On 4.11.2020, a Division Bench of the Allahabad High Court held that a construction project would be considered an ‘ongoing project’ if development is incomplete, even if the promoters have applied for a completion certificate.
Due to delay in handing over the possession, allottees filed a complaint with the RERA authority:
The Petitioner in the present case is the promoter of “Paramount Golf Forests” which is a construction project, and the respondents are the allottees who had booked flats in the said project.
In the year 2011, the Petitioner had issued allotment letters to the respondents but was unable to complete the project within time.
Aggrieved, the respondents filed a complaint before the Real Estate Regulatory Authority, Gautam Budh Nagar.
Before the RERA, Gautam Budh Nagar, the Petitioner argued that the authority did not have the jurisdiction as the project did not fall into the definition of an ‘ongoing project.
However, the RERA authority rejected the argument raised by the Petitioner and directed them to hand over the possession of the flats within sixty days and also pay interest to the respondents as well.
Aggrieved, the Petitioner moved the Hon’ble Allahabad High Court.
Counsel for the Petitioner reiterates that the project in question was not an ‘ongoing project.’
Learned Counsel for the Petitioner argued that the project of the Petitioner was not an ‘ongoing project’ in view of the fact that the Petitioner had applied for the completion certificate with the Uttar Pradesh State Industrial Development Corporation(UPSIDC) on 13.10.2016 and therefore, according to Rule 2 (h) of the Rules, 2016 the project in question was not an ‘ongoing project’ and consequently it was not required to be registered u/s 3 (1) of the Act, 2016 because of which, the RERA authority did not have jurisdiction to look into the complaint.
Observations made by the Hon’ble Court
The Court observed that as per Clause (iv) of Rule 2 (h) projects where all development work has been completed and an application for completion certificate has been filed with the competent authority are excluded from the ambit of the term ‘on going project’.
It was further observed that in projects where development work has not been completed, merely applying for a completion certificate will not bring a project out of the purview of an ‘ongoing project’ and as per Section 3 (1) of the Act, 2016 such projects will be held as an ongoing project.
In the instant case, the finding recorded by the RERA authority clearly states that the project was incomplete. Therefore it cannot be said to be excluded under Rule 2 (h), and it should be held as an ‘ongoing project’ within the meaning of Rule 2 (h).
Therefore, the project will fall within the jurisdiction of the RERA authority.
The Court held that the order passed by the RERA authority, cannot be held to be without jurisdiction and as the Petitioner has not been able to point out any material error or perversity in the findings recorded by the RERA Authority, no interference of the Court was required.
Accordingly, the petition was dismissed by the Court.
Title: M/S Paramount Prop. Build Pvt. Ltd vs State of UP & Ors
Case No.WRIT C No. 12574 of 2020
Date of Order:04.11.2020
Coram: Hon’ble Justice Surya Prakash Kesarwani and Hon’ble Justice Dr Yogendra Kumar Srivastava
Counsel for Petitioner: Syed Imran Ibrahim, Gaurav Tripathi
Counsel for Respondent: C.S.C., Ajeet Kumar Singh, Archana Singh, Wasim Masood