A society which has taken on the redevelopment under RERA is not liable for free sale flats.

The High Court of Bombay said that a housing society that terminated their redevelopment agreement with a developer due to delay and then took over redevelopment through judicial decisions cannot be held liable, under RERA, as a ‘promoter’ for buyers that have reserved free sale flat.

Justice S C Gupte nullified an order from the City Court that a 17-story building could be completed to rehouse it after they had vacated in a Goregaon building to be redeveloped. The judge S C Gupte found out that the members have been facing a legal battle over delays, conflicts and disputes for 12 years.

“The Real Estate (Regulation and Development) Act, 2016 was introduced to establish the Real Estate Regulatory Authority, ensuring efficient and transparent sales and safeguarding consumers,” Justice Gupte said.

The cooperative housing society Goregaon Pearl was in loggerhead with free-sale flat buyers which booked the apartments from the builder. The society said it was not entitled to apartments in the redeveloped building as third parties. Free-sale flat buyers argued that RERA is now responsible for society as a project promoter or developer. The promoter is required to offer buyers ownership in due time under the RERA.

But Justice Gupte said, “No RERA provision makes landowners of the freehold or rental interest liable for fulfilling the developer’s obligations under RERA to enter into an agreement with a developer (who, based on such development agreement, enters into flat purchase agreements with third parties).

In addition, HC said Maharashtra Real Estate Regulatory Authority (MahaRERA) had made it clear that only those individuals/organizations should fall under RERA’s concept of ‘promoter’ who are listed as such during online registration with the authority. The HC said, “It is not the case that in online registration the (Goregaon) society is such a specified promoter.”

The society had challenged an interim order passed by the civil court of Dindoshi City to restrict it from creating rights or alienating free sale flats sold to Dr Seema Paryekar. The lower court order was quashed by the HC.

The HC said that about 60 members of society who have given their apartments for redevelopment are roofless. In June 2008, the civic body issued a certificate of commencement and the new two-wing building was to be completed in two years. Both wings were to be partially accommodating old members and free new-sale flats buyers from third parties.

The society concluded its agreement with the developer in August 2016, when the project wasn’t near completion. The HC had previously appointed an arbitrator who last September appointed a receiver to complete the project. One wing is almost over and the struggle is to find accommodation for free sales buyers, as stipulated in the original agreement with the developing company.

The interim order of the arbitrator envisages accommodating all 60 members in wing B, which consists of three levels of podium and is almost complete. The society is expected to pursue the balanced development by means of a new developer and house all its 60 members in the wing B, which will be financed from the remaining 12 flats sale.