Long-term lease-cum-sale arrangements can fall under RERA, with Section 18 complaints and jurisdiction objections barred after registration.
A lease agreement for 999 years was treated as falling within RERA where, on the terms, it was economically and legally akin to a sale: substantial consideration had been paid, possession rights were transferred, rent was nominal, and execution of the lease deed was deferred. The Court applied a purposive reading of the statute and held that the long-term lease label could not defeat RERA's consumer-protective scheme. Complaints under Section 18 were held maintainable because the remedy is compensatory and intended to address promoter default and delayed possession. Having registered the project under RERA, the promoter was bound by that registration and could not deny the Adjudicating Authority's jurisdiction or go behind the registration certificate.
Issues: (i) Whether agreements styled as lease agreements for 999 years, involving substantial consideration and transfer of possession rights, fall within the ambit of the Real Estate (Regulation and Development) Act, 2016. (ii) Whether complaints under Section 18 of the Real Estate (Regulation and Development) Act, 2016 were maintainable before the Adjudicating Authority. (iii) Whether the promoter, having registered the project under the Real Estate (Regulation and Development) Act, 2016, could contend that the Adjudicating Authority lacked jurisdiction or go behind the registration certificate.
Issue (i): Whether agreements styled as lease agreements for 999 years, involving substantial consideration and transfer of possession rights, fall within the ambit of the Real Estate (Regulation and Development) Act, 2016.
Analysis: The statutory scheme was read in light of the Preamble, Objects and Reasons, and the definitions of allottee, promoter, and real estate project. The title of the document was held not to be conclusive. The agreement terms showed payment of more than 80% of the consideration, nominal annual rent, lease premium, deferred execution of the lease deed, and possession linked to completion of construction. The Court treated the transaction, in substance, as one of sale rather than a pure lease. The exclusion for a person given property on rent was held not to cover a long-term arrangement that was economically and legally akin to a sale and would otherwise defeat the consumer-protective object of the statute.
Conclusion: The agreements were held to be covered by the Real Estate (Regulation and Development) Act, 2016, and the plea that they were outside the Act as mere lease agreements was rejected.
Issue (ii): Whether complaints under Section 18 of the Real Estate (Regulation and Development) Act, 2016 were maintainable before the Adjudicating Authority.
Analysis: The Court held that Section 18 is a compensatory remedy available to allottees against promoter default and must be construed in harmony with the scheme of mandatory registration, consumer protection, and speedy redressal under the Act. Since the respondents had invested substantial sums and awaited possession far beyond the contractual period, excluding them from the remedy would frustrate the statutory purpose and permit unjust enrichment. The Court applied a purposive interpretation and the rule against suppressing the mischief targeted by the legislation.
Conclusion: The complaints under Section 18 were held maintainable before the Adjudicating Authority.
Issue (iii): Whether the promoter, having registered the project under the Real Estate (Regulation and Development) Act, 2016, could contend that the Adjudicating Authority lacked jurisdiction or go behind the registration certificate.
Analysis: The Court distinguished the Real Estate Regulatory Authority, which grants registration, from the Adjudicating Authority, which adjudicates compensation and complaints. Once the entire project had been registered, the promoter could not approbate and reprobate by taking the benefit of registration while denying the Act's applicability when claims were made under it. Section 115 of the Evidence Act, 1872 was invoked to hold that the promoter was estopped from denying the jurisdiction attracted by its own registration. The Adjudicating Authority could not sit in appeal over or disregard the registration certificate issued by the competent Regulatory Authority.
Conclusion: The promoter was held bound by the registration and could not deny the jurisdiction of the Adjudicating Authority on that basis.
Final Conclusion: The statute was applied to protect purchasers who had entered into long-term lease-cum-sale arrangements in substance, and the appeals failed because the respondents' complaints were maintainable and within the RERA framework.
Ratio Decidendi: A transaction styled as a lease will be governed by the Real Estate (Regulation and Development) Act, 2016 if, on a purposive and contextual reading, it is in substance a sale-like real estate allotment involving substantial consideration and delayed possession; once the project is registered under the Act, the promoter cannot deny the Act's applicability or the jurisdiction of the Adjudicating Authority in proceedings under Section 18.
TaxTMI 
AI Drafter ✕
TaxTMI 
