PROJECT REPORT ON

REAL ESTATE
(REGULATION AND DEVELOPMENT)
ACT, 2016

(RERA)

Presented By:

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 CONTENTS

Sl. No Particulars Page No

1 Introduction 1-2
2 Regulatory Framework – Real Estate (Regulation and Development) 3-10
Act, 2016
3 Registration of Real Estate Project and Registration of Real Estate 11-15
Agents
4 Functions and Duties of Promoter 16-19
5 Rights and Duties of Allottees 20-20
6 Central Advisory Council 21-21
7 The Real Estate Regulatory Authority 22-31
8 Role of Company Secretaries 32-32
9 Offences, Penalties and Adjudication 33-36

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 PREFACE

This Project is the outcome of the sound knowledge given to us and the knowledge
gained from various avenues like bare acts, books, journals and websites of the
RERA.

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 ACKNOWLEDGEMENT

We are immensely grateful to all involved in this project as without their inspiration and
valuable suggestion it would not have been possible to develop the project within the
prescribed time.

Place: Bangalore
Date: 21 March, 2018

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 INTRODUCTION

Real Estate Sector, one of the major contributors in the inclusive growth of the economy
with the contribution of Approx 9% of total GDP. Real estate sector plays a catalytic role in
fulfilling the needs and demand for housingand infrastructure in the country and is an
important pillar of the economy. While thissector has grown significantly in recent years, it
has been largely unregulated, withabsence of professionalism and standardisation and lack
of adequate consumer protection.It has no sectoral regulator like there are for other
specific sectors like insurance, telecom,stock markets etc. History is witness to the fact that
whenever sectoral regulators likeSEBI, IRDAI, TRAIetc have been formed, they have helped
in deepening the marketand made it more robust. Though the Consumer Protection Act,
1986 is available as aforum to the buyers in the real estate market, the recourse is only
curative and is notadequate to address all the concerns of buyers and promoters in that
sector. The lack ofstandardisation has been a constraint to the healthy and orderly growth
of industry.Therefore, since more than a decade the need for regulating the sector was
beingemphasised in various forums.

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Reason for Policy and regulation of real estate sector

1. False Promises:

With increasing competition in real estate, builders are trying to lure as many buyers in the
initial phase of a project to meet their funding requirements. Advertisements with false
promises are part of it.

2. Assured Rental Returns:

Many builders market their projects by assuring a fixed rental income from properties.
Some builders even publish fake rental listings of various projects over the internet. If the
prospective buyers does not conduct their own research, they may actually believe that the
property once bought can be easily rented out for a fixed monthly income. But, in all reality,
once the purchase is over, rentals are hard to come by, leaving the investor in a lurch.

3. Title Frauds:

This happens with both individual sellers and developers. There have been cases where
scammers have duplicated title deeds of vacant or disputed projects and sold them to
innocent buyers. "By the time the fraud is detected, the scammer is far out of sight,
counting the wads of money they has made. A related genre of real estate fraud is where
buyers purchase their dream home only to later come to know that the project does not
include that part of land the builder had specified as theirs when they booked it.

This led to a deep-seated legal transformation in the form of Real Estate (Regulation and
Development) Act, 2016.

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 REGULATORY FRAMEWORK – REAL ESTATE
(REGULATION AND DEVELOPMENT) ACT, 2016

Parliament enacted the Real Estate (Regulation and Development)Act, 2016 which aims at
protecting the rights and interests of consumers and promotionof uniformity and
standardization of business practices and transactions in the real estatesector. It attempts
to balance the interests of consumers and promoters by imposingcertain responsibilities
on both. It seeks to establish symmetry of information betweenthe promoter and
purchaser, transparency of contractual conditions, set minimumstandards of accountability
and a fast-track dispute resolution mechanism.This Act will be put in operation just like the
Motor Vehicles Act passed by the CentralGovernment, pursuant to which respective State
Governments (“SG”) and Union Territories(‘UT”) are required to notify their own Rules,
which would be in the lines of the CentralAct and accordingly administer their own State
Rules. Accordingly, every SG and UT areto required to promulgate their own Real Estate
Rules which would be based on thelines of the central Real Estate (Regulation and
Development) Act 2016, and establish aReal Estate Regulatory Authority (“RERA”)
pursuant to the Rules, which will administerthe respective Real Estate Rules of the State or
UT.

I. The objects and reasons for which the Act has been framed are:

 ensure accountability towards allottees and protect their interest.

 infuse transparency, ensure fair-play and reduce frauds & delays.
 introduce professionalism and pan India standardization.
 establish symmetry of information between the promoter and allottee.
 imposing certain responsibilities on both promoter and allottees.
 establish regulatory oversight mechanism to enforce contracts.
 establish fast- track dispute resolution mechanism.
 promote good governance in the sector which in turn would create investor
confidence

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II. Salient Features of the Real Estate (Regulation and Development) Act, 2016:

 Establish the Real Estate Regulatory Authority for regulation and promotion
ofthe real estate sector.

 Ensure sale of plot, apartment of building, as the case may be, or sale of
realestate project, in an efficient and transparent manner.

 Ensure protect the interest of consumers in the real estate sector.

 Establish an adjudicating mechanism for speedy dispute redressal and also

toestablish the Appellate Tribunal to hear appeals from the decisions,
directionsor orders of the Real Estate Regulatory Authority (RERA)Regulates
transactions between buyers and promoters of residential real estateprojects.

 Establishes state level regulatory authorities called Real Estate

RegulatoryAuthorities (RERAs).

 Residential real estate projects, with some exceptions, need to be registeredwith

RERAs.

 Promoters cannot book or offer these projects for sale without registeringthem.
Real estate agents dealing in these projects also need to register withRERAs.

 Registration, the promoter must upload details of the project on the website
ofthe RERA. These include the site and layout plan, and schedule for
completionof the real estate project.

 Amount collected from buyers for a project must be maintained in a

separatebank account and must only be used for construction of that project.
The stategovernment can alter this amount.

 Right to Legal Representation on behalf of Client by Company Secretaries

orchartered accountants or cost accountants or legal practitioners.

