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Principale » Bombay High Court upholds RERA Act

Bombay High Court upholds RERA Act

07 Décembre 2017

There's good news for home buyers as the Bombay High Court on Wednesday upheld the constitutional validity of the Real Estate (Regulation and Development) act, 2016 (RERA) and the authority formed under it.

A division bench of Justices Naresh Patil and Rajesh Ketkar rejected multiple petitions filed by builders and devlopers that challenged the validity of some of the sections of the Act. "To wipe out tears from every eye".

The RERA Act aims at protecting the interest of consumers in the real estate sector by establishing an adjudicating mechanism for speedy redressal of disputes. It also said that the authority should not cancel projects or developers' registration in cases where the delay was caused due to "exceptional and compelling circumstances".

The high court bench said, "Such powers shall be exercised on a case-to-case basis". The court's orders have come as a setback to the developer community, since the RERA is tasked with the business of regulating the incomplete projects. "The problems are enormous and it's time to take a step forward to fulfill the dream of the Father of the Nation - To wipe out tears from every eye".

The court also struck down a provision that provided for appointment of bureaucrats as members of an appellate tribunal.

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As per the Act, developers, projects and agents had time till July 31 to compulsorily register their projects with the Authority. DB Realty group of companies, had challenged as illegal, a provision which bars-except in case of a force majeure or a natural disaster-any extension beyond a year for completion of project, if it is not completed within the deadline mentioned by the builder while registration. In the constitution of a tribunal, majority members must be judges or judicial officers, the court added. However, Dhanuka said the court's view that only officials with judicial background should head the appellate tribunal makes lot of sense as it is expected to bring in transparency to the functioning.

The Centre and the State government had vehemently defended the Act, and justified the strict provisions by arguing the same were meant to protect buyers, and to rein in rogue developers.

While the bench concurred with the state and the Union government's arguments, it said that the authorities must also closely monitor the implementation of the Act.

Builders had filed cases in the High Courts of Bombay, Nagpur, Aurangabad, Bangalore challenging provisions of RERA including the provision of ongoing projects. Other courts should wait for the Bombay HC's decision before hearing RERA-related matters, it said, while directing the Bombay HC to expedite hearings.

Bombay High Court upholds RERA Act