Undoing the Wrong on Apartment Owners in the State - After 40 years

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Directions of the Kerala High Court 

in 

Ananda Padmanabhan Vs Union of India - Explained



The Backdrop of the Public Interest Litigation (PIL for short)

The PIL was filed by Mr Padmanabhan, an advocate practicing in the Kerala High Court and a member of the Society of Construction Law (Kerala).  The Society is founded to promote the study, research, and education of construction law and its allied fields. The pleadings in the case were inspired by the finding of the Report prepared by a Sub Committee constituted by the Society, to study condominium management in Kerala.  The society organized a seminar on 11th February 2023, based on the recommendations of its Sub Committee for interactions with the stakeholders regarding the lacunas in the condominium management law in Kerala.


The Petitioner in the PIL

Reliefs sought in the PIL

The one-liner for the reliefs sought in the PIL is "to repair the pathological provision regarding the application of the Kerala Apartment Ownership Act (the state law for short)", the condominium management law, applicable in Kerala.  The state law committed a fundamental mistake, by failing to include regulatory provisions, to compel the promoters of apartment buildings to execute and register declarations as sole owners, for its application.  Therefore the reliefs are directed towards restoring the valuable rights of 'apartment ownership' to the apartment owners. (Click the below link to read the interim order of the Division Bench, where reliefs in the PIL are mentioned)

Order dated 10.12.2024 in WP(C) No. 15166 of 2024

Interim Relief and the Findings of the Division Bench

The Court was requested to enforce the Promoter's Obligation to assure compliance of the State Law to the Allottees contained in the Rules of RERA, by all RERA registered projects through the instrumentalities of the Government. 

The Divison bench comprising of Chief Justice Mr. Justice Natin Jamdar and Mr Justice S Manu entered into the following findings:

  • it is accepted by the State before the Court that Rule 10  and Annexure A of the Kerala Rules of RERA which contained Clause 20 are in force in the State. 

    • Clause 20 reads as follows:

    • “The promoter has assured the Allottees that the project in its entirety is in accordance with the provisions of the Kerala Apartment Owners Act, 1983 (5 of 1984).[Please insert the name of the State Apartment Ownership Act]. The Promoter showing compliance of various laws/regulations as applicable in the State.” 

  • If that is the position, the Government itself should have issued necessary directions to enforce this stipulation on its own than leaving it to the Court to issue directions."  
In short, the Court did not try to invent any new right but simply directed the Government to enforce the statutory obligation of the Promoters under the Kerala RERA Rules with respect to Apartment Buildings, to assure the Allottees that the project is in its entirety in accordance with the State Law.

The Directions of the Bench:

  1. The Respondent Secretary of the Department of Housing, State of Kerala, to examine this aspect and thereafter issue necessary instructions to the concerned authorities to ensure that Clause 20 of Annexure A is strictly complied, with within three weeks from today.

  1. If upon examining the topic, the Secretary finds that issuance of this direction would give rise to any practical difficulties which have not been considered within the ambit of the pleadings of these Petitions, then take a reasoned decision and place the same on record. 

  1. If no such decision is placed on record within a period of four weeks, the Secretary will proceed to issue necessary directions as above to stipulate the condition.

Significance of the High Court Directions 

One of the important significances of the order is that it did not intrude into the executive domain.  However, there are specific timelines for exercising its powers towards the implementation of State Law.  This appears to be an opportunity for the State to make good the legislative fraud committed against the apartment owners. 

Undoing the wrong on the Apartment Owners

  • The State Law offered the following to the Apartment Owners:

    • It was enacted for the ownership of individual apartments in a building and to make such apartments heritable and transferable property. (Ref: preamble)

    • Each apartment together with its undivided interest in the common areas and facilities appurtenant to such apartment shall for all purposes constitute heritable and transferable immovable property within the meaning of any laws for the time being in force. (Ref Section 4)

    • The execution and registration of the declaration, not only provided for exclusive ownership over the individual apartment but also preserved the data to the eternity regarding private areas, common areas, and facilities in apartment buildings (Ref: Section 2, 5  and 10)

    • Efficient management of the common properties in accordance with the bye-laws framed (Ref Section 16)

  • The State initially committed a mistake by copying the Maharastra Apartment Ownership Act 1970, without incorporating the powers of the Competent Authoirty which was provided under Sections 4 and 10  of the Maharastra Ownership Flats Act 1963.

  • The mistake was never corrected, for the last 40 years, and the vested interest took advantage of the same.

  • Those vested interests included a few unscrupulous builders who trespassed into the common areas of apartment buildings and converted them to private areas for personal gains.  

  • Had the State compelled the promoters of apartment buildings to execute and register the Declaration, in Form A of the Rules of the State Laws, this unauthorized trespass could have been checked.

The lapses of Apartment Owners and the Media

  • The Apartment Owners were largely unorganized.  Most of them are non-resident Indians, who viewed apartment ownership as a profitable investment.  The remaining fought against each other, mostly on insignificant things, rather than to fight for securing their property rights

  • The Apartment Owners never realized that the State law was offering them some valuable property rights other than what was provided under the Transfer of Property Act but considered it as a mechanism for forming an apartment ownership association.  

  • And a few of them still believe that an Association under the Travancore Cochin Literary Scientific and Charitable Societies Act 1955 or the Societies Registration Act 1860 offers a better Owners Association.

  • The Media in the state does not appear to have given a proper thought about the troubled apartment ownership in the State.  As usual, they were working on their editorial table sensitivities, which were most of the time alien to the cause of the citizens.  And the struggles of the Apartment Owners were beyond the contours of their sensitivity yardsticks.

  • The issue had techno-legal complexities and was difficult to identify without thorough research.  

Conclusion

There is no use in blaming each other for the lost valuable years, in the development of apartment ownership.  It is advisable to take some time out to learn about condominium management and gated communities in other jurisdictions before the authorities try to cover up wrongs done to the apartment owners.  The order passed by the Kerala High Court is not a panacea for all diseases, but it is the beginning of a new era, where at least the Court appreciated that "there is something rotten in the city of Denmark

There is a need for some concerted efforts from all stakeholders to see that the State Law is repaired.  This shall not be done by condoning the wrongs done to the Apartment Owners in the state. The State has the obligation to ensure the implementation of the State Law from 12.01.1984, the date on which the State Law came into force.  However, given the order passed by the High Court, the State is bound to implement the State Law from 01.05.2017 the date on which the RERA came into force, and since this Central Law is  Retro Active.


Acknowledgments

  • The Members of the Sub Committee Constituted by the Society of Construction Law (Kerala Chapter)
  • Mrs. Gayathri Sasidharan, the Coordinator of the Sub Committee, Constituted by the Society of Construction Law (Kerala Chapter)
  • Adv Ajit Joy, Former IPS Officer and the Current President of the Society of Construction Law Kerala


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