REAT Delhi: While Exercising Its Authority Through Suo-Motu Proceedings, RERA Must Inform The Concerned Party Of The Alleged Violations

Background Facts

The appellant was issued a show cause notice on 21.12.2020 by the Authority for advertising unregistered real estate projects on its website “squareyards.com” and was directed to appear before the Authority.

In the reply to the notice, the appellant stated that the website was not facilitating the sale of unregistered projects, as “www.squareyards.com” was merely acting as a traditional medium of advertisement, similar to a newspaper.

Through its order dated 10.02.2022, the Authority held that the appellant had violated Section 10(a) of the RERA Act, 2016 by advertising unregistered real estate projects on their website and imposed a penalty of Rs. 1 lakh.

The appellant filed an appeal before the Tribunal against the Authority order dated 10.02.2022.

REAT Verdict

The Tribunal held that when exercising its authority to initiate suo-moto proceedings against a promoter or a real estate agent, it is necessary for the Authority to clearly inform the noticee of the specific alleged violations. This includes providing detailed information about the alleged violations to allow the noticee to adequately defend themselves against the allegations.

Furthermore, the tribunal noted that in the present case, the Authority failed to communicate the reasons to the appellant for issuing either the Show Cause Notice dated 21.12.2020 or the order dated 10.02.2022.

In conclusion, the Tribunal set aside the order and penalty imposed by the Authority. However, the Tribunal granted the Authority the liberty to initiate fresh suo-motu proceedings against the appellant by providing material details on the violations.