By Accommodation Times Bureau
Builders were jolted when central government had introduced a real estate regulatory law last year; a limited permissible one-year extension on completion deadline under the Act was mandatory, not discretionary.
On Wednesday, Naresh Patil and R G Ketkar a Bombay high court bench of Justices asked Anil Singh an additional solicitor general if a provision under the Real Estate Regulation & Development (RERA) Act was mandatory or directory. Aspi Chinoy the senior counsel, who represents a leading builders’ group challenged the RERA authority by saying an extension of one year, was “unreasonable and unworkable”.
According to Singh, “The one-year deadline cannot be allowed to be extended as builders would take advantage of such leeway and the vexed issue of delay in completion of projects will continue, instead of being rectified, which the Act was meant to do.”
There was a talk on the 70% amounts raised by the builder for a project, which the Act requires him to deposit in a separate account while registering the project, should apply to on-going projects. The bench said, if the builder had already used the amount for the ‘past word’, there would be no need to deposit it, but if not utilized, it could be deposited.
Singh however, pointed to a Delhi rule on RERA which said that when an on-going project is being registered 70% of the amount realized must be deposited in a separate bank account. Several states have similar rules, he pointed out.
Chinoy said, “The Act and Maharashtra rules made it clear that on-going projects were spared for work done earlier but the deposit would be prospective, from amounts to be realised” from allottees or buyers.”
On Thursday the hearing will continue, to justify why the provisions are not discriminatory or unreasonable.