 Imposes stringent penalty on promoter, real estate agent and also

prescribesimprisonment.

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III. Advantages of RERA (Real Estate Development and Regulation Act);

 Transparency.
 Project Planning.
 Timely completion of the project.
 Customer management.
 Reduction in Litigation.

RERA has brought in uniformity in definitions for important components of real estate,like,
“carpet area”, “common areas” etc which will prevent malpractices like changesin area,
specifications etc. Some of the important definitions are reproduced below:

IV. Important Definitions:

"Advertisement" means any document described or issued as advertisement throughany

medium and includes any notice, circular or other documents or publicity inany form,
informing persons about a real estate project, or offering for sale of aplot, building or
apartment or inviting persons to purchase in any manner such plot,building or apartment
or to make advances or deposits for such purposes;

"Agreement for sale" means an agreement entered into between the promoterand
theallottee;

"Allottee" in relation to a real estate project, means the person to whom a plot,apartment
or building, as the case may be, has been allotted, sold (whether asfreehold or leasehold) or
otherwise transferred by the promoter, and includes theperson who subsequently acquires
the said allotment through sale, transfer orotherwise but does not include a person to
whom such plot, apartment or building,as the case may be, is given on rent;

"Apartment" whether called block, chamber, dwelling unit, flat, office, showroom,shop,
godown, premises, suit, tenement, unit or by any other name, means aseparate and self-
contained part of any immovable property, including one or morerooms or enclosed
spaces, located on one or more floors or any part thereof, in abuilding or on a plot of land,
used or intended to be used for any residential orcommercial use such as residence, office,
shop, showroom or godown or for carryingon any business, occupation, profession or
trade, or for any other type of useancillary to the purpose specified;

"Building" includes any structure or erection or part of a structure or erection

whichisintended to be used for residential, commercial or for the purpose of any
business,occupation, profession or trade, or for any other related purposes;

"Carpet area" means the net usable floor area of an apartment, excluding the areacovered
by the external walls, areas under services shafts, exclusive balcony orverandah area and

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exclusive open terrace area, but includes the area covered bythe internal partition walls of
the apartment.

Explanation: the expression "exclusive balconyor verandah area" means the areaof the
balcony or verandah, as the case may be, which is appurtenant to the netusable floor area
of an apartment, meant for the exclusive use of the allottee; and"exclusive open terrace
area" means the area of open terrace which is appurtenantto the net usable floor area of an
apartment, meant for the exclusive use of theallottee;

"Commencement certificate" means the commencement certificate or the buildingpermit

or the construction permit, by whatever name called issued by the competentauthority to
allow or permit the promoter to begin development works on animmovable property, as
per the sanctioned plan;

"Common areas" mean—

(i) the entire land for the real estate project or where the project is developedin
phases and registration under this Act is sought for a phase, the entireland for
that phase;
(ii) the stair cases, lifts, staircase and lift lobbies, fir escapes, and common entrances
and exits of buildings;
(iii) the common basements, terraces, parks, play areas, open parking areas and
common storage spaces;
(iv) the premises for the lodging of persons employed for the management of the
property including accommodation for watch and ward staffs or for the lodging
of community service personnel;
(v) installations of central services such as electricity, gas, water and sanitation, air-
conditioning and incinerating, system for water conservation and renewable
energy;
(vi) the water tanks, sumps, motors, fans, compressors, ducts and all apparatus
connected with installations for common use;
(vii) all community and commercial facilities as provided in the real estate project;
(viii) all other portion of the project necessary or convenient for its maintenance,
safety, etc., and in common use;

"Company" means a company incorporated and registered under the CompaniesAct, 2013
and includes,—
(i) a corporation established by or under any Central Act or State Act;
(ii) a development authority or any public authority established by the
Governmentin this behalf under any law for the time being in force;

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"Competent authority" means the local authority or any authority created orestablished
under any law for the time being in force by the appropriate Governmentwhich exercises
authority over land under its jurisdiction, and has powers to givepermission for
development of such immovable property;

"Completion certificate" means the completion certificate, or such other certificate,by

whatever name called, issued by the competent authority certifying that the realestate
project has been developed according to the sanctioned plan, layout planand specifications,
as approved by the competent authority under the local laws;

"Day" means the working day, in the concerned State or Union territory, as the casemay be,
notified by the appropriate Government from time to time;

"Development" with its grammatical variations and cognate expressions, meanscarrying

out the development of immovable property, engineering or other operationsin, on, over or
under the land or the making of any material change in any immovableproperty or land and
includes re-development;

"Development works" means the external development works and internaldevelopment

works on immovable property;

"Estimated cost of real estate project" means the total cost involved in developingthe
real estate project and includes the land cost, taxes, cess, development andother charges;

"External development works" includes roads and road systems landscaping,

watersupply, seweage and drainage systems, electricity suply transformer, sub-
station,solid waste management and disposal or any other work which may have to
beexecuted in the periphery of, or outside, a project for its benefit, as may be
providedunder the local laws;

"Family" includes husband, wife, minor son and unmarried daughter wholly dependenton
a person;

"Garage" means a place within a project having a roof and walls on three sides forparking
any vehicle, but does not include an unenclosed or uncovered parkingspace such as open
parking areas;

"Immovable property" includes land, buildings, rights of ways, lights or any otherbenefit
arising out of land and things attached to the earth or permanently fastenedto anything
which is attached to the earth, but not standing timber, standing cropsor grass;

"Interest" means the rates of interest payable by the promoter or the allottee, asthe case
may be.

