The Tamil Nadu Real Estate Appellate Tribunal (TNREAT) has upheld a ruling by the Tamil Nadu Real Estate Regulatory Authority (TNRERA) that projects such as SEZ and estates involving sale of industrial plots to investors come under the purview of the Real Estate Regulatory Authority (RERA) Act.
The verdict comes in the case of GMR Krishnagiri SIR Ltd, which is establishing a special economic zone in Hosur, Krishagiri district.
According to official sources, RERA does not exempt sale of industrial plots from the definition of the Act. Maharashtra and Tamil Nadu have adopted this definition. Such industrial projects, which came after the implementation of the Act, should be registered.
GMR had entered into a memorandum of understanding with the Tamil Nadu Industrial Development Corporation Ltd (TIDCO) to develop the project as a joint venture with an infrastructure development company under the public-private partnership model.
It sought an opinion from the TNRERA on the applicability of RERA for the project.
It got a response that the project should be registered with the TNRERA.
Against this, the company moved the TNREAT, which noted that TIDCO entered into an MoU by way of facilitating the company to do a real estate business for the purpose of selling industrial plots.
“The entire act and legislative history clearly mentioned the sale of plots, apartments etc. Therefore, the very purpose of the enactment is only for regulation of sale of plots and apartments and not for any other purpose. Hence, TNRERA has rightly pointed out that the Act has not differentiated plots into housing plots, commercial plots or industrial plots,” it noted.
Sanjay Chugh, city head-Chennai, ANAROCK Property Consultants, pointed out that there was ambiguity whether industrial projects were included or not.
“The ruling only signifies that the State RERA considers all immovable properties under its purview. This is definitely good from the perspective that there will be all-round transparency and efficiency in the State’s real estate sector, and the scope of the RERA is not just limited to commercial or residential buildings. This leaves little room for any misadventure in the industry as a whole, and an overall fair play,” he said.
“The decision appears to be rendered in the context of specific issues raised therein. The tribunal has held that plots would cover residential commercial as well as industrial plots. This will have far-reaching implications for real estate projects, which would involve sale of industrial plots,” advocate K. Vaitheeswaran said.