Bombay HC Asks MahaRERA To Examine Delays On Case-To-Case Basis
The Bombay High Court, on December 6, has upheld the validity of the Real Estate (Regulation & Development) Act, 2016. A Bench of Justices Naresh Patil and Rajesh Ketkar made the judgement based on several petitions filed by real estate developers and individual plot owners, all challenging the constitutional validity of the Act that came into effect on May 1, 2017.
Under the Act, all developers register themselves with the Real Estate Regulatory Authority (RERA). The authority allows buyers to claim compensation for delay in possession and looks at the cancellation of a developer's registration in case he fails to complete the project within the stipulated deadline.
The petitions filed with the Bombay HC claimed that the Act, and the constitution of a state-level authority for its implementation, were arbitrary and unconstitutional.
The Bombay HC Bench, however, allowed a significant leeway for developers in today's judgement by permitting the state-level RERA authority and the Appellate Tribunal to consider delays on a case-to-case basis, and not to cancel projects or developers' registration in cases where the delay was caused due to "exceptional and compelling circumstances."
"In case the authority is satisfied that there are exceptional and compelling circumstances due to which a developer could not complete the project inspire the one-year extension granted, then the authority will be entitled to let the developers' registration continue," the HC Bench said.
"Such powers shall be exercised on a case-to-case basis. The authority shall consult with the state in such cases if needed," the Bench added.
The Bench ruled that the Act was crucial to protect the interest of flat buyers across the country. It said, "RERA is not a law relating to only regulatory control the promoters (developers), but its objective is to develop the real estate sector, particularly the incomplete projects across the country."
Most of the developers had challenged a provision of 'force majeure or a natural disaster', where any extension beyond a year for completion of the project would have led to penalties.
The Centre and the state had vehemently defended the Act, and justified the strict provisions by arguing that the same was meant to protect homebuyers, and to rein in rogue developers.
In September, after several petitions challenging the Act were filed in high courts across the country, the Supreme Court stayed the proceedings in other courts and suggested that the Bombay High Court hear its cases related to the Act first.
With inputs from Housing News