Rajasthan Real Estate Regulatory Authority vs. SKT Buildtech Pvt. Ltd.: A Case of Non-compliance and Penalties

In a significant legal case, the Rajasthan Real Estate Regulatory Authority (RERA) has taken action against SKT Buildtech Pvt. Ltd. for non-compliance with an order and subsequent penalties. This case highlights the importance of adhering to regulations and fulfilling obligations in the real estate sector.

Background of the Case

The Real Estate (Regulation and Development) Act, 2016, aims to regulate and promote transparency in the real estate sector. As the regulatory body in Rajasthan, RERA plays a vital role in overseeing compliance with the Act. In this case, RERA is the plaintiff, and SKT Buildtech Pvt. Ltd. is the respondent.

The case pertains to a specific project whose estimated completion date was approaching. However, the project faced delays, resulting in non-compliance with regulatory requirements.

Order and Non-compliance

On 14.06.2022, RERA issued an order against SKT Buildtech Pvt. Ltd. due to their failure to take necessary steps to extend the project beyond the estimated completion date. This non-compliance triggered the application of penalties.

Consequently, RERA imposed a penalty of Rs. 2,00,000/- on the respondent. The order emphasized the need for the respondent to submit the penalty amount within a specified timeframe and provide a compliance report to RERA. Additionally, the respondent was directed to initiate actions to extend the project for the lapsed period.

Absence and Ex-parte Order

During the court proceedings, the respondent was noticeably absent. Despite being served notice, they failed to appear. This consistent non-appearance led to an ex-parte order dated 14.06.2022, which imposed penalties and provided directions for payment and project extension.

The absence of the respondent implies that they did not present any defense or challenge the penalties imposed by RERA. As a result, the court proceeded based on the information and evidence presented by the plaintiff.

Initiation of Proceedings under Section 40

Given the respondent's persistent non-compliance, RERA made the decision to initiate proceedings under section 40 of the Real Estate (Regulation and Development) Act, 2016. This step signifies the seriousness of the non-compliance and indicates potential legal consequences for the respondent.

Section 40 proceedings empower RERA to take further actions to ensure compliance and resolve the matter satisfactorily. The initiation of these proceedings demonstrates RERA's commitment to upholding the integrity of the real estate sector.

Attachment and Auction of Unsold Property

To recover the penalty amount, RERA directed the attachment of the unsold portion of the project and the respondent's bank account. This step ensures that the ordered penalty is secured and can be retrieved. Furthermore, RERA intends to auction the flats or properties to facilitate the recovery process effectively.

The auction will be conducted to attract potential buyers who can acquire the attached properties. The funds generated from the auction will primarily be used to settle the penalty amount owed to RERA. Any surplus funds remaining after the recovery will be returned to the respondent.

Release of Attached Units

During the auction process and until the ordered penalty amount is fully paid to RERA, the attached units will remain under RERA's possession. However, once the respondent complies with the order by making the required payment, the remaining attached units can be released to them for their use.

This provision allows the respondent to regain control over the units that were previously attached, provided they fulfill their obligations within the given timeframe.

Compliance and Termination of Attachment/Auction

To terminate the attachment and auction process, the respondent must provide proof of full payment of the ordered penalty amount to RERA. Timely compliance is crucial to avoid further consequences and ensure a swift resolution to the case.

If the respondent can demonstrate that they have fulfilled their financial obligations, the attachment and auction process will be halted. This mechanism incentivizes compliance and encourages timely resolution.

Extension of the Project

In addition to the penalties imposed, RERA instructed the Registrar of the Authority to take necessary steps for extending the project beyond the lapsed period. This directive ensures that the project is completed and delivered to buyers, addressing the initial delays.

Complying with the extension directive is vital for the respondent to rectify the non-compliance issue fully. By extending the project and fulfilling their obligations, the respondent can demonstrate their commitment to meeting regulatory requirements and serving the interests of homebuyers.

Conclusion

The case between RERA and SKT Buildtech Pvt. Ltd. highlights the importance of compliance with real estate regulations. Non-compliance can result in severe penalties, attachment of unsold property, and potential auctions to recover owed amounts.

RERA's role in overseeing the real estate sector ensures transparency, accountability, and timely project completion. Adhering to RERA's orders and directives is crucial for both developers and homebuyers, as it promotes trust and confidence in the real estate market.

This case serves as a reminder that fulfilling regulatory obligations is essential for developers to operate legally and maintain the integrity of the industry. By complying with regulations, developers can contribute to a thriving real estate market that protects the interests of all stakeholders involved.

Note: The information provided in this article about Rajasthan Real Estate Regulatory Authority (RRERA) is for informational purposes only. It is not intended as legal or professional advice and readers should consult qualified professionals for advice specific to their circumstances. The information provided in this article is based on the File No. F.3(741)RJ/RERA/QPR/2018 before the Rajasthan Real Estate Regulatory Authority

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