The Act provides for curbs on builders and developers in execution of construction projects, penalising them for delay in completing projects and safeguarding flat-buyers from unscrupulous builders.
The Bombay high court (HC) on Wednesday dismissed a bunch of provisions challenging 18 provisions of the Real Estate (Regulation and Development) Act, which regulates construction industry and protects interests of flat purchasers, upholding its constitutional validity.
The Act provides for curbs on builders and developers in execution of construction projects, penalising them for delay in completing projects and safeguarding flat-buyers from unscrupulous builders.
A bench of justice Naresh Patil and justice Rajesh Ketkar, however, allowed the Real Estate Regulatory Authority to grant extension beyond one year -- limit set by the enactment – to complete projects under exceptional and compelling circumstances.
“Having careful scrutiny of relevant provisions of RERA (the Act), its object and scheme and submissions advanced, we have harmoniously construed sections 6, 7, 8 and 37,” the bench said. “We hold in case the Authority is satisfied that there are exceptional and circumstances due to which promoter could not complete the project in spite of extension granted under section 6, then the Authority would be entitled to continue registration for completing the project,” it said.
This comes as a major reprieve for builders and developers, as they will get additional period – over and above the stipulated period of one year – to complete their projects, in case the work is delayed due to circumstances beyond their control.
The bench has, however, clarified that this power to grant additional extension can be exercised by the Authority only in exceptional and compelling circumstances and on case to case basis, and no builder or developer can seek such an additional extension beyond the stipulated one year period as a matter of right.
The court held the two-member bench of a majority of the Real Estate Appellate Tribunal must comprise one judicial member and majority of the bench must comprise judicial officers where it has more than two members. It struck down part of section 46(1)(b) which required the judicial members of the Appellate Tribunal to have served as additional secretary to the government in addition to having been a judicial officer.
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