Overview
This case deals with the interpretation of the term “promoter” under the Real Estate (Regulation and Development) Act, 2016 (RERA) and whether it will include landowners who are not actively involved in the construction and development of a real estate project.
The dispute arose when the Kerala Real Estate Regulatory Authority (K-RERA) initiated suo motu proceedings against Pooja Constructions (the appellant) for failing to register a project called “Pooja Arcade” under Section 3 of RERA. Pooja Constructions argued that the landowners (the respondents) should also be considered co-promoters and be required to jointly register the project.
Key Issues
- Whether the term “person causes to be constructed” used in the definition of “promoter” under Section 2(zk) of RERA includes landowners who are not actively involved in the construction and development.
- Whether the landowners must be treated as co-promoters for the purpose of registration of the real estate project under Section 3 of RERA.
High Court’s Analysis and Findings
- The High Court examined the various provisions of RERA, including Sections 3, 4, 17 and the prescribed forms, and concluded that the term “promoter” in Sections 3 and 4 (dealing with project registration) does not include the landowners.
- The court noted that Section 4(2) requires the “promoter” to submit details about the land ownership, indicating the promoter and landowner are distinct entities. The prescribed forms also differentiate between the “promoter” submitting the application and the landowner providing consent.
- The court held that merely providing the land and accepting a share of the completed apartments as consideration does not make the landowners active participants in the construction and development process. The landowners had no role in the actual development of the project.
- While the court acknowledged that the landowners may be deemed “promoters” for limited purposes like executing sale deeds under Section 17, it held that this deeming provision does not make them promoters for all functions and liabilities under RERA.
- The liability and obligations of the “promoter” who undertakes the actual development (Pooja Constructions) are distinct from the limited role of the landowners under RERA.
Conclusion
The Kerala High Court upheld the orders of the K-RERA and the Real Estate Appellate Tribunal, directing Pooja Constructions as the sole promoter to register the “Pooja Arcade” project under Section 3 of RERA.
The key takeaway is that mere landowners, who do not actively participate in the construction and development process beyond providing the land, cannot be automatically considered “promoters” under RERA for the purpose of project registration and other general compliance requirements. Their liability is limited to the specific functions assigned to landowners under the Act.
Case Title: Pooja Constructions v. The Secretary, Kerala Uranma Devaswom Board and Anr., MSA No. 16 of 2024