Photo: iStockphoto
Photo: iStockphoto

RERA holds little hope for homebuyers against builders

While homebuyers looking for a remedy against developers' misdeeds are pinning their hopes on RERA provisions to protect them, the regulator is still finding its feet after just a year of existence

When Ankit Agarwal, an IT professional, booked a three-bedroom apartment in December 2006 in Ghaziabad, Uttar Pradesh, he had hoped to move into the house with his parents a couple of years later. He was based in Ghaziabad and his father sold off their only ancestral property in Haridwar to fund the apartment. A little more than 11 years later, he finds himself stuck in a string of legal cases because of his decision, and without a house of his own.

Agarwal, now 35, is only one of lakhs of homebuyers who have pending cases against developers in various courts. While the new Real Estate Regulatory Authority (RERA) is still finding its feet after just a year of existence, buyers looking for a remedy—to get back their money or to get possession of the house they have paid for—are pinning their hopes on the regulator.

The case

Agarwal’s ordeal started after he deposited the booking amount for the apartment, which was funded by selling the family’s ancestral property in Haridwar, in a project called Voila Souryapuram by NitiShree Infrastructure Ltd. While the flat cost about Rs35 lakh, Agarwal paid about Rs7.25 lakh to the developer in three instalments. After that, the developer stopped sending demand letters, typically sent by developers based on the construction progress.

After four years of waiting and chasing the builder, Agarwal, along with some other buyers in the project, lodged an FIR in June 2010—he was supposed to get the possession in January 2010—with the Noida police. In September 2010, NitiShree Infrastructure’s director Anil Jain was arrested in connection after the case. Mint has copies of emails and documents related to the case. But Jain managed to get bail within five months from the Allahabad high court. The court gave Jain bail on the condition that either he completes the project in a year or refund the money to homebuyers.

Jain, however, did not adhere to the verdict. Tired of pursuing the case, Agarwal went for an out-of-court settlement in 2013. The agreement said that Agarwal would withdraw all the cases and the developer would return the money in seven instalments. None of the instalments came.

“After some time, the company’s name was changed from NitiShree Infrastructure to Shorya Towers Pvt. Ltd and another project Shouryapuram Residential Floors Ph-1 was launched on the same plot," alleged Agarwal.

In 2016, once again Agarwal filed a case against Jain with a plea to cancel his bail, but nothing happened.

Since the new project is registered with Uttar Pradesh RERA, Agarwal finally approached the regulator and filed a complaint on 17 January 2018 against the developer. The first hearing was scheduled for 27 February in Lucknow, but Agarwal couldn’t appear for it (he now works in Hyderabad) and RERA assigned a new date, 22 May. However, on 28 March 2018, Agarwal received an SMS stating that the case has been disposed off. The UP RERA website too showed the case as “disposed off", but to add to the confusion, it also mentioned 22 May as the next date of hearing. He tried to contact RERA, but his emails and calls went unanswered. Mint’s emails and phone calls to the developer and UP RERA also remain unanswered.

RERA’s ambit

Since RERA is still evolving, possibility of a technical snag in Agarwal’s case cannot be ruled out. “The complainant should try to verify from the records (hard copy) of the order sheet," said Harsh Pathak, a Delhi-based lawyer.

Checking books of record could be helpful. “He should seek a roznama (register of daily proceedings of a court case, maintained in every Indian court or legal forum)," said Amit Kolekar, associate partner, Rajani Associates, a law firm. “He may seek such clarification by way of a personal meeting with a RERA official," said Sandeep Grover, partner, Induslaw, a law firm.

In this case, while the project Voila and Nitishree Infrastructure are not registered with RERA, the promoters are. There can be two possibilities in such a situation. “If the project was not registered with RERA, then the Act will not be applicable as per Section 3 and the aggrieved person will have to approach a consumer forum or go to the National Company Law Tribunal," said Pathak. “But if the builder is registered under RERA and the promoter or builder launches a new project with a new name on the same piece of land by shelving the old project, then the aggrieved person can file a complaint before RERA or an adjudicating authority under Section 31 for violation of Section 19 of the RERA Act."

“RERA aims to protect the interest of allottees, so there is scope of redressal. RERA may also facilitate the remaining development work to be carried out under its provisions," said Kolekar.

Recourse beyond RERA

If we assume that Agarwal’s case is indeed “disposed off", then “there is no provision to review the order enumerated under RERA by which the complainant can approach the same authority for setting aside the order passed by it," said Grover. However, “RERA also permits an amendment to the order passed by the Authority, i.e. there is a possibility of rectification of order by Authority within a period of two years from the date of the order, if the mistake is brought up to the Authority by the parties," said Kolekar. “The same is not permissible, if the aggrieved party has filed an appeal before the high court," he added.

When you approach RERA, but are not satisfied with the judgment, “you can appeal to an appellant tribunal, within 60 days from the date of the order," said Pathak.

Teething troubles

Since RERA has been around just for a year now, there is not much clarity on its rules and provisions as there are no historical decisions for cases to refer to. Also, not all RERA websites have updated information yet. “States like Maharashtra have been proactive. Many cases have been heard and disposed of. Whereas in places like Tamil Nadu, we have not heard of even one case being decided by RERA, though we understand that complaints have been filed," said Saroja, a consumer activist.

In Agarwal’s case, the builder was supposed to have disclosed all cases pending against him while getting registered with RERA. However, no information related to any case against the developer or the company is mentioned on the website.

The slow pace of RERA implementation is diluting the purpose of bringing in a regulator and the games builders play continue.

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