Recent Legal Developments in RERA Cases
The Real Estate (Regulation and Development) Act, 2016 (RERA) has significantly transformed the landscape of the real estate sector in India. Since its enforcement, courts across the country, including the Supreme Court and various High Courts, have delivered several important judgments interpreting its provisions. These judicial developments have shaped the way RERA operates, clarified ambiguities, and reinforced its consumer-centric spirit.
One of the earliest and most impactful developments came from the Supreme Court in the case of M/s Newtech Promoters and Developers Pvt. Ltd. v. State of UP & Ors. decided in 2021. The Court clarified that the remedies available under RERA and the Consumer Protection Act are concurrent, meaning that homebuyers can approach either the consumer forum or the RERA authority. This judgment settled an important question by confirming that the jurisdiction of consumer forums is not ousted by RERA, thereby strengthening the remedies available to allottees.
Another significant line of cases relates to the refund and interest liability of builders in cases of delay. Courts have consistently held that the right of an allottee to seek refund and interest is an enforceable statutory right under Section 18 of RERA. The National Consumer Disputes Redressal Commission (NCDRC) and various High Courts have observed that delays in possession are not merely contractual breaches but statutory violations under RERA, entitling allottees to relief. Builders have often argued force majeure or external circumstances, but the courts have taken a strict approach in requiring promoters to honour their commitments, barring exceptional circumstances.
The issue of retrospective application of RERA has also been addressed. Several High Courts, including the Bombay High Court in Neelkamal Realtors Suburban Pvt. Ltd. v. Union of India, have clarified that RERA applies prospectively but continues to cover projects that were ongoing at the time of its commencement. This interpretation has ensured that a large number of incomplete projects, many of which had been delayed for years, fall within the regulatory purview of RERA, providing relief to homebuyers who would otherwise have remained without an effective remedy.
The question of jurisdiction between RERA authorities and arbitral tribunals has also been tested. In several cases, courts have held that arbitration clauses in builder-buyer agreements do not oust the jurisdiction of RERA authorities. The reasoning is that RERA is a special statute enacted to protect the interests of consumers, and statutory rights under it cannot be waived by private agreements. This approach has prevented builders from avoiding RERA scrutiny by relying on arbitration clauses.
Another emerging trend in RERA litigation is the recognition of homebuyers as financial creditors under the Insolvency and Bankruptcy Code (IBC). Following the Supreme Court’s decision in Pioneer Urban Land and Infrastructure Limited v. Union of India, homebuyers have been given the status of financial creditors, which allows them to initiate insolvency proceedings against defaulting developers. While this overlaps with RERA remedies, the coexistence of these mechanisms reflects the judiciary’s intent to provide multiple layers of protection to consumers in the real estate sector.
Enforcement of orders passed by RERA authorities has also been a point of judicial scrutiny. Courts have stressed the binding nature of such orders and the obligation of state governments to ensure effective execution. The Delhi High Court, for instance, has directed authorities to establish mechanisms for speedy enforcement, recognising that relief on paper must translate into actual remedies for allottees.
Overall, the legal developments in RERA cases demonstrate a consistent judicial approach towards strengthening consumer rights, enforcing accountability on builders, and interpreting the Act in a manner that furthers its object of transparency and fairness. The evolving jurisprudence around RERA has balanced the interests of promoters and allottees while ensuring that the underlying objective of restoring confidence in the real estate sector is achieved.
