Appoint Permanent RERA and Appellate Tribunal Within Three Months, SC Tells 'Recalcitrant' States/UTs [Read Judgment]

The Supreme Court has directed the States/Union Territories to appoint permanent adjudicating officers as Real Estate Regulatory Authority and Appellate Tribunal within a period of three months.

The court issued this direction in its judgment upholding the amendments made to the Insolvency and Bankruptcy Code in 2018 to treat homebuyers as financial creditors.

The bench comprising Justice Rohinton Fali Nariman, Justice Sanjiv Khanna and Justice Surya Kant, noticed that there are some 'recalcitrant' States and Union Territories which are yet to establish/appoint adjudicating officers, the Real Estate Regulatory Authority, as well as the Appellate Tribunal as under the RERA. In this context, the bench said:

"We direct that in those States in which the needful has not been done, in that, only interim or no adjudicating officer/Real Estate Regulatory Authority and/or Appellate Tribunal have been appointed/established, such States/Union Territories are directed to appoint permanent adjudicating officers, a Real Estate Regulatory Authority and Appellate Tribunal within a period of three months from the date of this judgment."

The Court also added that the NCLT and the NCLAT needs to be manned with sufficient members to deal with litigation that may arise under the IBC generally, and from the real estate sector in particular. The court also directed the Union Government to file affidavit in this matter. 

Upholds Constitutional Validity Of Amendment To IBC Code

Disposing of a batch of petitions challenging amendment to the IBC Code, the bench held as follows:

• The Amendment Act to the Insolvency and Bankruptcy Code does not infringe Articles 14, 19(1)(g) read with Article 19(6), or 300-A of the Constitution of India.
• The RERA is to be read harmoniously with the Code, as amended by the Amendment Act. It is only in the event of conflict that the Code will prevail over the RERA. Remedies that are given to allottees of flats/apartments are therefore concurrent remedies, such allottees of flats/apartments being in a position to avail of remedies under the Consumer Protection Act, 1986, RERA as well as the triggering of the Code.
• Section 5(8)(f) as it originally appeared in the Code being a residuary provision, always subsumed within it allottees of flats/apartments. The explanation together with the deeming fiction added by the Amendment Act is only clarificatory of this position in law.

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