Status – 13/03/2020
Recently, we are received a lot of queries regarding the matter that orders passed by State RERA Authority are not being complied with by the party/builders or if we say it precisely, the builder is not paying the amount ordered by authority. Let’s analyze it legally.
The above issue may be described with following synonyms:
- The RERA authority has passed order for refund of money with interest but builder is not paying
- The RERA authority has issued RC (Recovery Certificate) but no response from RERA or builder
- The RERA Authority has directed the builder to give possession along with the interest and compensation for delay in possession but the builder is not paying any interest.
- The RERA authority has directed to the buyer for payment of balance amount and takes the possession, however, the buyer is not doing so.
- The RERA Authority has directed the builder to execute the builder buyer agreement or sale deed but, the builder not doing the same.
In this article, I’ll be trying to address some of such grievances and try to educate about the above-mentioned issues.
As we all are aware that Real Estate (Regulation and Development) Act, 2016 (hereinafter referred as Act) came into force from 01/05/2017, for among other, addressing the grievances of the aggrieved home buyer, and it is working effectively in almost every State and the authorities have passed number of orders, however, enforcement/execution of order are a prime concern.
Issue 1: What to do if the builder is not complying with the order of RERA Authority?
Solution: there may be 2 option
If the authority has passed an order in your favour granting you the desired relief, and the builder is not complying with the same then you have to file an application for enforcement of order u/s 40 of the Act, which deals with Recovery of interest or penalty or compensation and enforcement of orders, etc.
“Recovery of interest or penalty or compensation and enforcement of orders, etc.
Sec 40 (1) If a promoter or an allottee or a real estate agent, as the case may be, fails to pay any interest or penalty or compensation imposed on him, by the adjudicating officer or the Regulatory Authority or the Appellate Authority, as the case may be, under this Act or the rules and regulations made thereunder, it shall be recoverable from such promoter or allottee or real estate agent, in such manner as may be prescribed as an arrears of land revenue.
Sec 40 (2) If any adjudicating officer or the Regulatory Authority or the Appellate Tribunal, as the case may be, issues any order or directs any person to do any act, or refrain from doing any act, which it is empowered to do under this Act or the rules or regulations made thereunder, then in case of failure by any person to comply with such order or direction, the same shall be enforced, in such manner as may be prescribed.”
Issue 2: WHETHER ORDER CAN BE EXECUTED THROUGH nclt UNDER IBC LAWS?
Solution: IBC is one its kind law where action is taken instead of further orders. The IBC laws trigger when any corporate person is not able to pay off its liability.
If we take the order of NCLT. A order by RERA is a decree which need to be paid by the builder, if the builder does not pay it then it would be default as per IBC Laws. Hence, a petition can be filed before NCLT for default in compliance of RERA order.
Any person who has an order directing another party to pay the prescribed amount, but the other party is not complying with the same.
Issue 3: Who can file an application for enforcement of order?
Solution: Any person who has an order directing another party to pay the prescribed amount, but the other party is not complying with the same.
Problem 4: Where to file an application for enforcement of order before RERA?
Solution: As per the mere reading and under of the Act and Rules it is very much evident that the passing authority is having the power to enforce the same. Let me quote the verbatim of Rule 24 of UPRERA Rules for a better understanding.
“24 For the purpose of sub-section (2) of section 40, every order passed by the adjudicating officer, regulatory authority or Appellate Tribunal, as the case may be, under the Act or the rules and regulations made thereunder, shall be enforced by the adjudicating officer, regulatory authority or the Appellate Tribunal in the same manner as if it was a decree or order made by the principal civil court in a suit pending therein and it shall be lawful for the adjudicating officer, regulatory authority or Appellate Tribunal, as the case may be,
in the event of its inability to execute the order, send such order to the principal civil court, to execute such order either within the local limits of whose jurisdiction the real estate project is located or in the principal civil court within the local limits of whose jurisdiction the person against whom the order is being issued, actually and voluntarily resides, or carries on business, or personally works for gain.”
Here if we read the rule the basic understanding says that, the power of enforcing of order vests with the authority who has passed an order. This rule is different in every state but the base is same as above that the passing authority is having the enforcement power.
Following Points are to be remembered while filing an enforcement application before RERA
- The application for Execution
- Legal analysis of facts and the remedy sought.
- Supporting documents including order copy and grievances
- A proper format to be followed while filing an application.
Conclusion– For enforcement or execution of RERA authority, you have to approach to the RERA for issuance of RC or can file petition with NCLT u/s 7 of IBC laws . You are advised to make complete fact and legal analysis. For any clarification, please read to the author at firstname.lastname@example.org or speak to our expert at 8383011629
Disclaimer – The above points are based on the personal interpretation of related laws. The readers are expected to take expert opinion before placing reliance on it. For more information, please revert us back.