'No need for bodies like Cidco to register plots with MahaRera'

In a landmark judgement, the state's housing authority MahaRera ordered that government bodies like Cidco cannot be asked to register with them while they are selling plots. The apex body of developers in the state, CREDAI-MCHI had filed a complaint against City and Industrial Development Corporation (Cidco) with MahaRera. The fight was that CREDAI-MCHI's Navi Mumbai unit wanted Cidco to register with Maharashtra Real Estate Regulatory Authority (MahaRera) while they auctioned plots to developers via tenders. However, MahaRera chairperson ordered otherwise. He stated that transactions (that is sale of plots) by Cidco doesn't fall under the definition of a real estate project and he disposed of the complaint for registration.

Cidco keeps on auctioning plots via tenders in Navi Mumbai, earlier this year, CREADI-MCHI's Navi Mumbai unit approached MahaRera complaining that Cidco through advertisements sold plots to its members without registering the sale transactions of plots under RERA act. They further alleged that Cidco is a promoter as per the definition of promoter laid down by the act and asked MahaRera to issue directions to Cidco to register the projects.

The counsel for Cidco objected and stated that the plots were not sold for plotted development('Plotted development' means the projects where land is developed into plots for the purpose of selling all or some of the plots.). They were sold to prospective developers via a public tender for construction of apartments to be sold to third persons and hence Cidco wasn't liable to register the sale of such plots with MahaRera.

According to section 3 of Rera, the promoters are under obligations to not advertise, sell, or market any apartment of building unless they register with MahaRera. And under section 2 (zn) a real estate project is defined as development of building, apartments, development of plots for the purpose of selling. Gautam Chaterjee, the chairperson of MahaRera while passing the order also looked into section 2 (s) of the act, where he stated that essentially development would mean development of immovable property in accordance with permissions for such development which are given by the competent planning authority.

He stated that in case of Cidco's sale of plots, permissions for development are yet to be given by the competent planning authority. Hence, they cannot be treated as sale for the purpose of plotted development, which comes under the definition of a real estate project. Instead, it is the developer who after taking over the plots from Cidco will seek permissions from competent planning authority to develop buildings on the plots and these development of buildings will have to be registered with MahaRera by the developers. And these real estate developers who have bought plot from Cidco would then be termed as promoters.

MahaRera further explained to developers that in cases where the building development on plots acquired from Cidco are dependent on off-site infrastructure that has to be developed by Cidco then they while registering their projects with MahaRera they can include Cidco as a promoter (landowner).

However, this didn't go well with the developers, Rajesh Prajapati, PR Committee Chairman, CREDAI MCHI, "CREDAI-MCHI, is exploring with the advocates whether this order of MahaRera to make Cidco co-promoter will be sufficient for protecting the interest of flat buyers. Many times it is seen that Cidco does not fulfill its obligations like provision of infrastructure etc whereby delaying the project which negatively affects the flat buyers for which builders are held responsible. In case we get opinion that flat buyers may not get relief, we may explore the option of going for an appeal against this order of MahaRera."