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  • Commercial Law Advisors

Land owners are not liable for Contravention of Provisions of RERA

The Tamil Nadu Real Estate Regulatory Authority (TNRERA) in Rohini Muthuswami vs. Sree Vardhana Builders Pvt. Ltd. and 12 others (S.R. No. 266 of 2020) has held that the owners of the land in a real estate project are not necessary parties for an effective adjudication of complaint filed under Section 31 r/w 71 of the Real Estate (Regulation and Development) Act, 2016 (“RERA Act”).

In the present case, the Complainant had filed a complaint claiming refund of the amounts paid by the Complainant to the Respondents towards purchase of the flat against the Promoter, Sree Vardhana Builders Pvt. Ltd. (Respondent 1), its Directors (Respondents 2 to 5) and the Landowners (Respondents 6 to 13) of the real estate project. The Landowners and the Promoter has entered into a registered joint venture agreement and had executed a general power of attorney in favour of the Promoter. Pursuant to such power of attorney, the Promoter had executed a sale deed for the UDS in favour of the Complainant. Further, the Promoter had entered into the construction agreement with the Complainant for construction and delivery of the apartment in the real estate project launched by the Promoter.

The Adjudicating Officer held that only Respondent 1 i.e. the promoter of the real estate project, Sree Vardhana Builders Pvt. Ltd. falls under the purview of the definition of “Promoter” under Section 2(zk) of the RERA Act and therefore, only the Promoter can be proceeded against and made liable by the Complainant for the violation of the provisions of the RERA Act.

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