REAL ESTATE: (RERA Act 2016)

Ref. Builders challenge to Estate (regulation and Development) Act.in Sep 2018 before SC

A bench of Justice Naresh Patil and Justice RG Ketkar passed the judgment after hearing all parties in the matter and upheld the provisions of the new Act that came into effect on May 1, 2017.

In September this year, (2018) after several petitions challenging RERA were filed in high courts across the country, the Supreme Court stayed the proceedings in other courts and suggested that the Bombay High Court hear its RERA cases first.

Builders’ Contention

Builders had challenged Sections 3 to 19 of the Act. Regarding regulating the transactions of ongoing projects and compelling promoters to get the project registered under RERA from the date of notification.

Petitioners submitted that, the promoter has been given a liberty to declare the tenure during which the project will be completed while getting the project registered .However the extension of registration granted under Section 5 by the authority is restricted to a period of one year which is unreasonable and an arbitrary provision. It has not been taken into consideration the circumstances which are beyond the control of the promoter while carrying out the developmental work. The Petitioner prayed that extension of registration under Section 6 shall not be restricted only to the force majeure circumstances provided under the proviso to Section 6 but all other factors also

A bench of Justices Naresh Patil and Rajesh Ketkar pronounced its judgment on a bunch of petitions filed by real estate developers and individual plot owners, all challenging the constitutional validity of the Act .It was held-

“RERA is not a law relating to only regulatory control the promoters (developers), but its objective is to develop the real estate sector, particularly the incomplete projects across the country. It is also crucial to protect the interest of flat buyers across the country,”

.Justice Patil opined

“The problems are enormous. It’s time to take a step forward to fulfill dreams of the Father of the Nation, Mahatma Gandhi, to wipe every tear from every eye”

The authorities must also closely monitor the implementation of the Act. The bench said while the bench concurred with the state and the Union government’s arguments.

“We are conscious of the fact that the actual implementation of RERA needs to be closely monitored in the years to come,” the bench opined.

On the point of composition of the state –level Authority, HC did not interfere with but it ruled that the tribunal must be headed by a judicial officer and not a bureaucrat, or a member of the Indian legal services, and that majority of the members of such tribunal must be officers or members of the judiciary.

(Another way of Exploiting Consumers)

Ref.  – High Court of Punjab &Haryana

(Order Dated 30 June 2020)

Petition moved by one Vinod Kumar, challenging Punjab RERA’s circular dated May 13, 2020 extending the period of validity of registration of projects by six months. It was alleged that the circular was issued to give relief to those projects whose registration was expiring on or before March 15, 2020, by treating the Covid crisis as a ‘Force Majeure’

Allegations put forth by the petitioner were-

1. Those projects whose registration has expired long back had been extended by six months. Due to this, several small-time home buyers were suffering as the builders had stopped work.
2. Power to issue circulars/ notifications of this nature vests in the State Government and not in the adjudicatory bodies. At best, RERA could have entertained an application under Section 84 or 85 of the RERA, 2016. However, no such application was moved in the instant case.

The bench of Justice Rajan Gupta and Justice Karamjit Singh was “surprised” that the RERA had provided blanket extension to all projects, including those that had expired long back

RERA &CP ACT both are additional remedy to consumers

Ref .Imperia Structures Ltd V/S Anil Patni &Others

Civil appeal no 3581-3590of 2020 decided on 2.11.20

Provisions under RERA

“Section 79 of RERA Act bars jurisdiction of Civil Court to entertain any suit or proceedings in respect of any matter which the authority or adjudicating officer or the appellant Tribunal is empowered under the RERA Act to determine but does not in any way bar the commissions or forums under the provisions of the CP Act to entertain any complaint

“Consumer Commissions are not Courts ”Vaishy Co-operative society V/S Kalavati 2000 SC

‘The provisions specified under Section 88 of RERA Act would be an additional remedy and not in derogation of the provisions of any other law “

“Section 100 of CPAct provides provisions of CPAct as an additional remedy and not in derogation of the provisions of any other law’’

“It is significant that Section 100 of CP Act is enacted with an intent to secure the remedies under 2019 Act dealing with protection of interests of of consumers even after the RERA Act was brought into force “

“Section 107(2) Notwithstanding repeal anything done or any action taken or purported to have been done or taken under the Act hereby repealed shall in so far as it is not inconsistent with the provisions of this Act ,been to have been done or taken under the corresponding provisions of this Act ‘

Section 71(1) of RERA Act entitles a complainant who had initiated proceedings under the CP Act before the RERA Act came into force to withdraw the proceedings under the CPA Act with the permission from the For a or commission and file an appropriate application before the adjudicating officer under RERA Act but does not statutorily force him to withdraw such complaint nor do the provision of the RERA Act create any mechanism for transfer of such pending proceedings “

“Cases where such proceedings under CP Act are initiated after the provisions of RERA Act came into force there is nothing that bar such initiative.

“The absence of bar under section 79 to the initiation of proceedings before a For a which cannot be called Civil Court and express under section 88 of the RERA Act saying additional remedy makes the position clear “

“In terms of Section 18 of the RERA Act if promoter fails to complete or is unable to give possession of an apartment duly completed by the date specified in the agreement, the promoter will be liable on demand to return the amount received by him in respect of that apartment if allotee wishes to withdraw from the project. The right so given to the allotee is unqualified and if availed, the money is to be refunded with interest at such rate as may be prescribed”

“The proviso to section 18(1)contemplates a situation where the allottee does not intend to withdraw from the project In that case he is entitled to and must be paid interest for every month delay till handing over of the possession “

“Marely because registration under provisions of RERA Act is valid till 31.12.2020does not mean that entitlement of concerned allottees to maintain an action stands deferred even for the purpose of section 18.of RERA Act ,perid has to be reckoned in terms of agreement and not registration “