Sunteți pe pagina 1din 36

A ppeo I in SC 100006 7 2/69 1 CommonOrder 10.

07-2077

BEFORE THE MAHARASHTRA REAL ESTATE APPELLATE


TRIBUNAL, MUMBAI
AppealNo.
ln
Complaint No.SGl 0000672
ln
Complaint No.SCl 0000691

'l . M/s Geetanjali Aman Constructions


having its principal place of business
at Utkarsh Apartment, 1512,1514,
Sadashiv Peth, Near by
Renuka Swaroop School,
Pune-41'l 030.

And also at 410, 4th Floor,


San-Mahu Complex, 5 Bund Garden
Road, Camp, Pune-411 001.

2. Hussain Pathan
Partner of Geetanjali Aman Constructions,
residing al 571, Dattawadi,
Pune-4'l'l 030 ... Appellants/
Org.Respondents
Versus

1. Hrishikesh Ramesh ParanjPe


residing at 141,Shaniwar Peth,
Near Amruteshwar Mandir,
Pune-411 030

2. Ramesh Vasant ParajPe


residing at 141,Shaniwar Peth,
Near Amruteshwar [\4andir,
Pune-411 030

3. Balaji Shashikant Samudra


residing a|411021, Sadashiv Peth,
Avdhoot Society,

,l
Pune-411 030
,|
Appeol in SC1OOOO67 2/691 Common Ofuet 10.07.2077

4. Swapna Balaji Samudra


residing at 411021, Sadashiv
Peth, Avdhoot Society,
Pune-411 030 ..
Respondents/
Org. Complainants

Shri Mustafa Safiyuddin a/w lessica Rastogi, Advocates for


Appellants
Ms. Manasi Joshi, Advocate for Respondents

CORAM : INDIRAJAIN J. .CHAIRPERSON


SUMANT KOLHE, MEMBER (J)
S.S. SANDHU, MEMBER(A)

DATE: 10th JULY,2019.

JUDGMENT

INDIRA JAIN (J) Ghairperson & S. S. SAN DHU ( Member A)

PER S. S. SANDHU MEMBER (A)

This appeal is directed against the order dated 10th December,


2018 of Ld. Member and Adjudicating Officer, MahaRERA as modified
by order dated 11th March, 2019 pursuant to Review Application filed
by Appellant in Complaint Nos. SC10000672 & SC10000691.

2. The short controversy that arlses in this appeal revolves around


Clause (a) of Section 3(2) of the Real Estate Regulations and
Development Act, 2016 (for short, 'the Act). It is appropriate here to

reproduce the relevant part of the said Section for better

understanding and relating the same to the facts and circumstances


of the case in further account of this order'

2
"Section 3(2). Notwithstanding anything contained in sub
section 1, no registration of the Real Estate project shall be
required:
(a) Where the area of land proposed to be developed does not
exceed five hundred square meters or the number of
apaftments proposed to be developed does not exceed
eight inclusive of all phases....."

3. The facts submitted on record reveal that Appellants are


engaged in development and construction of real estate projects.
According to Appellants, they had commenced the construction of
project "Utkarsh Apartment" in Pune in the year 2013. On
commencement of the RERA w.e.f. 1st May, 2017, Appellants sought
guidance from MahaRERA (the Authority) on registrability of their
project by email dated 8th February, since the said project had an
area less than five hundred square meters but apartments more than
eight. However, there was no written reply or response from the
Authority despite persuasion. Appellants claim the officials in the
Authority advised them that their project is not required to be

registered.

4. On 6th December, 2018, Appellants received an email from the


Authority for hearing in respect of the said project on 10th December,
2018. During the hearing they came to know that the hearing was
pursuant to Complaints under caption by Respondents regarding
registration of their project. Appellants made oral submissions and
following order was passed by the Learned Member.

" The respondents shall register the project within three


) Weeks from this order.
-/) 3
The respondents shall pay penalty of Rs.30 Lacs under
Section 59 of the RERA,"

5. According to Appellants, they received the above order on 8th


January, 2019 by email. However, as there were errors in the above
order with regard to the area, estimated cost of the project etc.,
Appellants preferred Review Application on 4th February, 2019 on
following grounds:

(i) The Appellants were never served copy of complalnts as


falsely declared by Respondents. They became aware of
allegations in the complaints for the first time during
hearing on 10th December, 2018.
(il) Appellants were not given any opportunity to file their
reply to the complaints.
(lii) The area is wrongly mentioned in the order as 38259 sq.
mtrs. though the correct and duly ceftified area is 380.04
sq. mtrs. i.e. less than five hundred sq.mtrs. as orally
stated during the hearing.
(iv) Duly certified estimated cost of the project is Rs. 3.35
crore contrary to the cost erroneously mentioned as
Rs.10 crore approximately in the order.
(v) The project is exempted from registration U/Sec. 3(2) of
the Act since the area of the plot is 380 sq. mtrs and
therefore penalty of Rs 30 lacs is required to be cancelled.

6. Based on above grounds, the Appellants prayed for following

reliefs.

(i) To review the order dated 10th December, 2018 as the


4
said project is exempted from registration under Sec. 3(2)

of the Act being area under the project less than 500 sq.

mtrs;
(ii) To hold that the project is not registrable under the Act.
(iii) To withdraw and cancel the penalty of Rs.30 lacs imposed
by the said order;
(iv) To cancel/withdraw the directions requiring to register
the project within three weeks from the date of order;
(v) To stay operation of the order pending hearing and final
disposal of Review APPlication.

7. After reminders to the Authority to fix an early date for hearing,


Review Application and the application filed by Respondents for taking
action for non-compliance of the order dated 10th December, 2018
were heard together by Ld. Member on 11.3.2019'

8. After hearing the parties, Learned Member held that project is


registrable and passed the following order on the same day'

"The Respondents shall register the project within two days


from this order. The amount of penalty shall be Rs'30 lakhs
only.

