In a key legal victory for infrastructure giant Larsen & Toubro (L&T), the Allahabad High Court has nullified a notice issued by the Uttar Pradesh Real Estate Regulatory Authority (UP RERA) that had prohibited the sale of flats in L&T’s Green Reserve project in Sector 128, Noida. The court has granted L&T the green light to continue selling flats in the project, following months of regulatory disputes.
As reported by the Times of India, the judgment, passed on Oct. 1 by a bench comprising Justices Mahesh Chandra Tripathi and Prashant Kumar, stated that the notice issued by UP RERA, which labeled the sale of flats as illegal due to a lack of proper registration, was invalid. The court referred to Section 5(2) of the Real Estate (Regulation and Development) Act, 2016 (RERA), which mandates that the regulatory authority must either approve or reject a project’s registration within 30 days of application. If the authority fails to respond within that timeframe, the project is automatically considered registered.
In L&T’s case, the court determined that since RERA had not responded to its registration application within the statutory period, the Green Reserve project was automatically registered. The ruling allows L&T to continue selling flats and advertising the project, without facing penalties under Section 3 of the RERA Act, which pertains to violations related to unregistered projects.
A significant part of UP RERA’s opposition to L&T’s application was based on its assertion that Jaypee Infratech Ltd. (JIL) should be listed as a co-promoter of the Green Reserve project. In July 2017, L&T acquired development rights for a portion of land allotted to JIL through an agreement. The deal involved a payment of Rs 487.5 crore to JIL and granted L&T a general power of attorney (GPA) authorizing the development of the Green Reserve project, which comprises four towers.
RERA argued that since the land was originally allotted to JIL, the company should be listed as a co-promoter. However, the court ruled that JIL’s role was limited to executing sub-lease deeds in favor of the homebuyers, as per the agreement signed between the two companies, and did not extend to promoting the project. Therefore, JIL’s inclusion as a co-promoter was deemed unnecessary.
The case’s background highlights L&T’s repeated efforts to secure project registration from RERA. On June 2, 2023, L&T initially applied for RERA registration for Towers 1 and 2 of the Green Reserve project. However, the application was rejected on July 6, 2023, due to what RERA described as “technical issues.” Additionally, RERA continued to assert that JIL should be listed as a co-promoter.
L&T re-applied on July 21, 2023, contending that it was within its rights to develop the project and sell the flats, based on the GPA it held from JIL. Despite RERA not formally rejecting the application, the authority continued to raise objections over JIL’s non-inclusion as a co-promoter.
Undeterred, L&T submitted a third registration application on Aug. 23, 2023, this time for Towers 3 and 4 of the project. Once again, RERA issued notices on Sept. 2 and Sept. 11, asking the company to explain JIL’s absence as a promoter for Towers 1 and 2. L&T maintained its stance that JIL’s role was limited to executing sub-leases, and no formal rejection of the application was issued.
On May 8, 2023, despite the ongoing registration process, RERA issued a notice to L&T, claiming that the company had violated Section 3 of the RERA Act by allowing a private agency to advertise flats in the Green Reserve project on its website, without proper registration. L&T challenged this notice in the Allahabad High Court, asserting that the project was automatically deemed registered due to RERA’s failure to respond to their applications within the statutory 30-day period.
The court’s Oct. 1 ruling validated L&T’s position, dismissing RERA’s objections and affirming that no penalties could be imposed under Section 3 of the RERA Act. The court also instructed RERA to issue the necessary registration numbers and access credentials to L&T for the Green Reserve project.
This judgment is expected to have broader implications for the real estate sector, particularly regarding regulatory delays and automatic registration provisions under the RERA Act. The decision strengthens the position of developers facing similar delays in obtaining project approvals, ensuring that they can continue marketing and selling properties when regulatory authorities fail to meet deadlines.
For prospective buyers, the court’s decision offers clarity and reassurance about the legality of their purchases in the Green Reserve project. By upholding the automatic registration provision, the ruling reduces uncertainty for homebuyers and developers alike, promoting greater transparency in the real estate market.
The Allahabad High Court’s ruling has brought much-needed relief to L&T and potential homebuyers in its Green Reserve project. The case highlights the importance of timely regulatory responses and underscores the automatic registration provisions under the RERA Act, which protect developers from undue delays. With this judgment, L&T is now fully empowered to proceed with its project, and prospective buyers can move forward with confidence in their investments.