Rera Act to su­per­sede IBC in mat­ters of home-buyer rights

Hindustan Times (Chandigarh) - - REGION - Mu­niesh­wer A Sa­gar

CHANDIGARH: The amended In­sol­vency and Bank­ruptcy Code (IBC) has brought home buy­ers within the am­bit of fi­nan­cial cred­i­tors. Ac­cord­ingly, any amount raised from an al­lot­tee in a real es­tate pro­ject will be now deemed to be a bor­row­ing. Al­lot­tees will be deemed as fi­nan­cial cred­i­tors. Un­der the IBC, their claims can be pressed at par with other fi­nan­cial cred­i­tors.

Main­tain­ing that rights guar­an­teed by the Real Es­tate (Reg­u­la­tory and De­vel­op­ment) Act, 2016 (RERA) for pro­tec­tion of al­lot­tees are wide, the Haryana RERA (Panchkula) has put al­lot­tee rights su­pe­rior to fi­nan­cial lenders.

When an al­lot­tee books an apart­ment or plot, she is deemed to have ac­quired a stake in part of the pro­ject land, the au­thor­ity held. Fur­ther, when she pays full or sub­stan­tial part to the de­vel­oper, she has to be con­sid­ered a deemed owner of the piece of land.

Abhay Upad­hyay, na­tional con­vener of Fight For Rera, a home-buyer as­so­ci­a­tion, said, “This clar­i­fies supremacy of home buy­ers against as­sets of a pro­ject over fi­nan­cial in­sti­tu­tions.” The au­thor­ity con­tended that fi­nan­cial in­sti­tu­tions have the req­ui­site ex­per­tise to carry out due dili­gence about pro­moter and pro­ject, while the al­lot­tee is gen­er­ally a mid­dle-class per­son lack­ing ex­per­tise. Lend­ing in­sti­tu­tions are also re­spon­si­ble for mon­i­tor­ing pro­ject progress, the au­thor­ity held, “If the money lent by them is di­verted, they must also share bur­den for the same. If the lenders fail to mon­i­tor the pro­ject and if loan is not re­paid in time, they must share the blame. The al­lot­tee, how­ever, must not suf­fer on be­half of pro­moter or fi­nan­cial in­sti­tu­tion.”

PRO­JECT TAKEOVER: DI­VER­GENT VIEWS

The au­thor­ity also held that the di­rec­tor, Haryana Town and Coun­try Plan­ning depart­ment (TCP), is bound to pro­tect in­ter­est of al­lot­tees and en­sure that the pro­ject on the li­cenced land is com­pleted as per sanc­tioned plans. “Di­rec­tor shall take steps to take over the pro­ject and get it com­pleted,” it said.

The au­thor­ity con­tended that al­lot­tees pur­chased apart­ments on the ba­sis of the sovereign as­sur­ances held out to them by the TCP and in case of builder de­fault, it is the re­spon­si­bil­ity of TCP to safe­guard al­lot­tee in­ter­ests.

The two Rera au­thor­i­ties in the state, Panchkula and Gu­ru­gram, have taken di­ver­gent stand on sim­i­lar sit­u­a­tions. “While the HRERA (Gu­ru­gram) in Gree­nop­o­lis case took over an in­com­plete pro­ject it­self, the HRERA (Panchkula) deemed it fit to trans­fer re­spon­si­bil­ity of com­ple­tion of a Farid­abad pro­ject to the TCP,” said Hi­man­shu Raj, a Chandigarh-based ad­vo­cate.

The prac­ti­ca­bil­ity of the Hrera-panchkula di­rec­tions to TCP Haryana di­rec­tor to en­sure com­ple­tion of the pro­ject has also been ques­tioned. “It is not clear whether fi­nan­cial sta­tus of the builder and other projects has been taken into con­sid­er­a­tion while shift­ing onus of pro­ject com­ple­tion on TCP,” said Upad­hyay. Stat­ing that need is to give home buy­ers re­lief by re­fund­ing money, Raj said, “Pro­mot­ers are li­able for any act of vi­o­la­tion and con­tra­ven­tion.”

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