In case of the Respondent's failure to register the project as


directed, the Respondents are hereby restrained from
selling/transferring any part of the project and collecting any
money from the allottees till the project is registered'

In case, non-registration within the prescribed time limit, issue

5
notice to the Respondents under Section 7 of RERA to show
cause as to why MahaRERA should not take the project in its
control. The matter be kept before the Authority on 08.04.2019.

The representative of the Respondents has been directed to


remain present to collect the copy of the order' Hence, the copy
of the order be given to the representative of the Respondents
to act upon it.

The Respondents shall pay additional penalty of Rs.10,000/- per


day after 14.03.2019 under Section 59 of RERA till project is
registered. The order dated 10.12.2018 is rectified under Section
39 and the area of the plot is corrected to 382 sq'mtrs. and 22
flats and 9 shoPs".

g. Being aggrieved by the aforementioned orders dated 10th


December, 2018 as rectified by order dated 11th March, 2019, present
appeal has been filed on the following grounds:

(l) misconstruing the provisions of Section 3(2) of the Act, the


project is erroneously held registrable as it had more than
8 tenements even though land to be developed was less
than five hundred sq. mtrs.;
(ii) Learned Member wrongly held the project liable for
registration by interpreting that both the conditions U/Sec.
3(2) are to be met cumulatively and not alternatively for
exempting the project from registration;
(iii) Learned Member erred in imposing a penalty of Rs.30 Lacs
for non-registration and directing Appellants to register the
project within 2 days failing which further penalty of
-rl, 6
Rs.10,000/- per day to be imposed until registration of the
project;
(iv) Appellants have been restrained from selling/transferring
any part of the project and collecting any monies from
allottees;
(v) There is no rational for estimating the penalty of Rs.30 Lacs
as 30lo of the wrongly estimated project cost of Rs.10/-
crore and for not reconsiderlng the same even after
submitting duly certified project cost of Rs.3.35 crore in
Review Application.

10. In relief, the Appellants sought to quash and set aside the
impugned order dated 10th December, 2018 as modified by order
dated 1lth March,2019.

1i. Heard the Learned Counsel ofthe parties at length.

12. In oral arguments, the learned Counsel of Appellants reiterated


the facts as mentioned hereinabove. He drew our attention to the twin
ingredients of Section 3(2Xa) on satisfaction either of which a project
shall be exempted from registration. At the cost of repetition, the
relevant provisions are again reproduced for the sake of convenience
as under:

" Section 3(2Xa) - Where the area of land proposed to be


developed does not exceed five hundred square meters or
the number of apadments proposed to be developed does
not exceed eight inclusive of all phases....."

7
13. The learned counsel for Appellants submitted that on plain
reading of the aforesaid provisions it
is clear that the two
ingredients/conditions prescribed in the clause (a) for exempting
exemption to the projects from registration are mutually exclusive
due to the word "or" used therein. Therefore they are to be read and
considered alternatively and not conjunctively as is done by the
learned member while passing the impugned orders' He further
submitted that satisfaction of either of the conditions or ingredients
is only necessary for such exemptlon from registratlon'

L4. Further, the learned counsel referred to the conclusions drawn


by learned member in Para 3 of the order dated 11th March, 2019
reproduced as under:

"3. The learned advocate ofthe Respondents submits that since


the area of the plot is less than five hundred sq. mtrs' Project
does not require registratlon because the exemption is given to
the project having less than five hundred sq, mtrs or number of
apartments is below 8. Hence he submits that when one
ingredient regarding the area is satisfied, the project does not
require registration. I do not agree with him because it becomes
clear on plain reading of section that if the land below five

hundred sq. mtrs is to be developed, then it requires no

registration. Similarly, if the apartments not exceeding 8 are


being constructed, inclusive of all phases, then registration is
not required. The learned advocate admits that in approved
plan the number of tenements is 22 and there are nine shops'

,L Therefore, I do not accept the submissions of the learned

advocate ofthe Respondents that the project is exempted from


the registration."
8
15. The Learned Counsel pointed out that in third and fourth
sentences of the above para of the impugned order the learned
member appears to have actually agreed with the view of Appellants
for disjunctive reading and application of individual conditions
provided in Clause (a). Accordingly he also seems opining by stating
separately that a project requlres no registration if it falls under either
of the two conditions. Impliedly therefore the project of Appellants
satisfying the condition of having less than 500 sq. mtrs. area was not
required to be registered. Yet a moment later, without assigning any
plausible reason he comes to a totally different and erroneous

conclusion by applying the said individual conditions conjunctively and


holds that the project of Appellants is liable to be registered as it had
22 tenements and nine shoPs.

16. To support and substantiate his contention, Learned Counsel


for Appellants relied on judgments in the cases of (i) Lavasa
Corporation Limited Vs Jitendra Jagdish Tulsiani [(2018 SCC
Online Bom 20741:[(2018) 5 AIR Bom R 553]: [(2018) 6 Bom
CR 172)l and (ii) Babu Manmohan Das Shah vs. Bishun Das
l(1967 AIR 643, 1967 SCR (1)836)l' He also submitted ceftain
Reports of Committees of the Lok Sabha, the Rajya Sabha and Draft
Bills prepared for processing the enactment of the Act to demonstrate
the legislative intent for exempting cedain projects from registration
on fulfillment of either of the conditions laid down in Clause (a) U/Sec'
3(2) of the Act. By reiterating his contentions as above, the learned
Counsel vehemently claimed that project of Appellants was not
required to be registered and the directions to registering the same
and imposition of penalties by learned member in the impugned
orders for non registration deserve to be quashed and set aside.
9
17. The Learned Counsel for Appellants also contended that the
penalty @ 3olo that appears to have been imposed assuming
erroneously the project cost as Rs.10 crore in the order dated 10th
December, 2018 is not rational and the same is unreasonable and
arbitrary too. He also argued that learned Member took no

cognizance of duly certified project cost of Rs.3.35 crore submitted in


Review Application and passed an erroneous order 11th March, 2019
that needs to be set aside.

