It is important to know, how to execute RERA order as India’s real estate market is governed majorly by laws of RERA and thus, it is the duty of the defaulter party to execute the order of RERA judiciously. The Real Estate Regulation and Development Act (RERA) is marked as one of the strongest enactments in the field of real estate sector. The Act has increased the levels of transparency between the builder and buyer and also provided for a speedy adjudicating system for resolving the builder-buyer issues. This act has brought major positive changes in the Real Estate market of India. The rapid dispute resolution facility adopted by RERA has been a ray of hope for the aggrieved ones.
Under Real Estate Regulation and Development Act, a suit can be filed against the builder for multiple reasons such as non-compliance with the real estate laws and rules, orders, delayed possession, levying of extra charges by builder, changes in builder’s layout without the prior permission of buyer and other reasons.
The buyers can claim a refund with interest from the builder and even cancel their booking for any of the above stated grounds by filing a complaint under RERA. The RERA Authority is authorized with the power to grant compensation and interest to the aggrieved parties or direct the builder to deliver the possession within span of 12 months. So, let’s have a look at how, an order of RERA is executed!
Non Compliance by the Buyer against the RERA Order
When the RERA Authority passes an order for compensation or interest in favour of buyer, the builder is supposed to execute the order within 45 days and provide the rightful compensation along with interest to the buyer. The period of 45 days begins from the date when the order is served to the builder. This period of execution can be extended only, if sufficient substantive reasons are given by buyer.
But, it is usually seen that the defaulters do not compensate the aggrieved buyers so easily and fail to comply with the orders of the RERA and therefore justice remains unserved to the affected parties. It is often seen that even after getting the orders of possession or refund along with interest, the buyers have to struggle to get them executed by the builders.
In this kind of situations, Section 40 of the RERA Act comes into play, and the RERA Authority can be approached to get the order implemented by the builder. Section 40 of the RERA Act states that if a promoter, allottee or real estate agent doesn’t pay the compensation amount or penalty or interest imposed by the adjudicating authority or RERA authority, then it can be recovered from such promoter or allottee in such a manner as prescribed as an arrears of land revenue.
Apart from this, there is another provision under the RERA Act, Section 63 which mentions about the penalty for failure to comply with the orders of RERA by promoter. As per the provision, the one who fails to comply with the order of RERA or contravenes or breaches such order shall be liable to a penalty for every day till such default continues and it may extend up to 5% of the estimated cost of the respective real estate project.
How to execute RERA Order
Whenever an order is issued by the Adjudicating Authority or RERA Authority or direction to any person for doing any act or refraining from doing the act; the failure to adhere to such order or direction can be enforced by filing an application under Section 40 of the RERA Act. As per Section 40, any person who has the order in their favour and the other party is refusing or failing to execute the same, then this application can be filed to enforce the execution of the prior order.
Section 40 states that execution application can be filed before the concerned RERA Authority along with the certified copy of the original order and decree annexed with the Execution Application. This process is rapid and effective as the Authority will issue a Recovery Certificate (RC) to get the same implemented by the concerned district magistrate. If this also doesn’t work upon the defaulter then the party can approach High Court for execution of the RERA order.
The aggrieved party or buyer has another option of sending a legal notice to the builder for execution of the RERA order with the help of an advocate. But the notice should be sent before the application for enforcement is filed before the RERA Authorities. The notice can be used as a proof before the Authorities when the builder fails to adhere to the terms of legal notice also.
The major issue with RERA is that there is speedy disposal of cases, but the orders passed by RERA Authorities are not being executed in the given time. For instance- the UP RERA has had more than 28,000 cases filed in UP RERA and there were around 2,177 Recovery Certificates issued by the authority in last 3 years but till date only 13% or 353 RC have been realized by the builders, which raises questions on the capacity and competency of the Regulator. Thus, even though there are provisions for providing justice, but it can be only served when there is proper execution of such provisions and orders.
The UP RERA Chairman, Rajiv Kumar has shifted their burden execution of orders on the shoulders of District Magistrates, by stating that RCs are issued and sent to DM for looking into whether the buyers receive their money or not.
In the latest case of Marvel Sigma Homes Private v. Rustam Phiroze Mehta 2021, the Bombay High Court was in favour of the Adjudicating Authority and Appellate Authority confirming the recovery of arrears of the land revenue from the defendant under Section 40(1) read with Rule 3 of RERA Rules and not under Section 57 of the Act.
Even though, the execution part of RERA Act is still struggling for providing justice to the needy ones, RERA has presented with many remedies for the loopholes existing in the real estate market, and there are provisions like Section 63 and 65 speaking of penalties wherein the execution of order is pending even after the issuing of RCs. But, as per my views only law and regulations are not sufficient unless and until the implementation is not worked upon. The laws need to be strict but the ones enforcing them need to be stricter, in order to avoid such non-compliance of orders in future.
This article is authored by Rhea Banerjee.
https://indiankanoon.org/doc/89858737 (Marvel Sigma Homes Private v. Rustam Phiroze Mehta 2021)