Intense lobbying has started within a government-appointed panel to bar homebuyers — under the guise of “removing difficulties” for effective enforcement of the real estate regulation law, RERA — from approaching consumer forums and National Company Law Tribunal (NCLT) against erring builders.
Members of the panel include real estate regulators appointed by state governments, officials from the housing ministry as well as representatives of builders and consumers. Sources said that in Tuesday’s meeting, while some members, including real estate regulators, pushed for blocking the provision of consumer forums taking up disputes relating to the real estate sector permanently, they also suggested that RERA authorities may be given a chance to resolve disputes within six months before invoking insolvency proceedings against builders. They also favoured changing a section in the law that stipulates extension of registration of projects to a maximum of one year beyond the scheduled date of completion.
The government had amended the Insolvency and Bankruptcy Code (IBC) to include homebuyers as financial creditors so that they can approach NCLT against erring builders. Union housing minister Hardeep Singh Puri has maintained in public forums that no provision in the law will be diluted that can impact homebuyers adversely.
However, in the four regional workshops organised by the housing ministry to identify “difficulties”, some real estate regulators have openly batted for changes, according to the minutes of meetings available on the ministry’s website. The 10-member panel was set up to look into the issues and submit a report suggesting changes. The government wants to complete the process before the 2019 election. The Centre is empowered to make minor changes within two years of implementation of this law to remove difficulties.
“We have submitted that the consumer should have the choice of either approaching RERA or consumer forums, which is available in every district. There is an argument that consumer forums often order builders to make refunds with interest, adversely affecting completion of projects. We have said the affected homebuyer has all right to seek a refund, which is also in the RERA, since he is not at fault,” Abhay Upadhyay, president of Fight for RERA, an umbrella body of homebuyers said. Upadhyay is a member of the panel.
He added that even the provision of limiting the extension of registration of a project to one year has been incorporated in the RERA law keeping in mind the homebuyers’ experience of delayed projects. Even the Bombay high court dealt with the issue at length and held it to be constitutionally valid, Upadhyay said.
While Gautam Chatterjee, Maharashtra RERA chief said there was no proposal to make changes in the law, his Madhya Pradesh counterpart Anthony De Sa did not respond. Both are members of the panel.