As a couple of reporters had rushed to the office of Uttar Pradesh Real Estate Regulatory Authority (UP RERA) at Greater Noida to seek the reaction, following the Supreme Court landmark judgment on 11th November, some harassed home buyers knocking RERA doors were wondering as to whether something is going to change radically for their benefit this time. Track2Realty analyses the Supreme Court judgment on RERA and settled principle of law.
The Supreme Court in a landmark judgment in the case of Newtech Promoters & Developers versus State of UP & others has constitutionally validated challenged provisions of RERA. The Apex Court has thereby settled the principle of law via its judgment with respect to appeals emanating against UP RERA jurisdiction.
A retired army veteran wanted to know whether the RERA order passed in its favour will not be challenged by the builder. Another young couple waiting for the RERA Recovery Certificate to be executed were wondering as to whether the Supreme Court judgment touches upon their grey zone as well.
The real estate market of Uttar Pradesh in general and Noida-Greater Noida in particular is hotbed of consumer grievances, ranging from delay to default and unmet promises to builder’s high handedness. As per the industry estimate nearly 40% home buyers’ grievances in India are reported to be from this market alone. It is hence no surprise that even when the Real Estate Regulatory Authority proposes to clean the market, the builders devise their own ways & means to dispose it.
RERA, as a matter of fact, has always been work in progress in India. In the case of Noida-Greater Noida, the builders have been cunningly challenging its orders and RERA’s legal jurisdiction. The settled principle of law under RERA that should ideally not even been debated is continuously challenged to lengthen the litigation of the home buyers.
It is not that the builders don’t know the settled principles of the law under RERA Act before challenging it to the higher courts. Their game plan has nevertheless been to delay the justice in order to deny the justice. They are conscious of the fact that if out of 1000 odd buyers 10 have approached RERA and secured judgment in their favour, honouring that judgment would invite hundreds of more buyers to RERA doorsteps. So, they repeatedly question the RERA jurisdiction and purview to lengthen the litigation in the higher courts and thus continue to harass the home buyers.
Not anymore! Says the Supreme Court order. The highlights of the Supreme Court judgment are:
Constitutional Validity of RERA upheld
Ongoing Projects are those where CC has not been obtained prior to 1st May, 2017
RERA Act is retroactive
Pre-existing Agreements will be subject to retroactive application and thereby the provisions of the Act and Rules there under will prevail. Accordingly, rate of interest would be as per RERA
Jurisdiction for Refunds along with interest thereon and Interest on Delayed possession lies with Authority
Jurisdiction to decide on Compensation lies with AO
Delegation of powers to decide Complaints under Section 12,14,18 & 19 to a single member upheld
Pre-deposit of 100% of amounts payable to allottees to be deposited with Appellate Tribunal for admission of Appeal
Right to issue Recovery Certificates upheld
An elated Venket Rao, Legal Advisor of UP RERA points out that the judgement by the Supreme Court puts once for all a lid on certain contentious issues. According to him, there were three grey areas that the builders were repeatedly challenging. First one was which are the projects that fall under the ambit of RERA. The Apex Court has categorically said that the projects that didn’t have Completion Certificate (even if with Occupancy Certificate) as on 1st may, 2017 fall squarely in the ambit of RERA.
Secondly, a key issue decided by Apex Court is on the amount to be deposited by the developer with the Appellate Tribunal before its Appeal is admitted against a RERA order. Section 43(5) of RERA provides for deposit of 100% of the amount payable.
“Finally, Apex Court in most consumer friendly manner has clearly held that pre-existing contracts (i.e. contracts in existence prior to RERA coming into effect) will be read as per RERA and thereby Legislative has the power to make an Act retroactive and is therefore RERA is not violative of Constitution of India,” says Rao.
The judgment nevertheless leaves many questions unanswered. The law has always been very clear as far as the legal jurisdiction and ambit of RERA is concerned. The Apex Court has only clarified it further and there is nothing new in this order. The larger issue has been the builders’ intent to challenge it and lengthen the legal battle of the harassed home buyers.
Will this Supreme Court judgment put an end to the lengthy & expensive litigation of the home buyers?
Is RERA another window of litigation and not the final doorstep of justice?
What are the options for the home buyers if the builder continues to challenge RERA orders in higher courts on some other grounds?
Is multiple litigation window defeating the very purpose of RERA?
If RERA is not empowered to act as Fast Track Court for the home buyers then what purpose is it serving?
Shouldn’t higher courts admit cases against RERA orders selectively and only on the technical grounds?
Shouldn’t RERA approved projects act as a due diligence channel for the home buyers?
Shouldn’t RERA be empowered enough to create an entry barrier for the serial offender builders?
There are many more questions than what anyone could probably answer at this point of time. The said Supreme Court judgment has only defined the constitutional validity and ambit of UP RERA. This will definitely set a precedent for RERA in other States as well. However, it is difficult to say whether the Apex Court has set the tone for the builder to fall in line. More importantly, it can only be a guestimate now as to when and in which shape the real estate regulatory body emerges from its infancy stage of trial & error.
Ravi Sinha
@RaviTrack2Media
Track2Realty is an independent media group managed by a consortium of journalists. Starting as the first e-newspaper in the Indian real estate sector in 2011, the group has today evolved as a think-tank on the sector with specialized research reports and rating & ranking. We are editorially independent and free from commercial bias and/or influenced by investors or shareholders. Our editorial team has no clash of interest in practicing high quality journalism that is free, frank & fearless.
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