Status as on- 24/10/2020

INTRODUCTION

The Real Estate Regulation and Development (RERA) Act was implemented in 2016 and the Haryana RERA rules were implemented in 2017. Since the famous judgment of “Sameer Mahawar Vs. MG Housing Private Limited” wherein the Haryana RERA Tribunal ruled that the power of refund under Section-18 lies with the Adjudicating Officer a series of turmoil unfolded in the state of Haryana.

Thereafter, an amendment to the Haryana RERA Rules were brought in September, 2019 vide which the power of refund and possession with interest was made cleared to be vested in the Real Estate Regulatory Authority under the RERA Act read with Haryana RERA Rules. That the same was challenged before the High Court of Punjab and Haryana in batch of writ petitions filed by all major builder companies.

That the Hon’ble High Court has finally ruled on 4major legal issues raised in the said writ petitions which are explained in brief in pointwise manner below.

LEGAL ISSUE-1

Who has the power to grant refund and possession with interest?

The Hon’ble high Court very beautifully examining the provisions of the RERA Act and the Rules drafted and them amended vide the amendment notification dated 12.09.2019 ruled that the power to grant refund and possession with interest vests with the RERA Authority and not the Adjudication Officer (AO).

While reading the scheme of the Act the HC ruled that the power of the RERA Authority was much wider in terms of Section-35,36,37 and 38 which gives vide range of powers to RERA Authority and also confirms that under Section-35 it has all the powers of a Civil Court. That when looked at the scheme of appointment of Adjudicating Officer under Section-71 and 72 the same is very limited and only for the specific purpose of adjudicating compensation as given under Section-12,14,18 and 19.

How will the earlier decided matters and pending Complaints be treated now?

The orders which have reached finality will not be touched but the pending complaints and all future complaints if are seeking prayer of refund or possession with interest then same shall be stand transferred to the RERA Authority.

In case they seek prayer of refund or possession with interest clubbed with compensation then same will be decided first by RERA Authority in terms of refund or possession with interest and then for limited purpose of compensation be stand transferred to the Adjudicating Officer (AO).

LEGAL ISSUE-2

Whether the pre-deposit mandate casted upon promoter under Section-43(5) before filling of Appeal under Section-44 be waived off ore reduced?

The HC in line of SC rulings and the ruling of Divisional Bench of the High Court on same legal question ruled that the same cannot be done. While answering the legal question the HC ruled that appeal is creature of the Act and the same can be made subjective by the legislature.

Thus, any promoter can now not purpose any appeal from the RERA Authority or the Adjudicating Officer without making a deposit of the amount payable to the alottee/Homebuyeras per the order of RERA Authority of the Adjudicating Officer (AO).

LEGAL ISSUE-3

That the delayed interest or compensation cannot be granted retrospective?

That the same has also been denied by the High Court and in light of the ruling given by Bombay High Court in matter of “Neelkamal Realtors” they ruled that the relief is of retrospective nature and not application of the Act.

Thus, the interest and compensation under the Act can be provided from backdate.

LEGAL ISSUE-4

Whether the amendment brought in HARYANA RERA Rules dated 12.09.2019 valid?

Yes, the amendment brought in HARYANA RERA Rules in 2019 was upheld in all aspects and thus ongoing and fresh Complaints will now be decided in light of the same. Meaning thereby the RERA Authority will decide both refund and possession matters.

CONCLUSION

The High Court has very well settled the law and it seems to be the correct position of law. The Homebuyers who have been facing injustice due to the issue of power between the RERA Authority and the Adjudicating Officer will now finally be able to claim tehri rights.

Disclaimer: The above article is based on the interpretation of the related laws and judicial pronouncements. The readers are expected to take legal advice before relying on this article. The author can be reached at support@centrik.in