Petition challenging validity of MahaRERA Order defining ‘co-promoter’ disposed off after MahaRERA withdraws impugned Order

Bombay High Court: While deciding the petition which challenged the validity of the Order passed by the Maharashtra Real Estate Regulatory Authority wherein it had defined the term ‘co-promoter’ as the same was not defined in the Real Estate (Regulation and Development) Act, 2016, the Division Bench of Naresh H. Patil and R.G. Ketkar, JJ., allowed the petitioner to withdraw the instant petition after the Office of Maharashtra Real Estate Regulatory Authority withdrew its impugned Order dated 11.05.2017 which defined ‘co-promoter’.

On 11.05.2017, the Secretary, Maharashtra Real Estate Regulatory Authority had passed an Order in exercise of the powers vested in the Authority under Regulation 38 of the Maharashtra Real Estate Regulatory Authority (General) Regulations 2017. Thus ‘co-promoter’ was defined as “person(s) or organization(s) who, under any agreement or arrangement with the promoter of a Real Estate Project is allotted or entitled to a share of total revenue generated from sale of apartments or share of the total area developed in the real estate project. The liabilities of such Co-Promoters shall be as per the agreement or arrangement with the Promoters, however for withdrawal from designated Bank Account, they shall be at par with the Promoter of the Real Estate Project.”

The counsel for the petitioner argued that RERA defines ‘promoter’ under Section 2(zk) and Regulation 38 does not really empower the Authority to create a new term and notify the same in absence of statutory provisions under RERA. As per the counsel, Regulation 38 only empowers the Authority to issue orders ensuring the proper implementation of the Act and not to interpret the Act. Meanwhile the Secretary of the Authority submitted an affidavit before that Court that the impugned Order was passed only as to clarify the definition of ‘promoter’ and to bring about more transparency in the process of registration, ease of maintenance of accounts etc.

The counsel for the State and Authority put forth before the Court that the impugned Order has been thus withdrawn, and the same shall be replaced by an appropriate Order as expeditiously as possible with effect from the same date i.e. 11.05.2017. Not going into the averments made by the respondents in their affidavits, the Court accepted the request of the respondents to dispose off the petition as the grievance of the petitioner had been taken care of. [Ismail Ibrahim Patel v. State of Maharashtra,  2017 SCC OnLine Bom 9132, decided on 14.11.2017]

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