November 07, 2017

 

MUMBAI: The overriding principle of the Real Estate Regulation and Development Act (RERA) is to ensure completion of a project, said senior counsel Darius Khambata on Monday. The original promoter loses no right over the project and unsold flats, even if its registration is revoked for breach caused by him and the RERA authority tasks another builder to complete work, as a contractor, he said.

Khambata, appointed as an amicus curiae (friend of court) to assist Bombay high court on a constitutional challenge filed by builders to RERA provisions, made day-long submissions before a bench of Justices Naresh Patil and R G Ketkar. The Act, which came into force on May 1, is unduly penal and violates their fundamental right to trade, in property, and by its retroactive application on pending projects illegally impairs old contractual obligations, the builders had argued.

“There are sufficient safeguards that protect a promoter if there is a bona fide stay on a project,’’ Khambata said, pointing to sections 8 and 37 that allow the promoter to be appointed a contractor to complete a project even if registration of a project is revoked over defaults. The revocation will only stop sale of flats and does not interfere with other rights of a promoter “merely because his obligation to construct is taken away’’, he explained.

Khambata submitted that “alternatively it can be read’’ that a period of a bona fide stay one that is not obtained by collusion on a project on a court order, should be excluded from the completion time-line given by the builder while registering the project under RERA. He said state rules cannot be used to interpret the Act. The Maharashtra rules, home buyers claim, appear to have diluted the stringency of the Act.

Khambata, analyzing the Act, said it was constitutional and reasonable. What, however should “be struck down as unconstitutional’’ is the provision that allows an “additional chief secretary or member of Indian Legal Services’’ to be appointed as a ‘judicial member’ on the RERA appellate tribunal. The judicial member has to mean a judge or a person qualified to be a judge, something the builders also said.

There is no acquisition or expropriation of the builder’s right to the project, Khambata submitted, refuting submissions made earlier by a builder’s lawyer.

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Source: realty.economictimes.indiatimes.com