Case Note & Summary
The case involves three writ appeals filed by real estate developers (M/s. Panchmal Properties, M/s. Sri Nandana Builders, and another) against an order of a learned Single Judge of the Karnataka High Court dismissing their writ petitions. The appellants had challenged the constitutional validity of Rule 18(8) and Rule 31(9) of the Karnataka Real Estate (Regulation and Development) Rules, 2017, as ultra vires the Real Estate (Regulation and Development) Act, 2016 (RERA Act). They also sought quashing of an order passed by the Interim Real Estate Regulatory Authority directing them to register their ongoing projects under the RERA Act. The appellants argued that the rules compel registration of projects even when required approvals under other laws (such as building plan sanctions) are not obtained, which is contrary to the RERA Act. The respondents, including the Union of India, State of Karnataka, and the Regulatory Authority, defended the rules as valid and necessary to protect homebuyers. The Division Bench, after hearing arguments, held that the RERA Act is a complete code and the impugned rules are intra vires the Act. The court observed that Section 3 of the RERA Act mandates registration of all ongoing projects that have not received completion certificate, and the promoter cannot avoid registration by citing lack of approvals under other laws. The rules are consistent with the object of the Act to ensure transparency and accountability in the real estate sector. The court also upheld the jurisdiction of the Interim Authority to pass the impugned order. Consequently, the appeals were dismissed, and the order of the learned Single Judge was affirmed.
Headnote
A) Real Estate Law - Validity of Rules - Rule 18(8) and Rule 31(9) of Karnataka Real Estate (Regulation and Development) Rules, 2017 - Ultra Vires - The appellants challenged the rules as ultra vires the RERA Act, 2016, arguing that they compel registration of projects without required approvals under other laws. The court held that the RERA Act is a complete code and the rules are intra vires, as they are consistent with the object of the Act to protect homebuyers and ensure timely completion. The requirement of registration under Section 3 of the RERA Act is mandatory and does not depend on prior approvals under other laws. (Paras 1-10) B) Real Estate Law - Registration of Ongoing Projects - Section 3 of Real Estate (Regulation and Development) Act, 2016 - Mandatory Registration - The court held that all ongoing projects not having received completion certificate must be registered under the RERA Act. The promoter cannot avoid registration by claiming that approvals under other laws are pending. The RERA Act overrides other laws and the rules are valid. (Paras 11-20) C) Real Estate Law - Jurisdiction of Interim Authority - Interim Real Estate Regulatory Authority - The court held that the Interim Authority constituted under the Rules has jurisdiction to pass orders directing registration of projects. The impugned order was valid and within the authority's powers. (Paras 21-30)
Issue of Consideration
Whether Rule 18(8) and Rule 31(9) of the Karnataka Real Estate (Regulation and Development) Rules, 2017 are ultra vires the Real Estate (Regulation and Development) Act, 2016, and whether the Interim Real Estate Regulatory Authority had jurisdiction to pass the impugned order directing registration of ongoing projects.
Final Decision
The Division Bench dismissed the writ appeals, upholding the order of the learned Single Judge. The court held that Rule 18(8) and Rule 31(9) of the Karnataka RERA Rules are intra vires the RERA Act, and the Interim Authority had jurisdiction to pass the impugned order. The appeals were dismissed.
Law Points
- RERA Act is a complete code
- Rule 18(8) and Rule 31(9) are intra vires
- registration of ongoing projects mandatory
- promoter cannot avoid registration by claiming lack of approvals
- Section 3 of RERA Act overrides other laws
