-RERA and on going projects should be registered within three months from 1/1/2020. It is submitted that Sec. 3 of the Act was made applicable from 1/5/2017 and the K-RERA was constituted only on 1/1/2020, whereas the project Alfa Horizon was completed in the year 2017 and occupancy certificate obtained on 24/5/2018. As such, there cannot be any compulsion to register the project with the KRERA. In support of the contention, reliance is placed on the decision of the Apex Court in M/s.Newtech Promoters and Developers Pvt. Ltd v. State of UP and others [2021 SCC OnLine SC 1044]

(3.) Learned Standing Counsel for K-RERA contended that the project Alfa Horizon squarely falls within the ambit of the term 'ongoing project'. It is submitted that Ext.P6 has no relevance now, since that notification was subsequently withdrawn and replaced with another notification dtd. 19/4/2022, clarifying that, those real estate projects that had commenced before 1/5/2017 and not completed or occupancy certificate received as on 1/5/2017, shall be considered as 'ongoing projects' registerable under Sec. 3 of the Act. It is pointed out that the clarification was issued in the light of the decision in M/s.Newtech Promoters and Developers Pvt. Ltd, (supra), wherein the Apex Court has adumbrated on the retroactive character of the Act.