Page 147 - GSTL_16 April 2020_Vol 35_Part 3

2020 ] IN RE : NAGPUR INTEGRATED TOWNSHIP PVT. LTD. 361
period of 999 years in the Township Scheme of the Appellant. They had paid
most of the consideration amount, which is, approximately, to the extent of 80%
of the sale price. They had also paid substantial amount towards the stamp-duty
and the registration charges. As per the ‘Agreements of Lease’ executed between
the parties, the project was to be completed and the possession of the apartments
was to be handed over to the Respondents within a period of 24 months. How-
ever after a long delay, the parties approached RERA authorities and the ques-
tion arose whether, the provisions of the RERA are applicable to the ‘Agreement
of Lease’ executed between the parties. The High Court went through the clauses
of the agreement and held that though the agreement is shown to be of lease, it is
an agreement of sale. It observed the following :-
....”In this context, vis-a-vis, these definitions given in the RERA, it would
be essential to go through the ‘Agreements’ executed between the parties.
No doubt, it is true, that the ‘Agreements’ are titled as ‘Agreements of
Lease’. The word “Rent” is also defined therein to mean ‘the yearly rent
amount payable by the customer to Lavasa, once the lease is actually grant-
ed in respect of the apartment’. The term ‘Annual Rent’ is defined to be Rs.
1/- and the ‘period of lease’ is stated to be “999 years”. Clause No. 4(xi) of
the ‘Agreement’ is relevant in that respect. It says that, ‘under its Township
Development Scheme, Lavasa proposes to construct ‘Lake Views’ on the
‘Lots’ identified by it and grant on lease, the apartments constructed therein
for a period of 999 years on the notionally divided pieces of land termed as
“Lots”.’
43. Clause No. 5.1 of the ‘Agreement’ further provides that, in considera-
tion of the customer having expressly agreed to pay to Lavasa the lease
premium, which is in the range of Rs. 32 to 40 lakhs, as the case may be,
and which is more than 80% of the total consideration amount Lavasa.doc
and the annual lease rent of Rs. 1/- for the said apartment, Lavasa agrees to
grant to the customer a lease for a period of 999 years for the said apart-
ment.
44. Clause No. 5.2 of the ‘Agreement’ provides that, the ‘Lease Deed’ was
to be executed only after the development and construction of the said
apartment has been fully completed and all the lease premium amounts are
paid by the customer to Lavasa. The lease term was to commence from the
date of execution of the registration of the ‘Lease Deed’ by Lavasa in respect
of the said apartment in favour of the customer.
45. Clause No. 6 of the ‘Agreement’ lays down the ‘Schedule of the Pay-
ment’, which shows that the payment was to be made as per the progress in
the construction and except for some nominal amount, entire consideration
was to be paid before possession was to be delivered. This clause is a typi-
cal clause, which is normally found in the ‘Agreement of Sale’ under
MOFA. Clause No. 9.1 states that, the possession of the apartment was to be
handed over within a period of 24 months, on the customer depositing the
entire lease premium installments.
46. Further clauses in the ‘Agreement’, like Clause No. 10 pertaining to
Common Amenities and Facilities’; Clause No. 12.1 pertaining to ‘Charges
and Contributions towards the Maintenance and Amenities’; Clause No. 13
relating to ‘Statutory Payments’ and even other clauses in the ‘Agreement’
are more or less the same like the ones which are necessarily found in the
‘Agreement of Sale’ executed under MOFA. As a matter of fact, though the-
se Agreements are titled as ‘Agreements of Lease’, they are just the replicas
GST LAW TIMES  16th April 2020  267