18. On behalf of the Respondents, Learned Counsel supported the


impugned orders. She contended that both the conditions mentioned
in Clause (a) of Sec, 3(2) of the Act are required to be jointly complied
with to qualify for exemption from the registration. To buttress her
view, she submitted clarification at FAQ No.5 as downloaded from
MahaRERA website suggesting thereby that the Appellants'projects
requires registration. She also relied on the judgment of the Authority
of 17th October, 2018. She therefore emphasized that since there are
more than 8 flats in the Appellants' project, the same is required to
be registered U/Sec. 3 of RERA, 2016 and deserves no exemption.

19. After hearing the parties and considering the documents on


record, two points that arise for our consideration and adjudication
are
(i) Whether the project being executed by Appellants is
liable to be registered in terms of Clause (a) of
Sec.3(2) of the Act?

-l
{-
(ii) Whether Appellants are liable to comply with
directions for registration of the project and to pay
penalties imposed as per the impugned orders?
10
Appeol i n sc 1 000067 2 /6 91 CommonOrder 10.07-2077

We answer both the points in the negative for the reasons discussed
in the ensuing account.

20. As may be noted from above account, the principal question that
needs to be addressed in this appeal revolves around the interpretation
of word "or" used in clause (a) of Section 3(2) of RERA and its application
to the facts and circumstances of this case already detailed
comprehensively hereinabove. The crux is whether "or" has to be read
conjunctively or disjunctively. Needless to state that need to interpret
the provisions of law would arise only when there is ambiguity left or a
doubt is created in understanding the provisions. In our view in

understanding the provision of law what should be done when the words
are clear and unambiguous is to give the words that meaning which they
convey plainly, irrespective of the consequence. It is well settled law

that while interpreting a statute, efforts should be to give effect to each


and every word used by the Legislature keeping in view the legislative
intent. There cannot be two opinion that interpretative function of the
Court is to discover the true legislative intent. It is trite that in
interpreting the statute if the words are clear, plain, unambiguous and
reasonably susceptible to only one meaning, the Court must give to the
words that meaning and no question of construction of statute would
arise in such a case.

2t. In the light of above observations and with a view to gauge the
legislative intent for using the word 'or' in the said clause we have
also perused the material submitted by the Appellants. It is seen -

(i) that in the Bill XLVI of 2013 relating to enactment of the


Act introduced by Rajya Sabha, the word 'or' was used in
the then Sec. 3(a) though the area and number of flats
proposed therein were different from today's enactment'
11
Appeol in 5C1.000O67 2/691 CommonOrder 10.07.2077

(ii) the 30th Report of Standing Committee of the Lok Sabha


on the Bill for the Act was submitted in February 20t4.lt
is seen from pages 24-25 of the Report that based on
from National Housing Bank (NHB) the
suggestions
Committee after prolonged deliberations with Nodal
Ministry, had strongly recommended amendment to Clause
3 for extending applicability of the Bill "for residential
construction upto 100 sq. mtrs, and/or number of
apa*ments to be developed (not exceeding 3)
(emphasis supplied) instead of 1000 sq. mtrs (apartments
not exceeding 12 in number) as proposed in the Bill."
(iii) On July 30, 2015, the Select Committee of the Rajya Sabha
after good discussion on this issue submitted its Report
recommendlng no changes relating to the word 'or'except
the area and number of flats to be reduced for exemption.
(iv) Though there were recommendations, as noted above, to
use the words 'and/or' in the clause 3, it is seen that the
Bill introduced in 2015 in the Rajya Sabha retained the
word 'or' in Section 3(2)(a) of the Bill. Ultimately the Bill
No. XLVI-C of 2016 was passed by the Rajya Sabha in the
form of the Act as it exists today with the word 'or' in

Section 3(2)(a).

22. From the above proceedings, it is clearly discernible that by


retaining the word 'or' in the relevant clause, the legislature always
intended to provide two contingencies where if either of the two is
the project is to be held eligible for exemption
J
satisfied, from
registration. Had the legislature intended to apply both the conditions
collectively or conjunctively, the simple use of the word(s) 'and' or
'and/or'would have achieved the objective.
't2
A ppea I i n SC 100006 7 2/69 1 CommonOtdet 70.07.2017

23. Coming to the present controversy, it is not in dispute that


appellants commenced the construction of project'Utkarsh Apartments'
in Pune in the year 2013. The area of plot is 382 sq.mtrs. and project
consists of twenty two flats and nine shops. Allottees filed the complaint
against the appellants with MahaRERA alleging that promoters have not
registered the project though number of flats exceeds eight and thereby
violated the provisions of Section 3 of RER Act, 2016. Keeping in view
the settled law on interpretation of a statute and language of clause (a)
of Section 3(2) of the Act of 2016, we are of the firm view that on the
happening of any of the two contingencies il the area of land proposed
to be developed does not exceed 500 sq.mtrs or iil the number of
apartments proposed to be developed does not exceed eight incluslve
of all phases, project needs no registration under sub section (1) of
Section 3 of RER Act. The unambiguous language of clause (a) of
Section 3(2) of the Act of 2016 makes it clear that "or" is to be read
disjunctively and not conjunctively as conjunctive reading would make
legislative intent redundant and would amount to changing the texture
of the fabric which is not permissible in law.

24. The disjunctive reading of "or" in clause (a) of Section 3(2) of the
Act if applied to the facts of the present case, it is inevltable that the
total area of the plot being 382 sq.mtrs., project in question is out of the
purview of registration under the Act of 2016. Analysed from this view
point, it appears from his observations in 3rd and 4th sentences of Para
3 of the order dated 11th March 2019, that the learned member

4 understood and interpreted the law position correctly with regards to


use of the word 'or' between the two conditions for exemption of the
projectfrom registration if area is less than 500 sq. mtrs. or if there are
less than 8 apartments. However while concluding that the project of
13
Appellants is registrable on the basis of apartments more than 8, it is
obvious that he gave a total miss to the word'or'as he failed to assign

any context or meaning to the word 'or' used in the said clause. This
appears to have led him to take a view contrary to what was intended
to by the legislature.

