Flat Owners Can't Oppose Shared Amenities After Consenting in Sale Deed: Karnataka HC [Read Judgment]

Bengaluru: The Karnataka High Court has upheld the dismissal of a complaint filed by flat allottees against a developer for sharing common amenities between two adjacent housing projects, holding that the allottees were bound by, and estopped from resiling from, the terms of their own registered sale deed under which they had consented to such sharing.

A Division Bench of Justice Jayant Banerji and Justice Tara Vitasta Ganju was hearing an appeal filed by Mr. Shailesh B. Charati and Mrs. Mamta S. Charati, owners of a flat in the 'Arya Hamsa' project, against an order of the Karnataka Real Estate Appellate Tribunal (K-REAT) which had dismissed their appeal and confirmed the order of the Karnataka Real Estate Regulatory Authority rejecting their complaint against the developer, M/s Arya Gruha Private Limited, and the project's landowners.

At the outset, the Court allowed an application seeking condonation of a 25-day delay in filing the appeal, holding that the delay was not inordinate and that sufficient cause had been shown in the supporting affidavit.

The appellants were owners of a flat in 'Arya Hamsa', a project constructed on land bearing Survey No.28/1 which had received its occupancy certificate in 2015, prior to the enactment of the Real Estate (Regulation and Development) Act, 2016. The developer subsequently constructed an adjacent project, 'Arya Hamsa Grande', on Survey No.28/2, which was registered with K-RERA and received its occupancy certificate on 31.01.2019. Though developed under separate Joint Development Agreements with different landowners and sanctioned under independent plans, the two projects were constructed adjacent to each other and shared certain common facilities, including a club house, entertainment facility, roads and entry and exit gates.

The appellants had filed a complaint under Section 31 of the RERA Act seeking revocation of the developer's project registration and penalties under Sections 60 and 61 for contravention of Sections 4 and 14, contending that the sharing of amenities between the two distinct projects infringed their right to live peacefully in the property they had purchased. The Authority, on examining the sale deed dated 03.11.2015 executed in the appellants' favour, found that its recitals ran contrary to the appellants' claim and dismissed the complaint a finding subsequently affirmed by the Appellate Tribunal, which held that the sale deed clauses were clear that flat owners of both projects had consented to share the amenities, and that the appellants were estopped from taking a contrary stand.

Before the High Court, counsel for the appellants argued that the restriction in the sale deed permitting shared use of amenities was void under Section 11 of the Transfer of Property Act, 1882, as repugnant to the absolute interest transferred, and void for uncertainty under Section 29 of the Indian Contract Act, 1872. The Court rejected both contentions.

Examining Section 11 of the T.P. Act, the Court noted that the provision voids a restriction on enjoyment only where the transfer creates an absolute interest in favour of the transferee, relying on the Supreme Court's decision in Indu Kakkar v. Haryana State Industrial Development Corpn. Ltd., which held:

"For a transferee to deal with interest in the property transferred “as if there were no such direction” regarding the particular manner of enjoyment of the property, the instrument of transfer should evidence that an absolute interest in favour of the transferee has been created."

Applying this test, the Court held that the provision was inapplicable, since the interest in question was not in the flat allotted to the appellants but in common facilities such as the club house, which did not amount to an absolute interest. It further noted that the appellants had themselves agreed to the sharing of facilities in the sale deed Paragraphs 1.11 to 1.13 of which expressly recorded their consent to use of common amenities, including the club house and entertainment facility, by owners of units across both projects and that this validly executed and registered document had never been challenged in a civil court.

On the plea of uncertainty under Section 29 of the Contract Act, the Court held that the provision had no application where a sale deed clearly set out the sale consideration and the transfer and had been duly registered. Concluding that no question of law, much less a substantial question of law, arose for consideration, the Court dismissed the appeal, along with all pending applications.

Appearances:

For the Appellants: Sri Vidyadhar M. Durgekar, Advocate.

Case Title: Shailesh B. Charati & Anr. vs. Arya Gruha Private Limited & Ors., RERA Appeal No.74 of 2025 (NC: 2026:KHC:34569-DB).

[Read Judgment]