HM Journal

Vinod Kumar Agarwal Vs. Jaipur Development Authority (Rajasthan RERA)

The Real Estate regulatory authority (RERA) Act was instituted on the 1st of May, 2017. The Act focuses on protecting the interests of the consumers in the real estate sector by facilitating quick and convenient settlement of disputes. The point of determination in the given case includes whether a certain amount of money is payable to the Jaipur Development Authority, by Vinod Kumar Agarwal, in the absence of an agreement of sale.

BRIEF FACTS

Complainant- Vinod Kumar Agarwal

Respondent 1- Jaipur Development Authority

Respondent 2- Jaipur Metro Rail Corporation Ltd.

  • The complainant had participated in an auction wherein he had been allotted a plot, in the “Metro Enclave” project, implemented by respondent 1, under an MoU with Respondent 2, which was registered with the Real Estate Regulatory Authority.
  • As per the terms and conditions of the auction, the complainant had already deposited 15% of the total amount to respondent 1.
  • However, a demand note was further presented by respondent 1, which directed the complainant to deposit 35% of the amount within the stipulated period, failing which, an interest of 15% would be charged.
  • The point of dispute is that without the execution of an agreement of sale, how is the complainant liable to pay 35% of the amount? It is violative of the Section 13 of the RERA Act, which specifies that transfer of more than 10% of the total amount, without an agreement of sale is against the provisions of the Act.

CONTENTIONS BY THE COMPLAINANT

  • Advocate Pranjul Chopra, on the behalf of the complainant contended that, the project Metro Enclave was registered with RERA, which meant that it will conform with all the provisions laid down by the RERA Act. Along with the application of the registration, a draft agreement was also submitted which undoubtedly implies that the project would obey the rules and regulations of the RERA Act.
  • Furthermore, the project had announced to its potential buyers that it is a project registered with RERA, thereby expressing the fact that the relationship between the project and the buyers would be determined by the terms and requirements of the Act.

CONTENTIONS BY THE RESPONDENT

  • CA Mitesh Rathore, on behalf of the respondent contented that the agreement of sale is not required to be presented as it does not correspond with the overall scheme in general, under which respondent 1 operates. The auction was organized under Disposal of Urban Land Rules of 1974, and therefore was a statutory authority.
  • Also, by agreeing to participate in the auction, it is evident and goes without saying that the complainant agreed to comply with the terms and conditions of the auction too.
  • Hence, the possession of the auctioned plot can only be transferred to the complainant after the payment is completed.
  • Moreover, it would be unfair on the part of respondent 1, to not abide by the terms and conditions of the auction and also can be against the rights of the other participants of the auction.

PRINCIPLE LAID DOWN

 Section 13 (1) of the RERA Act provides for an agreement for sale to be executed and registered before the promoter accepts an amount exceeding 10 per cent of the total cost of the plot. This is a compulsory requirement of the Act and can’t be dispensed or compromised with.

JUDGEMENT

The forum directed that the promoter of a real estate project shall not accept amount of more than 10% of the cost of the plots as advance payment without first entering into a agreement purchasable and registering an equivalent.

1. An agreement of sale with the complainant, shall be executed by respondent 1, and the same should be registered before demanding or accepting any further amount beyond 15% of the total amount, which has been already deposited the complainant.

2. Respondent 1 should frame the rules of the auction in accordance to the provisions stated in the Act, so that such complaints are avoided in the future.

3. Respondent 1 should fulfil these orders and submit a compliance report within 45 days, from the date of issue of this order.

Thus, the RERA Act promotes transparency and justice to homebuyers. Non-compliance with the provisions of the Act can result in punishment as well.

REFRENCES

SUBJECT AREA– REAL ESTATE REGULATORY AUTHORITY ACT, 2016.

EDITED BY– PRANJAL NEERAJ SINGH

COLLEGE– UNIVERSITY OF MUMBAI LAW ACADEMY (SEMESTER II)

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