- Author – Adv. Mohit Khandelwal
- Co Author – Harsh Khandelwal
The Real Estate (Regulation and Development) Act, 2016 (“RERA”) balances the rights of homebuyers and obligations of promoters by enforcing accountability, transparency, and legal discipline. In the case of *South Ex Resident Welfare Society v. Virgo Buildestate Pvt. Ltd.*, questions arose about the legality of layout plan alterations, misuse of common areas, and the promoter’s obligations post-registration of the Project. This article delves into the legal, factual, and regulatory intricacies of the abovementioned case.
1. Introduction
The South Ex township project in Jaipur was launched as an integrated residential township. The Promoter provided several assurances concerning the amenities and distributed a Brochure at the launch of the project. Although the Project was scheduled for completion in 2016, the Respondent Promoter did not deliver the promised amenities as initially outlined.. The project suffered from incomplete amenities and instead of completing the same, a controversial bifurcation by was done by the promoter into a second RERA-registered project—“South Ex A Block” on the same land and area, onto which the Club House of the initial project was to be developed.
The residents, through their welfare society, alleged fraud, delay, and non-compliance with statutory obligations by the Promoter and approached the Ld. RERA Authority and subsequently the Hon’ble REAT.
The REAT’s decision in this matter adds critical legal weight to the question of whether a promoter can alter the project structure and avoid liability by re-registering parts of an incomplete project.
2. Key Facts
Unified Scheme Misrepresented as Phased Development:- The original brochure and agreements did not mention any “phased” approach. All components (residences, clubhouse, shopping area) were part of one plan and one Project i.e., “South Ex”.
Clubhouse and Amenities Unfulfilled: Despite charging “clubhouse membership” fees, the promoter never constructed the promised facility and subsequently proposed to modify the area into smaller one from what was originally promised.
Completion Certificate Challenged:- JDA’s certificate issued in 2017 for the “entire project” was later clarified that it was issued for partial construction. The REAT acknowledged this misrepresentation and found that the project is liable to be registered and the Completion Certificate is not valid.
New Project on Common Area Land:- “South Ex A Block” was registered on the very land originally promised for common amenities like “COSMOS” (clubhouse) and “PROMONT” (residential tower) in the initial project i.e., “South Ex”.
3. Legal Violations and Analysis
3.1 Section 14 RERA Act –Modification Without Consent:-
Promoter unilaterally modified the layout plan without the consent of two-thirds of allottees.
REAT Findings:- The Tribunal held that the revision of the layout plan without following the consent procedure under Section 14 was not sustainable. It recognized the construction of a separate project on common area land as a violation of both the Act and buyer trust.
3.2 Section 17 RERA –Transfer of Common Areas:-
Promoter failed to transfer common areas to the RWA, and instead claimed them for future commercial use.
REAT and RERA Authority Reiterated that ownership over such land vested with allottees, and promoters had no residual rights to carve out new projects on areas promised for collective use.
3.3 Section 7 RERA:- Grounds for Cancellation:-
Although the Tribunal did not outright cancel the new project, it ordered status quo on the land marked as “COSMOS” and prohibited further alienation or construction until the dispute is resolved through re-adjudication by the RERA Authority. RERA Authority vide its order had held that the Respondent Promoter was directed to get both the project “South Ex and South Ex- A Block” registered as an “integrated project” with the RERA Authority.
4. Doctrinal Support from Precedents:-
Supertech Ltd. v. Emerald Court:- Unauthorized structures constructed without allottees’ consent were ordered to be demolished.
Madhuvihar CHS v. Jayantilal Investments & Dosti Corp. v. Sea Flama CHS: Consent for plan change must be specific, informed, and not buried in general sale agreements.
Adinath Srinivasa Foundations v. Serene: Multiple approvals cannot be misused to split one integrated project after the fact.
Ashok Kumar Shivpuri v. Ashok Chajjar (NCDRC 2019): Facilities mentioned in brochures are binding; failure to deliver constitutes deficiency of service.
5. Impact of the Tribunal’s Findings:
The Appellate Authority made several legally significant determinations and acknowledged the interconnected nature of both projects. It recognized the RWA’s legal standing and right to enforce promises made through promotional materials.
It held that non-development of clubhouse despite charges was unjustifiable and directed the Developer to maintain status quo and restrained misuse of the disputed area (COSMOS/PROMONT). This outcome reinforced judicial intolerance for post-hoc phase manipulation and denial of collective amenities.
6. RERA Order:- Impact
Hon’ble REAT remanded the matter back to the RERA Authority to decide the complaint on merits, subsequently, RERA Authority, after hearing the parties had upheld the trust of the allottees upon the RERA Act and had held that the Respondent promoter is directed to get both the projects – “South Ex” and “South Ex- A Block” registered as “an integrated project” with the Authority along with the direction to construct the ‘Clubhouse” and all other common facilities/common areas/essential amenities as promised in the brochure of the project “South Ex” at the same location, with the same area. After completion, the respondent shall immediately hand over the management of common areas/facilities to the RWA. Hon’ble RERA further held that in case if the Promoter wishes to change the original plan the explicit consent of the allottees is required as the same was enshrined under the Section 14 of the RERA Act.
The RERA Authority had relied on the judgment passed by the REAT and had upheld the trust of the allottees who were fighting for their unqualified rights.
Conclusion
The South Ex case is a landmark in interpreting ‘buyer rights over common amenities’, ‘limits of promoter discretion’, and ‘regulatory power under Section 7 of RERA’. The REAT’s order and RERA Order, by preserving the sanctity of original project representations and curtailing unauthorized modifications, strengthens the enforceability of RERA’s core protections.
For homebuyers and RWAs across India, this decision sets a judicial precedent: “Once a project is sold with specific amenities and site plans, promoters cannot rewrite the promise.”