Recently, the division bench of Hon'ble Punjab & Haryana High Court ("HC") in the case of Experion Developers Pvt. Ltd. ("Petitioner") Vs. State of Haryana1 & Ors. has held that merely obtaining occupancy certificate before Section 3 of Real Estate (Regulation and Development) Act, 2016 ("Act") came into force would not oust the jurisdiction of Regulatory Authority.
The Petitioner filed a writ petition seeking issuance of a writ in the nature of certiorari for setting aside the proceedings pending before the Haryana Real Estate Regulatory Authority, Gurugram ("Authority/Respondent No.4"), in Complaint Case no.CR/6254/3831/2019 along with quashing of the orders dated 22.10.2021 and 22.02.2022. The Petitioner also sought issuance of a writ of mandamus/prohibition restraining the Authority from acting in contravention of the Act.
One of the main issue raised by the Petitioner was with regard to the jurisdiction of the Authority, with the contention being that the Petitioner had already received an occupancy certificate in respect of part of the project concerning the homebuyer/Respondents no.2 and 3 on 02.03.2017 i.e. prior to the Act having come into effect (as regards Section 3 thereof) and therefore the project has to be treated to be a completed project in view of Rules 2(1)(n) and 2(1)(o) of the Haryana Real Estate (Regulation and Development) Rules, 2017 ("2017 Rules"). Hence, there was no requirement for even registration of the project by the Petitioner with the Authority in terms of Section 3 of the Act.
The Advocate for the Respondent No.4 submitted that there is an obvious anomaly between Section 3(2)(b) of the Act and the 2017 Rules, in as much as Section 3(2)(b) reads to say that it is only after a completion certificate has been obtained by a developer in respect of any particular project, before the Act came into effect, that it would not be required to get such project registered with the RERA authority; but with the Petitioner having obtained only an occupancy certificate and not a completion certificate, it was necessarily required to get its project registered and therefore the Authority has the jurisdiction qua the project.
Whether obtaining of occupancy certificate before the commencement of the Act is enough for project to not get registered under the Act and thereby ousting the jurisdiction of the Authority?
Answering the question in the negative, HC dismissed the writ petition on the following grounds:
- HC agreed with the contention of the Respondent No.4 which relied on the judgment of the Supreme Court in M/s Newtech Promoters and Developers Pvt. Ltd. vs. State of Uttar Pradesh & Ors.2, to submit that it was held therein in the context of similar anomalies in the rules framed by the State of Uttar Pradesh, that it would be the principal Act which would govern the issue and not any rules framed thereunder.
- HC also referred to the Section 3 and definition of competition certificate and occupancy certificate under Section 2(q) and 2(zf) of the Act respectively. Section 3(2)(b) states that no registration of real estate project is required where the promoter has received completion certificate for a real estate project prior to commencement of the Act.
- HC held that there being a difference carved out in the Act itself as to what is a completion certificate and an occupancy certificate, unless the Petitioner had obtained a completion certificate for the project in question, prior to the date that Section 3 of Act came into effect, it was necessarily required to get itself registered with the Authority. HC held that the Petitioner would not fall outside the purview of the jurisdiction of the Authority, simply because the Petitioner obtained an occupancy certificate or having applied for such certificate in terms of the Haryana Building Code, 2017 ("Building Code") and completion certificate still not having been obtained by the Petitioner.
- Petitioner referred to paragraph 4.10 of the Haryana Building Code, 2017, to submit that the parameters provided under that provision of the said Code and the parameters contained in Section 2(q) of the Act which defines a completion certificate, are identical and therefore the intention of the competent authority as had promulgated the 2017 Rules, would get strength from the Act itself and consequently the provisions of the Rules themselves need to be given effect to.
- HC also agreed with the submission of the Respondent No.4 that an occupancy certificate is issued in respect of any part of a project as is ready for such occupation, whereas a completion certificate has to be issued only upon the entire project being fully completed and therefore the parameters as contained in Section 2(q) of the Act cannot be read to be pari materia with those provided in the provision of the Building Code.
4. INDUSLAW VIEW
This is a significant order for the real estate sector especially the builders/promoters as the HC has clearly distinguished between a completion certificate and an occupancy certificate and has held that a completion certificate has to be obtained prior to the commencement of the Act for a project to be not registered under the Act. This order implies that all those projects which have just obtained an occupancy certificate before the commencement of the Act will have to be registered under the Act and will come under the purview of the jurisdiction of the RERA Authority.
1. Order dated 20th April 2022 passed in CWP/7852/ 2022
2. CIVIL APPEAL NO(S). 6745-6749 OF 2021 - 2021 SCC OnLine SC 1044.
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