The Bombay High Court today upheld the constitutional validity of the Real Estate (Regulation and Development) Act (RERA), observing it was crucial to protect the interests of flat buyers across the country and develop incomplete projects.
The court passed the order while deciding on a bunch of petitions filed by developers and plot owners challenging the validity of several sections of the RERA act.
Noting that there are "enormous problems" in the housing sector, the court also said it's time to take a step forward to fulfil Mahatma Gandhi's vision of wiping every tear from every eye.
Rawat said there could be multiple genuine reasons behind the delay of a project delivery and the court has rightly addressed the issue.
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.
The Bench, headed by Justice Patil, allowed significant leeway for developers in the judgement by permitting the State-level RERA Authority and the Appellate Tribunal to consider delays on a case-to-case basis, and to not cancel such projects or developers' registration in cases where the delay was a result of "exceptional and compelling circumstances".
Such powers shall be exercised on a case-to-case basis and the authority shall consult with the state in such cases if needed, it said.
Several builders had filed cases in High Courts of Bombay, Nagpur, Aurangabad, Bangalore, Jabalpur to challenge the recently enacted Real Estate (Regulation & Development) Act, 2016 and few of its provisions including applicability for ongoing projects.
The court also struck down a provision that called for appointment of bureaucrats as members of an appellate tribunal. In the constitution of a tribunal, majority members must be judges or judicial officers, the court added.
As per the Act, developers, projects and agents had time till July 31 to compulsorily register their projects with the Authority.
Most of the developers had challenged a provision of "force majeure or a natural disaster"- that allowed an extension of the deadline by a maximum of one year, if the delay was caused on account of natural disasters such as earthquakes or floods. The Supreme Court then directed High Court of Bombay to hear the cases filed in Maharashtra with a directive to give a judgment within 2 months.
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. 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.