Controversy over Carpet Area: Karnataka Tribunal Rules in Favor of Allottee Against Purvankara Limited

In a significant ruling by the Karnataka Real Estate Appellate Tribunal, a controversy surrounding the carpet area of a real estate project has been resolved. The case, registered as FR No. (K-REAT) 43/2023, involved Purvankara Limited, a renowned real estate company, and the Karnataka Real Estate Regulatory Authority, along with Mr. Adarsh Nahata, an allottee of a flat in the project called "Purva Westend." The appellant, Purvankara Limited, challenged an order passed by the Adjudicating Officer regarding a complaint filed by the allottee. The tribunal's decision, dated March 30, 2023, ruled in favor of the allottee.

Background and Allegations

The dispute arose when the complainant alleged that the promoter, Purvankara Limited, sold the flat with a specified carpet area of 1280.16 sq.ft., which was later found to be less than the agreed measurement. Seeking a remedy, the complainant filed a complaint with the Adjudicating Officer, requesting the return of the excess amount collected based on the miscalculated carpet area.

This Appeal was filed under Section 44 of the Real Estate (Regulation and Development) Act, 2016, before this Tribunal to set aside the impugned order dated 25.08.2020 passed in Complaint No.CMP/190728/0003748 passed by respondent No-1 Adjudicating Officer.

Expert Opinion and Impugned Order

To resolve the factual dispute regarding the carpet area, the Adjudicating Officer appointed an Engineer from the Karnataka Real Estate Regulatory Authority. The Engineer conducted an assessment by visiting the site and taking accurate measurements of the flat in question in the presence of both parties. Following the assessment, the Engineer submitted a report stating that the net carpet area actually sold was 1216.92 sq.ft., indicating a shortage of 63.24 sq.ft. in comparison to the sale deed's mentioned area of 1280.16 sq.ft.

Based on the Engineer's report, the Adjudicating Officer passed an order on August 25, 2020. The order allowed the complaint in part, directing Purvankara Limited to return the excess amount collected for the 63.24 sq.ft. shortfall within 30 days. Failure to comply would result in interest being charged at a rate of 2% above the Marginal Cost of Lending Rate (MCLR) of the State Bank of India (SBI) from the 31st day until the amount was paid.

Appeal and Non-Compliance

Unsatisfied with the decision, Purvankara Limited filed an appeal before the Karnataka Real Estate Appellate Tribunal on February 16, 2023. However, the registry raised objections, including the appellant's failure to deposit the total amount payable to the allottee as required by the proviso to Section 43(5) of the Real Estate (Regulation and Development) Act, 2016. Despite granting the appellant multiple opportunities to comply, including extensions, Purvankara Limited failed to meet the office objections, particularly the statutory deposit.

Dismissal of the Appeal

In light of the appellant's non-compliance with the office objections, specifically the failure to deposit the total amount payable to the allottee as per the impugned order, the Karnataka Real Estate Appellate Tribunal made its decision. Referring to the judgment of the Supreme Court in the case of M/s NEWTECH PROMOTERS AND DEVELOPERS PVT. LTD Vs. STATE OF U.P AND OTHERS, the tribunal determined that further time could not be granted. Accordingly, on [date], the tribunal dismissed the appeal for non-compliance with office objections, including the failure to make the statutory deposit.

Conclusion

The ruling by the Karnataka Real Estate Appellate Tribunal in the case of Purvankara Limited versus the Karnataka Real Estate Regulatory Authority and Mr. Adarsh Nahata brings closure to the controversy surrounding the carpet area of the "Purva Westend" project. The tribunal's decision, dated March 30, 2023, upholds the earlier order of the Adjudicating Officer, ruling in favor of the allottee.

The dismissal of Purvankara Limited's appeal highlights the significance of complying with office objections and statutory requirements in legal proceedings. The tribunal's adherence to the proviso of Section 43(5) of the Real Estate (Regulation and Development) Act, 2016 emphasizes the importance of the pre-deposit obligation for promoters filing appeals.

This ruling sets a precedent and serves as a reminder to all promoters and developers in the real estate industry to uphold transparency and accuracy in disclosing the carpet area to prospective buyers. It reinforces the rights of allottees and the authority's commitment to ensuring fair practices and consumer protection in the real estate sector.

Note: The information provided in this article about Karnataka Real Estate Regulatory Authority (KRERA) is for informational purposes only. It is not intended as legal or professional advice and readers should consult qualified professionals for advice specific to their circumstances. The information provided in this article is based on the FR No. (K-REAT) 43/2023 before the Karnataka Real Estate Regulatory Authority

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