Finding that there already exists an Assignment Agreement and Special Power of Attorney in favour of Larsen & Toubro (Respondent), the Supreme Court affirmed the ruling given by the Allahabad High Court that Section 2(zk)(i) of the Real Estate (Regulation and Development) Act, 2016 defined ‘promoter’ as a person who constructs or causes to construct an independent building of apartments for being sold including a builder or a developer who has the power of attorney of the land on which the construction is to be carried out. Essentially, the Apex Court confirmed the findings given by the High Court in WRIT – C No. – 16616 of 2024 dated October 01, 2024, that the word ‘or’ was deliberately used in place of ‘and’ to not restrict the definition of promoter to the owner of the land and to include any person who is developing the land based on a power of attorney.
After considering the concerns about the restrictive interpretation of the definition of the expression ‘promoter’ in clause (zk) of Section 2 of the Real Estate Act, 2016 (RERA), as well as the deemed sanction of the project given by the Allahabad High Court, dated October 1, 2024, the Division Bench, comprising Justice B.V. Nagarathna and Justice K.V. Viswanathan refused to interfere with the findings of the High Court, that the project was deemed to be approved and that it was beyond the jurisdiction of UPRERA to reject Larsen & Toubro’s application.
The Bench also considered the findings by the High Court that “Section 5 (2) is clear that UPRERA has only two choices either allow the application for registration of the project within 30 days, or reject the same, but for any reason if the same is kept pending beyond the prescribed period of 30 days it would amount to a “deemed registration”. Hence, the application of the petitioner is deemed to have been registered after lapse of the mandatory period, since the same was not rejected, and it is mandatory on UPRERA to provide the registration number, Login ID, and Password to the petitioner.”
The Bench also observed that the concerns expressed by the petitioners have been fully taken care of and therefore, the deemed sanction which has been granted by the High Court does not call for any interference. However, the submissions with regard to the interpretation of Section 2(zk) of the Act, dealing with the meaning of the word “promoter” and Section 5(2) of the Act insofar as to when a deemed sanction can be recognized, the Bench left it open to be considered in any other appropriate case, and refrained from interfering with the reasonings of the High Court. Insofar as the interpretation of Section 2(zk) and Section 5(2) of the Act made by the High Court is concerned, the Bench reiterated that the observations of the High Court were fact-specific and shall not be construed as having a binding precedent.
As per the brief background of the case, Larsen & Toubro Limited entered into an agreement with Jaiprakash Associates Limited (JAL) for development in “Jaypee Greens Wish Town”, and JAL executed an irrevocable power of attorney in favour of the Respondent, who intending to develop 4 Towers, applied for registration of the first 2 towers with UPRERA. However, UPRERA asked the Respondent to seek clarification from the Suraksha Consortium, clarifying that the Project Land does not form part of the resolution plan of Suraksha Realtors. The Respondent claimed that it had rights over the project by registered agreements, and JIL was not to be added as a ‘Promoter’ in the project, which was corroborated by a letter issued by the Implementation and Monitoring Committee of JIL to UPRERA clarifying that the Respondent is the promoter/developer of the Project. However, UPRERA objected to the same. Since applications were kept pending for more than 30 days, the Respondent issued a letter stating that by virtue of Section 5(1) and 5(2) of the RERA Act, they were deemed to be approved and granted registration. The UPRERA, however, issued a notice stating that the Respondent had violated Section 3 of the Act as the project was not registered and could not be advertised.
Appearances:
Senior Advocates Shyam Divan & Arunabh Chowdhary, AOR Sarvesh Singh Baghel, and Advocates Yashvardhan Singh & Aniruddha Mahadevan Sethi, for the Petitioners
Senior Advocates Dr. Abhishek Manu Singhvi & Gopal Subramanium, AOR Shashank Shekhar Singh & Sudarshan Lamba, ASG Aishwarya Bhati, and Advocates Raunak Dhillon, Indranil Deshmukh, Saloni Kapadia, Gauri Subramanium, Avishkar Singhvi, Aishwarya Gupta, Karan Gandhi, Anchit Jasuja, Yash Johri, Pawan Bhushan, Raghav Kohli, Sakshi Raman, Abhinav Singh, Madhav Singhal, Suyash Pandey, Chitrangda Rashtravara, Vaishnav Kirti Singh & Jagdish Chandra
