The Allahabad High Court has ruled in favour of Larsen & Toubro (L&T), allowing the company to sell flats in its Green Reserve project in Sector 128 after overturning a Real Estate Regulatory Authority (RERA) decision. The court found that the project was automatically registered due to RERA's failure to respond to L&T's application within 30 days, dismissing RERA's claims regarding co-promoters and instructing the authority to issue necessary registrations. This ruling enables L&T to continue its sales and marketing efforts without facing penalties.
The Allahabad High Court has overturned a decision by the Real Estate Regulatory Authority (RERA) of Uttar Pradesh against Larsen & Toubro (L&T), allowing the infrastructure company to proceed with the sale of flats in its Green Reserve project located in Sector 128. In a ruling delivered on 1 October, Justices Mahesh Chandra Tripathi and Prashant Kumar stated that RERA's notice labelling the sale of flats as illegal due to a lack of registration was invalid, as the project was considered registered due to the authority's failure to respond to L&T's application within the required 30-day timeframe.
The court referenced Section 5(2) of the RERA Act, which stipulates that the authority must either approve or reject a project registration application within 30 days. If no action is taken within that period, the project is automatically deemed registered. The bench permitted L&T to proceed with its advertisements for the sale of flats, stating that no penalties could be imposed on the company under Section 3 of the RERA Act. Additionally, the court dismissed RERA's claim that Jaypee Infratech Ltd (JIL) should be regarded as a co-promoter of the project. RERA was instructed to provide the necessary registration numbers and access credentials to L&T. In July 2017, L&T obtained development rights for a portion of land allocated to JIL through an agreement.
The company paid INR 487.5 crore to JIL and received a general power of attorney, granting it the authority to develop the Green Reserve project, which consists of four towers. On 2 June of last year, L&T submitted an application to RERA for the registration of Towers 1 and 2. However, the regulatory authority rejected the application on 6 July 2023, citing "technical issues." It also stated that JIL should be recognised as one of the promoters of the project, as the land had been allocated in its name. Subsequently, RERA requested clarification from Suraksha Group, which had acquired JIL, to confirm that the land on which the Green Reserve project is being developed was not involved in any insolvency proceedings.
On 21 July of that year, L&T submitted another application, asserting its rights to develop the project and sell flats, backed by the power of attorney obtained from JIL. Despite this, RERA continued to express objections, maintaining that JIL should be regarded as a co-promoter, yet did not formally reject the application. Subsequently, on 23 August of last year, L&T filed a third registration application with RERA, this time for Towers 3 and 4.
Once more, on 2 and 11 September 2023, RERA issued notices to L&T, requesting an explanation for JIL's exclusion as a promoter for Towers 1 and 2. L&T stood firm in its position, asserting that JIL's involvement was confined to executing sub-lease deeds for homebuyers as per their agreement. After facing inaction regarding its applications, L&T proceeded to publish advertisements for the sale of its flats.
However, on 8 May of this year, RERA notified the realtor that it had breached Section 3 of the RERA Act by permitting a private agency to publish advertisements for the Green Reserve project on its website. In response, L&T contested this notice in the high court, contending that the project should be considered registered since RERA had not formally rejected its application within the stipulated 30-day period.
The Allahabad High Court's decision in favour of Larsen & Toubro (L&T) underscores the importance of adherence to procedural timelines by regulatory authorities. By overturning RERA's notice and allowing L&T to proceed with its Green Reserve project, the ruling highlights the legal protection offered to developers when authorities fail to act within the mandated time frame, thereby reinforcing the principles of justice and regulatory compliance.
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