Case Analysis of Neelkamal Case, Lecture notes of Real Estate Management

Download Case Analysis of Neelkamal Case and more Lecture notes Real Estate Management in PDF only on Docsity! REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016. The Real Estate (Regulation and Development) Act, 2016 is an Act of the Parliament of India which seeks to protect home-buyers as well as help boost investments in the real estate industry. The Act also establishes the Real Estate Regulatory Authority in each state for the regulation of the real estate sector and also acts as an adjudicating body for speedy dispute resolution. The RERA Bill was introduced by the UPA Government in 2013. In December 2015, the Union Cabinet of India had approved 20 major amendments to the bill based on the recommendations of a Rajya Sabha Committee that examined the bill. The Bill was passed by the Rajya Sabha on 10th March 2016 and then by Lok Sabha on 15 March 2016. The Act finally came into force on 1st May 2016 with 59 of 92 sections notified. The Act however led to several Builders/ Promoters facing challenges and difficulties in their operation and Thus, saw the Act being challenged on the grounds of Constitutionality in the case of Neelkamal Realtors Suburban Pvt. Ltd. and Anr. vs. Union of India and Ors., Writ Petition No. 2737 of 2017). NEELKAMAL REALTORS SUBURBAN PVT. LTD. AND ORS. VS. UNION OF INDIA AND ORS. BACKGROUND/ FACTS A group of Writ Petitions were filed before the Bombay High Court by various Builders/ Promoters challenging the validity of the Real Estate (Regulation and Development) Act, 2016 (RERA). These Writ Petitions were filed by them as they were facing extreme difficulties and challenges under the RERA. They felt compelled by the mandate to having their ongoing/ pre- existing projects registered under RERA, which were retrospective application of the provisions. Further the RERA allowed only one year extension for the registration in case the Builders/ Promoters failed to complete the project on time. These provisions led to the Builders/ Promoters facing extreme challenges, these challenges were further amplified considering the fact that most of the large scale projects were worth thousands of crores. Therefore, there were a batch of Writ Petitions filed by several Builders/ Promoters and they were all clubbed and hear together. ISSUES Several provisions of the Act were challenged for their constitutionality. The sections below mentioned were challenged as being violative of Articles – 14, 19(1)(g), 20 and 300A of the Constitution. These sections had been challenged, however arguments were mainly advanced for the validity of section 3(1), Section 3(2)(a), explanation to Section 3, Section 4(2)(l)(C), Section 4(2)(l)(D), Section 5(3), first proviso to Section 6, Sections 7, 8, 18, 38, 40, 46(1)(b), 59, 60, 61, 63, 64. Further they were challenged on three grounds – Retrospective/Retro-active application of provisions, Unreasonable restrictions and Mandatory requirements. ARGUMENTS/ ANALYSIS PETITIONERS Several contentions were made by the petitioners challenging other sections of RERA. However, the most prominent ones have been below. Firstly, section 3 of the RERA which provided for registration of projects, including current and ongoing projects was argued by the petitioner as to having retrospective application, hence arbitrary. Further the interest payable for delay under section 18 of RERA were understood as penal and having a retrospective nature, thus could not be validated. It was also contested by