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Explanation.—
(i) the rate of interest chargeable from the allottee by the promoter, in case
ofdefault, shall be equal to the rate of interest which the promoter shall be
liableto pay the allottee, in case of default;

(ii) the interest payable by the promoter to the allottee shall be from the date
thepromoter received the amount or any part thereof till the date the amount
orpart thereof and interest thereon is refunded, and the interest payable by
the,allottee to the promoter shall be from the date the allottee defaults in
paymentto the promoter till the date it is paid;

"Internal development works" means roads, footpaths, water supply, sewers,drains,

parks, tree planting, street lighting, provision for community buildings andfor treatment
and disposal of sewage and sullage water, solid waste managementand disposal, water
conservation, energy management, fire protection and firesafety requirements, social
infrastructure such as educational health and other publicamenities or any other work in a
project for its benefit, as per sanctioned plans;

"Local authority" means the Municipal Corporation or Municipality or Panchayatsor any

other Local Body constituted under any law for the time being in force forproviding
municipal services or basic services, as the case may be, in respect ofareas under its
jurisdication;

"Occupancy certificate" means the occupancy certificate, or such other certificateby

whatever name called, issued by the competent authority permitting occupationof any
building, as provided under local laws, which has provision for civicinfrastructure such as
water, sanitation and electricity;

"Person" includes,—
(i) an individual;
(ii) a Hindu undivided family;
(iii) a company;
(iv) a firm under the Indian Partnership Act, 1932 or the Limited Liability
PartnershipAct, 2008, as the case may be;
(v) a competent authority;
(vi) an association of persons or a body of individuals whether incorporated or not;
(vii) a co-operative society registered under any law relating to co-operative
societies;
(viii) any such other entity as the appropriate Government may, by notification,specify
in this behalf;

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"Planning area" means a planning area or a development area or a local planningarea or a
regional development plan area, by whatever name called, or any otherarea specified as
such by the appropriate Government or any competent authorityand includes any area
designated by the appropriate Government or the competentauthority to be a planning
area for future planned development, under the lawrelating to Town and Country Planning
for the time being in force and as revisedfrom time to time;

"Promoter" means,—

(i) a person who constructs or causes to be constructed an independent buildingor a

building consisting of apartments, or converts an existing building or a partthereof
into apartments, for the purpose of selling all or some of the apartmentsto other
persons and includes his assignees; or

(ii) a person who develops land into a project, whether or not the person alsoconstructs
structures on any of the plots, for the purpose of selling to otherpersons all or some
of the plots in the said project, whether with or withoutstructures thereon; or

(iii) any development authority or any other public body in respect of allottees of:

a. buildings or apartments, as the case may be, constructed by such authorityor

body on lands owned by them or placed at their disposal by theGovernment; or
b. plots owned by such authority or body or placed at their disposal by
theGovernment, for the purpose of selling all or some of the apartments orplots;
or

(iv) an apex State level co-operative housing finance society and a primary
cooperativehousing society which constructs apartments or buildings for
itsMembers or in respect of the allottees of such apartments or buildings; or

(v) any other person who acts himself as a builder, coloniser, contractor,
developer,estate developer or by any other name or claims to be acting as the holder
ofa power of attorney from the owner of the land on which the building
orapartment is constructed or plot is developed for sale; or

(vi) such other person who constructs any building or apartment for sale to thegeneral
public.

Explanation.— where the person who constructs or converts a building intoapartments or

develops a plot for sale and the persons who sells apartments or plotsare different persons,
both of them shall be deemed to be the promoters and shallbe jointly liable as such for the
functions and responsibilities specified, under thisAct or the rules and regulations made
there under;

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"Prospectus" means any document described or issued as a prospectus or anynotice,
circular, or other document offering for sale or any real estate project orinviting any person
to make advances or deposits for such purposes;

"Real estate agent" means any person, who negotiates or acts on behalf of oneperson in a
transaction of transfer of his plot, apartment or building, as the casemay be, in a real estate
project, by way of sale, with another person or transfer ofplot, apartment or building, as the
case may be, of any other person to him andreceives remuneration or fees or any other
charges for his services whether ascommission or otherwise and includes a person who
introduces, through any medium,prospective buyers and sellers to each other for
negotiation for sale or purchase ofplot, apartment or building, as the case may be, and
includes property dealers,brokers, middlemen by whatever name called;

"Real estate project" means the development of a building or a building consistingof

apartments, or converting an existing building or a part thereof into apartments,or the
development of land into plots or apartment, as the case may be, for thepurpose of selling
all or some of the said apartments or plots or building, as thecase may be, and includes the
common areas, the development works, allimprovements and structures thereon, and all
easement, rights and appurtenancesbelonging thereto;

"Sanctioned plan" means the site plan, building plan, service plan, parking andcirculation
plan, landscape plan, layout plan, zoning plan and such other plan andincludes structural
designs, if applicable, permissions such as environment permissionand such other
permissions, which are approved by the competent authority priorto start of a real estate
project;

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 REGISTRATION OF REAL ESTATE PROJECT AND
REGISTRATION OF REAL ESTATE AGENTS

Many developers across India follow a common practice of pre-lauching a project

withoutsecuring requisite approvals for the project from the local authorities, which is
termedas “soft launch”, “pre-launch” etc. Buyers also lap into this opportunity as they
getdiscounted prices during the pre-launches period. But if it is from a developer who
isunscrupulous or a fly by night operator, then it carries a great risk. Hence, to plug thisgap,
registration of every project with the regulatory authority has been mandatorybefore it is
launched for sale and for registration the basic pre-requisite is that thedeveloper must
have all the requisite approvals. Thus the buyer is protected as theproject is ring-fenced
from the vagaries of non-approvals or delays in approvals whichare one of the major
causes of delay for the project. The gist of relevant provisions forregistration as prescribed
in sections 3, 4 and 5 of the Act are stated below:

I. Prior Registration of Real Estate project with Real Estate Regulatory Authority:

A promoter shall not advertise, market, book, sell or offer for sale, or invite persons
topurchase in any manner any plot, apartment or building, as the case may be, in any
realestate project or part of it, in any planning area, without registering the real
estateproject with the Real Estate Regulatory Authority established .

The projects that are ongoing on the date of commencement of this Act and for whichthe
completion certificate has not been issued, the promoter shall make an applicationto the
Authority for registration of the said project within a period of three months fromthe date
of commencement of this Act.

Authority in the interest of allottees, for projects which are developed beyond theplanning
area but with the requisite permission of the local authority, it may, by order,direct the
promoter of such project to register with the Authority, and the provisions ofthis Act or the
rules and regulations made there under, shall apply to such projects fromthat stage of
registration where the real estate project is to be developed in phases,every such phase
shall be considered a standalone real estate project, and the promotershall obtain
registration under this Act for each phase separately.

