The Karnataka Real Estate Appellate Tribunal (REAT) has established a significant precedent by ruling that housing co-operative societies without land or real estate projects cannot be classified as 'Promoters' under the Real Estate (Regulation and Development) Act, 2016 (RERA Act). According to reports from LiveLawBiz, a Bench comprising Chairperson Justice JM Khazi and Judicial Member Santhosh Kumar Shetty N made this observation while dismissing an appeal filed against BSNL Employees Welfare House Building Co-operative Society Ltd. The tribunal concluded that since the respondent society had not acquired any land for development and no real estate project existed, it did not fall within the statutory definition of a Promoter.
The case involved an BSNL employee who paid ₹7.66 lakh during 2013 and 2014 towards the proposed BSNL Madhavanagara Project Phase-II, located off Nelamangala Road. As reported by LiveLawBiz, the appellant had worked with BSNL for more than 18 years before becoming a member of the housing society, which was established by BSNL employees to provide houses or residential plots to its members at comparatively lower rates. The society had represented that sites were available at Madhavanagara, but the promised site was not delivered despite repeated requests for refund from the appellant.
The society opposed the complaint before Karnataka RERA, contending that the project had not been registered with the Authority and therefore the Authority had no jurisdiction to adjudicate the dispute. According to LiveLawBiz, the society argued that the receipts issued to the appellant could not be considered allotment letters, as the payments were not made against any specific plot and the parties had never executed an agreement for sale. The society further submitted that it had not acquired any land for development, consequently there was no real estate project, and it could not be classified as a 'Promoter' under RERA.
Karnataka RERA dismissed the complaint, following which the appellant approached the appellate tribunal. As reported by LiveLawBiz, the appellant argued that the Authority had failed to properly assess the evidence and relevant provisions of RERA, and that because the project remained incomplete, Section 18 of the Act entitled him to the relief sought. Section 18 provides remedies to an Allottee where a Promoter fails to complete a project or hand over possession in accordance with an agreement for sale. However, the tribunal found that since there was no Promoter or project to which the appellant could be linked as an allottee, the appellant could not be treated as an ''Allottee'' under RERA.
Agreeing with Karnataka RERA's earlier decision, the tribunal held that RERA did not apply to the dispute and the complaint was not maintainable before the Authority. According to LiveLawBiz, the tribunal observed that the society had enrolled members and collected different amounts towards the proposed purchase of sites, which were to be allotted if and when the society developed a project or layout. The tribunal concluded that since the society had not acquired any land for development and no real estate project existed, it did not fall within the statutory definition of a Promoter, making the complaint legally unsustainable under RERA provisions.
