Supreme Court Asks States To Submit Suggestions For Model Builder-Buyer Agreement With Mandatory RERA Clauses

Supreme Court bench comprising Chief Justice DY Chandrachud and Justice PS Narasimha asked states to submit suggestions to the Union Ministry of Housing and Urban Affairs on the model builder-buyer agreement with the mandatory provisions of the Real Estate (Regulation and Development) Act 2016 (RERA Act). 

At the outset, amicus curiae Advocate Devashish Bharuka submitted that in terms of the last order, the court had asked to at least frame Part A of the model agreement, which was to have core clauses with the mandatory provisions of the Real Estate (Regulation and Development) Act 2016 for the protection of the home buyers. He added that Part B was to be framed by States and was to contain additional clauses as per the requirements of the individual States/UTs subject to the condition that it would not be contrary to or dilute in any manner the clauses in Part A.

Owing to a heavy board, the CJI remarked–

"We may not be able to dispose it today. We will keep it on a Friday maybe."

Additional Solicitor General Aishwarya Bhati suggested that they could take suggestions of states for the agreement. It was submitted by the amicus that three states had certain suggestions–

"One is Haryana. Second is Nagaland, where the Constitution Article 371A comes into play and third is Tamil Nadu which suggest that there should be two separate agreements."

Accordingly, the CJI dictated the order which states–

"ASG Bhati and amicus Bharukha have placed a compendium on record comprising of Part A Clauses which are proposed to be uniform across the country; and Part B clauses which may be inserted by the states subject to the condition that they should not be contrary to or dilute the clauses of Part A and must conform to the provisions of the RERA Act. The compendium has been circulated to all the states and to the associations which are represented in the court. We permit the associations and the states as the case may be to submit their responses to the Union Ministry of Housing and Urban Affairs within a period of on or before 15 February 2023. The suggestions can then be taken into account while preparing the final compendium. Haryana, Nagaland, and Tamil Nadu have raised certain issues which may be taken into account. Listed in the last week of February."

The issue arose in the PIL filed by Advocate Ashwini Upadhyay seeking a model builder-buyer agreement. Earlier, the Supreme Court had observed that a model agreement was necessary to protect the interests of home buyers and had asked the Union to frame a model agreement after taking inputs from the States. Later, the Court asked the Union to scrutinize the rules framed by the States under RERA to ascertain if essential norms have been incorporated. Accordingly, the Central Government had proposed to submit before the Supreme Court a model builder-buyer agreement with mandatory clauses which cannot be altered by the States or the Union Territories.

Case Title : Ashwini Kumar Upadhyay versus Union of India|Writ Petition(s)(Civil) No(s).1216/2020

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