BREAKING : Supreme Court Upholds Application Of RERA To Real Estate Projects Ongoing At Act's Commencement

The Supreme Court on Friday upheld the retroactive application of the Real Estate(Regulation and Development) Act, 2016 to the real estate projects which were ongoing at the commencement of the Act.The bench comprising Justices Uday Umesh Lalit, Ajay Rastogi and Aniruddha Bose observed that the RERA Act does not apply to the projects already completed or to which the completion certificate has been granted at the commencement of the Act. The court rejected the contentions raised by Promoters/Developers that the first proviso to Section 3(1) of the Act is violative of Articles 14 and 19(1)(g) of the Constitution of India.Section 3(1) RERASection 3(1) states that no promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project or part of it, in any planning area, without registering the real estate project with the Real Estate Regulatory Authority. The proviso reads as follows: Provided that projects that are ongoing on the date of commencement of this Act and for which the completion certificate has not been issued, the promoter shall make an application to the Authority for registration of the said project within a period of three months from the date of commencement of this Act.BackgroundIn this case, the single member of the RERA on the complaint instituted at the instance of the home buyers/allottees directed the promoter/real estate developer to refund the principal amount along with interest. The Developer approached the High Court by filing a writ petition challenging the jurisdiction of the Tribunal. This writ petition came to be dismissed by the High Court. In appeal, one of the issues considered by the Apex Court was whether RERA is retrospective or retroactive in its operation and what will be its legal consequence if tested on the anvil of the Constitution of India.Taking note of the statutory provisions especially Section 3 of the RERA, the court observed that all "ongoing projects" that commence prior to the Act and in respect to which completion certificate has not been issued are covered under the Act. It said:"It manifests that the legislative intent is to make the Act applicable not only to the projects which were yet to commence after the Act became operational but also to bring under its fold the ongoing projects and to protect from its inception the inter se rights of the stake holders, including allottees/home buyers, promoters and real estate agents while imposing certain duties and responsibilities on each of them and to regulate, administer and supervise the unregulated real estate sector within the fold of the real estate authority."ContentionsThe Developer's contention was that the agreement of sale was executed in the year 2010-11, i.e. much before the coming into force of the Act and the present Act has retrospective application. It was contended that the registration of ongoing project under the Act would be in contravention to the contractual rights established between the promoter and allottee under the agreement for sale executed which is impermissible in law and further submits that Sections 13, 18(1), 19(4) of the Act 2016 to the extent of their retrospective application is in violation of Articles 14, 19(1)(g) of the Constitution of India. On the other hand, the Centre defended the retroactive application of the law and submitted that the provisions make it clear that it operates in future, however, its operation is based upon the character and status which have been done earlier and the presumption against retrospectivity in this case is ex-facie rebuttable. The bench, made the following observations:The legislature consciously enacted a retroactive statute41. The clear and unambiguous language of the statute is retroactive in operation and by applying purposive interpretation rule of statutory construction, only one result is possible, i.e., the legislature consciously enacted a retroactive statute to ensure sale of plot, apartment or building, real estate project is done in an efficient and transparent manner so that the interest of consumers in the real estate sector is protected by all means and Sections 13, 18(1) and 19(4) are all beneficial provisions for safeguarding the pecuniary interest of the consumers/allottees. In the given circumstances, if the Act is held prospective then the adjudicatory mechanism under Section 31 would not be available to any of the allottee for an ongoing project. Thus, it negates the contention of the promoters regarding the contractual terms having an overriding effect over the retrospective applicability of the Act, even on facts of this case. Parliament is always competent to enact any law affecting the antecedent events 42. What...

BREAKING : Supreme Court Upholds Application Of RERA To Real Estate Projects Ongoing At Act's Commencement

LIVELAW NEWS NETWORK

Tags