II. Projects exempt from the ambit of the Act:

The following projects do not require to be registered under the Act:

1. Area of land does not exceed 500 Sq. Meters

2. Number of apartments does not exceed 8
3. In case of Renovation/ Repair/Re-development*
4. where the promoter has received completion certificate for a real estate
projectprior to commencement of this Act;

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 *for the purpose of renovation or repair or re-development which does not
involvemarketing, advertising selling or new allotment of any apartment, plot or
building, asthe case may be, under the real estate project.

III. Application for Registration of real estate projects:

Every promoter shall make an application to the Authority for registration of the realestate
project in such form, manner, within such time and accompanied by such fee asmay
bespecified by the regulations made by the Authority.

Step 1
Applicant has to file an application for registration with RERA in prescribed form along
with prescribed fees and documents

Step 2
Application for registration must be either approved or rejected within a period of 30 days
from the date of application by the RERA

Step 3
On successful registration, the promoter of the project will be provided with a registration
number, a login ID and password for the applicant

Documents to be submitted along with application:

1. a brief details of his enterprise including its name, registered address, type
ofenterprise (proprietorship, societies, partnership, companies,
competentauthority), and theparticulars of registration, and the names and
photographsof the promoter;

2. a brief detail of the projects launched by him, in the past five years and the current
status of the same.

3. An authenticated copy of the approvals and commencement certificate fromthe

competent authority obtained in accordance with the laws as may beapplicable for
the real estate project mentioned in the application, and wherethe project is
proposed to be developed in phases, an authenticated copy ofthe approvals and
commencement certificate from the competent authorityfor each of such phases;

4. the sanctioned plan, layout plan and specifications of the proposed project orthe
phase thereof, and the whole project as sanctioned by the competentauthority;

5. the plan of development works to be executed in the proposed project andthe

proposed facilities to be provided thereof including firefighting facilities,drinking
water facilities, emergency evacuation services, use of renewableenergy;

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 6. The location details of the project, with clear demarcation of land dedicated forthe
project along with its boundaries including the latitude and longitude ofthe end
points of the project;

7. Proforma of the allotment letter, agreement for sale, and the conveyance
deedproposed to be signed with the allottees;

8. The number, type and the carpet area of apartments for sale in the projectalong
with the area of the exclusive balcony or verandah areas and the exclusiveopen
terrace areas apartment with the apartment, if any;

9. The number and areas of garage for sale in the project;

10. The names and addresses of his real estate agents, if any, for the proposedproject;

11. the names and addresses of the contractors, architect, structural engineer, ifany and
other persons concerned with the development of the proposed project;

12. A declaration, supported by an affidavit, which shall be signed by the promoteror

any person authorised by the promoter.

IV. Granting of Registration by the Authority:

On receipt of the application, the Authority shall within a period of thirty days-

a. Grant registration subject to the provisions of the Act and the rules and
regulationsmade thereunder. A registration number, including a Login Id and
password totheapplicant for accessing the website of the Authority and to create his
webpage and to fill therein the details of the proposed project; orreject the
application for reasons to be recorded in writing, if such applicationdoes not
conform to the provisions of this Act or the rules or regulations madethereunder.

b. If the Authority fails to grant the registration or reject the application, as the case
maybe, the project shall be deemed to have been registered, and the Authority shall
withina period of seven days of the expiry of the said period of thirty days
specified.The registration granted shall be valid for a period declared by the
promoter for completionof the project or phase thereof, as the case may be.

V. Extension of registration:

Delay in handing over of projects by the developer within the stipulated time frame
hasbeen a major woe of the buyers and hence has been a major trigger for promulgationof
this act. Hence, at the time of registration, a developer has to specify a time lineduring
which he will complete and handover the project to the buyer. The timeline isvery

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sacrosanct because if he fails to do so within the stated time, then there arerigorous
provisions in the Act as prescribed in section 7 & 8 whereby his registrationwould be
revoked and his project would be usurped by the Regulator. Though as persection 6, an
extension of registration may be granted at the sole discretion of theregulator due to Force
Majeure conditions or if there are reasonable circumstanceswhich merit extension.

The registration granted may be extended by the Authority on an application made bythe
promoter due to force majeure, in such form and on payment of such fee as may
bespecified by regulations made by the Authority.

"Force majeure" shall mean a case of war, flood, drought, fire, cyclone, earthquake orany
other calamity caused by nature affecting the regular development of the realestate project.

The Authority may in reasonable circumstances, without default on the part of

thepromoter, based on the facts of each case, and for reasons to be recorded in
writing,extend the registration granted to a project for such time as it considers
necessary,which shall, in aggregate, not exceed a period of one year.

VI. Revocation of registration:

The Authority may, on receipt of a complaint or suomotu in this behalf or on

therecommendation of the competent authority, revoke the registration granted, afterbeing
satisfied that—

a. the promoter makes default in doing anything required by or under this Act orthe
rules or the regulations made there under;
b. the promoter violates any of the terms or conditions of the approval given bythe
competent authority;
c. the promoter is involved in any kind of unfair practice or irregularities.

VII. The powers which authority will gets subsequent to revocation of

theregistration:

1. Debar the promoter from accessing its website in relation to that project andspecify
his name in the list of defaulters and display his photograph on itswebsite and also
inform the other Real Estate Regulatory Authority in otherStates and Union
territories about such revocation or registration.

2. Facilitate the remaining development works to be carried out.

3. Direct the bank holding the project back account to freeze the account,
andthereafter take such further necessary actions, including consequent de-
freezingof the said account, towards facilitating the remaining development works.

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VIII. Registration of real estate agents:

Real estate broking is one of the easiest business in India as there are no
specificqualification or experience requirements and also there is no code of practice
whichsets accountability, transparency and professional benchmarks. Hence, there are
thousandsof non-professional agents/ brokers in every city operating without any
accountability.Hence, to bring in transparency and accountability, agents have also been
coveredunder the ambit of RERA and registration requirement has been mandatory for
them asper section 9 of the Act.

