MANU/RR/0002/2022

BEFORE THE REAL ESTATE REGULATORY AUTHORITY

RAJASTHAN
Comp. No. RAJ-RERA-C-2020-3971
Decided On: 05.01.2022
Shyam Goyal Vs. ARG Developers Pvt. Ltd.
Hon'ble Judges/Coram:
Shailendra Agarwal, Member
Counsels:
For Appellant/Petitioner/Plaintiff: Aditya Bohra, Adv. and Prateek Goyal
For Respondents/Defendant: Praneti Agarwal, CA
ORDER
Shailendra Agarwal, Member
1 . In the Instant case, the complainant Shyam Goyal, was represented by his son
Prateek Goyal and Advocate Aditya Bohra. They argued that the complainant Shyam
Goyal was the landowner in respect of the project in question and entered into a
development agreement dated 03.07.2014 with the respondent promoter granting the
rights of development of the said project to the respondent and agreeing for 50 percent
of the sale proceeds to be given to the complainant. They further argued that the
project was to be completed by 03.01.2018 but the project was not completed by the
developer even by today. He alleged that the respondent promoter obtained a bank loan
of Rs. 24 crore which was not paid back, as a result of which, it became categorized a
Non-Performing Asset (NPA) and further alleged that the respondent siphoned away
huge amounts of money from the project. The complainant argued that they executed a
supplementary deed on 14.09.2020, by virtue of which, the developer agreed to
complete the project and obtain the completion certificate by January, 2021. However,
the respondent could not adhere to this time limit also and instead, obtained a
completion certificate from the empanelled architect on 13.04.2021 despite the fact that
the project was not complete even today. They further argued that looking at the
grievances of the allottees and the incompetence of the respondent, the complainant
also contributed his own funds and became a developer in his own right in the said
project and tried to get the project completed. However, the respondent with malafide
intention stopped payments from the escrow account opened in the bank for the
purpose of construction of the said project. The respondent, it was alleged, also refused
to sign the sale deeds for the allottees who have paid or willing to pay the entire sale
consideration. The contention of the complainant was that the allottees have also
initiated civil as well as criminal litigation against the complainant as well as against the
respondent; the project land has been mortgaged by the developer with the bank and
the complainant has also become an aggrieved person under section 31 of the Real
Estate (Regulation and Development) Act, 2016 (hereinafter called 'the Act'); They
further argued that even though the respondent has obtained the completion certificate
from an empanelled architect, the respondent has not been able to obtain the electricity,
water, sewerage or fire NOC from the requisite authorities. In view of the above
allegations and the failure of the developer to adhere to the deadlines regarding

