Maha-RERA Withdraws Office Order Defining ‘Co-Promoter’ [Read Order]

The Bombay High Court, in the case of Ismail Ibrahim Patel and others vs State of Maharashtra and others, has allowed the petitioner to withdraw the petition after the Secretary, Maharashtra Real Estate Regulatory Authority, withdrew the office order dated 11.05.17, providing a definition for the term ‘co-promoter’, which is absent in the enactment.

In this case, Ismail Ibrahim Patel had challenged the validity of an office order dated 11.05.17, passed by the Secretary, Maharashtra Real Estate Regulatory Authority (Maha-RERA). In the said order, a definition of the term co-promoter was provided, since the term wasn’t defined in the Act. The term was defined under the exercise of powers under Regulation 38 of the Maha-RERA as:

‘Co­Promoter means and includes any person(s) or organization(s), who under any agreement with the promoter of a Real Estate Project is allotted or entitled to a share of total revenue generated from sale of apartments or share of the total area developed in the real estate project. The liabilities of such co-promoters shall be as per the agreement or arrangement with the Promoters, however for withdrawal from designated Bank Account, they shall be at par with the Promoter of the Real Estate Project’.

Counsel for the petitioner, Mr. Girish Godbole, submitted that the RERA provisions do not provide a definition of the term ‘co-promoter’, however, even under Regulation 38, the RERA Authority is not empowered to coin a new definition and notify the same in the absence of statutory provisions under the RERA. He further submitted that the State RERA Authority is not empowered to interpret the provisions of the central legislation in defining the term.

The counsel for the respondent submitted that the order had been issued only to clarify the definition of ‘promoter’, already provided for under Section 2(zk). Further, the Advocate-General submitted an affidavit-in-reply filed by the Secretary of the Maha-RERA. In the said affidavit, the Secretary had stated that to dispel the apprehensions raised by the petitioner, the impugned office order has been withdrawn and replaced with effect from the same date.

The counsel for the petitioner accepted the affidavit and prayed for withdrawal of the petition, which was, in turn, allowed by the high court.