Without obtaining registration, real estate agent shall not facilitate the sale or purchaseofor
act on behalf of any person to facilitate the sale or purchase of any plot,
apartmentorbuilding, as the case may be, in a real estate project or part of it, being the part
of therealestate project registered, being sold by the promoter in any planning area.Every
real estate agent shall make an application to the Authority for registration in suchform,
manner, within such time and accompanied by such fee and documents as maybe
prescribed.

IX. Functions of real estate agents:

1. Real estate agents to sell properties registered with the Authority.

2. Maintain books of accounts, records and documents.
3. Not to involve in any unfair trade practices.
4. Facilitate the possession of all the information and documents, as the allottee, is
entitled to at the time of booking of any plot, apartment or building as the case may
be.
5. Discharge such other duties as may be prescribed.

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 FUNCTIONS AND DUTIES OF PROMOTER

The most important duty of the promoter which has been mandated by the Act is toprovide
complete details of the project so that a layman who does not even know thelegal
requirements is able to check the legal sanctity of the project. The promoter hasalso been
debarred from advertising and selling his project until he has procured therequisite
approvals from the authorities and got his project registered with RERA.

1. Disclosure of all relevant information relating to the project.

2. Adherence to approved plans and project specifications as approved by competent
authorities.
3. Obligations regarding veracity of the advertisement or prospectus.
4. Rectification of structural defects within two years of possession.
5. Refund of money in cases of default.

I. Duties/Obligation of the Promoter:

i. No deposit or advance to be taken by promoter without first entering

intoagreement for sale:

A promoter shall not accept a sum more than ten per cent of the cost of the apartment,plot,
or building as the case may be, as an advance payment or an application fee, froma person
without first entering into a written agreement for sale with such person andregister the
said agreement for sale, under any law for the time being in force.

ii. Obligations of promoter in case of transfer of a real estate project to a

thirdparty:

The promoter shall not transfer or assign his majority rights and liabilities in respect of
areal estate project to a third party without obtaining prior written consent from
twothirdallottees, except the promoter, and without the prior written approval of
theAuthority:

However such transfer or assignment shall not affect the allotment or sale of
theapartments, plots or buildings as the case may be, in the real estate project made bythe
erstwhile promoter.

The allottee, irrespective of the number of apartments or plots, as the case may be,booked
by him or booked in the name of his family, or in the case of other persons
suchascompanies or firms or any association of individuals, by whatever name called,
bookedin its name or booked in the name of its associated entities or related enterprises,
shallbe considered as one allottee only.

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On the transfer or assignment being permitted by the allottees and the authority,
theintending promoter shall be required to independently comply with all the
pendingobligations under the provisions of the Act or the rules and regulations made
thereunder,and the pending obligations as per the agreement for sale entered into by the
erstwhilepromoter with the allottees:

Any transfer or assignment permitted shall not result in extension of time to the
intendingpromoter to complete the real estate project and he shall be required to comply
with allthe pending obligations of the erstwhile promoter, and in case of default, such
intendingpromoter shall be liable to the consequences of breach or delay, as the case may
be, asprovided under this Act or the rules and regulations made thereunder.

iii. Obligations of promoter regarding insurance of real estate project:

The promoter shall obtain all such insurances as may be notified by the
appropriateGovernment, including but not limited to insurance in respect of —
(i) title of the land and building as a part of the real estate project; and
(ii) construction of the real estate project.

The promoter shall be liable to pay the premium and charges in respect of the
insuranceand shall pay the same before transferring the insurance to the association of the
allottees.The insurance shall stand transferred to the benefit of the allottee or the
association ofallottees, as the case may be, at the time of promoter entering into an
agreementfor sale with the allottee. On formation of the association of the allottees,
alldocuments relating to the insurance shall be handed over to the association of
theallottees.

iv. Transfer of title:

The promoter shall execute a registered conveyance deed in favour of the allotteealong
with the undivided proportionate title in the common areas to the association ofthe
allottees or the competent authority, as the case may be, and hand over the
physicalpossession of the plot, apartment of building, as the case may be, to the allottees
andthe common areas to the association of the allottees or the competent authority, as
thecase may be, in a real estate project, and the other title documents pertaining
theretowithin specified period as per sanctioned plans as provided under the local laws.

Provided that, in the absence of any local law, conveyance deed in favour of the allotteeor
the association of the allottees or the competent authority, as the case may be, underthis
section shall be carried out by the promoter within three months from date of issueof
occupancy certificate.

After obtaining the occupancy certificate and handing over physical possession to
theallottees, it shall be the responsibility of the promoter to handover the
necessarydocuments and plans, including common areas, to the association of the allottees
orthe competent authority, as the case may be, as per the local laws.
17
Provided that, in the absence of any local law, the promoter shall handover the
necessarydocuments and plans, including common areas, the association of the allottees or
thecompetentauthority, as the case may be, within thirty days after obtaining the
occupancy certificate.

v. Return of amount and compensation:

If the promoter fails to complete or is unable to give possession of an apartment, plot

orBuilding:

(a) in accordance with the terms of the agreement for sale or, as the case may be,duly
completed by the date specified therein; or
(b) due to discontinuance of his business as a developer on account of
suspensionorrevocation of the registration under this Act or for any other reason,

he shall be liable on demand to the allottees, in case the allottee wishes to

withdrawfromthe project, withouot prejudice to any other remedy avai0lable, to return the
amountreceived by him in respect of that apartment, plot, building, as the case may be,
withinterest at such rate as may be prescribed in this behalf including compensation in
themanner as provided under this Act.

Provided that where an allottee does not intend to withdraw from the project, he shallbe
paid, by the promoter, interest for every month of delay, till the handing over of
thepossession, at such rate as may be prescribed.

The promoter shall compensate the allottees in case of any loss caused to him due
todefective title of the land, on which the project is being developed or has been developed,
inthe manner as provided under this Act, and the claim for compensation under
thissubsectionshall not be barred by limitation provided under any law for the time being
in force.

If the promoter fails to discharge any other obligations imposed on him under this Act
orthe rules or regulations made thereunder or in accordance with the terms and
conditionsof the agreement for sale, he shall be liable to pay such compensation to the
allottees,in the manner as provided under this Act.

