RERA UPDATES

Gujarat High Court – Whether Gujarat Real Estate Regulatory Authority is a person eligible to file 2nd Appeal before High Court?

Gujarat Real Estate Regulatory Authority Vs Satyam Infracon

Issues:

• Whether Hon’ble RERA Authority can challenge a decision of the Appellate Tribunal before the High Court under Section 58 of the RERA, 2016.
• Whether, Hon’ble RERA Authority falls under the definition of “Person” as defined under section 2(zg).

 Relevant Provisions:

Section 58:- Appeal to High Court

“58(1) Any person aggrieved by any decision or order of theAppellate Tribunal, may, file an appeal to the High Court, withina period of sixty days from the date of communication of thedecision or order of the Appellate Tribunal, to him, on any oneor more of the grounds specified in section 100 of the Code ofCivil Procedure, 1908 (5 of 1908):

2(I) Authority

“Authority” means the Real Estate Regulatory Authority established under sub-section (1) of section 20.

2(o) :- Company

“company” means a company incorporated and registered under theCompanies Act, 2013 and includes,

• a corporation established by or under any Central Act or State Act;
• a development authority or any public authority established by the Government in this behalf under any law for the time being in force

2(p) :-Competent Authority

“competent authority” means the local authority or any authority created or established under any law for the time being in force by the appropriate Government which exercises authority over land under its jurisdiction, and has powers to give permission for development of such immovable property.

2(zg) Person :-

“Person” includes,—

• an individual;
  • a Hindu undivided family;
  • a company;
  • a firm under the Indian Partnership Act, 1932 or the Limited Liability Partnership Act, 2008, as the case may be;
  • a competent authority;
  • an association of persons or a body of individuals whether incorporated or not;
  • a co-operative society registered under any law relating to co-operative societies;
  • any such other entity as the appropriate Government may, by notification, specify in this behalf

Fact of the Case:

• Gujrat Real Estate Regulatory Authority has rejected the RERA registration application by raising the questions regarding authenticity and legality of the plans approved by the competent Authority.

• Hon’ble Chairman Gujarat Real Estate regu latory Authority has suggested to clarify/modify
• the planning of the project for which development permission was granted by the competent Authority.
• The Gujarat Real Estate regulatory Authority rejected the application and directed the Surat Municipal Corporation to stay the construction work and re-verify the modified development permission granted to the developer being a promoter.

• Aggrieved with the order for rejection of registration application, promoter filed and appeal before the Appellate Tribunal.

• The Hon’ble Appellate Tribunal sough final report from the municipal corporation regarding the validity of the development permission and as per the report of municipal corporation the development permission was granted as per the applicable rules and regulations.
  • On the basis of submission made by the Promoter and the Report of Municipal Corporation, Hon’ble Appellate Tribunal observed that RERA Authority has no jurisdiction to direct the muni- cipal corporation to stay the construction and re- verify the development permission and accor- dingly order was passed by the Hon’ble Appellate Tribunal that RERA Authority shall grant the registration to the promoter and municipal corporation will vacate the stay on construction.
  • Aggrieved with the Order, RERA Authority filed an appeal before the Hon’ble High Court challen- ging the order passed by the Hon’ble Appellate Tribunal.
  • In the said Appeal,Promoter raised the Prelimi- nary Objection that the scheme of the RERA Act does not envisage the Authority being empowered or authorized to prefer an appeal before the High Court against a decision passed by the Appellate Tribunal.
  • In the objection, promoter contented that as per provision of the Section 58 of the RERA any aggrieved person can file the appeal before the Hon’ble High Court and RERA Authority is not the person as per provision of Section 2(zg).
• Further, it is stated by the Promoter that the Authority and the competent Authority are different and it is submitted that in the definition of person includes a competent authority, but does not include “Authority”.

Observation of Hon’ble Gujarat High Court :-

• Hon’ble High Court observed that word ‘Person’ as defined in Section 2(zg) of the Act does not directly refer to the ‘Authority’ as person.
• However reading of Section 2(o) of the Act, a completely different meaning can be culled out inasmuch as the Section 2(zg)(iii) states that the word ‘Person’ also includes ‘a company’.
• In definition of the word “company” at Section 2(o) of the Act in addition to a company incorpo- rated and registered under the Companies Act, 2013, the words “a development authority or any public authority established by the Government in this behalf” is also included.

Conclusion :

• Undoubtedly the Real Estate Regulatory Authority is a public authority established by the Government under the Real Estate (Regulation and Development) Act, 2016.
• Once the RERA Authority is made the party by the Promoter in the 1stAppeal filed before the Appellate Tribunal than, RERA Authority can also file 2nd Appeal before the Hon’ble High Court if it is aggrieved.
• The Authority would be included in the definition of ‘Person’ on a conjoint reading of section2(zg) and 2(o) of the Act.

The Authority falling within the definition of the word ‘Person’ is therefore empowered to challenge a decision of the Appellate Tribunal before the High Court under Section 58 of the Act.