Karnataka RERA Recalls Orders Transferring Decrees to Civil Courts Without Hearing

The Karnataka Real Estate Regulatory Authority (K-RERA) has taken a significant step by recalling its earlier orders that permitted the transfer of decrees to civil courts. The authority, in an order dated November 17, 2025, ruled that such orders were void due to a violation of natural justice. The coram of Chairman Rakesh Singh and Member Gurijala Ravindranadha Reddy emphasized that any order passed without notice to an affected party is unsustainable and falls within the category of decisions passed without jurisdiction.

The controversy arose from objections raised by allottees of the “Nitesh Long Island” residential project in Bengaluru. These allottees alleged that the developer had failed to complete the agreed infrastructure and common facilities. The issue was initially resolved through a Joint Memo recorded before the Lok Adalat on February 11, 2023, which attained the status of a civil court decree. Subsequently, the allottees filed Decree Transfer Petitions under Sections 40 and 57 of the RERA Act, seeking the transfer of the decree to the competent civil court. The Authority allowed these petitions without issuing notice to the developer.

The developer challenged these ex-parte Decree Transfer Petition orders, arguing that they were legally unsustainable as they were passed without notice or hearing, thereby violating principles of natural justice. The developer also claimed that it had substantially complied with its obligations under the Joint Memo.

During the proceedings, the authority directed a technical committee led by an Assistant Executive Engineer of Karnataka RERA to conduct a spot inspection. In its report dated May 23, 2025, the Committee found that while certain components had deteriorated due to poor maintenance, the major infrastructure and facilities contemplated under the Joint Memo had been completed. Both parties accepted the Committee's assessment that the remaining deficiencies were minor, incidental, and technical in nature, not attributable to deliberate non-compliance by the Developer.

Recalling its earlier orders, the Authority held that permitting decree transfer without first undertaking execution proceedings was contrary to Section 38(2) of the Act, which mandates adherence to principles of natural justice. On the issue of its power to recall, the Authority cited the precedent set by Asit Kumar Kar, Budhia Swain, and Indian Bank, which recognizes the inherent power of tribunals and quasi-judicial authorities to recall orders passed without jurisdiction or in violation of natural justice or due to procedural irregularities that strike at the root of the decision.

The Authority further ruled that decree holders cannot circumvent RERA and immediately seek transfer of decrees to Civil Courts. Instead, execution must first be sought before the Authority, where non-compliance must be established after notice to the judgment debtor and an opportunity for a hearing. On this basis, the earlier Decree Transfer Petition orders were recalled, with liberty granted to the complainants to initiate execution proceedings before RERA.

This decision underscores the importance of due process and the principles of natural justice in legal proceedings, ensuring that all parties have a fair opportunity to be heard before any final decisions are made.