Introduction
Real Estate (Regulation and Development) Act, 2016 popularly known as RERA Act came in to force with an intent to regularize the real estate sector. Before the coming into force of act, real estate sector was highly unregularized and everything was happening according to the whims and fancies of the builders. Homebuyers were harassed, they were forced to pay extra money and even after all this the property was not delivered to them timely or in severe cases at all. But with the advent of RERA Act, buyers have a quicker and efficient remedy against all these actions of the builder as now they can approach Real Estate Regulatory Authority (RERA) and can take actions against the builder in such circumstances. But this has been observed that even after RERA passes orders against the builder, most of the builders fail to comply the same and it becomes a headache for the buyer. Keeping in mind all such scenarios the lawmakers have added to the act such provisions which can help the buyer in case the builder refuses to comply with the orders passed by RERA and certain powers have been given powers to RERA for execution of orders.
Powers of RERA Authority While Execution of Orders:
Let us assume a scenario where A, a homebuyer, buys a home in a project developed by the builder X. A has made the booking in 2013 and X has promised that he will deliver the possession of the house in 2016. A is very diligently on the assurances given by X is making the timely payments. But when it comes to giving of possession, X stating various grounds keep on postponing the possession date. On continuous asking, A gets the same reply that wait for next 6 months the project will be ready for possession. That somehow after the pandemic, A files a case before RERA (adjudicating officer if in case A wants compensation from X) in mid-2021 and is no more interested to take the possession of apartment and wants to his entire investment back as per Section 18 of the Act. Finally in Feb. 2022, A receives an order from RERA stating that X is liable to pay the entire money invested by A along with interest at rate of MCLR +1% (as in case of U.P.) within 45 days the order is uploaded on the portal but even after sending various reminders X is not willing to comply with orders. In such a case, A can file execution request with UP RERA at their portal.
RERA Act empowers the RERA Authority as well as the adjudicating officer that they have the power to recover the money from the builders as arrears of land revenue if in case the builder fails to such amount. In this regard, using the powers given to it under section 40(1), the authority issues a Recovery Certificate against the builder to be executed by the collector. On receiving such orders from the RERA, the Collector issues the recovery citation and has the power to seize the bank accounts of the promoter and auction the properties of the builder by issuing a public notice.
As, per the language of the act a Recovery Certificate could only be issued in case of default of payment of interest or penalty, or compensation imposed by the authority. But authorities were issuing the same for Principal Amount as well. This question was settled by the Hon’ble Supreme Court in the landmark judgement of Newtech Promoters and Developers Pvt. Ltd. Vs. State of UP and Others [2021 SCC OnLine SC1044], where the Hon’ble Court held that taking into consideration the scheme of the Act what is to be returned to the allottee is his own life savings with interest on computed/quantified by the authority becomes recoverable and such arrear becomes enforceable in law. There appears some ambiguity in Section 40(1) of the Act that in our view, by harmonising the provision with the purpose of the Act, is given effect to the provisions is allowed to operate rather running either of them redundant, noticing purport of the legislature and the above-stated principle into consideration, we make it clear that the amount which has been determined and refundable to the allottees/home buyers either by the authority or the adjudicating officer in terms of the order is recoverable within the ambit of Section 40(1) of the Act.
Other than this, section 41(2) of the act states that if in case someone does not comply with orders of the authority (adjudicating officer) it has powers to enforce them in such manner as is prescribed. The manner is laid by the various state governments in the rules that are framed under RERA Act. As per Rule 24 of The Uttar Pradesh Real Estate (Regulation and Development) Rules, 2016, the following are the powers that are given to UP RERA Authority (adjudicating officer) in order to execute the orders:
- It shall execute the order in a manner if it were a decree or order made by the principal civil court in a suit. In layman terms the authority enjoys the similar powers as is given to a Civil Court for executing its orders.
- If in case the authority is unbale to execute the orders by itself can send such orders to a Civil Court for execution of the same. The order could be sent to that civil Court in whose jurisdiction the project lies or the builder resides/work.
Similar powers are given to Haryana RERA by Rule 27(1) of the Haryana Real Estate (Regulation and Development) Rules, 201, Karnataka RERA Rule 26 of the Karnataka Real Estate (Regulation and Development) Rules, 2017.
Powers of a Civil Court to Execute the Order:
The powers so given to the authority by the act to execute the orders are very vast. For implementing the orders, RERA Authority while exercising the powers of Civil Court can sell the property, or attach the property in question, or appoint a receiver and get the registry executed in case of possession order has been passed or in severe circumstances the promoter can also be arrested or detained.
Recently, UP RERA in its 94th meeting for making the execution process more efficient has decided to use the provisions of Civil Procedure Code (CPC) for implementation of orders. In cases of refund the authority used to issue RC which was further executed by the DC for execution but in case when possession order was passed by the authority, many a times it was not complied by the builders and the builders were not able to deliver the possession. The authority has thus decided to attach the property in such cases and appoint a receiver for transferring the property to allottee. The adjudicating officers in UP RERA will be authorized for taking such action. A detailed report on it can be read here.
Conclusion:
The intent of the act is noticeably clear that it has been brought into effect for the welfare of the homebuyers and adequate provisions have been added to it, protect and safeguard the rights. The authority mentioned in the act has been provided with vast powers of a Civil Court. But it has been seen that the authorities are reluctant to use this power and the homebuyers are not able to get the relief that they deserve. Though the trend has been changing, with the latest decision taken by UP RERA to use its powers of Civil Court for execution of orders. The decision has given assurance to many homebuyers that the authorities are adamant on protecting their rights and has prompted faith among homebuyers in the judicial system of the country.