In a significant judgment that brings clarity and relief to cooperative housing societies undergoing self-redevelopment, the Maharashtra Real Estate Appellate Tribunal (MahaREAT) has ruled that a society is not automatically a “Promoter” under the Real Estate (Regulation and Development) Act, 2016 (RERA Act), and is therefore not liable for the claims of third-party flat purchasers of a terminated developer.
The common order, pronounced on October 10, 2025, by a Coram of SHRI S.S. SHINDE J., CHAIRPERSON, and SHRI S.M. DESHPANDE, MEMBER (A), set aside a prior order by the Maharashtra Real Estate Regulatory Authority (MahaRERA).
The Core Dispute: Promoter Status under RERA
The case involved the appellant, D. N. Nagar Shivneri CHS Ltd., a cooperative housing society for a low-income group. The dispute began after the society terminated its development agreement with the erstwhile developer, M/s Sai Siddhant Developers, due to their failure to fulfil obligations. The society subsequently undertook self-redevelopment.
Third-party allottees, who had purchased flats from the erstwhile developer in the free-sale component, filed complaints before MahaRERA.
MahaRERA’s Controversial Order
In its common order dated April 17, 2025, MahaRERA had partly allowed the complaints and passed several key directions against the society, holding it jointly and severally liable:
- Promoter Status: The Society was held to be a “promoter” under the RERA Act, jointly and severally liable for the acts and responsibilities of the erstwhile developer.
- Financial Liabilities: The Society was directed to pay interest for delayed possession from March 31, 2020, and in a few cases, grant a refund of paid amounts along with interest under Section 18 of the RERA Act.
- Project Completion: The Society was ordered to file an affidavit with a roadmap for project completion (either self-development or new developer appointment) within 30 days, failing which penalties under Sections 61 and 63 of the Act would apply.
The Society filed the captioned appeals (MA 377-406 of 2025) before the Tribunal, primarily challenging the finding that it was a “promoter”.
MahaREAT’s Final Verdict: Society is Exempt from Liability
In its final order, MahaREAT set aside the MahaRERA judgment and provided a strong framework for the non-liability of societies in such redevelopment scenarios.
The Tribunal held that the D. N. Nagar Shivneri CHS Ltd. does not fall within the definition of a “promoter” under Section 2(zk) of the RERA Act. The Tribunal’s key findings included:
- No Contractual Privity: The Society did not have any revenue or area sharing arrangement with the erstwhile developer, nor did it enter into agreements for sale with the allottees.
- Limited Role: The Society’s role was confined to that of a land owner (on a leasehold basis from MHADA) and undertaking redevelopment solely for its own members.
- Sole Responsibility: The erstwhile developer was held to be solely responsible for the third-party sales.
Consequently, the MahaREAT ruled that the Society is not liable for the claims of third-party purchasers who had agreements with the terminated developer. This decision effectively insulates societies pursuing self-redevelopment from being burdened by the financial obligations and liabilities arising from the original developer’s transactions. The Tribunal also held that the Society was exempt from the mandatory pre-deposit requirement under the proviso to Section 43(5) of the RERA Act, as it was not a ‘promoter’.
