Category: HI & RERA

Prime Minister Narendra Modi on Monday said that there was a trust deficit between builders and home buyers, and the Real Estate Regulatory Authority (RERA) Act was introduced to remove this problem.

While inaugurating the construction of the Agra Metro project via video conferencing, Modi said, “People with wrong intentions brought disrepute to the entire real estate sector, upsetting our middle class.”

The prime minister said that there was a trust deficit between the builders and the home buyers, and the RERA law was introduced to remove this problem. He added that some recent reports showed that middle class homes were getting completed quickly after the introduction of this law.

He also said that all-round development, from modern public transport to housing, was going to make life easier in cities.

Noting that the Pradhan Mantri Awas Yojana was inaugurated from Agra, the prime minister said that more than one crore houses have been approved for the urban poor under this scheme.

Modi said help is being provided to middle class families of the city to buy houses for the first time. He said so far, more than 12 lakh urban families have been given help of about ₹28,000 crore to buy houses.

The prime minister said infrastructure like water and sewer are being upgraded in several cities under the AMRUT mission, and help is being given to local bodies to make public toilets better in cities and to implement a modern system of waste management.

“Dreams of today’s new India are big (‘badhe’) and enormous (‘viraat’). But, visualizing the dreams is not enough, courage is needed to fulfil them. When you move ahead with courage and dedication, no obstacle can stop you. The youth of India and smaller cities are displaying this courage and dedication,” he said.

“The role played by metro cities in the 20th century is now being played by smaller cities like Agra,” the prime minister said.

He said that metro rail coaches are being made in India under the Make in India mission. When it comes to the matter of metro network, India is becoming self-reliant, he said, and added that Agra is the seventh city of Uttar Pradesh to have the metro rail facility.

“Agra has an age-old identity. Now, a new dimension of modernity is getting attached to it. The city which has treasured history of hundreds of years is all set to march in tune with the 21st century,” Modi said.

“In the past six years, the speed and scale with which work has been done on the metro network in UP and in the country, shows the identity (‘pehchaan’) and commitment of the government,” he asserted.

Modi also remarked that cities of western UP have everything, which is needed for self-reliance.

“The farmers here have a tremendous potential. In the matter of animal husbandry, this region is a leader in the country. There is a huge scope for the dairy and food processing industry here, and this region is also moving ahead in the service and manufacturing sector,” he said.

He added that with modern infrastructure and modern facilities, this potential of western UP is increasing.

The first Rapid Rail Transport System (RRTS) is being constructed between Delhi and Meerut, he said, adding that a 14-lane expressway between Delhi and Meerut will soon serve people.

Source: https://www.livemint.com/news/india/rera-act-introduced-to-remove-trust-deficit-between-builders-homebuyers-pm-modi-11607346808812.html

Homebuyers have been subjected to excessive delays under the justice delivery system because construction projects have long gestation periods. From a mere contractual dispute to instances of fraud and delays in handing over the property, homebuyers face a lot of challenges. So remedies under one particular legislation may not be sufficient to cover all the offences and problems. Consequently, there is a need to give expansive remedies to them under different Acts.

In case of any dispute, they can now approach three possible forums under three different Acts: The Consumer Protection Act, 2019, as a consumer; Real Estate (Regulation and Development) Act, 2016 (RERA Act) as an allottee; and Insolvency and Bankruptcy Code, 2016, as a financial creditor.

The new Consumer Protection Act, 2019, has been a relief in more ways than one and has wide-ranging provisions with respect to both defining the offence under the Act and dispute resolution. It is also not specific to resolution like the Insolvency Code. Therefore, it is important to understand that the remedies should be simultaneous and not mutually exclusive.

The fact that the RERA Act contains a ‘bar of jurisdiction’ clause has not stopped the courts from providing the homebuyers with simultaneous remedy under the Consumer Protection Act for issues that go beyond the RERA Act. This has been for various reasons. The Punjab and Haryana HC has held in two judgments—Experion Developers Pvt. Ltd. v. State of Haryana and Ors., and Janta Land Promoters Private Limited v. Union of India and Ors—that remedies under RERA are in addition to and not in derogation of the other laws in force, taking recourse to Section 88 of the Real Estate Act.

