BEFORE THE MAHARASHTRA REAL ESTATE REGULATORY AUTHORITY, MUMBAI Virtual Hearing held through video conference as per MahaRERA Circular No.: 27 / 2020 SUO.MOTU CASE NO.21O OF 2O2I KANAKIA FUTURE CITY B ...PROIECT NAME KANAKIA SPACES REALTY PRIVATE LIMITED .PROMOTER MahaRERA Proiect Registration No. P5LE000L8113 Order December 23,202'l' (Date of oirtual luaring - 21..L2.2021", matter resented for order) Coram: Shri. Aioy Meht+ Chairperson, MahaRERA Advocate Abir Patel i/byWadiya Ghandy & Co. for the Promoter 1. Kanakia Spaces Realty Private Limited are the Promoter/Developer within the meaning of Section 2 (zk) of the Real Estate (Regulation and Development) Act 201.6 ("said Act') of Real Estate Regulatory Authority ('RERA"). The Promoter had registered their project "KANAKIA FUTURE CITY B" under section 5 of the said Act bearing MAHARERA Registration No. P51800018113 (hereinafter referred to as the "said Proiect"). 2. On21.12.202'1,, a virtual hearing was held in the matter wherein the following tozttarnawas passed: "T?rc Aihtocate of the Promoter is present and aoers that pursuant to a dcmerger sclrcme Kanakia Spaces Realty Prioate Limited hnoe transferred their capital asset to Kanakia Future Realty Priaate Limited. He further aaers thnt the transferee and thc transferor haae the same sharehalding pattern. He also points out that the condition mentioned in the circular No. 24 dated 04.06.20L9 of MahaRERA are also fulfilled and thus seek exemption from taking consents of Allottees. He further assures that tluir clients haaing stryedinto the shoes of thc earlier entity nottl agree to fulfil all tlu promised conditions. Matter heard and is reserued for order." Page 1 of 4 w 3. The Promoter has submitted an application has submitted an application Annexure 'A' dated 06.09.2021, under section of 15 of the said Act, for transferring/assigning their rights and liabilities in the real estate project being undertaken by them in favour of Kanakia Future Reality Pvt. Ltd. The reason for transfer as indicated in the said application is "Demerger Order dated 16.07.2027". The relevant portion of the said order is reproduced herein below: "Order (Demerger Order) dated 1.6.07.2021 under Sclume of Arrangement CP(CAA) No.13 of 2021in CA (CAA) No.LL21, of 2l2Obefitteen Kanakia Spaces Reality Pat. Ltd. ("Transferor Company") and Kanakia Future Reality Pztt. Ltd. ("Transferee Company" ) along zpith other Transferee C-ompanies, whereby all the assets and properties comprisid in the real estate undertaking of the Transferor Company shall under proaisions of Section 230 to 232 stands transferred to and ztested in the Transferee Company. Clause 10 Gx) of the Demerger Order records that there is no requirement for procuring 2/3rd consent uniler Section 15 of the Real Estate (Regulation and Deztelopment) Act, 2016 since there is no change in tlu shnreholding of ttu Transferee Company". 4. The Promoter also declares / undertakes that the details furnished are true and correc! that any changes would be immediately informed; that there is no pending case before any Court/NCLT / any authorized body regarding transfer of the Promoter's rights and liabilities in the project, that there is no bar to transfer the rights and liabilities to a third party from any financial institution or financiers who have a charge on the projec! and that there is no prohibitory order passed by any Court of law against transfer of the existing project in favour of third party. 5. Thus, with regard to the change of Promoter sought by the Promoter herein it is pertinent to examine section 15 of said Act. The relevant extract of section L5 is reproduced hereinbelow: " section 75: Obligations of promoter in case of transfer of a real estate proiect to a thiril party: @ ru promoter shall not trnnsfer or assignhis majority ights andliabilities in respect of a real estate project to a third party witlnut obtaining pior zttritten consent from tuto- third allottees, except the promoter, and without tlu prior ruritten approaal of tlre Authoity: \\Nt' Page 2 of 4 W Proaidcd that such transfer or assignment shall not ffict the allotment or sale of the apartments, plots or buildings as the case may be, in the real estate project made by the erstuthile promoter. Explanation - For the purpose of this sub-section, the nllottee, irrespectiae of the number of apartments or plots, as the case may be, boolccd by him or boolced in the name of his family, or in the case of otlur persons such as companies or firms or any association of indhsiduals, by rohateoer name called, booked in its name or boolced in the name of its associated entities or related enterpises, shnllbe considered as one allottee only. (2) On the transfer or assignment being permitted W the allottees and tlp Authon$ under sub-section (1), the intendingpromoter shallbe required to independently comply with all the pending obligations under the prooisions of this Act or the rules and regulations made tlureunder, and the pending obligations as per thc agreement for sale entered into by the erstutthile promoter utith the allottees: Proaided that any transfer or assignmentpermittedunder prottisions of this section shall not result in extension of time to tlu intending promoter to complete the real estate project andhe shallbe required to comply with all the pending obligations of the erstzohile promoter, and in case of default, such intending promoter shall be liable to the consequences of breach or delay, as the case may be, as prooided under this Act or the rules and regulations made thereunder." 6. From the plain reading of section 1.5, it is clear that the transfer of majority rights and liabilities of the Promoter herein in respect of said Project to a third party i.e. Kanakia Future Reality Pvt. Ltd. herein shall not happen without obtaining prior written consent from two-third Allottees, except the Promoter. However, in the present case, the Demerger Order dated 1,6.07.2021, of the NCLT has clearly stated that there is no requirement for procurtng2/3ta consent under section 1,5 of the said Act as there is no change in the shareholding of the incoming Promoter company i.e. Kanakia Future Reality Pvt. Ltd., is a wholly-owned subsidiary of the Promoter (Kanakia Spaces Reality Pvt. Ltd.). 7 Further, the Promoter during the hearing has relied uPon the MahaRERA circular No. 24 dated 04.06.2019 wherein it has been provided that if the amalgamation or merger or demerger of the companies, which is not regarded as transfer under section 47 of the Income Tax Act 1967 or where 75% of the shareholders remain same in the resultant company, the same shall not require taking approvals of Allottee(s) under section 15 of the said Act. In view of the Page 3 of 4 \,t")e \.( aforesaid circular the Promoter is exempted from taking 2/3'a consent of the Allottees and is permitted the change of name of the Promoter to Kanakia Future Reality Pvt. Ltd. In the said Project. FINAL ORDER Thus, Kanakia Future Reality Pvt. Ltd. is permitted as the new Promoter for the said Project. Needless to say, that Kanakia Future Reality Pvt. Ltd. shall be required to independently compty with all the pending obligations under the provisions of the said Act or the rules and regulations made thereunder, and the pending obligations as per the agreement for sale entered into by the Promoter with the Allottees and shall complete the balance construction work and handover possession to all the Allottees of the said Project as per the timelines mentioned on the MahaRERA Project registration webpage. h.-\J"- Mehta) Chairpersorl Page 4 of 4