Friday 12 April 2019

Real Estate (Regulation and Development) Act: AN OVERVIEW

The Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as “RERA”) which came into effect from May 1, 2017, has around 34,600 projects and 26,800 real estate agents being registered under the act, as of November 28, 2018.

Objective of RERA

With the advent of RERA, there began a norm for strict compliances that has to be adhered by each and every developer, builder and construction giant in different parts of the country. Most of the states have established their own RERA offices where they work under the established rules and regulations. Though the act is not retrospective in nature it mandates every project to be registered with the respective State RERA offices by the promoters of the company within 3 months of the commencement of the Act.

The RERA was enacted to protect the interest of the homebuyers and boost investment in the sector. The provisions like timely completion and delivery of projects to the buyers and making the information of the project plan, layout, government approvals, land title status, and sub-contractors available, consent of two-thirds of the allottees on any alteration or addition in the project, and other such provisions, would bring in more transparency and accountability in the real estate sector.

Problems solved by RERA

Before the commencement of RERA, there were no bindings and compulsions on the real estate developers and construction pioneers to deliver the property to its respective owners on time. An inconsiderable delay was usually witnessed which had a negative effect on the financial health of the homebuyer. On one hand the buyer had to pay the monthly rent where he was residing and on the other hand, he also paid monthly installments and abide by the terms and conditions of the Buyer Builder Agreement thereby overburdening him financially. Unfortunately, there was no one to question the developers and builders.

With the RERA coming into force, 56% of the homebuyers prefer to initiate litigation and dispute resolution under State RERA Regulations rather than going to consumer forums, state commissions or any other court for civil remedies[1]. These homebuyers believe that the success ratio of RERA is much more as compared to the years of struggle of litigation before other forums and courts. Also, the success ratio of cases under RERA are more result oriented, expeditious with concrete judgment being passed against the errant developers and builders.

Impact of RERA

After the enforcement of RERA, the banks and other financial institutions don’t lend money to retail buyers under the real estate project, which is not registered or registration of the same has been cancelled by the respective State RERA office. Both the developers and the builders are expected to submit all the necessary documents and approvals to their requisite regulator in order to obtain registration under RERA.

In India, RERA has been enacted and implemented in 28 states as well as Union Territories and in November 2018, it was confirmed by the six north eastern states Nagaland, Arunachal Pradesh, Meghalaya, Manipur, Mizoram, and Sikkim have finally agreed to implement Real Estate Regulation Act. The only states to not have implemented RERA are Jammu and Kashmir where  Jammu and Kashmir Real Estate (Regulation and Development) Bill, 2018 has been approved by the State Advisory Council under the chairmanship of the J & K Governor and is under the process of establishing the Real Estate Regulating Authority and the Real Estate Appellate Tribunal for efficient and effective regulation of the real estate sector and West Bengal which has notified its own real estate law — the Housing and Industrial Regulation Act, 2017 (HIRA) instead of RERA.  

Penalties for non-compliance under RERA

The RERA Act gives explicit and mentions of specific penalties for offences by promoters, real estate agents, builders and other parties who are involved under the ambit of this act:-
  • For non-registration of the project with the RERA Authority: 10% of the total estimated cost of the project.
  • Where a project has not been registered and any order or direction for the same has been issued by the authorities: Upto 3 years of imprisonment with or without fine of 10% of the estimated cost of the project
  • Where information or advertisement regarding the project is found to be false: 5% of the estimated cost of the project
  • Where an order of the RERA has been contravened or has not been executed: Daily penalty for every day after passing of the order which has been contravened upto 5% of the estimated cost of the project
  • Where an order of the Appellate Tribunal has been contravened: Upto 3 years imprisonment with or without fine of upto 5% of the estimated cost of the project

The legislative regime was not strong enough to render the developer and the builder guilty of misconduct and also for breaching the terms and conditions of the builder buyer agreement in the long run. Introduction and enforcement of RERA comes further to protect the interest of the homebuyers as well as save them from any kind of financial burdens.

