Tri Star Hotels PVT LTD vs. Curo INDIA PVT LTD And Ors

Facts

Tri Star Hotels Private Limited (appellant) filed a complaint before the Real Estate Regulatory Authority (RERA), Punjab, against Curo India Private Limited and others (respondents). The appellant alleged that based on representations regarding land acquisition and conversion for a five-star hotel, they paid Rs. 6.50 crores to the respondent company between 2005 and 2006. An agreement to sell dated July 19, 2006, stipulated a sale consideration of Rs. 12.50 crores for 1.53 acres. However, in 2008, the respondents informed the appellant that the project was not possible due to inadequate frontage. Despite assurances from 2008 to 2019, the appellant discovered in 2020 that the respondents had renamed their company and developed residential and commercial projects on the same land. The appellant sought revocation of the respondents' RERA registration and compensation. The Authority dismissed the complaint, and the Real Estate Appellate Tribunal upheld this decision. The appellant then filed the present appeal before the High Court.

Held

The Court held that the Authority did not apply its mind properly while granting the registration and successive revised registrations for both projects. Similarly, the learned Tribunal failed to consider the matter adequately. Consequently, the Court found it appropriate to remit the matter back to the Authority for reconsideration. The appeal was allowed, and both impugned orders were set aside. The matter was remanded to the Authority with a direction to re-examine the registration/revised registration of the projects, namely Curo One Part I Commercial and Curo One Part II Residential, and pass a fresh order in accordance with law by August 31, 2023. The liberty granted by the Tribunal to the appellant to maintain his complaint against the respondent for non-disclosure of vital information was also preserved.

Key Issues

1. Whether the Real Estate Regulatory Authority (RERA) has the jurisdiction to entertain a complaint where the cause of action arose prior to the enforcement of the Real Estate (Regulation and Development) Act, 2016 (the Act of 2016)? The appellant contended that the Act of 2016, particularly Section 71, allows the Authority to adjudicate disputes even if the cause of action predates the Act, provided the complaint is filed after its commencement. The respondents argued that the Act applies prospectively and the Authority lacks jurisdiction as the cause of action arose before the Act's enforcement. 2. Whether the registration of the respondent's projects with RERA was granted erroneously, warranting revocation? The appellant argued that the respondents engaged in fraudulent practices and violations of the Act, justifying revocation under Section 39 of the Act. The respondents countered that the agreement to sell was frustrated due to a notification mandating a larger frontage for hotels, and the appellant failed to honor their commitment to pay an additional sum. They also claimed no communication occurred after 2008 until the complaint was filed. The Authority and Tribunal had dismissed the complaint.