Status as on- 03/06/2022
Air Force Naval Housing Board is a welfare organization formed with the efforts of Senior Officers of the Air Force and Navy with an object to provide suitable and affordable houses to the Air Force and Naval personnel on a ‘no profit no loss’ basis. As there was a delay in the completion of the AFNHB, Meerut project, some of the allottees approached RERA and were awarded interest on their deposited amount, and in some cases refund of the deposited amount with interest was awarded.
Against the said order, AFNHB filed an appeal before the Appellate Tribunal under Section 44 of the Act, 2016. The Appellate Tribunal recorded its dissatisfaction to the effect that the appellant has not complied with provisions of Section 43(5) of the Act, 2016 and has not deposited the balance amount. As the balance amount was not deposited, the appeal was dismissed.
Therefore, the appellant filed an appeal to get an exemption from the pre-deposit claiming they are not a ‘promoter’ but a ‘no profit no loss’ organization. The argument of being a ‘no profit no loss’ organization, therefore, should be exempted from complying with provisions of sub-section (5) of Section 43 was rejected, as a proviso to the sub-section (5) provides that in case promoter files an appeal, he has to deposit with the Tribunal at least 30% of the penalty or such higher amount determined by the Tribunal, or the total amount to be paid to the allottee including interest and compensation imposed on him.
It is accepted that the appellant is registered under the RERA Authority since the project was ongoing at the time the Act of 2016 was enforced. It was held that once they got their project registered with the Authority, they cannot resale from the fact that their application for registration of the project was made claiming to be ‘promoter’ of the project. It is clear from the reading of Section 4 that registration of a project is to be done by a ‘Promoter’ and by no one else.
Section 4 of the Act, 2016 requires making an application by a promoter for registration of a real estate project. The said application has to be made to the authority in a prescribed manner within the prescribed time accompanied by fees, as may be prescribed along with the documents mentioned in sub-section (2) of Section 4 of Act, 2016.
The very purpose and object of enacting the Act, 2016 was to safeguard the interest of the home buyers from the project which was launched by the promoter and was not completed in time. The legislature does not leave any individual, association, or organization as an exception to the word ‘promoter’. The use of the word ‘a person’ at the outset of the definition clause of the word ‘promoter’ clearly signifies that it embraces all types of individuals, associations, corporations, and authorities dealing in the real estate sector and does not exclude any organization.
The Apex Court in M/s Newtech Promoters and Developers Pvt. Ltd. vs State of U.P. and others, 2021 categorically held that pre-deposit, as envisaged under Section 43(5) of Act, 2016, in no circumstances can be said to be onerous, as prayed for, or in violation of Article 14 or 19(1)(g) of the Constitution of India.
Disclaimer: The above article is based on the personal interpretation of the related orders and laws. The readers are expected to take expert opinions before relying upon the article. For more information, please contact us at rera@centrik.in
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