Nafr High Court
Case Details
1 2025:CGHC:16454 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR MA No. 28 of 2025 Sumit Kumar Daga S/o Shri Sunil Kumar Daga Aged About 46 Years Address At Tagore Nagar, Raipur, Tehsil And District Raipur Chhattisgarh ... Appellant/Plaintiff versus 1 - Chhattisgarh Real Estate Regulatory Authority, Through Its Chairman, Shastri Chowk, Raipur Chhattisgarh 2 - Chairman Chhattisgarh Real Estate Regulatory Authority, Shastri Chowk, Raipur Chhattisgarh ... Respondents/Defendants (Cause title taken from the Case Information System) For Appellant : Mr. Amrito Das and Mr. Ankur Agrawal, Advocates For Respondents : Mr. Yogesh Pachoriya, Advocate (Hon’ble Shri Justice Naresh Kumar Chandravanshi) 08/04/2025 Order on Board 1. 2. With the consent of the parties, the matter is heard finally. The appellant has preferred this miscellaneous appeal, being
Legal Reasoning
aggrieved by the order dated 23.12.2024 (Annexure A-1) passed by the Chhattisgarh Real Estate Appellate Tribunal, Raipur (henceforth referred to as “Tribunal, Raipur”) in Appeal No.299/2024 upholding the 2 order dated 16.10.2024 (Anneuxre A-2) passed by the Chhattisgarh Real Estate Regulatory Authority (henceforth referred to as “RERA, Raipur”) in suo moto Case No.SM-URP-2024-02406, whereby RERA, Raipur has held that aforesaid sue moto case is maintainable before it. 3. Issue to be considered by this Court is, whether the status of appellant in respect of the disputed property/land is that of a “promoter” under Sections 3 and 59 of the Real Estate (Regulation and Development) Act, 2016 (henceforth referred to as “the Act, 2016”) or not? 4. Facts of the case, in nutshell, are that on 24.05.2024, RERA, Raipur registered suo moto Case No.SM-URP-2024-02406 against the appellant on the ground that, he had obtained development permission for his land bearing Khasra No.2/14 & others admeasuring area 21,159 sq. ft. situated at Old Police Line, Abdul Hamid Ward No.36, Moudhapara, District Raipur (CG), without being registered as promoter/developer under the RERA, Raipur and developed the disputed property for the purpose of sale and purchase of Real Estate Project, thereby violated the provisions of Section 3 of the Act, 2016, which is punishable under Section 59 of the aforesaid Act. Thereafter, show cause notice (Annexure A-4) was issued to the appellant. After receiving show cause notice, the appellant entered his appearance before RERA, Raipur and filed his reply/objection (Annexure A-6) stating inter alia that the disputed property was purchased by a Firm namely; ‘Ramdev Realties’. The appellant along with Amit Kumar Daga, Deepa Daga and Varsha Daga were partners of the aforesaid Firm. The partnership firm has purchased building situated over the disputed property along with open area. In that land, about 60 years old three- storey building was situated, some portion was open land and in some 3 part of the building, shops were also established. Since structure of the building was in dilapidated condition and some part of the same was already collapsed, therefore, after getting permission from the Municipal Corporation, Raipur, to protect the life & property of the persons, removed the dilapidated portion of the building and cleared the collapsed material. Some shops are still being operated in the said building. It was further contended that though some part of the disputed property/land has been sold by the partnership firm, but the same has been sold without any construction or development, therefore, the partnership firm was not required to be registered under the RERA, Raipur to sell that land, as such, suo moto case registered against the appellant by RERA, Raipur is not maintainable hence, the same be dismissed. 5. RERA, Raipur, after considering the reply/objection filed by the appellant, dismissed the same vide order dated 16.10.2024 on the ground that the appellant, without getting registration of his project, has redeveloped the disputed property and has sold some portion of it, as such, he has violated the provisions of Section 3, which is punishable under Section 59 of the Act, 2016. 6. Being aggrieved by the order dated 16.10.2024 passed by RERA, Raipur, the appellant preferred appeal before the Tribunal, Raipur bearing Appeal No.299/2024, which was dismissed by it, holding therein that the appellant has bulldozed building/Bhawan and started developing land into the project for the purpose of selling to other persons and has also sold 900 sq. ft. land to Lalchand Fulwadhya & Nanak Prakash Fulwadhya and 1200 sq. ft. land to Mohan Lal Krishnani & Vicky Krishnani vide two registered sale deeds, as such, at 4 the time of execution of aforesaid sale deeds, the status of partnership firm was a “promoter”, which has been challenged by the appellant in instant appeal. 7. Learned counsel for the appellant would submit that the disputed property was purchased by the partnership firm, upon which, structure of about 60 years old three-storey building was standing, which was in a dilapidated condition, some part of the building was already collapsed, therefore, under information of the Municipal Corporation, Raipur and to save life & property of people, dilapidated portion was removed and collapsed material was cleared. The partnership firm neither constructed nor developed nor carried out any other work except removal of dilapidated portion of the building. Even some shops are still being operated in the said building. Though partnership firm had applied for development permission of the disputed property, but the same has been rejected. He further submitted that the said partnership firm has dissolved on 03.10.2024 because all the partners were having different objectives relating to the purchased property and the same was informed to the