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completion of the project, the complainant prayed for dismissing the respondent to be
the promoter of the project and appoint the landowner as the deemed promoter of the
project and be allowed to complete the construction of the project in the capacity of the
promoter. They further prayed to be allowed to withdraw money from the escrow bank
account in the capacity of a promoter and be vested with the exclusive rights to execute
the sale deeds with the allottees as per the provisions of the Act. Finally they prayed for
the respondent to be black-listed on the web portal of the Authority.
2 . The respondent ARG Developers Pvt. Ltd. was represented by CA Praneti Agarwal,
whose arguments started with the prayer that the instant complaint was not
maintainable as it has been filed by the land owner and a co-promoter of the project.
The complainant being the land owner and by his own admission the promoter of the
project, is neither an allottee nor an aggrieved person in terms of the Real Estate
(Regulation and Development) Act, 2016 and the case was, therefore, not within the
jurisdiction of the Authority. She argued that the inter-se disputes between the
promoter and the co-promoter or those between the promoter or the land owners, are
not within the jurisdiction of the Authority and are liable to be dismissed. In support of
her arguments she argued that the web portal of the Authority clearly mentions Shyam
Goyal as the other promoter. She cited the judgment delivered by this Authority on
12.06.2019 in Complaint No. RAJ-RERA-C-2017-2105 Raghunath Prasad Jain Vs. Arihant
Dream Infra Projects Ltd. and the judgment dated 17.03.2021 delivered in Complaint
No. RAJ-RERA-C.F. 7(7) Star Valley Real Estate Pvt. Ltd. Vs. SNG Real Estate Pvt. Ltd.
whereby it has been held that this Authority is not an appropriate Forum for the
settlement of disputes between the landowner and the promoter and such disputes
between the promoter or the co-promoter or between the land owner and the
promoters, are not maintainable under the aforesaid Act. With these arguments, the
respondent prayed that the complaint be dismissed as not being maintainable.
3. We have heard the arguments made on behalf of both the parties and examined the
case file in detail. It is admitted that the complainant is a landowner as well as the
promoter. This has been admitted by the complainant in the oral arguments as well as
the written arguments submitted by the complainant to this Authority. It has also been
admitted by the complainant that the dispute between the landowner and the promoter
is regarding the alleged violation of the development agreement, delay in completing
the project and stoppage of payment from the escrow bank account of the project. We
have also noticed that no allottee has approached this Authority regarding non-
fulfilment of the obligations of the respondent promoter towards them or towards the
Authority. It is only the landowner who, by way of supplementary agreements with the
respondent promoter, has also become a promoter or a co-promoter, and has
approached this Authority for dismissing the respondent as the promoter of the project
and appointing the complainant as exclusive promoter of the project with the exclusive
power to operate the escrow bank account and sign the sale deeds as well. We are very
clear that the jurisdiction of the Real Estate Regulatory Authority extends to the
complaints filed by the aggrieved persons as brought out by section 31 of the Act. No
person who is not aggrieved within the definition of this Act, is entitled to get a relief
under the provisions of this Act. A landowner or a business partner or a co-promoter is
not an allottee. The complainant being the landowner and by his own admission also, a
promoter is not an aggrieved person under section 31 of the Act and any dispute arising
out of the development agreement or a collaboration agreement or any understanding
whatsoever between the landowner and the promoter or between the two co-promoters,
has to be adjudicated by another appropriate Forum, which is certainly not this
Authority. It is also clear that the respondent promoter has got the rights and
obligations. We are also clear that a promoter and a landowner or two co-promoters

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have rights and obligations towards each other as agreed between them in the
development agreement signed by the two parties and if any dispute arises between the
two parties for the breach of conditions of such development agreement the appropriate
Forum for such litigation is a Civil Court and not this Authority. We reiterate and
reproduce our observations brought out in our judgment dated 17.03.2021 in Complaint
No. RAJ-RERA-C.F.7(7) Star Valley Real Estate Pvt. Ltd. Vs. SNG Real Estate Pvt. Ltd.,
as under:
...We are clear that no dispute between the promoter and the landowner can
involve contravention or violation of the provisions of the Act or the Rajasthan
Real Estate (Regulation and Development) Rules, 2017 (hereinafter called 'the
Rules') and regulations made thereunder. Section 34 (f) of the Act, clearly
brings out that one of the functions of the Authority is to ensure the compliance
of the obligations cast upon the promoters, allottees and the real estate agents
under this Act and the Rules and Regulations made thereunder. But the
Authority has no obligation for the dispute between the landowner and the
promoter in regard to the development agreement or the collaboration
agreement signed between the two. We are in agreement with the observations
made in the cited judgment dated 12.06.2019 (Raghunath Prasad Jain Vs.
Arihant Dream Infra Projects Ltd.) that all the obligations of the promoter
enumerated under the Act, are either towards the allottees or towards the
Authority, but there is no obligation the promoter has towards the landowner in
business. The Authority is competent only to deal with the violations or
contravention of the Act and it would be wrong to invoke the jurisdiction of this
Authority as has been done by the complainant who is a landowner in dispute
with the promoter and not an allottee. The Act provides for the remedial action
for the allottees of a real estate project and the disputes between the developer
and the landowners are not in the ambit or jurisdiction of the Authority. Thus,
this Authority is not an appropriate forum for the settlement of disputes
between the landowner and the promoter and the complaint filed by the
complainant landowner against the respondent promoter, does not appear to be
maintainable under this Act".
4. In view of the above observations and findings, the complaint is dismissed for want
of jurisdiction. However, the complainant is at liberty to approach the proper Forum
having civil jurisdiction for redressal of his grievance against the respondent.
5. The present matter stands disposed of.
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