It has held that the appropriate forum may be approached under the Consumer Protection Act in case of remedies that may not be available under RERA. This has been furthered by a recent Supreme Court judgment on the same issue in the case of M/S Imperial Structures Ltd v. Anil Patni. In the said case, the project had not been completed even after substantial booking amounts had been paid by the allottees. In 2017, the National Consumer Disputes Redressal Commission (NCDRC) was approached under the Consumer Protection Act 1986 (now amended to Consumer Protection Act, 2019); it ordered refund of the amount paid with 9% interest per annum and costs to the tune of Rs 50,000.

The NCDRC also dismissed the claim of the builder that it had no jurisdiction to adjudicate on that particular issue as the project was approved by RERA and therefore, the Regulatory Authority under the Real Estate Act was the appropriate forum. Consequently, an appeal was filed by the builder in the Supreme Court. The Division Bench at the apex court held that there was no bar in approaching the NCDRC under the provisions of RERA. This was because of two distinct reasons.

First, the court relied on its decision in Malay Kumar Ganguli v. Dr Sukumar Mukherjee, where it has been held that the NCDRC is not to be treated as a civil court as defined under the Civil Procedure Code; and Section 79 of RERA, which deals with bar on jurisdiction of other courts, will thus not cover the NCDRC. Second, that Section 71 deals with the authority’s power to adjudicate and the proviso to Section 71(1) states that the complainant under RERA may withdraw a complaint that is pending before any of the Consumer Disputes Redressal Commissions after taking permission from such forum or authority and then file a complaint under the Real Estate Act.

This clearly indicates at a legislative intent of giving an option to the complainant to either proceed simultaneously or in any of the forums distinctly, rather than mandatory withdrawal of a complaint under the Consumer Protection Act to file a complaint under RERA. These judgments are a much-needed respite to homebuyers as the remedies under the specialised Acts are very selective and may also limit the cause of action. The three reasons given above can offer an opportunity to the homebuyers to make complaints under the preferred Act or expand their rights by making simultaneous complaints in order to get exhaustive remedies.

However, while these are protective legislations, the courts shall endeavour to prevent any overlaps if the homebuyers choose to pursue simultaneous remedies. For instance, Section 12 of RERA penalises the promoter for misleading advertisements in the context of layout, plan or model of the building. Such penal consequences for misleading advertisements are also available under the Consumer Protection Act under Sections 2(28) and 10(1) more generally, which relate to any aspect of the false and misleading advertisement. Therefore, the compensation awarded will have to prevent any overlaps in these areas; otherwise, it will lead to unjust enrichment of the complainant, which is not the purpose of these Acts.

Source: https://www.newindianexpress.com/opinions/2020/nov/27/simultaneous-proceedings-a-relief-for-homebuyers-2228667.html

The Builders’ Association of India (BAI) on the Supreme Court’s recent judgement allowing homebuyer for compensation uphelding the consumer court’s order stated that Real Estate Regulatory Authority (RERA) is formed only to resolve real estate related matters. Anand Gupta, Chairperson of housing and RERA committee of BAI said, “RERA has been doing a great job. The RERA act was approved by the Parliament of India in 2016 and from 2017 it was implemented. After 70 years, such authority was formed where builders and homebuyers can seek justice.” RERA was established to expeditiously hear the real estate matters unlike other civil courts that listen to several other matters, he asserted.

Meanwhile, he also stated, “Of course, homebuyers will have an option to approach the various courts of law and with this judgment, now it is clear that consumer court can also pronounce on real estate projects where the possession has been delayed or homebuyer seeking a refund. Though the platform was open earlier too but this judgement now specifically cites that homebuyers can reach consumer forums with their complaints.

Instead of doing so, the SC in its judgement could have directed the parties to approach RERA and if not satisfied then further to appellate tribunal, HC among others, Gupta explained.

The matter is about a Housing Scheme “The ESFERA” in, Gurgaon, launched by the builder (Appellant) sometime in 2011, and all the original complainants — Anil Patni and others booked their respective apartments by paying the booking amounts and thereafter each of them executed Builder Buyer Agreement.

However, even after four years, there were no signs of the project getting completed. In the circumstances, the homebuyer approached the consumer commission that ordered the builder to pay Rs 50,000 as compensation. However, the builder approached SC wherein, it upheld the order to be paid by the appellant in respect of each of the consumer cases, over and above the amounts directed to be made over to the complainants and shall form part of the amount payable by the appellant to the complainants.

Source: https://www.freepressjournal.in/mumbai/builders-association-of-india-chairman-says-rera-is-a-dedicated-authority