Karnataka HC: Disgruntled Home Buyers Must Identify Promoters in Complaint.

In a recent ruling, the Karnataka High Court emphasized the necessity for home buyers to name the promoters in their complaints against real estate companies.

This comes in response to a common issue where real estate firms declare insolvency while their promoters continue to thrive financially.

Some promoters exploit this situation by declaring bankruptcy and starting new companies under different names, often to avoid compensating home buyers for delays, substandard quality, or unmet commitments.

Typically, home buyers file complaints with local police or court petitions, often only naming the real estate company. They frequently overlook the requirement to include the promoters and directors of the company in their complaints.

The High Court has recently directed petitioners to return to the Karnataka Real Estate Regulatory Authority (RERA) for a fresh review of their cases.

This order arose from a petition filed by Vasudevan Sathyamoorthy and Priya Vasudevan, involving multiple respondents including the state government, Deputy Commissioner of Bengaluru Urban, the Secretary of Karnataka RERA, and others.

The court noted that without including the petitioners in the RERA proceedings, it was improper for the Tahsildar to take action against them. The Judge concluded that the notices issued against the petitioners should be quashed, and the parties must be redirected to RERA for a thorough reevaluation of their grievances.

The High Court’s order instructs RERA to add the petitioners and the company directors as parties to the proceedings.

Dhananjaya Padmanabhachar, Coordinator of the Karnataka Home Buyers Forum, hailed the ruling as a crucial step for home buyers.

He advised that anyone involved in litigation with RERA or consumer courts should include the builder company’s name, as well as the names of the founders, executive directors, and landowners as respondents to seek justice.

Retired Naval Commander Surendra also stressed the importance of including promoters’ names in complaints. He called for RERA to amend its rules to ensure landowners are included in the complaint process.