respondent authorities, but they did not take it on record. He would further submit that, the partnership firm was not a promoter/builder and also not developing any real estate project. It also did not invite/advertise any land/building/plot for sale of real estate project. Though the firm has sold some portion of the disputed property/land after removal of dilapidated portion, but it was without any construction or development, therefore, it was not required to get registered under the RERA to sell that land. He further submitted that the scope and objective of the Act, 2016 is for regulation & promotion of the real estate sector and to ensure sale of plot, apartment or 5 building or sale of real estate project in an efficient and transparent manner and to protect interest of consumers of the real estate sector. In instant case, the appellant or the partnership firm has not violated provisions of the Act, 2016, as such, status of appellant or the partnership firm does not fall under “promoter”, but without considering aforesaid facts, only on the basis of wrong facts, RERA has registered suo moto case and without considering aforesaid facts in its true perspective, RERA has rejected objection of the appellant and the same has been wrongly upheld by the Tribunal, Raipur, hence, the same is liable to be set aside. 8. Per contra, learned counsel appearing for the respondents would submit that, in reply/objection (Annexure A-6), the appellant has admitted that he had demolished dilapidated portion of the building situated at disputed property and also applied for development permission, which shows that he wanted to develop the disputed property. He has also admitted that he sold some portion of the disputed property, which clearly shows that he demolished dilapidated structure with intention to develop the disputed property/land without obtaining development permission. Such development/redevelopment has been carried out by the appellant without getting registered his project. Thus, such conduct of appellant bring his status as “promoter/developer”, therefore, the appeal is liable to be dismissed. 9. I have heard learned counsel for the parties and perused the material available on record. 10. Allegation against the appellant/firm is that, after purchasing of disputed property, he demolished structure situated upon it and thereafter, he sold some portion of the disputed property and thereby 6 he violated provisions of Section 3, which is punishable under Section 59 of the Act, 2016. 11. Section 3 of the Act, 2016 contemplates the prior registration of real estate project with the Real Estate Regulatory Authority and Section 59 provides punishment for violation of provisions of Section 3. 12. It would be apt to be noted here relevant portion of provisions of Sections 3 and 59 of the Act, 2016, which reads thus:- “3. Prior registration of real estate project with Real Estate Regulatory Authority-(1) No promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project or part of it, in any planning area, without registering the real estate project with the Real Estate Regulatory Authority established under this Act: Provided that projects that are ongoing on the date of commencement of this Act and for which the completion certificate has not been issued, the promoter shall make an application to the Authority for registration of the said project within a period of three months from the date of commencement of this Act: Provided further that if the Authority thinks necessary, in the interest of allottees, for projects which are developed beyond the planning area but with the requisite permission of the local authority, it may, by order, direct the promoter of such project to register with the Authority, and the provisions of this Act or the rules and regulations made thereunder, shall apply to such projects from that stage of registration. XXX XXX XXX XXX XXX XXX 59. Punishment for non-registration under Section 3 – (1) If any promoter contravenes the provisions of Section 3, he 7 shall be liable to a penalty which may extend up to ten per cent. of the estimated cost of the real estate project as determined by the Authority. (2) If any promoter does not comply with the orders, decisions or directions issued under sub-section (1) or continues to violate the provisions of Section 3, he shall be punishable with imprisonment for a term which may extend up to three years or with fine which may extend up to a further ten per cent. of the estimated cost of the real estate project, or with both.” 13. Conjoint reading of aforesaid provisions shows that, no promoter shall book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project, or part of it, in any planning area, without registering the real estate project with the Real Estate Regulatory Authority established under the Act, 2016 and if any promoter contravenes the provisions of Section 3, then he shall be liable to be penalised under Section 59 of the Act, 2016. 14. Now, issue to be considered is whether status of appellant is of a promoter/developer or whether selling of some portion of the disputed property can be termed as ‘real estate project’. 