25. In view of the above discussion, we are in complete agreement


with interpretation by Appellants meaning thereby that once the
project meets one of the conditions that precedes or succeeds the
word 'or' in the said clause, their project is not registrable. However
we do flnd any merit in the view advanced by learned Counsel for
Respondent. Also her references to the FAQ published on the website
of MahaRERA and the orders passed by the Authority relating to the

controversy have no evidentiary value for giving any consideration


thereto. In conclusion, we find it difficult to accept the view taken by
learned Member while holding the Appellants' project as registrable
based on the erroneous interpretation of the provisions of Clause (a)
of Section 3(2) of the Act in the impugned orders. The said orders
dated 10th December, 2018 and 11th March, 2019 therefore deserve
to be quashed and set aside along with other directions relating to
requirement of registration of the project by Appellants and penalties
imposed for failure to do so.

26. Accordingly, we pass the following order:

-:ORDER:-

i] The impugned orders dated 10th December, 2018 and 11th


March, 2019 are quashed and set aside;

14
A ppeo I i n 5C1000067 2 /69 1 Common Oder 70.07.2077

ii] The consequential effects of the said orders in terms of


directions to register the project, penalties etc. are also set
aside;

iiil No costs;

ivl In view of the provisions of Section 44(4) of the Act of 2016,


copy of the order shall be sent to the parties and to the
Learned Member and Adjudicating Officer.

.S. SAND lrno*-larru:;

PER: SUMANT KOLHE MEMBER (J)

27. I have perused the draft judgment prepared by my learned


I am unable to agree with the conclusion and
sister and brother.
reasons assigned for in the judgment. Important issue of
interpretation and meaning of Section 3(2)(a) of RER Act 2016 is

involved. I hold divergent view on the crucial point involved in the


matter. I consider it
to arrive at my conclusion with
necessary
reasons by expressing my views as the issue has far reaching
impact.

Admitted facts

28. Appellants are the promoters. Respondents are the Allottees.


"Utkarsha Apaftment" is the project launched by the Promoters on
the plot located at Sadashiv Peth, Pune. Area of the plot is 382 sq.
meters. Project consists of 22 flats and 9 shops. Allottees lodged
the complaints against the Promoters with MahaRERA Authority.
They alleged that the Promoters have not registered the project

15
Appeol in 5C1000067 2/691 CommonOrder 70.07.2017

with MahaRERA Authority though number of flats exceed eight and


they have violated Section 3 of RER Act 2016.

Decis on of Mah RERA

29. The Ld. Member of MahaRERA Authority heard both sides in


complaint No. SC 10000672 and 10000691 fited by Ailottees on
allegation of non-registration of the project and passed order on
10.12.2018 and directed the Promoters to register the project
within three weeks and to pay penalty of Rs.30,00,000/- under
Section 59 of RER Act.

32. Allottees made grievance of non-execution of the said order.


Promoters preferred Review Petition on 04.02.2019 against the said
order. The Ld. Member of MahaRERA Authority heard both sides
and passed the order on 11.03.2019 as under :-

ORDER

"The respondents shall register the project within two


days from date of this order. The amount of penalty
shall be Rs.30 lakhs only.

In of the respondent's failure to register the


case

\\ project as directed the respondents are hereby


restrained from selling/transferring any part of the
project and collecting any money from the allottees tilt
the project is registered.

In casg non-registration within the prescribed time


limit, issue notice to the respondents under Section 7 of
RERA to show cause as to why MahaRERA should not

16
take the project in its control. The matter be kept before
the authoritY on 08.04.2019.

The representative of the respondenb has been


directed to remain present to collect the copy of the
order. Hencq the copy of the order be given to the
representative of the respondents to act upon it'

The respondents shall pay additional penalty of


Rs.10,000/- per day after 14.03.2019 under Sedion 59
of RERA titt prolect is registered. The order dated
10.12.2018 is rectified under Section 39 and the area of
the ptot is corrected to 382 sq. mtrs., and 22 flats and
9 shoPs."

30. In theorderdated 10'12.2018, area ofthe plotwaswrongly


mentioned as 38259 sq. ft. and number of flats and shops were
wrongly mentioned as 30 and 10 respectively. This typographical
mistake was brought to the notice of Ld. Member of MahRERA
Authority by Promoters. The Ld. Member of MahaRERA Authority
rectified the said typographical mistake by showing correct area of

\e the plot as 382 sq. meters and correct number of flats and shops
as 22 and 9 respectively by passing order to that effect on
11.03.2019.

31. Order dated 10.12.2018 with modification as per order dt'


11.03.2019 directing Promoters to register project and to pay
penalty and to face consequences on failure to obey the order, is
assailed by Promoters in this Appeal'

17
Riva lClaims

32. Promoters have challenged propriety, correctness and legality

of the impugned order on the ground that project stands on the


plot of area of 382 sq. meters which does not exceed 500 sq'
meters and project falls within ambit of Section 3(2Xa) of RER Act,
2016 for exemption from registration. Allottees have made counter
attack that project consists of 22flats and 9 shops which exceeds
limit of 8 flats prescribed for exemption from registration under
Section 3(2Xa) of RER Act 2016. According to the Promoters, any
one of the conditions if satisfied, the project is not required to be
registered. According to Allottees both conditions must be satisfied
by the project to get exempted from registration' Thus, whether
condition of area of plot not exceeding 500 sq' meters and
condition of number of Plots not exceeding B are mutually exclusive
to each other and only one can be satisfied for exemption or both
conditions must be satisfied is the main controversy'

33. Now, I proceed to discuss the controversy'


{,
Nature of develooment

Real Estate project is defined under Section 2(zn) of


RER Act. It means development of a building or building consisting

of apartments or conversion of existing building or part thereof into


apattments.

