1. |
INTRODUCTION |
1.1. |
Recently, vide its order, Hon'ble Assam Real Estate
Appellate Tribunal at Guwahati ("AREAT")
in the case of RDB Realty & Infrastructure Ltd.
("Appellant") Vs. Real Estate Regulatory
Authority, Assam ("RERA Assam") &
Anr.1 has held that since the Appellant did not obtain
an occupancy certificate ("OC") on the
date of commencement of the Real Estate (Regulation and
Development) Act, 2016 ("Act") and
failed to register the real estate project "Regent
Paradise", Appellant has contravened the provisions of Section
3 of the Act, inviting penalty under Section 59 of the Act. |
2. |
BREIF FACTS |
2.1. |
RDB Industries Ltd. entered into a joint venture agreement with
Assam State Housing Board ("Housing
Board") on December 29, 2006 for construction of
residential/commercial complex on the land belonging to the Housing
Board at Borsojai, Guwahati. A No-Objection Certificate
("NOC") for construction of building was
issued by the Guwahati Metropolitan Development Authority
("GMDA") on October 04, 2007 whereafter
construction commenced. The allotment of flats was made prior to
the year 2015 and the application for OC was made to GMDA on
December 17, 2016. |
2.2. |
GMDA addressed a letter dated May 11, 2017 highlighting certain
shortcomings in the application for OC inter alia absence of
signature of the Construction Engineer and Structural Engineer Form
Nos. 18 and 19 respectively; non-submission of the licence for use
of lifts; non-submission of the NOC from Fire and Emergency
Services, Assam, etc. Vide letter dated June 17, 2017 addressed by
the Appellant to GMDA, the shortcomings were rectified. However, it
was mentioned that the approval from the Chief Electrical
Inspector-cum-Adviser as well as the NOC from the Fire and
Emergency Services, Assam would be submitted within a short
time. |
2.3. |
GMDA vide its letter dated February 26, 2021 informed the
Appellant that the proposal for OC was approved and the Appellant
required to deposit regularisation fees amounting to INR1,26,52,843
(Indian Rupees One Crore Twenty Six Lakh Fifty Two Thousand Eight
Hundred and Forty Three only) for excess area measuring 2300.55
sq.m. at certain blocks under the Phase-I construction.
Regularisation fees was deposited within the time by Appellant and
OC was issued by GMDA on June 22, 2021 under Bye-law 15 (a) of the
Guwahati Building Construction (Regulation) Bye-laws, 2014
("GBCBL"). |
2.4. |
Since the Appellant did not register the project as required
under sub-section (1) of Section 3 of the Act, read with sub-rule
(1) of Rule 4 of the Assam Real Estate (Regulation and Development)
Rules 2017 ("Rules"), vide Order dated July 06, 2023,
passed by the Hon'ble RERA Assam, in Complaint Case No.
RERA/ASSAM/Reg./Notice/2022/03 ("Impugned
Order"), Appellant was imposed penalty of INR
2,00,000 (Indian Rupees Two Lakh only) as per Section 59 of the
Act. |
2.5. |
The Appellant filed an appeal before Hon'ble AREAT
challenging the Impugned Order inter alia on the following
grounds:
- Application for OC was made to the GMDA on December 17, 2016
and the Appellant has not received any letter regarding any defect
or any inspection of the project within 21 (Twenty One) days from
the date of application being made in view of Section 11(b) of
Guwahati Building Construction (Regulation) Act, 2010
("Building Act, 2010"). Thus, the OC
must be deemed to have been granted.
- Shortcomings pointed out by the GMDA having been rectified and
that the proposal for OC having been approved by the authority, as
indicated in the GMDA's letter dated February 26, 2021, and the
direction to deposit the regularisation fees having been duly
complied with within prescribed time, OC dated June 22, 2021 issued
in favour of the Appellant must relate back as having taken force
with effect from the date of application i.e., December 17,
2016.
- Retrospective application of OC w.e.f. December 17, 2016 would
find support from the "Doctrine of Relation Back", which
postulates that an act performed at a later time may be deemed to
have occurred at previous time. The effect of OC is to be reckoned
from December 17, 2016, and the first proviso to sub-section (1) of
Section 3 of the Act will have no applicability as far as the
Appellant is concerned.
- All transactions relating to the project under Phase-I,
including the deemed approval for occupation were prior in time to
the date when said Section 3 of the Act was put into force i.e.,
May 01, 2017, therefore, the Appellant could not have been
subjected to or brought within the purview of the Act. Hence, there
was no requirement for the Appellant to make application to the
RERA Assam for registration of the project, let alone far from
being imposed with any penalty.
|
2.6. |
The RERA Assam resisted the appeal inter alia on the following
grounds:
- Due to apparent shortcomings in the application for OC dated
December 17, 2016, Appellant is not entitled to the benefit of
deemed approval as per Section 11(b) of Building Act, 2010.
- Referring to said Section 11(b) and, more particularly,
"on receipt of the completion certificate"- it
was contended that the completion certificate ("CC") to
be submitted by the owner must conform to the manner, method and
form in terms of Section 11 (a) and those prescribed in the GBCBL.
Referring to Byelaw 14, it was shown that the CC has to be
submitted by the owner in Form Nos. 16, 17, 18, 19 and 27.
Reference was made to letter dated March 16, 2022 addressed by
GMDA, to authority, to show that Form Nos. 18 and 19 were not
signed by Construction Engineer and Structural Engineer
respectively. Referring to Section 11(b) of Building Act 2010, it
was contended that CC submitted on December 17, 2016 cannot be
deemed to be CC and, consequently, any deemed approval for
occupation cannot be read in favour of the Appellant.
- Application which is incomplete in terms of the particulars
required to be furnished, or defective as not being accompanied by
the requisite documents, the same cannot give rise to any deemed
permission.
- The project was not executed as per the NOC and approved plan,
in that, a number of deviations/changes were there which required
consideration before issuance of OC and, in fact, the approval for
OC was made subject to deposit of regularization fees of INR
1,26,52,843 (Indian Rupees One Crore Twenty Six Lakh Fifty Two
Thousand Eight Hundred and Forty Three only).
- It was further contended that first proviso to sub-section (1)
of Section 3 of Act clearly postulates that a project will fall
into the category of 'ongoing project' where construction
is ongoing on the date of commencement of the Act and for which CC
has not been issued.
- The project of the Appellant was without an OC on the date of
commencement of said Section 3 i.e., May 01, 2017. The OC was
obtained by Appellant only on June 22, 2021, which is well after
May 01, 2017. Since the Appellant failed to make application before
RERA Assam for registration of its ongoing project within the
mandatory next 3 (Three) month period, that is by August 01, 2017,
as such, the imposition of penalty on the Appellant in terms of
Section 59 of the Act is legal and justified.
- As regards Doctrine of Relation Back, it was contended that
doctrine has no application in the facts and circumstances of the
case, more so, when there is no judicial order to back the said
doctrine in favour of the Appellant. It was contended that it is to
be kept in mind that the object and purpose for which the doctrine
is created, and such legal fiction cannot be extended beyond the
scope and language by which it is created, inasmuch as, a deeming
provision cannot be pushed to such an extent so as to result in an
anomalous or absurd position.
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