Policy & Regulation Intelligence Edition 10 Jurisdictional Collision

Policy & Regulation Intelligence

Edition 10

Jurisdictional Collision: Who Controls Power During Project Instability?

By Arindam Bose
BeEstates | Decoding law, markets, and power in Indian real estate

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The first generation of RERA litigation was simple.

Delay.
Possession.
Refund.

The second generation is not about delay.

It is about institutional collision.

When projects destabilize, four power centres compete:

• Media
• Secured creditors
• Adjudicatory tribunals
• Collective buyer federations

This edition examines how four High Courts calibrated those collisions — not by expanding RERA, but by defining its limits.

I. Media Power vs. Developer Reputation

Experion Developers Pvt. Ltd. vs. UP Television Network Pvt. Ltd.

Court: Delhi High Court
Judge: Justice V. Kameswar Rao
Citation: AIR 2020 (NOC) 833 (DEL.)

Background

A television network broadcast allegations that Experion was a “thug builder,” claiming illegal land acquisition, unsanctioned plans, and RERA irregularities.

The developer sued for defamation.

The defendant failed to file a written statement.

Judicial Position

The Court reiterated foundational defamation doctrine:

• A corporate entity can sue for defamation.
• Reputation is a commercial asset.
• Defamatory statements are presumed false unless justified.
• Wide publication aggravates injury.

Permanent injunction granted.
Damages: ₹5 lakhs + interest.
All defamatory content ordered removed.

BeEstates Declassification

This case did not test RERA compliance.

It tested narrative power.

The allegations referenced:

• RERA registration numbers
• Development authority approvals
• Project location disclosures

But the Court did not evaluate regulatory truth.

It evaluated reputational injury.

Structural implication:

In modern real estate, compliance is no longer confined to statutory filings.

It lives in public perception.

Media can destabilize a project faster than litigation.

Courts have now affirmed that reputational injury in real estate is legally actionable and commercially significant.

II. Secured Creditors vs. Homebuyers vs. RERA

Dewa Investors Association vs. Dewa Projects Pvt. Ltd.

Court: Kerala High Court
Judge: Justice N. Nagaresh
Date: 25 March 2024

The Collision

Three statutes intersected:

• SARFAESI – secured creditor enforcement
• IBC – insolvency resolution
• RERA – buyer protection

Mortgage created in 2006.
Project abandoned in 2013.
RERA enacted in 2016.

Kerala RERA later ordered mandatory registration and prior permission before sale.

Banks challenged.

Judicial Calibration

The Court held:

• Mortgage predated RERA.
• Project not an “ongoing project.”
• RERA cannot retroactively restrict SARFAESI enforcement.

However, the Court did not abandon buyers.

Banks were directed to release ₹24.75 crores (admitted claims) to homebuyers through the liquidator.

RERA’s restraint on sale was set aside.

BeEstates Declassification

The Court did not declare RERA superior.

Nor did it privilege banks absolutely.

It harmonized.

Doctrine emerging:

RERA cannot rewrite pre-2016 security structures.

But courts will impose equitable safeguards to protect homebuyers in enforcement proceedings.

Structural implication:

In distressed projects, supremacy yields to judicial balancing.

This is tri-jurisdictional governance in action.

III. Tribunal Legitimacy & Limits of Adjudicating Authority

Gold Bricks Cluster – Anandam World City

Court: Chhattisgarh High Court
Bench: Justice Goutam Bhaduri with Justice Sanjay S. Agrawal / Justice N.K. Chandravanshi
Dates: 6 May 2022 & 7–8 February 2023

Connected appeals challenged:

• Validity of a single-member appellate tribunal
• Scope of remand powers
• Jurisdiction of adjudicating officer under Section 71

Issue 1: Was the Tribunal Properly Constituted?

State had temporarily vested appellate powers in the State Transport Appellate Tribunal under proviso to Section 43.

Petitioners argued this violated statutory composition requirements.

The Court held:

• The arrangement was transitory.

• Jurisdiction was valid.

• Orders were not void merely due to single-member composition.

Continuity of adjudication was prioritized.

Issue 2: Scope of Adjudicating Officer

Section 71 limits jurisdiction to compensation claims.

Tribunal had directed adjudicating officer to examine infrastructure development charges and related issues.

High Court struck down those directions as ultra vires.

However:

Appointment of an architect to inspect development vis-à-vis promises was upheld — as it assisted compensation determination.

State directed to operationalize a proper multi-member RERA Appellate Tribunal.

BeEstates Declassification

This cluster is not about ponds, temples, or multiplexes.

It is about jurisdictional discipline.

Clear boundary drawn:

Compensation → within power
Contractual restructuring → outside power

RERA adjudicating officers are not civil courts.

They are compensation authorities with statutory limits.

Structural implication:

Tribunal infrastructure gaps cannot expand jurisdictional authority.

Institutional weakness does not create new powers.

IV. Federation Sovereignty vs. RERA Supremacy

Lodha Belmondo Housing Federation Ltd. vs. State of Maharashtra

Court: Bombay High Court
Judge: Justice Sharmila U. Deshmukh
Date: 22 November 2024

The Conflict

Six cooperative societies formed a federation before project completion.

Developer challenged registration.

Key issue:

Can cooperative law override RERA’s project-completion timeline?

Judicial Findings

The Court held:

• MCS Act and RERA must be read harmoniously.
• Section 9(1) MCS Act requires compliance with other applicable laws.
• Rule 9(1)(ii) of RERA Rules mandates apex body formation only after occupancy certificate of last building.
• Buyers had contractually agreed to federation formation post-completion.

Federation registration declared premature.

Petition dismissed.

Developer retains control until project completion.

BeEstates Declassification

This ruling does not weaken buyer rights.

It sequences them.

Collective power activates after regulatory milestones.

Premature institutional takeover disrupts:

• Contractual allocation of responsibilities
• Amenity management structures
• Ongoing development execution

Structural implication:

RERA timelines override cooperative assertion during active development.

Cross-Case Institutional Mapping

Power Centre	Judicial Outcome
Media	Reputation legally protected
Secured Creditors	Enforcement allowed, but buyers safeguarded
Tribunal	Validity upheld, jurisdiction strictly limited
Federation	Collective control deferred until completion

Conclusion: The Second Generation of RERA

The first generation resolved delay.

The second generation resolves institutional overlap.

Courts are not expanding RERA into a super-statute.

They are defining:

Where it stops.
Where it harmonizes.
Where it yields.

The central question is no longer:

“Is the project compliant?”

It is:

“Who controls authority when compliance, insolvency, reputation, and collective assertion collide?”

Indian real estate governance is no longer about construction.

It is about calibrated power.

And the judiciary is drawing the map.

Arindam Bose
BeEstates

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Disclaimer
This article is based on publicly available court judgments, statutory provisions, and independent legal research. It is intended for educational and informational purposes only and does not constitute legal advice. Readers should consult qualified professionals for case-specific guidance.