It also means development of land into plots or


apaftmentsasthecasemaybe,forpurposeofsellingallorsome
of the said apaftments or plots or building as case may be' As a
result,projectconsistsofdevelopmentofBuildingorland'
18
Whenever building is to be developed then condition of number of
flats not exceeding B will have to be observed for getting exemption
from registration.

Whenever land is to be developed, it may be plotted


development i.e. land is divided into number of plots for selling
them in project. If such plotted development is there in project,
then condition of area of land not exceeding 500 sq. meters (10
Gunthas) will have to be observed for getting exemption from
registration. Now, land may be developed by making construction
of building thereon. So, project consists of development of land by
construction of building. In this case, since construction of building
is involved in the project, the number of apartments should not
exceed 8 for getting exemption from registration.

Due care is also taken to see that if project is developed

into phases then construction of building in all phases will be


considered together for ascertaining maximum limit of B flats in
project for obtaining exemption from registration.

Thus, exemption under Section 3(2Xa) will depend

\) upon nature of development' If it is development of land by dividing


into plots first condition of minimum area of 500 sq. meters of land
shall apply for seeking exemption from registration and similarly if
project consists of development of building or land by construction
of building on land then second condition of number of flats less
than 8 shall apply for getting exemption from registration' So, every
project involving construction of number of flats not exceeding 8
shall be exempted irrespective of area of the land' Every project

19
involving development of land having area not exceeding 500 sq'
meters into plots for sale shall be exempted.

Leqal interoretation and meanrnq

34. In view of this interpretation, both conditions as per Section

3(2Xa) are not mutually exclusive but both shall be satisfied for
seeking exemption of the project from registration.

Section 3(2)(a) of RER Act 2016 reads as under :-

"3(2) : Notwithstanding a nything contained in sub-section


(1) no registration of the real estate proled shall be
required :-

(a) : where the area of tand proposed to be developed


does not exceed five hundred square meters or

the number of apartments proposed to be

devetoped does not exceed eight inclusive of all

Phases:"

35. Ld. Member held that project must satisfy both conditions i'e'
area of plot not exceeding 500 sq. meters and number of flats not
\A exceeding B for getting exemption from registration as per section
3(2Xa) of RER Act. satisfaction of one condition is not sufficient to
exempt the project from registration'

PrinciPles and guidelines

36. Let us see what is the legal interpretation and true meaning
of Section 3(2Xa) of RER Act for exemption of project from the
registration. In view of word "OR" used in Section 3(2Xa) between
20
Appeol i n 5C1000067 2/691 CommonOrder 70.07.2077

both conditions we have to see whether meaning of word "OR" in


Section 3(2Xa) is to be gathered from grammatical sense or
statutory sense. Section 3(2)(a) is statutory provislon and meaning
of the word "OR" in this provision is to be gathered from statutory
sense. Some principles and guidelines required to be followed for
asceftaining correct meaning of the provision are referred by their
Lordships of Hon'ble Bombay High Court in Case law of Neelkamat
Realtors Suburban Pvt. Ltd and Ors. (Writ Petition No. 2737
of 2Ot7) decided on 06.12.2017 (Hon'ble Chief Justice N.H. Patil
and R. G. Ketkar J. Bombay High Court).

I refer to para 158, 159 and 160 of the said Case Law.

"158. When the question arises as to the


meaning of a ceftain provision in a statute, it is not only
legitimate but proper to read that provision in its
context. The context here means, the statute as a
whole, the previous state of the law, other statutes in
pari materia, the general scope of the statute and the
mischief that it was intended to remedy [as held in R.S.
Raghunath v. State of Karnataka, AIR 1992 SC 811. This
statement of the rule was later fully adopted by the
Constitution Bench of the Apex Court in Union of India
qil v. Elphinstone Spinning and Weaving Co. Ltd., (2001) 4
SCC 139.

159. It is a rule now firmly established, [as held


in Philips India Ltd. v. Labour Court, (1985) 3 SCC 1031,
that the intention of the Legislature must be found by
reading the statute as a whole. "The Court must
asceftain the intention of the Legislature by directing its
attention not merely to the clauses to be construed but
to the entire statute; it must compare the clause with
the other parts of the law, and the setting in which the
clause to be interpreted occurs."[as held in State of
W.B. v. Union of India, AIR 1963 SC ll}4tl.
21
Appeol in SC10o0o67 2/691 CommonOtdet 70.07.2077

160. "One must have regard to the scheme of


the fasciculus of the relevant rules or sections in order
to determine the true meaning of any one or more of
them. An isolated consideration of a provision leads to
the risk of some other interrelated provision becoming
otiose or devoid of meaning." [as held in O.P. Singla v.
Union of India, (1984) 4 SCC 450.1"

Backqround of RER ACT

37. Now let us consider background of enacting RER Act, 2016.


Maharashtra Ownership Flat (Regulation of promotion of
construction, sale, management and transfer) Act, 1963 was in
force. However, there was no regulatory Authority and there was
no mandate to register the project. There was no statutory
protection to the Allottees and their interest was not safeguarded
by statutory provisions. Hence, in order to overcome shoft falls and
lacunas in MOFA and for development as well as regularisation of
real estate sector, new uniform RER Act in addition to MOFA is

v enacted after long deliberations, discussions and after considering


suggestions and views of all Stake holders of Real Estate Sector.

Obiects

38. Objects spelt out from preamble of RERA are as under:-

i) To establish Real Estate Regulatory Authority for


regulation and promotion of Real Estate Sector.

ii) To ensure efficiency and transparency in sale of plot,


apaftment, building or Real Estate Sector.

iii) To safeguard the interest of the customers.

22
iv) To provide speedy adjudicating mechanism.
v) To complete the on-going project. [Neelkamal Realtors]
39. As per Section 3(1) of RER Act, without registration of project
Promoters shall not advertise, market, book, sale or offer for sale
or invite persons to purchase any plot, apartment or building in the
project.

