Page 146 - GSTL_16 April 2020_Vol 35_Part 3

360 GST LAW TIMES [ Vol. 35
booked by the appellant are flats with agreement to construct and cannot be col-
oured by the ‘lease agreement’ word being used throughout the agreement un-
der consideration.
44. It is also seen from the payment schedule for the prospective lease
that the lessee has to give 0.5% of the lease consideration before signing and 9.5%
within 30 days of booking. The rest of the amount is to be paid by him on com-
pletion of certain milestone in the construction of the project. So for example, on
completion of foundation - 10% is to be given, after completion of third slab 15%
is to be given and so on. As lease never comes under construction project, the
above payment schedule is only seen when an agreement is entered into by a
prospective buyer with a builder/developer for the construction of a building or
complex. Therefore, it is seen that almost 95% of the amount comprising the lease
consideration is paid before the possession of the apartment. It is difficult to be-
lieve that a Lessee will commit such amount before moving or enjoying the flat.
All these leads us to believe that this is nothing but a sale transaction projected as
a lease transaction.
45. As per clause 5.2 of the draft agreement, the prospective Lessee also
has to pay advance maintenance charges for the operation and maintenance of
the common facilities in the township project.
46. As per clause 9.1 of the Agreement, it is stated that the developer
shall facilitate formation of Society/Association of the prospective lessee of the
flat. As per the said clause, all prospective lessee of the flats shall be entitled to
join the said Association or Cooperative Society. This clause also goes on to
prove that the appellant has built a complex or residential unit and the same is to
be given on outright supply and not as a lease. We say so because it is only in the
case of transfer of ownership where the flat owner is entitled to form an associa-
tion or a Co-operative Society.
47. A similar case was decided by the Bombay High Court in the case
(9717 of 2018 with Civil Application No. 683 of 2018) of Lavasa Corporation Lim-
ited, The appeals were preferred, under Section 58 of the Real Estate (Regulation
and Development) Act, 2016, (for short, “RERA”), by Lavasa Corporation, which
is developing a Township Project to construct ‘Lake Views’ and which is regis-
tered under the RERA. These Appeals are raising the common questions of law
as to ‘whether the provisions of the RERA would apply in case of an ‘Agreement
to Lease’?’; The Appellants are aggrieved by the three separate orders passed by
the Maharashtra Real Estate Appellate Tribunal in three separate Appeals filed
by the Respondents, under Section 43(5) of the RERA, against the orders passed
by the ‘Adjudicating Authority’, under Section 18 of the said Act. By the im-
pugned orders, the Appellate Tribunal had set aside the orders passed by the
‘Adjudicating Authority’ and held that, the provisions of the RERA are applica-
ble even in case of ‘Agreement of Lease’ in the present case and, therefore, the
Adjudicating Member of the Maharashtra Real Estate Regulatory Authority has
jurisdiction to entertain the complaints filed by the Respondents. It was held so,
despite the fact that, according to the Appellant, relationship between the Appel-
lant and Respondents is of ‘Lessor’ and ‘Lessee’ and there is no sale and/or abso-
lute transfer of right, title and interest in favour of the Respondents with respect
to their respective apartments.
In the said case, the ‘Agreements of Lease’ came to be executed between
Lavasa Corporation and the buyers of the property and as per the said ‘Agree-
ments’, the Respondents have booked the apartments on the basis of lease for the
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