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Vibes Of India
Vibes Of India

SC Upholds Mandatotory Precondition For Builders To Challenge RERA Orders

| Updated: November 15, 2021 17:15

The Supreme Court upheld Section 43(5)of the Real Estate (Regulation and Development) Act which states it mandatory for the builders to deposit the full compensation and interest asked by the authoriser or at least 30 per cent of the penalty as a prerequisite for challenging such an order before the appellate authority.

The apex court observed, “the intention of the legislature appears to be to ensure that the rights of the decree-holder (the successful party) are to be protected and only genuine bonafide appeals are to be entertained… the intention of the instant legislation ought to show the promoters their bona fides by depositing the amount as considered.”

The judgement given by a three-member SC bench led by Justice UU Lalit on Thursday has come as a breather for homebuyers. As it will discourage builders from taking complaining home buyers to the court and thereby increasing fair practices.

Homebuyer’s body Forum for People’s Collective Efforts (FPCE) had earlier approached Government over the weakening of the RERA rules in favour of the builders by some states. They had approached Prime Minister Narendra Modi, Former Union Minister of Urban Development Venkaiah Naidu and Chief Ministers of Uttar Pradesh and Gujarat.

This judgement comes as a win for the FPCE as they were fighting for the cause since 2016. They consider this to be a landmark judgement, hoping that this plugs all the loopholes and the builders must deposit the full refund ordered by the RERA authorities before going for any appeal. They believe that this will also filter the appeals which were intended only to harass homebuyers.

Earlier Bombay High Court had passed a similar order after builders had challenged the law.

RERA Act was notified on May 1, 2016. All states were required to notify the law within 6 months time. Most states had weakened the law in favour of the Builders. This judgement reaffirmed the jurisdiction on all RERA Projects that were going on at the time of the law enactment.  

Some of the states which will need to amend their RERA rules are UP, Haryana, Tamilnadu, Telangana, Punjab and Karnataka. Also, they will need to ensure that projects which were going on at the time of law enactment are also covered under the RERA law.

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