India: Prevention of Workplace Sexual Harassment Laws


The implementation of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (hereinafter referred to as the “Act”) was a win for all women employees. However, it was anything far from an easy or quick win. Sexual harassment at workplace is not only a wrong against the body of the woman but also wrong against her mentally. It is yet another form of discrimination, deterring her to be the part of the work force, and therefore refraining her from exercising her fundamental right to work as enshrined in Article 19 of the Constitution of India. It is a wrong against her life and against her dignity. The Supreme Court of India gave the landmark judgment in the case of  Vishakha v. State of Rajasthan[1] in 1997, wherein the Court laid down the guidelines that the employers are required to follow. However, even after the direction of the Supreme Court, the guidelines were seldom followed. Finally, in 2013 the Parliament enacted the Act and the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013 (hereinafter referred to as the “Rules”) framed thereunder.

Vishakha v. State of Rajasthan
A writ petition was filed before the Supreme Court for the enforcement of the fundamental right of working women under Article 14, 19 and 21 of the Constitution of India. The petition was filed to find suitable methods for realization of the true concept of ‘gender equality’; and to prevent sexual harassment of working women in all work places through judicial process, to fill the vacuum in existing legislation. This came in the wake of a brutal gang rape of a social worker Bhanwari Devi when she was petitioning to curb the evil of child marriage. This incident exposed the hazards that a working woman may be exposed to.
The Supreme Court acknowledged that sexual harassment at workplace is in violation of Article(s) 14, 15, 19(1)(g), 21, 42, 51A, 51 and 253. Thus, the Court laid down 12 guidelines and directed strict compliance in all workplaces for enforcement of gender equality at workplace until suitable legislation is enacted.

Evolution of POSH Laws
Convention on the Elimination of all Forms of Discrimination against Women (CEDAW) to which India is signatory in this 11th session in 1992 laid down General Recommendation No. 19. These recommendations correlate sexual harassment with violation of a women’s human and fundamental rights. It urges states to ensure that women are not coerced into sexual harassment at workplace.
Since 1997, even after the Vishakha Judgment the Parliament did not take any significant steps to enact a suitable legislation. In Apparel Export Promotion Council v. A.K. Chopra[2], the Court yet again upheld that any action which may not necessarily result in molestation can be covered under the ambit of harassment at work place if it creates a hostile work environment for the woman involved. Ten years after the judgment, Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Bill was introduced in 2007. The Union Cabinet approved the bill in 2010 after much deliberation. The bill was later referred to the Parliamentary Standing Committee on Human Resources Development which published its report in November 2011. The delay only resulted in array of cases of sexual harassment at workplace before Courts all over the country. The media started picking up cases and implementation of legislation became the dire need of the hour.

The Supreme Court came heavily on the legislators for ignoring such a crucial issue in Medha Kotwa Lele v. Union of India[3]. The Court ordered the states to ensure strict adherence of the guidelines until suitable legislation is enacted. Finally, the bill was passed by the Lok Sabah in September 2012 and the Rajya Sabhah approved the bill in February, 2013.

Salient Features of the Act
The Act incorporates the guidelines of the Vishakha Judgment. It covers within its ambit women which may or may not be employed at the workplace. This is crucial as any woman who comes in contact with the workplace such as Interns can avail relief under the Act. Further, the Act includes household workers within its scope.
The Act stipulates a specialized committee known as Internal Complaints Committee to be appointed at workplace with more than ten employees for ensuring all complaints of sexual harassment are dealt with utmost diligence. For other workplace a local complaints committee is constituted in every district.
The Act and the Rules made thereunder prescribes procedure to be followed by the committee. The provisions aim to afford maximum support and ease to the aggrieved. The Act also lays down duties of the employer for safeguarding the interest and dignity of all employees.

The Act and the Rules made thereunder is unquestionably a positive step in the direction of achieving equality in the professional sphere. This has resulted in empowering working women to work at par with their male counter parts without the fear of harassment. Moreover, the Act attempted to create awareness towards the problem previously so conveniently ignored.

[1] 1997 (7) SCC 323.
[2] (1999) 1 SCC 759.
[3] Civil Appeal No. – 5009-5010 of 2006; decided on October 19, 2012.