UNABLE TO GET YOUR RERA ORDER EXECUTED?

Backdrop of RERA Act:

Real Estate (Regulation and Development) Act, 2016 popularly known as RERA Act came into force on May 1, 2016. RERA was launched with the intention to regularise the real state sector. The issue of regularisation was prominent in real estate which created a havoc and feeling of despair among the home buyers. Establishment of an authoritative body was the need of the hours to have a quicker and efficient remedy against all the malpractices of the builder. With the establishment, the redressal process became efficient and regularisation. Prior to RERA 2016, the matters of real estate was handled under Indian Contract Act, 1872; the Consumer Protection Act, 1986. In this excerpt, we will divulge into the process of getting RERA certificate executed and redressal one has in cases of non-compliance.

When the amount will be returned by the promoter?

Under Section 18 of the RERA Act, provides redressal when promoter is unable to complete or give possession of apartment plot or building-

1. with respect to the terms of the agreement for sale or duly completed by the date specified therein; or
2. due to discontinuance of his business as a developer on account of suspension

or revocation of the registration under this Act or for any other reason,

• Whether or not the allotees decides to withdraw from the project, promoter will still be liable. When the allottee decides to leave the project, the promoter must pay the sum he was paid for that flat, along with interest calculated at the statutory rate and compensate in accordance with this Act’s provisions. In circumstances of non-withdrawal, the promoter is required to pay interest at the specified rate for each calendar month of delay up until the transfer of possession. In accordance with Section 31 of the Act, the RERA Authority grants relief.
• Compensation- Promoter will make up for any losses incurred by allottees as a result of faulty land titles, etc. If the promoter does not fulfil any further requirements outlined in the act or the terms and conditions of the agreement for sale, he must pay compensation. One must go to the Adjudicating Authority established by the Act in accordance with Section 71 to request compensation.

 Execution order by RERA Court:

• Whenever a complaint is made by an allottee under Section 31 of the RERA Act before the RERA or the Adjudicating Officer, the same is to be adjudicated in terms of the procedure prescribed under the Act and in case the default is proved, the RERA or the Adjudicating Officer has powers under Section 38 and 71 of the RERA Act, to impose penalty or interest upon the builder or developer and to compensate the allottee for the loss faced by him.
• Once the RERA Authority passes such an order upon the complaint filed by the allottee, the builder must execute the order within 45 days or within such a time period as specified in the order and provide a refund or compensation to the allottee.
• Section-40: In case, the builder fails to enforce the order and further commits default in paying the interest or penalty or compensation or processing the refund in favour of the allottee, the home buyer can file for the execution of the said order passed by the RERA or the Adjudicating Officer against the builder before the same RERA Authority under Section 40.
• Under section 40 of the Act, in case of non-compliance by the builder/promoter/ developer, RERA or the Adjudicating Officer, is empowered to pass directions or order to recover the same from such builder or promoter as ‘arrears of land revenue’. Order passed under sec 40 is also known as “Recovery certificate”.
• The term “arrears of land revenue” is not mentioned in RERA act, its given in Chapter XII of the U.P. Revenue Code, 2006 (and Chapter X of the erstwhile U.P. Zamindari Abolition and Land Reforms Act, 1950) for matters related to UP. Under Section 170 of UP Revenue code, 2006, and arrear of land revenue may be recovered by-
• “by arrest and detention of the defaulter;
• by attachment and sale of his movable property including agricultural produce;
• by attachment of any bank account or locker of the defaulter;
• by attachment of the land in respect of which the arrear is due;
• by lease or sale of the land in respect of which the arrear is due;
• by attachment and sale of other immovable property of the defaulter;
• by appointing a receiver of any property, movable or immovable, of the defaulter.”[1]
• Role of DM in recovery- It is the duty of DM to ensure that the recovery certificate is executed stated under the U.P. Revenue Code 2006 under Chapter XII from Section 169 to Section 205, however in cases of non-compliance, allotee’s last resort is to move to High Court.
• Penalty on promoter under section 63- If a promoter disobeys the authority’s orders or directives, they could face penalties under section 63, which apply every day. If default persists, it could increase cumulatively to 5% of the project’s estimated cost for real estate.
• The builder may also be subject to fines of up to 10% of the projected cost of the real estate project, up to three years in prison, or both under the Act’s penalties for non-compliance.

Speeding up execution:

• Writ of mandamus for execution in High Court

According to the U.P. Revenue Code, the Tahsildar and other revenue authorities, such as the Collector, have a statutory obligation to collect  arrears of land revenue and carry out the recovery citation and writ of demand issued by the U.P. RERA and by it, respectively. A Writ of Mandamus may be invoked to enforce the fulfilment of statutory duties.  A person who is aggrieved by a governmental official who disregarded their legal obligations may resort to the Hon’ble High Court to enforce out his RC.

In accordance with Rule 24, the HC may issue a writ of mandamus ordering the RERA to assure execution of the recovery certificate, or it may order the Collector to enforce the recovery citation in a timely manner.

1. In accordance with Rule 24 of the 2016 Up RERA Rules, it was required to start the execution process as soon as the promoter disregarded the order. The U.P. RERA execution processes may be performed similarly to civil court proceedings. Dates for the execution proceedings shall be provided to the complainant, and the RERA should summon a report on the recovery certificate’s execution before itself during those proceedings.
2. In a recent decision, the Hon’ble Allahabad High Court ordered the Collector to enforce the recovery citation that was issued in a timely way.[2]
3. In Ansari Mohammed Zaki vs The State of Maharashtra, Bombay HC said that, if settlement is not reached within 2 months, then within 15 days Tahsildar to execute recovery warrant as per the Land codes of Maharashtra with the attachment of the property.[3]

What is the remedy the if collector is not recovering the recovery citation even after the order of Hon’ble High Court?

The order passed by High Court should be submitted before the Collector/DM concerned and Tahsildar- and be brought to their Notice. This makes them duty bound to enforce the order/recovery certificate issued by RERA. However, if the needful is still not done, one needs to initiate contempt proceedings in the High Court.

Conclusion:

From the above trajectory, it is a long-drawn process to attain the result in compliance of a RERA order/judgement. Obtaining a favourable order from RERA is just the start of the battle; and the actual ordeal begins thereafter. The non-compliance of Recovery certificates by executives is a hurdle to fulfil the objective of RERA act.  Having said that, with consistent efforts and able legal guidance, the compliance/actual; execution of RERA orders it is quite possible to aid the objective of RERA act, aiding allottees.

Footnotes:

[1] Section 170 of  UP Revenue Code, 2006.

[2]Priya Kapahi and Another V. State Of U.P. Writ No- 26717 of 2020.

[3]Ansari Mohammed Zaki V. State of Maharashtra & Ors, Writ Petition No.6872 of 2021.