A division bench of the Bombay High Court, on Tuesday upheld the validity of the provisions relating to imposing penalty under the Real Estate (Regulation and Development) Act.
Justices R G Ketkar and Naresh H Patil was hearing petitions filed by a large number of Builders and Developers who were aggrieved by the new provisions of the said Act which contains specific provisions to tackle problems like delay in possession, arbitrary interests levied on home buyers etc.
Under the new Act, the promoters have obligations towards home buyers in case a real estate project is transferred to a third party and in case, a promoter fails to deliver possession he is liable to repay the entire amount with interest.
The new Act mandates prior registration of concerned projects with the Regulatory Authority under RERA, also registration of real estate agents. It defines functions of real estate agents and promoters.
Before the High Court, the petitioners argued that the penalties imposed under Sections 18, 38, 59, 60, 61, 63 and 64 are violative of Articles 14, 19(1)(g) and 20(1) of the Constitution of India and it amount to unreasonable restrictions.
Disapproving the contentions, the bench ruled that the provisions of RERA are prospective in nature. “The penalty under Sections 18, 38, 59, 60, 61, 63 and 64 is to be levied on account of contravention of provisions of RERA, prospectively and not retrospectively. These provisions, therefore, cannot be said to be violative of Articles 14, 19(1)(g), 20(1) and 300-A of the Constitution of India.”
The bench, however, set aside the provisions of Section 46 (b) of the Act as it included any officer who has held the post of Additional Secretary to be eligible for membership of the two-member Tribunal. Court held that the majority of the total members of the tribunal should always be judicial members.
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