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II. Functions of Promoters:

1. To get the proposed real estate project registered with the RERA.

2. To create a web page and display the project on the website of RERA so as to make
the details therein available on public domain.

3. Not to advertise or make offer for sale without registering the project.

4. The Promoter shall make available certain documents at the time of booking and
issue of allotment letter such as.

5. Sanctioned plans, layout plans, along with specifications, approved by thecompetent

authority, by display at the site or such other place as may be specifiedby the
regulations made by the Authority.

6. The stage-wise time schedule for completion of the project, including the
provisionsfor civic infrastructure like water, sanitation, and electricity.

7. To obtain the completion certificate and the occupancy certificate from the
relevantcompetent authority as per local laws or other laws for the time being in
force andto make it available to the allottees individually or to the association of
allottees, asthe case may be.

8. To obtain lease certificate, where the real estate project is developed on a

leaseholdland, specifying the period of lease, and certifying that all dues and charges
inregard to the leasehold land have been paid, and to provide the lease certificate
tothe association of allottees.

9. To refund the amount received in case of failure to give possession on time.

10. To compensate the allottees for loss due to defective title of the land etc.

11. The Promoter shall not accept a sum more than ten percent of the cost of
theapartment, plot, or building as the case may be, as an advance payment or
anapplication fee, from a person without first entering into a written Agreement
forsale, in the prescribed form, with such person.

19
 RIGHTS AND DUTIES OF ALLOTTEES

Though the Act is pro-consumer, yet it has striked a balance by specifying the duties ofthe
Allottees. Allottes who do not pay their instalments, maintenance dues in time willalso be
subjected to the rigours of this act.

I. Rights allottees;

1. To obtain information in relation to the promoter and the real estate project.

2. To know stage-wise time schedule of completion of the project and in relation

tovarious services as agreed to be provided by the promoter to the allottees
inaccordance with the terms and conditions of the Agreement for Sale.

3. To claim possession once the project is completed by the promoter. Also,

theAssociation of Allottees can claim possession of common area.

4. To claim refund along with interest at prescribed rate and compensation as

providedunder the Act in the event the Promoter fails to comply with or due to non-
completion of the project as per the terms of Agreement for Sale or due
todiscontinuance of his business as a developer on account of suspension
orrevocation of his registration under the provisions of this Act or the rules
orregulations made thereunder.

5. To obtain documents and plans, including that of common areas, after handing over
the physical possession of the apartment or plot or building as the case may be, by
the promoter.

II. Duties of Allottes:

1. To make payments as per the Agreement for Sale.

2. To pay interest at a prescribed rate in case of delay in payments as per the

Agreement for Sale.

3. To participate towards the formation of society/association.

4. To take physical possession of the apartment, plot or building as the case may be,
within a period of two months of the occupancy certificate issued for the said
apartment plot or building, as the case may be.

5. To participate in the registration of Conveyance Deed.

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 CENTRAL ADVISORY COUNCIL

I. Establishment of Central Advisory Council:

1. The Central Government may, by notification, establish with effect from such date as
it may specify in such notification, a Council to be known as the Central Advisory
Council.

2. The Minister to the Government of India in charge of the Ministry of the

CentralGovernment dealing with Housing shall be the ex officio Chairperson of the
Central Advisory Council.

3. The Central Advisory Council shall consist of representatives of the Ministry of

Finance, Ministry of Industry and Commerce, Ministry of Urban Development,
Ministry of Consumer Affairs, Minstry of Corporate Affairs, Ministry of Law and
Justice, NitiAayog, National Housing Bank, Housing and Urban Development
Corporation, five representatives of State Governments to be selected by rotation,
five representatives of the Real Estate Regulatory Authorities to be selected by
rotation, and any other Central Government department as notified.

4. The Central Advisory Council shall also consist of not more than ten membersto
represent the interests of real estate industry, consumers, real estate
agents,construction labourers, non-governmental organisations and academic
andresearch bodies in the real estatesector.

II. Functions of Central Advisory Council:

The Central Advisory Council is required to advise the Central Government on

mattersrelating to implementation of the Act, questions of policy, protection of
consumerinterest, foster growth and development of the real estate sector, and other
matters asmay be assigned to it by the Central Government.

21
 THE REAL ESTATE REGULATORY AUTHORITY

As stated earlier, though this sector has seen unprecented growth since Independence,it
has remained unregulated till know. We have witnessed that whenever a regulator
isappointed for a sector, like SEBI, IRDAI, TRAI etc, it widens the sectors. Accordingly,this
act mandates that RERA would be established by each of the State and UT foradministering
the real estate sector in the respective State/UT. A state can have morethan one RERA or
two states can have the same authority.

I. Establishment and incorporation of Real Estate Regulatory Authority:

The appropriate Government shallestablish an Authority to be known as the Real

EstateRegulatory Authority to exercise the powers conferred on it and to perform the
functionsassigned to it under the Act.

II. Composition of Authority:

The Authority shall consist of

i. a Chairperson and
ii. not less than two whole time Membersto be appointed by the appropriate
Government.

III. Qualifications of Chairperson and Members of Authority:

The Chairperson and other Members of the Authority shall be appointed by theappropriate
Government on the recommendations of a Selection Committee consistingof the Chief
Justice of the High Court or his nominee, the Secretary of the Departmentdealing with
Housing and the Law Secretary, in such manner as may be prescribed,from amongst
persons having adequate knowledge of and professional experience ofat-least twenty years
in case of the Chairperson and fifteen years in the case of theMembers in urban
development, housing, real estate development, infrastructure,economics, technical experts
from relevant fields, planning, law, commerce, accountancy,industry, management, social
service, public affairs or administration:

It may be noted that a person who is, or has been, in the service of the State
Governmentshall not be appointed as a Chairperson unless such person has held the post of
AdditionalSecretary to the Central Government or any equivalent post in the Central
Governmentor State Government. Further, a person who is, or has been, in the service of
the StateGovernment shall not be appointed as a member unless such person has held the
postof Secretary to the State Government or any equivalent post in the State Government
orCentral Government.

