SC directs housing ministry to assess if state rules under RERA comply with those notified by Centre

The Supreme Court on February 14 directed the ministry of housing and urban affairs to scrutinise whether the rules adopted by the states under Real Estate Regulatory Authority (RERA) comply with those framed by the Centre and appointed advocate-on-record Devashish Bharuka as amicus curiae in the case. A bench of Justices D Y Chandrachud and Surya Kant gave three months to the Centre to examine if there are any deviations in the rules framed by the states to the rules framed by the Centre in 2016 and to place the report by first week of May, 2022. The Supreme Court was hearing the petition seeking a direction to the Central government to frame a Model Builder Buyer Agreement to ensure transparency and to protect the interests of homebuyers as per the aims of the Real Estate (Regulation and Development) Act, 2016. The court observed that the Central government had shared the draft 'agreement for sale' in 2016 after the enactment of RERA with all the states and Union Territories and currently West Bengal, Jammu and Kashmir and some north-eastern states are yet to notify the rules. "At the present stage, it is necessary for the court to be apprised of whether the rules which have been framed by the states contain the essential norms which have been adopted by the Union Government in the rules of 2016 referred to above, or whether there are any deviations which would not subserve the interest of the flat purchasers,” the bench observed. “This exercise should be carried out at two levels. Union Ministry for Housing shall scrutinize the state rules and report to this court if they comply with the 2016 rules by centre. We also appoint Mr Bharuka as the amicus in this case and also assist this court is carrying out this exercise,” a bench of Justice DY Chandrachud and Justice Surya Kant said. Additional Solicitor General Aishwarya Bhati, appearing for the Centre, submitted that the statutory rules have been framed and placed before the bench for the Union Territories, whereas, several states have notified them except for a few such as West Bengal and other states from the North East region. The bench agreed that there may be some local conditions which need to be taken care of by the states but most of the rules should be in compliance with the Centre's draft rules of 2016. The bench asked Bhati if the Centre has examined whether the rules which have been framed by the states are in conformity with the rules the Centre has framed. Bhati said that they have compared the rules framed by major states where construction activity is more and they have done in the case of Maharashtra and Haryana. She said that the government will do that exercise of examining all the state rules and apprise the court about the same. However, Senior Advocate Menaka Guruswamy, appearing for BJP leader Ashwini Upadhyay, who has filed a Public interest litigation (PIL), said that there has to be a minimum set of guidelines for the protection of the consumers. She said concerns remain despite Centre's 2016 rules and that is why this writ petition was filed. She said that the Union of India says that it is the responsibility of state governments to frame rules and they ignore sections 41 and 42 of RERA which have been reproduced in the October 4, last year order of the court. On Nov 5, 2016 RERA had formulated rules and all states were requested to forward copy of rules as notified. The Supreme Court on January 17 had told the Centre that it was not in favour of separate state governments having builder-buyer agreements, but would rather prefer a national- level model to deter builders from fleecing homebuyers. “We are concerned about the broader public interest of the middle-class home buyers,” Justice Chandrachud and Surya Kant had said and asked the Centre to consider framing uniform rules under the provisions of RERA. “The whole purpose of the present PIL is that there should be a model builder-buyer agreement which will be formulated by the central advisory council so that there is some uniformity in the basic terms and conditions and the flat buyers are not exploited,” he had said. Justice Chandrachud said, “We are very keen on this. Instead of leaving it to all the individual states, we want the Centre to formulate a uniform builder-buyer agreement, which shall be applicable in all the States.” He also cited the West Bengal matter, in which a state law regulating the real estate sector was similar to RERA and was struck down by the court last year. The bench had asked Solicitor General Tushar Mehta, appearing for the Centre, to seek a considered view of the Union Government of the need to formulate a model builder-buyer and agent-buyer agreement at the central level. On November 8, 2021, the Supreme Court had said that a model builder-buyer agreement is needed in the real estate sector and the Centre should file its reply on the issue as it is an "important matter in the public interest". On October 4, the top court had issued a notice to the Centre, asking it to frame model agreements for the builder-buyer and the agent-buyer deals to bring in more transparency in the real-estate sector. A PIL has been filed by advocate and BJP leader Ashwini Upadhyay, seeking a direction to all states to enforce a model builder-buyer agreement and a model agent-buyer agreement and to take steps to avoid "mental, physical and financial injury" to customers. "Promoters, builders and agents use manifestly arbitrary one-sided agreements that do not place customers at an equal platform with them, which offends Articles 14, 15, 21 of the Constitution. "There have been many cases of deliberate inordinate delays in handing over possession and customers lodge complaints but the police don't register FIRs, citing arbitrary clauses of the agreement," the PIL had said. Source: Money Control