Maharashtra Tribunal Directs CIDCO to Register Land Schemes as Real Estate Projects
The Maharashtra Real Estate Appellate Tribunal (MREAT) has ruled that the City and Industrial Development Corporation (CIDCO) must register its land schemes as real estate projects, aligning with the Real Estate (Regulation and Development) Act of 2016.
Real EstateCidcoMreatMchiRegulatory ComplianceReal EstateOct 28, 2024
The core issue was whether these transactions qualified as real estate projects under the law, despite pending development permissions from the relevant planning authority. The MCHI raised this concern in October 2018, asserting that CIDCO had not registered as a project promoter before initiating a scheme to allot and sell land plots through tenders. MCHI argued that its members, as allottees, had rights under the Real Estate (Regulation and Development) Act of 2016, which designated CIDCO as a promoter.
After thorough deliberation, the MREAT concluded that CIDCO's activities fell under the definition of development work as per Section 2(t) of the Real Estate Act. The Tribunal noted that the various development activities, such as transforming raw land into approved layout plots, qualified as real estate projects. As a recognized planning and development authority, CIDCO's selling or marketing of these plots established it as a legitimate real estate project.
The MREAT further ruled that CIDCO indisputably held the designation of a promoter (Town Development) for its land subdivision work. The legal arguments presented by CIDCO's counsel were deemed insufficient under Section 2(zk)(ii) of the Act, which stipulates that when the seller of the plots is different from the developer, both parties must be considered promoters under the law.
The ruling mandates CIDCO to adhere to the provisions of the Real Estate (Regulation and Development) Act. This includes converting both past and future schemes into compliant, registered projects before any plot sales proceed. This requirement applies regardless of whether the dealings conform to the Maharashtra Regional and Town Planning Act (MRTP) or the Non-Agricultural Land Development Rules (NMDLR), and irrespective of CIDCO’s responsibilities for on-site or off-site infrastructure development.
This decision underscores the importance for CIDCO to comply with the regulations set forth in the Real Estate (Regulation and Development) Act of 2016. By formally registering itself as a promoter for its town development schemes, CIDCO will enhance transparency and regulatory adherence in its land sales and development practices. This move is expected to better protect the rights of stakeholders and prospective buyers, setting a precedent for other developers to follow, thereby fostering a more structured and trustworthy real estate market in the region.
The implications of this ruling are far-reaching, potentially influencing the industry to adopt higher standards of compliance and accountability. This could help prevent similar legal disputes in the future, contributing to a more transparent and reliable real estate market in Maharashtra.
Frequently Asked Questions
What is the Real Estate (Regulation and Development) Act of 2016?
The Real Estate (Regulation and Development) Act of 2016 is a law in India aimed at protecting home buyers and promoting transparency, accountability, and efficiency in the real estate sector. It mandates the registration of real estate projects and the disclosure of key information to buyers.
Who is the City and Industrial Development Corporation (CIDCO)?
CIDCO is a statutory authority in Maharashtra, India, tasked with the development of new towns and industrial areas. It plays a crucial role in urban planning and infrastructure development.
What was the main issue in the MCHI complaint against CIDCO?
The main issue in the MCHI complaint was that CIDCO had not registered as a project promoter before initiating a scheme to allot and sell land plots through tenders, despite the requirements of the Real Estate (Regulation and Development) Act of 2016.
What did the MREAT rule regarding CIDCO's land sale transactions?
The MREAT ruled that CIDCO's land sale transactions qualified as real estate projects and that CIDCO must register as a promoter and comply with the Real Estate (Regulation and Development) Act of 2016.
How does this ruling affect the real estate market in Maharashtra?
This ruling is expected to enhance transparency and regulatory adherence in land sales and development practices, potentially setting a precedent for other developers to follow and contributing to a more structured and trustworthy real estate market in Maharashtra.
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