Mandate of Reqistration

40. As per Section 3(2) notwithstanding anything contained in


sub-clause 1. no registration of the project shall be required'

a) Where area of the land proposed to be developed


does not exceed 500 sq. meters or number of
apartments proposed to be developed do not

exceed B inclusive of all Phases.

Provided that if the appropriate Government


considers it necessary, it may reduce the threshold
below five hundred square meters or eight
r^,b apartment, as the case may be inclusive of all
phases, for exemption from registration under this
Act,
b) Where the promoter has received completion
certificate for a real estate project prior to
commencement of this Act;

c) For the purpose of renovation or repair or re-

development which does not involve marketing,


advertising selling or new allotment of any
23
apartment, plot or building, as the case may be,
under the real estate Project.

Explanation - For the purpose of this section, where the


real estate project is to be developed in phases, every
such phase shall be considered a stand alone real estate
project, and the promoter shall obtain registration
under this Act for each phase separately.

Exception

4t. On careful perusal of Section 3 of RER Act, it is revealed


that every new project or ongoing project on the date of application
of RER Act, 2016 i.e. 01.05.2017 shall be registered with MahaRERA
Authority. There are three exceptions to this rule as given under
Section 3(2) of RER Act.

42. Exception (a) regarding minimum area of the plot or


minimum number of apartments; (b) regarding receiving of
completion certificate prior to commencement of the Act. Exception
(c ) regarding renovation or redevelopment or repair which does
not involve market, adveftising, selling or new allotment of any
q[ plot, apaftment or building.

43. Whenever legal interpretation and true meaning of Section


3(2Xa) is to be gathered it must be borne in mind that it is an
exception to the rule. Therefore, scope of exception granting
exemption from registration cannot be widened and stretched to
the extent that such scope may defeat the very purpose of the Rule
of registration of the project. consequently, legal interpretation and
true meaning of the exception contemplated under Section 3(2Xa)
24
ppe ol i n SC 1 000067 2/69 1
CommonOrder 70.07.2077
A

must be in spirit of and in support of Rule of registration and not in


derogation thereof.

44. The entire provision will have to be read in context of other


provisions of the Act. For ascertaining true meaning of the
provision, whole Act must be read and not only that provision in
isolation.

45,Theintentionoflegislatureinmakingregistrationmandatory
and compulsory for the new and ongoing projects clearly shows
that as far as possible all the projects are made compulsorily
registrable as per Section 3 of RER Act' However, every rule
is

having exception, So, exception is carved out to exempt the small


project from registration. In order to determine concept of small
project, it is provided that if area of land to be developed is not
exceeding 500 sq. meters or number of flats not exceeding B
including all phases, then such project is exempted from

registration.

46.IntheexplanationasprovidedunderSection3ofRERAct'
phase
where the project is to be developed in phases every such
shallbe considered as stand alone real estate project and the
-Afi promoter shall obtain registration in each phase separately' Unless
the project is registered with MahaRERA Authority, Regulatory

Authority under RER Act may not be in a position to supervise'


monitor and control the project for achieving the objects of
RER

per clause
Act. So, intention of legislature in framing exception as
(a) for exemption of the project from registration on the point of
to
area of the plot or number of apaftments must be construed

25
satisfy both the conditions for obtaining the exemption from the
registration.

Mandate of Section 4 for Reoistratlm

47. Registration of project with Authority by making compliance


of mandatory requirement as per Section 4(a) to Section a(m) by
promoter is the basic and fundamental stage for commencing the
project by making adveftisement in public domain and soliciting
response from Allottees to purchase the flats. From this stage, on
due registration of project, Regulatory Authority stafts monitoring
the project and Promoter is under obligation to carry out the
development by adhering to the statutory provisions of RER Act
2016. The object of protecting interest of home buyers is required
to be checked from stage of booking of flat in registered project till
the project gets completion certificate from competent Authority.
The period between date of booking the flat and the date of getting
completion certiflcate of project is crucial and project is required to
be regulated by observing and following respective obligations and
rights by Promoters and Allottees as per provisions of RER Act
under control and supervision of Regulatory Authority in order to
'/u complete the project successfully without diverting it into limbo.

Power of oovernment to reduce threshold

48. Appropriate Government is statutorily empowered to reduce


the threshold below 500 sq. meters or eight apaftments as the case
may be inclusive of all phases for exemption from registration of
project as per proviso of Section 3(2)(a) of RER Act.

26
Appeol in 5C1000O67 2/69 1 CommonOtder 70.07.2077

49. This proviso empowers the Government to reduce the


threshold and not to increase the threshold. It shows the intention
of legislature to bring maximum projects even below the above
mentioned threshold under mandate of registration so as to
regulate such projects and to protect the interest of the Allottees
and also to help Promoters in completing the project. Appropriate
government is armed with such power to reduce the threshold only
with object of bringing maximum projects under purview of
MahaRERA Authority without exempting them from registration.

Ame dment of Rules of istratio fees


50. Recently Government of Maharashtra amended some of the
Rules framed under RER Act 2016 by reducing the registration fees

of the projects of plot development and building development.


Mandate of payment of minimum registraUon fees of Rs.50,000/-
is also amended by removing such mandate and making payment
of registration fees on basis of area of land and the rate of land per
square meter. lt is pertinent to note that the action initiated by
Government of Maharashtra in reducing the registration fees of the
projects is with a view to get registered their maximum projects with

\,t Authority and to encourage the Promoters of projects particularly in


rural area to get governed by the provisions of RER Act, 2016.

Relev ant
inform ation of Bill, reco mmendatio of
Com ittees

51. It we consider sailent features of RER Act Bill and suggestions


made by various stake holders as well as observations and
recommendations of the Standing Committee of the Lok Sabha and

27
Appeol in sC1000067 2/691 Connon Otder 1O.O7.2017

Select Committee of the Rajya Sabha it is revealed that though the


word "or" is used in between two conditions as per Section 3(2Xa)
of RER Act for exemption from registration, the Standing
Committee has used the word and/or whereas Select Committee
has used the word "and" while making recommendations on this
point.