22
IV. Term of office of Chairperson and Members:

The Chairperson and Members shall hold office for a term not exceeding fiveyears from the
date on which they enter upon their office, or until they attainthe age of sixty-five
years,whichever is earlier and shall not be eligible for reappointment.

V. Administrative powers of Chairperson:

The Chairperson shall have powers of general superintendence and directions in

theconduct of the affairs of Authority and he shall, in addition to presiding over the
meetingsof the Authority, exercise and discharge such administrative powers and functions
ofthe Authority as may be prescribed.

VI. Functions of Authority for promotion of real estate sector:

The Authority shall in order to facilitate the growth and promotion of a

healthy,transparent, efficient and competitive real estate sector make recommendations to
theappropriate Government of the competent authority, as the case may be, on,

1. Protection of interest of the allottees, promoter and real estate agent;

2. Creation of a single window system for ensuring time bound project approvalsand
clearances for timely completion of the project;

3. Creation of a transparent and robust grievance redressal mechanism againstacts of

omission and commission of competent authorities and their officials;

4. Measures to encourage investment in the real estate sector including measuresto

increase financial assistance to affordable housing segment;

5. Measures to encourage construction of environmentally sustainable andaffordable

housing, promoting standardisation and use of appropriate constructionmaterials,
fixtures, fittings and construction techniques;

6. Measures to encourage grading of projects on various parameters ofdevelopment

including grading of promoters;

7. Measures to facilitate amicable conciliation of disputes between the promotersand

the allottees through dispute settlement forums set up by the consumer orpromoter
associations;

8. Measures to facilitate digitization of land records and system towards

conclusiveproperty titles with title guarantee;

23
 9. To render advice to the appropriate Government in matters relating to
thedevelopment of real estate sector;

10. Any other issue that the Authority may think necessary for the promotion of thereal
estate sector.

VII. Functions of Authority:

1. To register and regulate real estate projects and real estate agents registeredunder
the Act;

2. To publish and maintain a website of records, for public viewing, of all realestate
projects for which registration has been given, with such details as maybe
prescribed, including information provided in the application for whichregistration
has been granted;

3. To maintain a database, on its website, for public viewing, and enter the namesand
photographs of promoters as defaulters including the project details,registration for
which has been revoked or have been penalised under this Act,with reasons
therefor, for access to the general public;

4. To maintain a database, on its website, for public viewing, and enter the namesand
photographs of real estate agents who have applied and registered underthis Act,
with such details as may be prescribed, including those whoseregistration has been
rejected or revoked;

5. To fix through regulations for each areas under its jurisdiction the standard feesto
be levied on the allottees or the promoter or the real estate agent, as thecase may
be;

6. To ensure compliance of the obligations cast upon the promoters, the allotteesand
the real estate agents under the Act and the rules and regulations madethereunder;

7. To ensure compliance of its regulations or orders or directions made in exerciseof

its powers under the Act;

VIII. Powers of Authority:

Where the Authority considers it expedient to do so, on a complaint or suomotu,relating to

the Act or the rules of regulations made thereunder, it may, by order inwriting
andrecording reasons therefor call upon any promoter or allottee or real estateagent,
asthecase may be, at any time to furnish in writing such information or explanationrelating
to its affairs as the Authority may require and appoint one or more persons tomake an

24
inquiry in relation to the affairs of any promoter or allottee or the real estateagent, as the
case may be.

A. Notwithstanding anything contained in any other law for the time being in force,
whileexercising the powers, the Authority shall have the same powers as are vested
in a civilcourt under the Code of Civil Procedure, 1908 while trying a suit, in respect
of thefollowing matters, namely:—

(i) the discovery and production of books of account and other documents, atsuch
place and at such time as may be specified by the Authority;

(ii) summoning and enforcing the attendance of persons and examining them
onoath;

(iii) issuing commissions for the examination of witnesses or documents;

(iv) Any other matter which may be prescribed.

B. Power to issue interim orders

C. Powers issue directions

D. Others

(i) The Authority shall have powers to impose penalty or interest, in regard to
anycontravention of obligations cast upon the promoters, the allottees and
therealestate agents, under this Act or the rules and the regulations
madethereunder.

(ii) The Authority shall be guided by the principles of natural justice and, subjectto
the other provisions of this Act and the rules made thereunder, the
Authorityshall have powers to regulate its own procedure.

(iii) Where an issue is raised relating to agreement, action, omission, practice

orprocedure that—

a. has an appreciable prevention, restriction or distortion of competition

inconnection with the development of a real estate project; or

b. has effect of market power of monopoly situation being abused for

affectinginterest of allottees adversely, then the Authority, may suomotu,
makereference in respect of such issue to the Competition Commission of
India.

25
IX. Responsibilities of the ‘Regulatory Authority’:

1. Registration of the real estate project andthe real estate agent.

2. Extension of registration of the real estateproject and its revocation.

3. Renewal of registration of the real estateagent and its revocation.

4. To maintain a website.

5. To appoint one or more ‘adjudicating officer’ public viewing.

6. Notify Regulations.

7. Recommendations for the growth andpromotion of a healthy, transparent,efficient

and competitive real estate sector

26
 THE REAL ESTATE APPELLATE TRIBUNAL

Real Estate Appellate Tribunal (REAT) is to be formed by appropriate government

toensure faster resolution of disputes. Parties aggrieved by the RERA order can
appealbefore REAT and REAT has to adjudicate such cases within 60 days. Civil Courts
havebeen prevented from exercising jurisdiction on such matters. If any of the parties is
notsatisfied with the REAT order they can file an appeal against the REAT order to the
HighCourt within 60 days.

I. Establishment of Real Estate Appellate Tribunal:

1. The appropriate Government may, if it deems necessary, establish one or

morebenches of the Appellate Tribunal, for various jurisdictions, in the State
orUnion territory, as the case may be.

2. Every bench of the Appellate Tribunal shall consist of at least one Judicial
Memberand one Administrative to Technical Member.

3. The appropriate Government of two or more States or Union territories may, ifit
deems fit, establish one single Appellate Tribunal.

