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RERA Retroactive not Retrospective

The Real estate (regulation and development) Act 2016 had come into force to regulate the real estate sector of the nation. And since the past two years it has played a major role as well as been a topic to daily discussion for a huge amount to citizens which seems obvious in a way that it has impacted a huge population too.

Madhu Sareen vs. BPTP Ltd

Also Read- FAQS RERA PUNJAB HARYANA PANCHKULA

RERA Act has its individual rules for every state. In a recent judgment, Madhu Sareen Vs BPTP Ltd & others the Panchkula Bench of Haryana Real Estate Regulatory Authority decides principal of awarding relief to allottees relief in pre RERA Projects.

The allottees of flats in BTPT real estate had filed a complaint that developers had offered delayed possession and only on escalation of the cost. On eight out of nine issues it came out be a unanimous decision. The members of the majority decision Anil Kumar Panwar and Dilbag Singh Sihar said that the developers were guilty of the act under the provisions of the RERA Act and need to pay compensation.

Also Read- DOES RERA COVER COMMERCIAL PROJECTS?

The judges henceforth quotes “these acts are the reason why the legislature made it mandatory for the promoter even to get there ongoing projects registered”. It was found that according to the agreement the buyer was supposed to pay an interest of 18% in case of default and only 2.7%in case of default by promoter.

 It was clear that the agreement was in favour of the promoter and wholly discrimatory. In an earlier judgment Bombay High Court had said that  “RERA was not retrospective but Retroactive in action” therefore the legislature has disproved the disparity in agreement for sale by ensuring section 2(a) under which the compensation shall be equal for both.

Also Read- RERA SALIENT FEATURES

 The dissenting note given by Chairman Ranjan Gupta has stated that such provisions are to be applicable only from the date on which the act came into force. Finally the allottees had also said that they had been demanded GST (goods and services tax) after it came into force. The authorities decided that GST is a new tax that came into force in 2017.

The delayed possession is from 2014 therefore had the possession been on time they would not have to pay this tax. Thus GST should not be levied. The sole aim of this act is to protect the interest of the consumers, promote fair play in the real estate, and ensure timely execution of projects which is being taken care of evidently.

This post is written by Anshu Sharma, a student of Vivekananda Institute of Professional Studies (2021). For any legal advice or opinion related to RERA matters in Panchkula, Haryana or Punjab at Moahli, please dial 99888-17966 or email us at satish@legalseva.net

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