Disputes over real estate projects that received partial occupancy certificate prior to RERA enforcement are out of authority’s limits: Karnataka HC

When the Karnataka RERA itself exempted applicability of the Act and the Rules for the ‘ongoing projects’ for which partial occupancy certificate was granted prior to commencement of the Act, the KRERA cannot get jurisdiction to adjudicate the disputes over such exempted projects, said the court

The disputes pertaining to real estate projects, for which partial occupancy certificate was granted prior to commencement of the Real Estate (Regulation and Development Act), 2016, and the Rules, were not maintainable before the Karnataka Real Estate Regulatory Authority (KRERA), said the High Court of Karnataka.

When the Karnataka Real Estate (Regulation and Development) Rules, 2017, itself exempted applicability of the Act and the Rules for the ‘ongoing projects’ for which partial occupancy certificate was granted prior to commencement of the Act, the KRERA cannot get jurisdiction to adjudicate the disputes over such exempted projects, the Court said.

Justice M. Nagaprasanna passed the order while allowing a petition filed by Provident Housing Ltd., a real estate developer.

The petitioner has questioned the order passed in 2020 by the State Authority, which had asked the company to refund ₹6.84 lakh in addition to ₹17.85 lakh already refunded to a customer, who had cancelled booking of a flat in one of its projects in Bengaluru city.

The Court noted that apartment project had received partial occupancy certificates from the competent authority twice, in November 2015 and in April 2017, much before the commencement of Karnataka Rules, which came into force in July 2017 after the Act was notified in May 2016.

The company had refunded ₹17.84 lakh to the customer in December 2017 by deducing cancellation charges and taxes, and the customer had registered the complaint before the KRERA in February 2019 seeking additional amount.

The adjudicating authority appears to have swayed by the grievances vented out by the complainant in entertaining the complainant notwithstanding the fact that the law, which states that ongoing project for which partial occupancy certificate was issued, would not not come under the purview of the Act and the Rules.