Written by: Aditi Saklani
It is a breathe of relief for home buyers and builders. The Bombay High court has upheld the validity of Real Estate Regulation and Development Act (RERA) on the ongoing projects across various states.
RERA was established to make home buying a transparent procedure.
This judgment also gave relief to builders as High Court provided a leeway by granting additional time to complete a project under exceptional circumstances. The additional time would be granted in case of compelling conditions. It has to be mentioned during the registration that the extension time will go beyond statutory one year after the deadline for completion. A division bench of Justice Naresh Patil and Justice RG KetKar upheld the constitutional validity of 18 sections of RERA and its application to ongoing projects across various states. Bombay High court also stated that the fresh timeline for ongoing projects doesn’t absolve builders of liability.
This verdict was announced on Wednesday with respect to the challenges that were raised by the builders in various High Courts. Provisions that were challenged included:
- Builders to specify time within which he will finish a project or a phase.
- Builders to deposit 70% of amount received from buyers in separate account to cover only construction & land costs.
- Builder is liable to compensate buyer for delay in possession even if he exits from project.
The main legal challenge from builders to RERA was against Section 3 – required registration of not just new but even ongoing constructions that were yet to get completion certificates by May 1.
The High Court rejected all the constitutional challenges raised by builders in a single go but agreed to the appointment of members on a tribunal for appeals under RERA. The High Court accepted the builder’s plea that “judicial members” must mean “judicial officers” as tribunal has powers to order imprisonment upto three years. The Supreme Court had asked the Bombay High Court in September to set the path. The additional time provided to builders under RERA by Bombay High Court is granted under the scrutiny of Sections 6,7,8 and 37. It will be granted on a case-by-case basis after hearing promoter allottee and even the government in certain cases.
Now home buyers from several states will be able to challenge the rules that had been diluted by the State Governments under RERA.
About the Author: Aditi Saklani is a trainee journalist in India Today Media Institute
Published by: Shubhrika Bahadur Satyawakta
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