15. “Development”, “promoter” and “real estate project” have been defined under Sections 2(s), 2(zk) and 2(zn) respectively of the Act, 2016, which reads thus:- “2(s). “Development” with its grammatical variations and cognate expressions, means carrying out the development of immovable property, engineering or other operations in, on, over or under the land or the making of any material change in any immovable property or land and includes re-development; 8 2(zk). “Promoter” means,— (i) a person who constructs or causes to be constructed an independent building or a building consisting of apartments, or converts an existing building or a part thereof into apartments, for the purpose of selling all or some of the apartments to other persons and includes his assignees; or (ii) a person who develops land into a project, whether or not the person also constructs structures on any of the plots, for the purpose of selling to other persons all or some of the plots in the said project, whether with or without structures thereon; or XXX XXX XXX XXX XXX XXX” 2(zn). “Real estate project” means the development of a building or a building consisting of apartments, or converting an existing building or a part thereof into apartments, or the development of land into plots or apartments, as the case may be, for the purpose of selling all or some of the said apartments or plots or building, as the case may be, and includes the common areas, the development works, all improvements and structures thereon, and all easement, rights and appurtenances belonging thereto; 16. Combined reading of aforesaid provisions shows that if a person constructs any building, apartments or converts an existing building or apartments or develops land into a project for sell of plots, then he shall be a promoter and his project shall be termed as ‘real estate project’. As provided in Section 3, if such promoter book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, in any real estate project, or part of it, in any planning area, then registration of the real estate project is mandatory and if any 9 promoter, without getting prior registration under Section 3 of the Act, 2016, starts any development project, then, he shall be punishable under Section 59 of the Act, 2016. 17. In instant case, appellant/partnership firm purchased disputed property, upon which, structure of school building was standing. As contended by
Legal Reasoning
learned counsel for the appellant, that structure was very old one and it was in a dilapidated condition, even some parts of the building was already collapsed, therefore, under intimation to the Municipal Corporation, Raipur, to protect live and property of surrounding persons, dilapidated portion of the structure was removed and collapsed material was cleared. Further, as per the impugned order dated 23.12.2024, partnership firm, who purchased the disputed property, has sold 900 sq. ft. and 1200 sq. ft. land of disputed property to, two set of person. Thus, after removal of dilapidated portion of the building/Bhawan situated over the disputed property, said part of land has been sold by the partnership firm. 18. Though partnership firm had applied for development permission of the disputed property, but during course of submission, learned counsel for the appellant informed that the same has been rejected, whereas, as per the order sheet dated 24.05.2024 (Annexure A-3) of RERA, Raipur and notice dated 24.05.2024 (Annexure A-4) issued by its Registrar, suo moto case was registered against the appellant on the strength that without registration of his project, he has obtained development permission of the disputed property, thus, it is clear that suo moto case was registered against the appellant on false ground. Such overt act of RERA, Raipur cannot be appreciated. 19. Undisputedly in instant case, after purchasing the disputed property, 10 some portion of building (Bhawan), which was said to be in dilapidated condition, has been removed by the appellant under intimation to Municipal Corporation, Raipur and thereafter, some portion has been sold by the appellant /partnership firm, but nothing has been mentioned in the order dated 16.10.2024 passed by the RERA, Raipur and the impugned order dated 23.12.2024 passed by the Tribunal, Raipur that except such removal of dilapidated portion, any construction or development has been made by the appellant /partnership firm prior to execution of said registered sale deeds. The disputed property/land is already situated in Raipur city, upon which, school was being run, thus, the said land was already a developed land. As per reply/objection filed by appellant, it seems that whole building has not been demolished as some shops are still being run and as contended by appellant that only dilapidated portion has been removed. 20. It is also not a case of respondents that prior to selling of said portion of disputed property, the appellant/partnership firm had made any advertisement, marketing or invited persons to purchase the said plot. 21. Having considered the aforesaid facts, only because the appellant/partnership firm sold some portion of the land, after removal of dilapidated portion of the building situated over the disputed property, it cannot be said that status of appellant/partnership firm falls as ‘promoter’ or their running real estate project. 22. In view of above discussion, in considered opinion of this Court, aforesaid suo moto case has been instituted against the appellant by the respondents without any valid ground and rejection of objection raised by appellant with regard to maintainability of aforesaid case by 11 RERA, Raipur vide order dated 16.10.2024 and upheld by Tribunal, Raipur vide impugned order dated 23.12.2024 are found to be perverse and illegal, therefore, it deserves to be set aside. Thus, since status of appellant /partnership firm does not fall as ‘promoter’ or ‘builder’, therefore the issue /question as formulated in para 3 of this order is answered accordingly. 23. Consequently, this miscellaneous appeal is allowed and the impugned order dated 23.12.2024 (Annexure A-1) passed by the Tribunal Raipur is set aside. Resultantly, suo moto Case No.SM-URP-2024-02406 registered against the appellant is also quashed. 24.
Decision
Pending application(s), if any, stands disposed of. Sd/- (Naresh Kumar Chandravanshi) JUDGE Rukhsar RUKHSAR BANO Digitally signed by RUKHSAR BANO Date: 2025.04.15 15:59:35 +0530