Supreme Court Adjourns Plea Seeking Directions For Model Builder-Buyer Agreement & Agent-Buyer Agreement

A Bench headed by Chief Justice of India SA Bobde allowed the Petitioner to take a week to seek instruction and information pertaining to multiple States already having a model agreement.

During the hearing, Senior Advocate Vikas Singh, on behalf of the Petitioner Aswhini Upadhyay, submitted to the Bench that there was no concrete model provided under RERA. This was refuted by Justice V. Ramasubramanian who informed Singh that there were twenty States who had already framed model agreements.

The matter was then passed over, and after it resumed, Singh sought for a week's time to gather information on the same.

At this juncture, Senior Advocate Menaka Guruswamy, appearing on behalf of a bunch of homeowners in Karnataka, asserted before the Bench that a lack of uniformity in the standard agreements led to the homebuyers being disadvantaged.

"For homebuyers, I am disadvantaged because the model agreement differs from State to State. The builders shift the funds to another State, then our hands up getting tied due to the lack of a standard agreement. For instance, in Karnataka there exists a standard agreement, but another State may not have the same which renders to impossible for homebuyers to move against holding companies", submitted Guruswamy.

The Court told Guruswamy that there was a point in her submission and noted that the law pertaining to the duties of the Union and the State also had to be taken into consideration as the Union could not legislate in the matter.

Accordingly, the matter has been adjourned by a week.

Filed on behalf of BJP leader and Advocate Ashwini Kumar Upadhyay, the plea states that the model agreements shall restrain the builders, promoters and agents from indulging in arbitrary unfair restrictive trade practises in order to protect the rights and interests of customers and objectives of the Real Estate Regulation Act (RERA), 2016.

It is stated that the cause of action accrued on May 1, 2017 when states were required to enforce RERA in letter and spirit but they failed to do so within due date. It was expected that States would meet the second deadline i.e. 31.7.2017 but they failed again, the plea states.

Stating that the Promoters, Builders and Agents use "manifestly arbitrary one-sided agreements that do not place customers at an equal platform with them", the injury caused to public is large, thereby offending Articles 14, 15 & 21 of the Constitution.

"It is impossible to achieve the golden goals of Preamble without curbing corruption, black money generation and benami transaction, the biggest menaces to our democracy and development. Therefore, Centre must frame a Builder Buyer Agreement and Agent Buyer Agreement", the plea states.

Further, there have been many cases of deliberate inordinate delays in handing over possession and customers lodge complaints but police doesn't register FIRs, citing arbitrary clauses of the agreement, the plea adds.

In this context, the petitioner goes on to stipulate objectives and salient features of the RERA, adding that developers across India still follow a common practice of pre-lauching a project without securing requisite approvals for project from the authorities, and term it as 'soft launch' or 'pre-launch' etc. thus, openly violating the Law but no action has been taken against any builder till date.

The plea states that Article 144 also mandates all authorities civil or judicial in the territory of India, to act in aid of the order passed by the Supreme Court. Being the protector of civil liberties of citizens, the Supreme Court has not only the power and jurisdiction, but also an obligation to protect the fundamental rights, guaranteed by part-III in general and under Article 21 in particular zealously and vigilantly. The top court, the plea adds is vested with extraordinary powers of judicial review to ensure rights of citizens are duly protected.

In this backdrop, the prayer also stipulates directions to States to enforce 'Model Builder Buyer Agreement' and 'Model Agent Buyer Agreement' and take appropriate steps to avoid mental physical financial injury, ensure accountability toward customers & develop an effective mechanism to weed-out criminal conspiracy for wrongful gain, criminal breach of trust, dishonest misappropriation of buyers' money, committed by Promoters and Agents.