Assam REAT - RERA Does Not Have Retroactive Application To Already Completed Real Estate Projects

The Assam Real Estate Appellate Tribunal ('Tribunal') bench, comprising Justice (Retd.) Manojit Bhuyan (Chairperson), has held that the provisions of the Real Estate (Regulation and Development) Act, 2016, cannot be applied retroactively to projects that were completed prior to the enactment of the Act. Accordingly, the Tribunal dismissed the appeal of the appellant regarding the project in question, which obtained an Occupancy Certificate on 07.05.2014.

Occupation Certificate is a document issued by the local municipal authority, which serves as proof that a building has been constructed according to sanctioned plans and complies with all necessary safety norms and regulations. The occupation certificate is issued after the completion of the construction process and indicates that the building is ready for occupancy.

Background Fact

The appellant is a co-owner of land in village Darandha, Mouza Beltola, P.S. Dispur, Guwahati, District Kamrup, where the respondent (builder) erected an RCC (G+7 Floor) building housing residential apartments and shops.

The case revolves around a registered Development Agreement and a General Power of Attorney, both dated 23.11.2005, executed by Sankar Baruah, an authorized co-owner, permitting the builder to develop the "Dona Presidency" project. The Guwahati Municipal Corporation granted the necessary No-Objection Certificate for construction on 05.07.2007. The agreement earmarked 25% of the built-up area for the landowners, but the appellant claims the actual area provided was deficient.

Following Sankar Baruah's death in September 2014, the builder resumed construction without obtaining a new Power of Attorney from the co-owners or resolving the deficiency issue. They also advertised the sale of commercial units. Alleging violations of the Real Estate (Regulation and Development) Act, 2016, and failure to adhere to the sanctioned plan and allotment commitments, the appellant filed a complaint before the Assam Real Estate Regulatory Authority ('Authority'), seeking compensation or proportionate space in the commercial units to fulfill the original allotment commitments.

The Authority, in its order dated 25.01.2024, held that the project in question does not fall within its ambit and noted that the appellant did not approach any forum earlier, choosing to file the case nearly eight years after the project's completion. Aggrieved by the Authority's order, the appellant filed an appeal before the Tribunal.

Tribunal Verdict

The Tribunal, after observing that the real estate project in question had obtained an Occupancy Certificate on 07.05.2014, well before the enactment of the RERA framework, held that the provisions of the Real Estate (Regulation and Development) Act, 2016, cannot be applied retroactively to projects completed prior to the enactment of the Act.

To reach this conclusion, the Tribunal relied on paragraph 54 of the Supreme Court judgment in M/s Newtech Promoters and Developers Pvt. Ltd. v. State of U.P., which states:

“54. From the scheme of the Act 2016, its application is retroactive in character, and it can safely be observed that the projects already completed or to which the completion certificate has been granted are not under its fold and therefore, vested or accrued rights, if any, in no manner are affected. At the same time, it will apply after getting the ongoing projects and future projects registered under Section 3 to prospectively follow the mandate of the Act 2016.”

Therefore, the Tribunal, after noting that the construction of the G+7 RCC building was completed and the Occupancy Certificate obtained prior to the enactment of RERA, held that the appeal filed before the Tribunal is not maintainable.

Case – Sri Shantanu Baruah Versus M/s Dona Builders Pvt. Ltd. & anr

Citation - REAT/ASSAM/APPEAL No. 04 of 2024.

Click Here To Read/Download Order