Mumbai: ‘Do industrial estates, units come under ambit of RERA?’

MahaRERA and the MahaRERA appellate tribunal have stated that industrial units are not under RERA’s ambit Representation pic

Is the Real Estate (Regulation and Development) Act (RERA) applicable only to residential projects or is it also for resolving disputes involving industrial units and industrial estates? Interpretation of provisions laid under RERA by different RERA authorities in the country and that by MahaRERA and appellate tribunals of MahaRERA, has compelled litigants and their lawyers to demand clarity from the government.

Ramesh Prabhu, founder chairman of MahaSEWA, said, "The purpose of RERA is to protect the interests of apartment purchasers. The word apartment is defined in RERA as all construction activities carried out for residential and commercial use. The latter includes industrial, offices and other allied services; therefore, industrial estates and industrial units, which involve the construction of the said industrial building, are very much within the ambit of RERA. However, MahaRERA and the MahaRERA appellate tribunal, have interpreted this differently - stating that industrial units and estates are not under the ambit of RERA.

Prabhu stated, "The Tamil Nadu RERA Appellate Tribunal, in a recent order, held that all types of construction activities are considered real estate projects and whenever such projects are sold as under-construction properties, all the provisions of RERA are equally applicable, and, accordingly, the tribunal directed that such industrial projects be registered with RERA. However, the scenario in Maharashtra is different."

He added, "In the recent case of M/s Techno Drive Engineering Pvt Ltd v/s Renaissance Indus Infra Pvt Ltd, even though the real estate project was registered with MahaRERA, both the latter and the appellate tribunal surprisingly ignored this aspect and rejected the petition on the ground that the industrial units are not covered under RERA. The petitioners had done their bookings in the upcoming industrial units and were deprived of interest for delayed possession in the said project."

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According to Prabhu, this contradicts the landmark judgment passed by the Bombay High Court in 2017 in the case of Neelkamal Suburban Realtors Pvt Ltd v/s Union of India, wherein it was held that once a real estate project is registered with RERA, all provisions of RERA become applicable.

Asked about the number of industrial units and estates registered with MahaRERA, Prabhu replied, "The MahaRERA portal does have a provision to register industrial projects and many such upcoming industrial units/estate projects are already registered on the portal. This also means that these industrial projects come under the ambit of MahaRERA. However, the order in the above case has led to confusion for both the litigants and their lawyers, who have now sought clarity from the government."

Prabhu stated that if the government does not clarify this issue, industrial units likely to be constructed in the future will not be registered with MahaRERA and those buying such units will not have protection from errant developers.

Advocate Vinod Sampat, founder and president of the Flat Users Residents Welfare Association, said "Different RERA authorities across the country are taking different interpretations as regards the law's provisions. The need of the hour is proper coordination at the Central level whereby a circular should be issued to the states so that policies and decisions pertaining to RERA are uniformly followed by the latter. A classic example of the same is pertaining to the applicability of RERA for industrial premises. Irrespective of the fact whether the same is applicable or not, a policy decision is required because RERA is a Central act."

He added that standing orders must be issued by the Centre clarifying various points. Advocate Godfrey Pimenta, trustee of the Watchdog Foundation, said, "The interpretation of RERA which holds that it does not apply to the purchase of industrial premises would lead to disastrous consequences since all forms of investment in the real estate sector is required to be protected."