The Karnataka RERA[ KRERA] gave the green light to the Abhinandan Residency Welfare Association to take over and finish the Abhinandan Residency project that has been delayed for a long time. The project, which had only been 40% completed, was left unfinished after the death of the developer Raju Doddabommannavar in March 2022. The decision is a rescue mission for the allottees who have been paying EMIs without getting possession and with no assurance of the project being completed.
The Abhinandan Residency project, being developed by North Karnataka Metro City Developers and Builders, was left incomplete after the death of its proprietor. “The Authority authorises the Complainant Association (Abhinandan Residency Welfare Association) to take over the incomplete project, Abhinandan Residency, for the purpose of completing the remaining development work under the supervision of this Authority and obtain all necessary statutory approvals and file periodic compliance accordingly,” the RERA order stated.
After the developer’s demise, the office of North Karnataka Metro City Developers shut down, and no authorised representative or legal successor took charge of the project. As a result, construction halted at approximately 40% and remained stalled for more than a year. The RERA registration of the project had also expired in 2022, and no extension or revocation procedure had been granted to the landowners holding a 35% undivided share in the built-up area. Meanwhile, the interim order freezing the escrow account remained in effect to safeguard the project’s financial assets.
Karnataka RERA invoked Section 8 of the RERA Act, which allows intervention when a promoter is non-functional and a project remains incomplete. “This case squarely fits the condition contemplated under Section 8, a situation of a non-functioning promoter and incomplete project warranting intervention by the Authority to safeguard the interest of allottees. Hence, transfer of project rights or unsold inventory to the Association can be ordered under Section 8 of the RERA Act without due process,” the order noted.
While homebuyers’ associations cannot claim takeover as a matter of right, KRERA confirmed that this particular situation met the criteria for administrative intervention. Accordingly, the Abhinandan Residency Welfare Association has been authorised to complete the remaining development work under RERA’s supervision. The association can also utilise the existing escrow account and raise additional funds by selling unsold flats and shops previously owned by the late promoter.
The Authority has directed the legal heirs of the deceased proprietary promoter to appear before it and disclose all project-related documents, approvals, and agreements within 30 days of receiving the order. The association has been given a 24-month timeframe to complete the project and is required to submit progress updates every three months to KRERA.
Homebuyers have expressed cautious optimism at the decision. Many had faced uncertainty for over three years, paying EMIs without possession while the project remained dormant. The intervention by KRERA provides a legal and administrative framework for the association to take control and ensure timely completion.
The Abhinandan Residency project, located in Belagavi, has become a textbook example of the challenges faced by homebuyers in stalled projects across Karnataka. The administrative intervention provides a precedent for similar cases, where homebuyers’ associations may be authorised to complete projects under Section 8 of the RERA Act.
As the developer’s office has been closed after the death of Raju Doddabommannavar and no representative has been appointed to take over, the association is now responsible for the construction, approvals, and financial oversight. RERA’s supervision is in line with statutory norms and is a protection for the financial interests of allottees, thus lessening the risks of stalled projects.
Karnataka RERA through the authority given to the homebuyers’ association over the project, has made an indelible mark in the real estate sector by a) safeguarding consumer rights; and b) ensuring that long-delayed projects can be completed even when the original promoter is no longer there. This decision will probably have long-range effects on stalled projects, paving the way for RERA to be seen as a body that can take pre-emptive measures and offer feasible solutions to homebuyers.
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