Design a site like this with WordPress.com
Get started

Neelkamal Realtors Suburban Pvt. Ltd v. Union of India

Introduction:

A bunch of petitions was filed by the real estate developers and individual plot owners, challenging the constitutional validity of the Real Estate (Regulation and Development) Act(RERA). The decision was upheld by The Hon’ble High Court of Bombay.

Facts:

Several writ petitions were filed by Neelkamal RealtorsSuburban Private Limited and another, for the project against the Union of India and others, before the Hon’ble High Court of Bombay challenging the constitutional validity of provisions:  first proviso to Section 3(1), Section 3(2)(a) and (c), Explanation to Section 3, Section 4(2)(l)(C) & (D), Section 5(1) (b) 5(3) and the first proviso of Section 6, Sections 7,8,18, 22,38,40,46,59,60,61,63,64 of RERA (Regulation and Development) as being violative of the Articles 14, 19(1) (g), 20 and 300A of the Constitution of India.

Issues raised:

• Whether the provisions of RERA stated above are violative of Article 14, 19(1)(g), 20 and 300A of the Constitution?• Whether the provisions of RERA have retrospective/ retroactive application?

Contentions of the Petitioners:

The Petitioners challenged the validity of the above provisions of RERA on the following grounds:

• Absence of judicial member in the REAL (Regulation and Development) constituted under Section 46 (b) of RERA (Regulation and Development).

• Unreasonable restrictions placed by certain provisions of RERA (Regulation and Development), contrary to Article 19(1) (g) and violative of Article 14 of the Constitution.

• Retrospective/ retroactive application of certain provisions.

The allottees approaching Maha RERA (Maharashtra’s Regulation and Development Authority) Authorities pleaded for a grant of interest for delayed possession for their respective flats booked by them. The Agreement provided that the promoter was to hand over possession of the flat to the Allottees on 31.12.2014 with a grace period of one year i.e. by the end of 31.12.2015. The principal grievance is, the date stipulated has been deliberately ignored by the promoter.

Promoter principally emphasized the economic turmoil faced by them. He traveled through the entire report to show how the conditions worsened the development in the project and the promoters had to suffer a lot. The balance sheets were produced to show the quantum of losses successively suffered by them in the last three years.

From submissions from both sides, it can be concluded that the allottees do not want in each of the cases to withdraw from the project. The objection is the payment of interest for delayed possession.

The appeal preferred by Neelkamal Realtors Versus KeshavlalUpadhyay in which on 25th April 2015 where the promoter was declined to be entertained in respect of economic downturn or the non-availability of raw material. It was observed in the said order; the delay occasioned in completing the project cannot be attributed to being suffered by the allottee. The allottee was mandated under the terms of the agreement if he commits default to release interest @21% p.a. however when the turn of the Promoter comes, he took an umbrella to the legal provisions of MOFA (Maharashtra Ownership Flats ) to release interests @9% p.a. when committed default in making payment suffered liability of interest at 9% p.a. Therefore, no concession is extended to them in remittance.

The Promoters are directed to release interest from 7.7.2016 @ 10.05% p.a. The Promoter is at liberty to appropriate/adjust the interest if certain recoverable are due by the allottees.

Thus, the allottees’ two appeals are partly allowed.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: