RERA can pick contractor to finish project, says Darius Khambata

Mumbai: In a major development in the Real Estate Regulatory Agency (RERA) case, the amicus curiae has clarified that the Act is not retroactive or retrospective, as alleged by the builders, but prospective in nature as it provides curative solutions to ensure that projects are started and completed within a stipulated period and hence ongoing projects should also be registered with the authority. The amicus also pointed out that in the event of promoter not completing an ongoing project, the Act gave the authority the powers to appoint a contractor and ask the promoter to pay the contractor to complete the project.

A division bench of Justice Naresh Patil and Justice Rajesh Ketkar has been hearing petitions filed by the builders opposing the RERA Act as well as intervention application of stakeholders who support the Act under the directions of the Supreme Court. The apex court in September had directed the Bombay high court to hear all petitions challenging the Act and pass appropriate orders within two months.

While replying to objections raised by petitioners that ongoing projects that started before RERA Act should not be included as it would mean applying the Act retrospectively, senior counsel Darius Khambata, who is the amicus curiae, said that unlike the previous Maharashtra Owner-ship Flats Act (MOFA), RERA dealt with projects from its start to completion stage. Hence, even though projects were started before RERA as they were still ongoing they would come under the purview of the Act and hence prospective in nature.

Mr Khambata elaborated that the RERA Act gave widespread powers to the authority to ensure that stuck or pending projects were completed within a stipulated period. “Many projects are pending and pass the stipulated period for completion. In such cases where projects are held up, the authority can appoint contractors to complete the project. Promoters will have to pay the contractors,” said Mr Khambata adding that as per the Act, the promoter and developer were agents of the buyers and had to comply with the conditions of the deal.