The Bombay High Court today directed the central and Maharashtra governments to file replies to petitions challenging constitutional validity of some of the provisions of the Real Estate (Regulation and Development) Act (RERA) saying its applicability will have to be tested. A division bench headed by Justice Anoop Mohta was hearing petitions filed by DB Realty, MIG (Bandra) Realtors and Builders and others, questioning the “extreme and unreasonable” provision that requires ongoing projects to be registered with the authority set up under the new act.
After hearing brief arguments, the court asked the Centre and the state to file reply affidavits in four weeks. “We will have to consider and test the applicability of the act,” Justice Mohta said.
The court also asked the Maharashtra government to file reply to a petition filed by some plot owners, challenging a circular issued by the state authority under the RERA which says plot owners are covered under the definition of ‘promoter’ in the act, if they take part in construction and sale of flats.
The May 11 order of the Maharashtra Real Estate Regulatory Authority notified that any owner or organisation signing development agreement with a builder will also have to register under the RERA, and will be treated as a co-promoter.
This is because such owner/organisation will be getting a share of revenue from the sale of flats, it said. Maharashtra Advocate General Ashutosh Kumbhakoni today told the court that RERA was aimed at regulating construction activity and also the sale of flats to third parties.
“If the owner is part of the construction and also sale of flats, then he is a promoter,” Kumbhakoni said. The judges, while asking the government to file reply, noted that they would have to examine the definition of ‘promoter’ under the act.