52. The Bill excludes projects smaller than 1000 sq. meters area
or 12 apartments from its purview. The Standing Committee

observed that large number of small housing projects will escape


the purview of this law and therefore, the middle class allottees will
suffer. The Standing Committee strongly recommend that Clause 3
should be suitably amended thereby ensuring applicability of the
Bill on area of land proposed for residential construction up to 100
sq. meters and/or number of apaftments to be developed (not
exceeding 3 numbers) instead of 1000 sq. meters and apartments
not exceeding 12 in number as proposed in the Bill.

53. Consumers and Resident Welfare Association suggested that


there should not be any exemption to any project from the
registration as per provisions of this Bill in respect of area and
-$ number of flats.

54. The Select Committee recommends that the area of the land
and number of flats to be exempted from registration should be
reduced and adequate powers in this regard may be provided to
the appropriate government. Thus, Standing Committee has
specifically used word 'and/or' in its recommendations whereas

Select Committee has used the word "and" in its recommendations

28
A ppe o I i n S C 1000OG 7 2 /69 1 CommonOrder 70.07.2017

in respect of lowering the limit of area and number of apaftments


for getting exemption from the registration.

55. Thus, it can be easily said from observations and


recommendations of various stake holders and Select Committee
and Standing Committee report that condition of area and condition
of number of flats for getting exemption from registration are not
mutually exclusive to each other but both must exist and not only
one to get the concession of exemption from the registration.

Meaninq of Secti on 3(2Xa) in con of other orov isions


and statute as a whole.

56. I reveft back to para 158 of Neelkamal Case Law. As per ratio
laid down in R.S. Raghunath Vs. State of Karnataka.
"When the question arises as to the meaning of a certain
provision in a statute, it is not only legitimate but proper to read
that provision in its context. The context here means, the statute
as a whole, the previous state of the law, other statutes in pari
materia, the general scope of the statute and the mischief that it
was intended to remedy."
ttCI
57. Considering context of provision of Section 3(2)(a) for
exemption from registering the project on basis of minimum area
of land and minimum number of flats read together with other
provisions such as Section 3 of mandate for registration of the
project and mandatory requirements to be submitted in detail for
registration of the project as per Section 4 by the Promoter and
power of appropriate government to reduce minimum threshold of
area and number of flats and move of the Maharashtra Government
29
Appeol in 5C1000067 2/691 ComnonOtdet 10.07.2017

in reducing registration fees of project in order to cover maximum


number of projects for registration by encouraging the promoters,
I am of candid view that conditions of minimum area of land and
minimum number of flats are not exclusive of each other but both
must be observed together is the intention of legislation and such
interpretation is helpful to achieve the objects of RER Act 2016. If
Section 3(2Xa) is interpreted to mean that only one condition if
satisfied is sufficient to get exemption from registration then
Promoter may commit mischief by making construction of large
number of flats on area of land below the requirement for
exemption from registration by launching separate and
independent project at different time having huge number of floors
consisting of large number of flats on the plot of land having area
less than 500 sq. meter in order to escape from clutches of
compulsory registration of project under Section 4 of RER Act 2016.

Conclusion

.\,9 58. In view of the above discussion, I am of the opinion that you
cannot read provlso of Section 3(2Xa) in isolation but it must be
read with other clauses and provisions laid down under RER Act in
order to determine the true meaning of the said clause i.e. 3(2Xa)
of RER Act. Though, provisions of section 3(2Xa) appears simple
for the purpose of reading the same, the true meaning of it cannot
be correctly gathered by ignoring the intention of legislature in
framing this clause which is to be read with context of other
provisions of the Act and with objects of the Act. Thus, considering
the object of RER Act to regulate and develop real estate sector, to
protect the interest of customers in respect of transactions of sale
30
Appeal in 5C10000672/691. Common Ordet 70.07.201.7

of flats in Real Estate Sector and to monitor the activities of


Promoters and Allottees in respect of such transactions and to
encourage Promoters to complete the projects in agreed time and
to fulfil the dream of home buyers to get their home, the clause of
exception i.e. Section 3(2Xa) must be interpreted and meaning of
the said clause must be gathered in such a manner that the objects
of RER Act should not be defeated and intention of legislature in

bringing maximum number of projects in Real Estate Sector under


registration with RERA Authority should not be ignored. Condition
of area of the plot and condition of number of flats for getting
exemption from the project are not mutually exclusive to each other
and both conditions must be satisfied at once for obtaining the
exemption from the registration.

Clarification so ht bv Promoters

59. I would like to refer mail dated 08.02.2018 which was sent
by Promoters to MahaRERA Authority for seeking the clarification
t^,b as to whether the project is registrable under provisions of RER Act
in view of exception as per Section 3(2Xa) of RER Act. Copy of E-
mail is produced on record by the Promoter. It shows that the
project is redevelopment scheme launched by the Promoter.
However, the project is not exempted from registration as per
clause 3(2Xc) as it involves marketing, adveftising selling or new
allotment of any flat or project. In the copy of mail it is seen that
Promoter has mentioned total area of flat as 382 sq. meters and
total number of tenements 29. I would like to note down the
clarification sought in the said mail by the Promoters from RER

Authority. It is as under :- "Do we have to register for RERA in the


31
A p pe o I i n S C100006 7 2 /69 1 Common Otdet 10.07.2017

above given case? Because as per MahaRERA laws if plot is under


500 sq. meters or B units or less for sale RERA Registration is not
compulsory so for clarification do I have to register or not ?"

