Whether Real Estate Appellate Tribunal Has Jurisdiction To Initiate Suo Moto Proceedings & Pass Directions Under RERA Act? Delhi HC Appoints Amicus

The Delhi High Court has appointed Senior Advocate Rajeeve Mehra as the amicus curiae to assist it in considering the issue as to whether the Real Estate Appellate Tribunal has the jurisdiction to initiate suo motu proceedings and pass directions affecting the ongoing constructions in the city.

Justice Rekha Palli was dealing with a petition filed by one Praveen Chhabra claiming to be engaged in the business of developing residential and commercials properties in Delhi, Uttar Pradesh and Chandigarh.

The petitioner had challenged the order passed by the Real Estate Appellate Tribunal dated November 24, 2021. Vide the said order, the Delhi Real Estate Appellate Tribunal had stayed all the construction activities, including residential and commercial activities, in the national capital that were undertaken without registration of the Real Estate Regulatory Authority (RERA) till the project was registered with the authority.

The suo moto proceedings were initiated by it for ensuring strict compliance of the provisions of the Real Estate (Regulation and Development) Act, 2016 regarding prior registration of projects and also to curb incidents of developers cheating innocent buyers.

According to the petitioner, it was submitted that the said order was passed in blatant violations of Section 3 of Real Estate (Regulation and Development) Act, 2016 the promoters or builders in respect of construction projects.

It was submitted that the Appellate Tribunal do not have any jurisdiction to initiate suo motu proceedings and pass directions and that the tribunal had proceeded on an entirely wrong premise by failing to appreciate that sec. 3(2) of the Act has mandated compulsory prior registration of the project under the Act.

"Having perused the impugned order, I find that though the learned Tribunal has noted the fact that in terms of Section 3(2), registration of a real estate project is mandatory only where the area of the land proposed to be developed exceeds 500 sq. mtrs. or the number of the apartments proposed to be developed exceeds eight inclusive of all phases, the subsequent part of the order does not clearly bring out this position," the Court said.

It was further observed that the order was being misinterpreted by the local authorities which was evident from the letter issued by the North Delhi Municipal Corporation, wherein a direction was issued to all its Executive Engineers (Building) to ensure compliance with section 3(2) of the Act, which only specifies the categories where no prior registration under the Act is required.

"In my view, the intent of the impugned order is crystal clear that registration under the Act is required only in respect of projects which are not excluded under Section 3(2). There is nothing in the order which conveys that there is a requirement for registration of projects which are excluded by the provisions of the Act itself i.e Section 3(2)," the Court added.

However, considering the jurisdictional issue raised by the petitioner, the Court went ahead to appoint the amicus curiae.

The matter will now be heard on February 2, 2022.

Vide the impugned order, the Tribunal had also directed the concerned Commissioner as well as Executive Engineer of each of the Municipal Corporations, DDA, NDMC and the Commissioner of Police through concerned SHO of the local Police Station of each area to ensure that with immediate effect no further construction activity is continued in the absence of RERA registration.

The Tribunal had also observed that the object of the statute is to redress the grievances of the buyers against any builder in transactions related to both residential and commercial projects and to further ensure the timely completion of the same.

Title: PRAVEEN CHHABRA v. REAL ESTATE APPELLATE TRIBUNAL

Click Here To Read Order