SUBHASHINI THULASIRAM vs. SPR & RG CONSTRUCTION PVT LTD (2022)
LEGAL SUBJECTS - Real Estate Law, Statutory Interpretation, Consumer Protection Law, Administrative Law, Contract Law
CITATION OF THE CASE -
C.M.S.A.No.22 of 2019
FACTS -
a) This case addresses critical issues surrounding the enforcement of the Real Estate (Regulation and Development) Act, 2016 (RERA) in the Chennai Metropolitan area, specifically focusing on the obligations of real estate developers in obtaining necessary approvals and clearances before project commencement. The appellant, representing the purchaser, challenged the decision of the Tamil Nadu Real Estate Appellate Tribunal, which had reversed the earlier order of the Real Estate Regulatory Authority (RERA). The core contention revolves around whether SPR & Rg Constructions Pvt. Ltd., the developer, could claim exemption from RERA registration based on regional rules, despite alleged violations of environmental clearances and delay in obtaining completion certificates.
ISSUES -
Whether the promoter (developer) can split a single integrated project into two phases to claim exemption from RERA registration? Whether the authority (TNRERA) has the power to examine and override the promoter’s claim of project completion or phase-splitting based on the actual facts and intent? Whether the promoter has an unfettered right to determine the phasing of a project for RERA compliance, especially when such intention was not disclosed in the original approvals?
DECISION BY COURT -
The TNRERA and subsequently the appellate tribunal held that the developer could not split the project into two phases for the purpose of evading RERA registration, especially when the project was originally presented and approved as an integrated residential development. The authority emphasized that phasing must be stated in the initial approvals, and any subsequent intention to phase a project requires the approval of two-thirds of the allottees. The court ruled that the inclusion under Rule 2(h)(iii) (exemption for structurally completed projects) does not override the regulatory powers granted to the authority under Sections 34 (functions of authority) and 35(Powers of the Authority to Call for Information and Conduct Investigations) of the RERA Act. The appeal by SPR & RG Constructions Pvt. Ltd. was dismissed, and the tribunal affirmed that the project must be registered under RERA as a single integrated project, not as two separate phases.
IMPORTANCE OF THE CASE -
The case is significant as it establishes that developers cannot artificially split projects or misuse exemptions to bypass RERA registration and regulatory requirements. It reinforces the authority of RERA to examine the substance over form in project approvals and marketing, ensuring that homebuyers are protected from attempts to evade statutory safeguards.
Compiled by Adv. Bincy Benny, Research and Training Admin, ATPA.
