HC points out anomalies in RERA, embarrasses Centre

The Bombay High Court on Wednesday left the Union government red-faced by pointing out certain aspects, which the lawmakers ‘did not even think of ’ while passing the Real Estate Regulatory Authority (RERA) Act.

A division bench of Justice Naresh Patil and Justice Rajesh Ketkar embarrassed the government while hearing a batch of petitions challenging the constitutional validity of various provisions of RERA.

Additional solicitor general (ASG) Anil Singh, had started his arguments defending the Union government’s decision to introduce the RERA. He informed the judges that the Act applies only when there is a promotion or sale of flat or apartments.

Singh apprised the judges of inapplicability of RERA on individuals who form a society and purchase a plot to construct flats and apartments for their very own members. He argued that RERA applies only on promoters who advertise their real estate projects for the purpose of selling it to consumers.

The ASG also informed the judges that the authorities cannot take any action against the projects which are not registered with RERA. He also said that such societies need not register themselves under RERA.

Having heard the submissions, Justice Patil said, “If such societies are constructing flats or apartments and selling them to their very own members, then they would become the promoters. So, we think RERA would apply on them too.”

During the course of hearing, Justice Patil pointed out anomaly in the RERA which left the government red-faced.

Justice Patil said, “What if in the garb of forming a society, a promoter sells off the flats and earns profits? And as per your submissions, this society need not register. Then, tell us, does the authority has the powers to take any cognizance post this mischief ?”

“Since your power comes only after registration of a project, then what if such societies are not registered under the Act. Let us tell you, we have raised a query which you did not even think of,” Justice Patil added.

Posting the petitions for further hearing on Thursday, the judges said that the RERA authority needs to be watchful of such mischiefs. The judges also said there must be a provision wherein the authority can take suo moto cognizance of such mischiefs.