The Delhi High Court dismissed an appeal filed by Sansadiya Adhikari Welfare Society, challenging the order dated 07.02.2025 passed by the Ld. Real Estate Regulatory Authority Appellate Tribunal (RERA Appellate Tribunal), which had rejected the appeal due to failure to pre-deposit the decretal amount as mandated under Section 43(5) of the Real Estate (Regulation & Development) Act, 2016. The Court observed that as per Section 2(zk)(i) of the Act, any person who constructs or causes to be constructed an independent building or a building consisting of apartments shall fall within the definition of “promoter”.
The Division Bench comprising Justice Anil Kshetarpal and Justice Harish Vaidyanathan Shankar observed that the definition of ‘promoter’ under Section 2(zk) of the Act is expansive and wide, particularly as it includes six different clauses covering various entities, including Companies, Cooperative Housing Societies, and state authorities. The Court noted that the appellant society, established to provide cost-effective housing for Lok Sabha Secretariat officials, had collected Rs. 12,40,250/- from each member in 2013 to purchase 85 Bigha 3 Biswa land in village Khera Kalan under the Land Pooling Policy. However, it failed to construct houses after Delhi Development Authority’s policy changes reduced the Floor Area Ratio from 400 to 200. The Court found that the society’s Memorandum of Association clearly stated its objective was to acquire land for development and construction of residential houses/flats for its members at cost price, and therefore fell within the promoter definition.
The Appellant (SAWS) contended that it was merely a welfare society registered under the Societies Registration Act, 1860 and had neither carved out the plots nor got the buildings constructed, and hence should not be classified as a ‘promoter’. The respondent members, who had filed complaints with RERA seeking refund with 18% interest, were granted relief on 21.11.2023, with the authority directing the society to refund their contributions with interest at 10.75% per annum from the date of payment until actual return.
Accordingly, the Court observed that a Registered Society is a “body corporate” as per Section 6 of the Societies Registration Act, 1860. This section enables the Society to sue or be sued in the name of its officials, thereby recognising the inference that the Society operates as a juristic person. It further held that a welfare society was an association of persons, who have joined their hands to provide housing to its members and therefore the appellant would fall in the expression ‘promoter’ used in the Act. The Court concluded that even though the society had not constructed buildings, it still fell within the promoter definition because the objective of acquisition of land by the Appellant was/is to construct/provide apartments for its members. Therefore, the appeal was dismissed in limine.
Appearances:
Appellant: Ms. Rekha Aggarwal, Ms. Hiteshi Kakkar, Mr. Amrit Singh K. and Mr. Aayush, Advocates
Respondents: Mr. Kunwar Chandresh, Ms. Poonam Prasad, Mr. Munis Nasir and Mr. Divyansh Singh, Advocates