'Strict Adherence To Conditions While Granting Occupancy Certificates Required': Karnataka HC Directs State Govt. To Issue Guidelines For Authorities

The Karnataka High Court has observed that strict adherence is required to the prerequisite conditions while granting Occupancy Certificates. To that end, the Court directed the State Government to issue guidelines for authorities towards ensuring that projects are completed as per the prevailing norms before the Occupation Certificate is granted.

To that end, the Bench of Justice M Nagaprasanna observed that, "The Authorities henceforth shall inspect the property, satisfy themselves whether occupancy certificate can be issued in terms of law, and only then issue such occupancy certificate, failing which those officers who handle such files where grant of occupancy certificate is sought, would be solely responsible and accountable for issuance of illegal occupancy certificates."

It was further held that, "Looking at the large increase in the number of cases which call in question reckless issuance of occupancy certificates, it has become necessary to direct the State Government to issue necessary circular in the form of guidelines to the Authorities who handle grant of occupancy certificates to strictly adhere to the conditions necessary to be looked into while granting occupancy certificates."

Counsel V Sanjay Krishna appeared for the petitioner, while Counsel Girish KV and Counsel G Suriya Narayanan appeared for the respondents.

M/s Ozone Urbana Infra Developers Private Limited filed a writ petition challenging the Karnataka Real Estate Regulatory Authority's order dated 05-07-2023, which rejected the petitioner's interlocutory application in a complaint against it.

The petitioner, a real estate company, promoted a retirement community project named 'Serene Urbana.' The project faced scrutiny after the Serene Urbana Apartment Owners’ Welfare Association lodged a complaint with the Authority, seeking various reliefs. During the proceedings, the petitioner filed an application invoking Sections 35 and 36 of the Real Estate (Regulation and Development) Act, 2016, seeking rejection of the complaint, asserting that the project was not registerable under Rule 4 of the Rules framed under the Act. The petitioner contended that the project was exempt from registration as it had obtained a completion certificate and an occupancy certificate.

However, the Authority rejected this application, declaring the project 'Serene Urbana' as an on-going project.

The petitioner approached the Court challenging this order, arguing that the complaint was without jurisdiction. The Association countered these claims, alleging fraud by the petitioner in obtaining the occupancy certificate and asserting that the project was still on-going. The petitioner's failure to provide the completion certificate and occupancy certificate was highlighted. The Association sought dismissal of the petition.

It was observed that, "It is the 2nd respondent who has placed every document on record and the documents would demonstrate that the petitioner has played fraud with the Gram Panchayat in securing occupancy certificate. Such fraud cannot be played only by the hands of the developer or by the hands of the competent officers, it can be played only when the hands of the competent officers are in the glove of the developers. It is an action hand in glove."

The High Court ordered that the State Government's circular shall also bear that in the event of scrutiny of occupancy certificates, if it is found that they are issued contrary to law, those officers would become open to initiation of departmental enquiry, or in a given case registration of crime, as well against those officers. 

Observing that, "The developers should bear in mind, particularly of those projects, which involve retirement homes or homes for senior citizens, should not make those citizens run pillar to post, to secure accommodation, after them having paid substantial amount. It is necessary to bear in mind that retired people should not be made to re-tire themselves.", the Court dismissed the petition.

Appearances:

Petitioner: Counsel V Sanjay Krishna

Respondents: Counsels Girish KV, G Suriya Narayanan

Cause Title: M/s. Ozone Urbana Infra Developers Pvt. Ltd. vs The Karnataka Real Estate Regulatory Authority 

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