Applicability Of Real Estate (Regulation And Development) Act 2016 To Industrial Premises

Ankur Mittal, Additional Advocate General Haryana
Punjab & Haryana High Court, Chandigarh
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Date : 06/02/2021
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Applicability Of Real Estate (Regulation And Development) Act 2016 To Industrial Premises

It is said that the preamble is the key to understand the underlying philosophy of an Act and is a declaration by the legislature of the reasons for the passing of the statutes to which it is prefixed. It is the preliminary part of legislation, setting out what is all about or for it has been prepared, especially expresses the general purpose of the piece of legislation. However, it neither enlarges nor confers any powers. Accordingly, from the perusal of the preamble of Real Estate (Regulation and Development) Act, 2016, it transpires that the Act of 2016 aims to establish the real estate regulatory authority for regulation and promotion of the real estate sector and further to ensure the sale of `plot', `apartment' or `building' or sale of `real estate project', in an efficient and transparent manner and also to protect the interest of consumers.

There has always remained uncertainty as to whether the allottee of an Industrial `Plot' or `Building' or `Apartment' can seek the legal recourse provided under the Act of 2016 or whether the real estate project for Industrial Purpose is included within the ambit of Act of 2016. Suffice to mention that the uncertainty has ascended from the legislative history of the Act of 2016. The Real Estate (Regulation and Development) Bill, 2013 was initially introduced in the Upper House of the Parliament and it was only extended to premises under residential and allied purposes. Thereafter it was referred to Standing Committee for its report by Lok Sabha. The standing committee considering the views of the Ministry of Finance recommended that the expanse of the definition of 'building' should be extended to include residential, commercial, and industrial use within its ambit. The amendment was though approved by the Cabinet, however, the Select Committee only retained the Commercial use and omitted the word `industrial' from the definitions of apartment as well as building.

Therefore, given the intent of the legislature, the word 'Industrial' was consciously omitted from the definition of 'apartment' and 'building'. However, though on one hand the Apartment or Building for Industrial Use was kept outside the purview of the Act of 2016, at the same time no end usage was specified for the 'plot' under the Act of 2016. The word 'plot' assumes significance as while defining the word 'allottee', 'promoter', and 'real estate project' the legislature has kept the sale or transfer of plot within the scope of the Act of 2016.

The perusal of the definition of allottee as provided under section 2 (d) reveals that any person to whom a plot, apartment, or building is allotted or sold or transferred otherwise by the promoter, would be deemed to be an allottee. It also includes the person who subsequently acquires the said allotment through sale, transfers or otherwise, however, excludes the person to whom the plot, building, apartment has been given on rent from its purview. Suffice to mention that the legislation in its wisdom has not carved any distinction as regards to nature of the plot and the word used is the "Plot", "Apartment" and "Building"

Likewise in the definition of `promoter', the reference has been made to the development of land in form of plots, besides referring to the construction of a building as well as apartments.

It is further relevant to note here that the definition of 'promoter' is not only delineated for the private builders but also recognize the development authority or any other public body in respect of the `buildings' or `apartments' constructed by such authority or allottees of `plots' owned by such authority or body or placed at their disposal by the government to sell all or some of the apartments or plots, as promoters[1*]. Even the definition of `promoter' does not end usage of the `plots'.

[1* Section 2(zk) of Real Estate (Development and Regulation) Act, 2016]

To clarify further, the definition of the `real estate project' becomes relevant and the Act defined the real estate project as the development of a building or a building consisting of apartments or converting an existing building or a part thereof into apartments, or the development of land into plots or apartments, to sell all or some of the said apartments or plots or building, and includes the common areas, the development works, all improvements and structures thereon, and all easement, rights, and appurtenances belonging thereto;[2*] The definition of Real estate project is again irrespective of the fact that the plots are residential, commercial, or industrial.

[2* Section 2(zn) of Real Estate( Development and Regulation) Act, 2016]

The Act of 2016 talks of the intent of the legislature in framing the Act to ensure efficiency and transparency in the sale of plot, apartment, or building in a real estate project. As far as the `plot' is concerned, its end user has not been prescribed in the Act to exclude the plot being used for the industrial purpose from the purview of the Act. However, if we see the scope of the 2016 Act in respect of the apartment or building as contained in section 2 (e) and (j), it prescribes the end usage i.e. residential or commercial use such as residence, office, shops, show room or godown or for carrying on any business, occupation, profession or trade or for any other type of use ancillary for the purpose specified meaning thereby, the usage is provided and the use of apartment or building for industrial purposes has been excluded from the scope of the Act of 2016.

This further stands fortified from the background of real estate "Bill" to "Act" to include the "industry" in the ambit and scope of the 2016 Act. The Select Committee while omitting `industry' from the definitions of `apartment' and `building', did not prescribe any end user for the use of plot in order to include or exclude it from the ambit of an Act. It is settled law that what has not been provided under the Act expressly, cannot be read into the Act by way of implication. Thus, it leads us to a clear conclusion that as far as the real estate project undertaking the development of land in form of 'plots' for the industrial use, it is amenable to the provisions of the Act of 2016 and such promoter whether a private builder or a statutory corporation has to get the project register in accordance with the provisions of the Act of 2013 and the allottees thereto have right to approach the Real Estate Regulatory Authority for redressal of their grievances against such promoters.

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