(i) The first issue was dealt extensively by the Hon’ble Court. The Hon’ble Court held that if the party decides to continue with the joint venture after Real Estate (Regulation and Development) Act, 2016 comes into force, they must accept the responsibility as a promoter. They can leave the joint venture before the project is registered if they wish to absolve themselves of any liability as a promoter. Therefore, when an investor such as the appellant decides to maintain their involvement in the joint venture, they do so with full knowledge and are subsequently officially registered with Maharashtra Real Estate Regulatory Authority as the promoter of the project. In doing so, it accepts all of the liabilities together with its joint venture partner. It can no longer be asserted that the joint venture exists solely for the purpose of profit sharing and not for the purpose of liability sharing.

(ii) As a result, the promoter is obligated by Section 18(1)(b) to compensate the flat purchaser for the money they were paid. The second respondent, who is the other promoter, and the appellant are both jointly accountable for the money to be refunded because they fall under the description of "promoter."

(iii) The objective behind enactment of Real Estate (Regulation and Development) Act, 2016 must be borne in mind. If this narrow interpretation of Section 18 is approved, developers would then have the authority to intentionally accept payments into one promoter's account and then use the other promoters' fictitious claim that they are not liable for those payments to escape paying interest or receiving a refund.

(iv) RERA is applicable to ongoing projects as well. Therefore, in determining the joint liability of promoters under Section 18, the account in which funds are received is irrelevant.

(v) The argument put forth by the appellant regarding the lack of privity of contract between it and the complainant is completely erroneous. According to the definition of "promoter" in Section 2(zk) of the Real Estate (Regulation and Development) Act, 2016, even individuals or organisations that a flat buyer does not enter into a contract with are covered by the definition. Consequently, an agreement between each promoter and the buyer of the unit is not required. The issue is one of indoor management between the promoters. The buyer of the flat is not expected to be aware of the specifics of the agreements reached between more than one promoters.

(vi) Regardless of whether they have a contractual relationship with each other or not, all promoters become jointly accountable with respect to flat purchasers who make claims regarding real estate projects. This is the scheme of the said Act and a promoter is not released from their obligations under it just because they do not have a contract with them.

(vi) With regard to the second issue, the Hon'ble Court was of the opinion that the Appellate Tribunal refrained from delving into the issue of the appellant’s liability to refund the amount to the complainant, presumably due to the fact that the appellant is also encompassed within the definition of the term 'promoter' and bears joint liability for the obligations and responsibilities stipulated in the Real estate (Regulation and Development) Act, 2016. The Hon'ble Court observed that it is true that the Appellate Tribunal should have documented some conclusions regarding the issue. Nevertheless, as the matter was being resolved in this appeal, the Hon'ble Court found no need to remand the appeal for the technical reason that the Appellate Tribunal neglected to record its conclusions regarding the same.

Vani Mehta takes over as General Counsel of GE South Asia