60. The above mentioned clarification sought by the Promoter


clearly shows that the Promoter was aware about the clause of
exemption from registration of the project on the basis of minimum
area and minimum number of flats in such project. In fact Promoter
was doubtful as to whether project should be registered or not as
the area of the plot was only 382 sq. meters but number of flats
were 29 i.e. more than 8. First order came to be passed by learned
member of MahaRERA Authority on 10.12.2018 in the complaints
filed by present two Allottees and directed the Promoters to register
the project within three weeks and also pay the penalty. Thereafter,
while deciding Review Petition filed on 04.02.2019 by the
Promoters and grievance of non-compliance of first order as made
by Allottees order came to be passed by MahaRERA Authority
directing the Promoter to register the project wlthin 2 days. In para

qf 5 of impugned order, the Ld. Member has observed that the


Promoters are ready to register the project within 2 days if so
directed. It appears that Promoters agreed to register the project
and accordingly the Ld. Member passed the order to register the
project within 2 days. Once, the Promoters agreed to register the
project within 2 days as revealed from para 5 of the impugned
order dated 11.03.2019, the Promoters cannot again challenge
such order. It is settled position of law that the observations made

by Ld. Member in lmpugned order on the point of consent of


Promoters to register the project within 2 days cannot be doubted

32
Appeol in SC1O0OO67 2/691 CommonOtdet 10.07.2077

for any reason. The Hon'ble Apex Court laid down in (2004) 1O

S.C.C. 598 Ram Bali Vs. State of U.P. that whatever happened
in court and what transpired at the hearing in Court the statement
recorded in Judgment in respect of that, held as conclusive and
cannot be contradicted on affidavit or otherwise by other evidence.
Party believing them to be erroneously recorded should promptly
approach the Judge who made the record while a matter is still
fresh in their mind for necessary rectification that being remedy it
cannot be challenged in appeal. In view of the above discussion, I
am of the opinion that the word "or" as used in Section 3(2Xa) of
RER Act is to be treated as "and". Both conditions must be satisfied
together at once by the Promoters for seeking exemption from the
registration of the project.

Order of PenalW

61. As per impugned order Promoter is directed to pay the


penalty of Rs.30,00,000/- and failure to register proiect as directed,
promoter to pay additional penalty of Rs.10,000/- per day under
Section 59 of RER Act till the project is registered and Promoter is
rA,/t
restrained from selling and transferring any part of the project and
collecting money from the Allottees till the project is registered and
Promoter to show cause as to why MahaRERA should not take the
project under its control on failure of Promoter to register the same
as per order.

62. Order of penalty of Rs. 30 Lacs is passed in view of Section


59 of RER Act, 2016. Such a penalty may extend up to 10% of
estimated cost of real estate project as determined by the
Authority. There is no iota of evidence to show that estimated cost
33
Appeol in SC1O0O067 2/691 CommonOrder 10.07.2077

of the Real Estate Project was determined by the Authority, In fact


the certificate issued by authorised CA of the project reveals that
estimated cost of the project is about 3 Crores 30 Lacs. The Ld.
Member awarded penalty of 30 Lacs on basis of submission of the
Promoters of estimated cost of Rs.10 Crores by imposing penalty
to the extent of 3% of the cost. If we consider extent of penalty
up to 10% of the estimated costs of the project as per Section 59
of RER Act 2016 and estimated cost of Rs.3 Crores 35 Lakhs as
certified by C.A. then Promoters are liable to pay penalty of
Rs.30.10 Lacs for not complying the order of registration of the
project. The Ld. Member has also imposed additional penalty of
Rs.10,000/- per day till the project is registered by the Promoter.
As per Section 59 (2) of RER Act, 2016 if the Promoter fails to
comply the order or continues to violate provision of Section 3, then
he shall be punishable with imprisonment for a term which may
extend up to 3 years or fine which may extend further up to 100/o

of estimated cost of real estate project or both. Thus, there is no

q't concept of awarding additional penalty under Section 59(2) of RER


Act.

Finaldecision

63. The impugned order directing promoter to register the


project and to pay penalty is legal, proper and correct. However,
determination of the penalty of Rs. 30,00,000/- is not correct.
Certificate of C.A. shows estimated cost of project approximately
Rs.3 Crores 34 Lacs. So, penalty of Rs.30.10 Lacs will be 10% of
estimated cost of the project. Now, additional penalty of
Rs.10,000/- per day is not contemplated under Section 59 of RER
34
Ap pe al i n SC1 000067 2 /69 1 Conmon Ordet 10.07.2017

Act and not proper legal and correct. So to the extent of awarding
additional penalty to the promoter, the impugned order is not
proper/ legal and correct.

64. In the result following order is passed:

ORDER

Appeal No. U-6 in Complaint No. SC 10000672 along


with Complaint No.SC 10000691 is paftly allowed as
under ;-
a) Impugned order dated 11,03.2019 passed by Ld.

Member of MahaRERA Authority in Complaint No.


SC t0000672 along with Complaint No.SC
10000691 is confirmed to the extent of
directing the Promoters to register the project and
to pay penalty.

b) Promoters shall register the project with


MahaRERA Authority in accordance with law

\( within one month from the date of this order.

c) Promoters shall pay penalty of Rs.30,10,000/- i.e.


10o/o of total estimated costs of the project as per
certificate of C.A. i.e. Rs.3 Crores and 35 Lakhs
approximately within one month from date of this
order.

d) Failure to register the project as directed above


may result in further action as contemplated
under the law against the promoters.

35
Appeol in 5C10O0O672/691 CommonOrder 70.07.2017

e) Part of impugned order to the extent of imposing


additional penalty of Rs.10,000/- per day till the
project is registered is set aside.

f) Part of impugned order restraining the Promoters


from selling, transferring any part of the project
and collecting money from the Allottees till the
project is registered is confirmed.

g) Part of the impugned order pertaining to issuance


of notice under Section 7 of RER Act to show
cause as to why MahaRERA should not take the
project in its control is confirmed.
q[ h) No order as to costs.

i) Copy of the judgment be sent to the parties and


the Authority and the Adjudicating Officer as per
Section 44(4) of RER Act 2016.

(suM T KOLHE)

36

S-ar putea să vă placă și