Several homebuyers in Bengaluru have filed a complaint at the Karnataka Lokayukta, levelling charges against Karnataka RERA (KRERA) chief Kishore Chandra HC, as well as members of the regulatory body, D. Vishnuvardhana Reddy and Neelamani N. Raju, for passing misleading orders and for alleged dereliction of duty.
The Karnataka Lokayukta is a watchdog founded in 1984 to look into and document corruption in the state government and to address public complaints against state personnel.
The case
One of the homebuyers, Shailesh Charati of Arya Hamsa apartment in JP Nagar Phase 8, got the occupation certificate (OC) for his flat in 2015. The project sprawls over 2 acres 38 guntas and has 245 units.
The construction agreement accessed by Moneycontrol, says, "The developer agrees to provide a clubhouse and entertainment facility within Schedule A property." The document defines Schedule A as a land parcel in Survey No. 28/1 that Charati says is the parcel on which his apartment stands. However, the sale deed signed by the parties says, "The developer is providing a clubhouse and entertainment facility outside the Schedule A property."
Construction Agreement Vs Sale Deed accessed by Moneycontrol
In 2019, the developer completed another project on the adjacent land, Arya Hamsa Grande, and declared it as Phase 2 of Arya Hamsa. "At that time, the builder said that both land parcels come under the same project and respective homebuyers need to share the clubhouse and entertainment facility. The clubhouse was completed around June 2017 and it is partly inside our complex and the rest of it on an additional land parcel, purchased by the developer," Charati added. He said apartment owners of Arya Hamse Grande need to walk across the Arya Hamse complex to reach the clubhouse.
Charati approached KRERA in 2021, seeking relief and demanding a separate clubhouse while objecting against the project phases mentioned by the developer.
"The promoters are making claims in front of various fora that the project Arya Hamsa Grande (registered with K-RERA) and adjacent project Arya Hamsa are phases of the same project and share common amenities and facilities (violation of sections 2 and 4 of the RERA ACT)," says the complaint filed with the Lokayukta.
The evidence
A show cause notice sent to the developer by State Level Environment Impact Assessment Authority, Karnataka, says, "It may be noted that the project of Arya Hamsa at Sy. No. 28/1 and the project at Sy. No. 28/2 are two independent projects appraised and granted environmental clearance with certain conditions."
"Both the projects are expected to be independent and not linked as expressed in your letter dated 20.02.2022," the notice added.
In January 2020, Bruhat Bengaluru Mahanagara Palike sent another show-cause notice to the developer to provide the plan sanctioned by the municipal body and the sale deed copy. However, homebuyers claim, there has been no update on the same.
Manjula, an advocate added, "Both the project sanction plans are different. Nowhere does it mention that there will be a Phase 2 of the project. For the continuation of Phase 2 of a project, the developers need to get permission from concerned authorities like KRERA or BBMP."
One of the replies from KRERA, dated February 14, 2020 mentions, "Only one project has been registered in the name of Arya Hamse Grande, there is no details of the different phases [sic]."
Additionally, the project details submitted on the KRERA website do not mention Phase 1 of the project.
In another case, the residents of Arya Hamsa objected when the developer formed an association under the Karnataka Societies Registration Act (KSRA), 1960. A notice sent by the District Registrar Of Society in November 2019 says, "The circular issued under Registrar of Cooperative Societies that societies under KSRA are not for building maintenance [sic]."
In a written submission dated November 2021, the developer told KRERA, "The respondent has decided to have separate associations for Arya Hamsa Apartments (Phase-I) and Arya Hamsa Grande Apartments (Phase-II). As of date, only the association for Arya Hamsa Apartments (Phase-I ) is formed while the formation of the Owners' Association for Arya Hamsa Grande apartments (Phase-II) is under progress in consultation with the allottees therein."
The KRERA order
The KRERA order of May 2022 says, "It is apparent that the clubhouse and other common amenities provided by the respondent is meant for use and enjoyment of allottees under both phases and the allotted are aware of the clauses since the date of execution of sales deed."
Charati added that he had submitted 28 documents; however, the KRERA order only cites the sales deed. "Additionally, if KRERA in their reply said they are not aware of the phases, how can the order passed by them mention them? We have moved the Lokayukta to get further relief," he added.
Retired Naval officer Sudhir Pillai, a close watcher of the real estate industry, cites Chapter II, part (2) of the RERA Act, 2016, which says, "Where the real estate project is to be developed in phases, every such phase shall be considered a stand-alone real estate project, and the promoter shall obtain registration under this Act for each phase separately." Pillai said if the clubhouse is being shared by Phase 1 and Phase 2, can each be considered a standalone project and separate phase under the RERA Act?
"Also, they are required to register each phase separately under RERA, and, if each phase has a separate phase, obtain the sanction from the competent authority," he added.
Advocates say homebuyers need to be aware of every document they sign. Vittal BR, an advocate at the Karnataka High Court, said the KRERA has not considered all the documents and pieces of evidence available. "If the developers are modifying the construction agreement they need concurrence from people also. Right now, they can appear at the appellate tribunal challenging the KRERA order," he added.
Dereliction of duty charge
Dhananjaya Padmanabhachar, a resident of Mantri Serenity, purchased an apartment in 2013 that was supposed to be delivered in 2016. After waiting for the project’s completion, Padmanabhachar filed a complaint at KRERA for delayed compensation in 2020.
After waiting for two more years, on August 17, 2022, he decided to withdraw the complaint and move to the consumer court.
On August 26, 2022, KRERA passed an order that says, "Today Mohan Kumar advocate for the complainant has been filed for a memo of withdraw the complaint as settled between the parties [sic]."
RERA Chairman Kishore Chandra said that the case has been settled between the parties, giving completely wrong and false information, as the case has not been settled, said Padmanabhachar. "I am suspicious about this wrong RERA order, which can be misused in other criminal proceedings or other courts. So, I filed a complaint at Lokayukta for an investigation and to get justice against the wrong RERA order," he added.
Previously, Padmanabhachar was the primary complainant among 18 homebuyers who had filed an FIR against the developer, levelling charges of cheating and money laundering.
Karnataka RERA Chairman Kishore Chandra HC could not be reached for comments.
A list of questions has been sent to the Karnataka RERA and Moneycontrol will update this story after receiving a response.
Commander Surendra, a naval veteran and member of the Karnataka Homebuyers’ Forum, said homebuyers across the state are already suffering due to delayed justice from the KRERA. "Hence, homebuyers have started looking to the Lokayukta for relief," he added.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
