Bombay high court upholds RERA’s validity, allows body to give extension to projects
The bench dismissed several pleas filed by developers; it has allowed the regulatory authority to grant extension to projects beyond the one-year limitmumbai Updated: Dec 07, 2017 14:57 IST
The Bombay high court (HC) on Wednesday upheld the constitutional validity of recently enacted Real Estate (Regulation & Development) Act, 2016, which regulates the construction industry and protects the interests of home buyers.
The two-judge bench dismissed a bunch of pleas filed by real estate developers and individual plot owners challenging 18 provisions of the Act.
The bench of justice Naresh Patil and justice Rajesh Ketkar, however, allowed the Real Estate Regulatory Authority to grant an extension – beyond the one-year limit set by the enactment – to complete projects under exceptional and compelling circumstances.
“Having careful scrutiny of relevant provisions of RERA (the Act), its object and scheme and submissions advanced, we have harmoniously construed sections 6, 7, 8 and 37,” the bench said.
“We hold in case the authority is satisfied that there are exceptional and circumstances due to which promoter could not complete the project in spite of extension granted under section 6, then the authority would be entitled to continue registration for completing the project,” it said.
This comes as a major reprieve for builders and developers as they will get an additional period – over and above the stipulated period of one year – to complete their projects, in case the work is delayed due to circumstances beyond their control.
The bench has, however, clarified that this power to grant additional extension can be exercised by the authority only in exceptional and compelling circumstances and on a case to case basis, and no builder or developer can seek an additional extension beyond the stipulated one year period as a matter of right.
The court held the two-member bench of a majority of the Real Estate Appellate Tribunal must comprise one judicial member and majority of the bench must comprise judicial officers where it has more than two members.
It struck down part of section 46(1)(b) which required the judicial members of the tribunal to have served as additional secretary to the government in addition to having been a judicial officer.
Advocate general Ashutosh Kumbhakoni sought a stay on the operation of the judgement, especially the two changes introduced by the decision, but the bench rejected the request saying it lacked merit.
In the course of the judgment, the bench stressed on the scrupulous implementation of provisions of the RERA act.
“We are conscious of the fact that actual implementation of RERA needs to be closely monitored in years to come. RERA is not a law relating only to regulatory control over the promoters but its object is also to develop the real estate sector, particularly to complete the incomplete projects across the country,” it said.
“The problems are enormous and it is time to take a step forward to fulfil the dream of the Father of the Nation Mahatma Gandhi, to wipe every tear from every eye,” it added.
The act provides for curbs on builders and developers in the execution of construction projects, penalising them for the delay in completing projects and safeguarding flat-buyers from unscrupulous builders.