Rajasthan RERA Case: Non-Compliance and Auction of Unsold Units - Explained

In a significant case before the Rajasthan Real Estate Regulatory Authority (RERA) in Jaipur, Complaint No. RAJ-RERA-C-2022-4783, a dispute arose between Mahesh Kumar Mishra as the complainant and Icarus Builders and Developers Pvt. Ltd. as the respondent. The case centers around the non-execution of an order dated 09.11.2022 issued by the Authority. The order directed the respondent to refund the entire booking amount paid by the complainant, with deductions for cancellation charges and taxes. However, even after a period of approximately 6 months, the respondent failed to comply with the order, leading to the complainant seeking action under section 40 of the Real Estate (Regulation and Development) Act, 2016 (RERA). Let's delve into the details of this intriguing case.

Understanding the Real Estate (Regulation and Development) Act, 2016

The Real Estate (Regulation and Development) Act, 2016, commonly known as RERA, plays a crucial role in regulating the real estate sector in India. It was introduced to protect the interests of homebuyers and promote transparency in the industry. RERA aims to ensure fair practices, enhance accountability, and establish a mechanism for the speedy resolution of disputes between homebuyers and developers. The act imposes strict obligations on developers, requiring them to adhere to specified timelines, provide accurate project details, and protect buyers' investments. Non-compliance with RERA orders can lead to severe consequences for developers, as highlighted in the present case.

Overview of the Case

Complaint No. RAJ-RERA-C-2022-4783 was filed by Mahesh Kumar Mishra against Icarus Builders and Developers Pvt. Ltd., alleging non-execution of the Authority's order issued on 09.11.2022. The order directed the respondent to refund the booking amount received from the complainant, while allowing for deductions of 10 percent as cancellation charges and applicable taxes. The respondent was granted a period of 45 days to comply with the order, failing which the complainant could initiate execution proceedings under section 40(1) of RERA. The case highlights the importance of timely compliance with RERA orders and the consequences of non-compliance.

Non-Compliance and Consequences

Despite the 45-day deadline given to the respondent, the complainant reported that the respondent had not taken any action to refund the amount. The complainant alleged that the respondent willfully and intentionally disregarded the Authority's directions, prompting the complainant to seek the initiation of proceedings under section 40 of RERA. On the other hand, the respondent requested additional time for compliance and claimed to be negotiating with the complainant for installment-based payments. However, the respondent failed to provide satisfactory reasons for the delay in executing the order. The dispute highlights the importance of adhering to the Authority's directives and fulfilling obligations within the stipulated timelines.

Authority's Decision: Auction of Unsold Units

Considering the non-compliance and the gravity of the case, the Rajasthan RERA decided to exercise its powers under section 40 of the Act. The Authority directed the Registrar of the Authority to attach the unsold portion of the project in question and the respondent's bank account. The proceeds from the auction of the unsold units would be used to fulfill the refund obligation owed to the complainant, as per the order dated 09.11.2022. Any surplus amount remaining after the auction would be returned to the respondent. This decision underscores the Authority's commitment to enforce its orders and protect the rights of homebuyers.

Conditions for Aborting the Auction

To prevent the auction of unsold units, the respondent has the opportunity to submit proof of having made the full payment to the complainant before the conclusion of the auction process. If the respondent can demonstrate full compliance with the order, the attachment and auction of unsold units will be aborted, and the matter will be resolved without further action. The conditions for aborting the auction provide the respondent with a chance to rectify the situation and prevent the potential loss of unsold units.

Conclusion

The Rajasthan RERA case, involving Mahesh Kumar Mishra and Icarus Builders and Developers Pvt. Ltd., exemplifies the significance of timely compliance with RERA orders. The non-compliance and subsequent auction of unsold units serve as a reminder to developers about the importance of adhering to the Authority's directives. RERA, as a regulatory framework, plays a vital role in protecting homebuyers' rights and promoting transparency in the real estate sector. The resolution of this case signifies the Authority's commitment to enforcing its orders and ensuring accountability within the real estate industry.

Note: The information provided in this article about Real Estate Regulatory Authority  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.  

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