4. Any person aggrieved by any direction or decision or order made by the

Authorityor by an adjudicating officer under the Act may prefer an appeal
before theAppellate Tribunal having jurisdiction over the matter:

II. Composition of Appellate Tribunal:

The Appellate Tribunal shall consist of a Chairperson and not less than two whole
timeMembers of which one shall be a Judicial member and other shall be a Technical or

III. Qualifications for appointment of Chairperson and Members:

A person shall not be qualified for appointment as the Chairperson or a Member of

theAppellate Tribunal unless he,—

(a) in the case of Chairperson, is or has been a Judge of a High Court; and

(b) in the case of a Judicial Member he has held a judicial office in the territory of India
for at least fifteen years or has been a member of the Indian Legal Service and has
held the post of Additional Secretary of that service or any equivalent post, or has
been an advocate for at least twenty years with experience in dealing with real
estate matters; and

27
 (c) in the case of a Technical or Administrative Member, he is a person who iswell-
versed in the field of urban development, housing, real estate
development,infrastructure, economics, planning, law, commerce, accountancy,
industry,management, public affairs or administration and possesses experience of
atleast twenty years in the field or who has held the post in the CentralGovernment,
or a State Government equivalent to the post of AdditionalSecretary to the
Government of India or an equivalent post in the CentralGovernment or an
equivalent post in the State Government.

IV. Term of office of Chairperson and Members:

1. The Chairperson of the Appellate Tribunal or a Member of the Appellate

Tribunalshall hold office, as such for a term not exceeding five years from the date
onwhich he enters upon his office, but shall not be eligible for re-appointment:

2. It may be noted that in case a person, who is or has been a Judge of a HighCourt, has
been appointed as Chairperson of the Tribunal, he shall not holdoffice after he has
attained the age of sixty-seven years.However no Judicial Member or Technical or
Administrative Member shallhold office after he has attained the age of sixty-five
years.

V. Application for settlement of disputes and appeals to Appellate Tribunal:

Section 44 of the Act deals with Application for settlement of disputes and appeals
toAppellate Tribunal. It provides that:

 The appropriate Government or the competent authority or any person aggrieved

byany direction or order or decision of the Authority or the adjudicating officer may
preferan appeal to the Appellate Tribunal.

 Every appeal made to the Appellate Tribunal shall be preferred within a period of
sixtydays from the date on which a copy of the direction or order or decision made
by theAuthority or the adjudicating officer is received by the appropriate
Government or thecompetent authority or the aggrieved person and it shall be in
such form andaccompanied by such fee, as may be prescribed.

 The Appellate Tribunal may entertain any appeal after the expiry of sixty days if it
issatisfied that there was sufficient cause for not filling it within that period.

 On receipt of an appeal, the Appellate Tribunal may after giving the parties an
opportunityof being heard, pass such orders, including interim orders, as it thinks
fit.

 The Appellate Tribunal shall send a copy of every order made by it to the parties
and tothe Authority or the adjudicating officer, as the case may be.

28
  The appeal shall be dealt with by it as expeditiously as possible and endeavour shall
bemade by it to dispose of the appeal within a period of sixty days from the date of
receiptof appeal:

 Provided that where any such appeal could not be disposed of within the said period
ofsixty days, the Appellate Tribunal shall record its reasons in writing for not
disposing ofthe appeal within that period.

 The Appellate Tribunal may, for the purpose of examining the legality or propriety
orcorrectness of any order or decision of the Authority or the adjudicating officer,
on itsown motion or otherwise, call for the records relevant to deposing of such
appeal andmake such orders as it thinks fit.

VI. Powers of Tribunal:

1. The Appellate Tribunal shall not be bound by the procedure laid down by theCodeof
Civil Procedure, 1908 but shall be guided by the principles of naturaljustice.

2. Subject to the provisions of this Act, the Appellate Tribunal shall have power
toregulate its own procedure.

3. The Appellate Tribunal shall also not be bound by the rules of evidence containedin
the Indian Evidence Act, 1872.

4. The Appellate Tribunal shall have, for the purpose of discharging its functionsunder
this Act, the same powers as are vested in a civil court under the Codeof Civil
Procedure, 1908 in respect of the following matters, namely:

a. summoning and enforcing the attendance of any person and examininghim on

oath;
b. requiring the discovery and production of documents;
c. receiving evidence on affidavits;
d. issuing commissions for the examinations of witnesses or documents;
e. reviewing its decisions;
f. dismissing an application for default or directing it ex parte; and
g. any other matter which may be prescribed.

5. All proceedings before the Appellate Tribunal shall be deemed to be

judicialproceedings within the meaning of sections 193, 219 and 228 for the
purposesof section 196 of the Indian Penal Code, and the Appellate Tribunal shall
bedeemed to be civil court for the purposes of section 195 and Chapter XXVI ofthe
Code of Criminal Procedure, 1973.

29
VII. Orders passed by Appellate Tribunal to be executable as a decree:

Every order made by the Appellate Tribunal under this Act shall be executable by
theAppellate Tribunal as a decree of civil court, and for this purpose, the Appellate
Tribunalshall have all the powers of a civil court.

The Appellate Tribunal may transmit any order made by it to a civil court having
localjurisdiction and such civil court shall execute the order as if it were a decree made
bythe court.

VIII. Appeal to High Court:

Any person aggrieved by any decision or order of the Appellate Tribunal may, file anappeal
to the High Court, within a period of sixty days from the date of communicationof the
decision or order of the Appellate Tribunal to him on any one or more of thegrounds
specified in section 100 of the Code of Civil Procedure, 1908.

The High Court may entertain the appeal after the expiry of the said period of sixtydays, if it
is satisfied that the appellant was prevented by sufficient cause from preferringtheappeal
in time.

Explanation: High Court" means the High Court of a State or Union territory wherethe real
estate project is situated.

No appeal shall lie against any decision or order made by the Appellate Tribunal withthe
consent of the parties.

IX. Real Estate Regulatory Authority and Appellate Tribunal:

1. Real Estate Regulatory Authority regulatetransactions related to both residential

andcommercial projects.
2. Appellate Tribunals be required to adjudicatecases in 60 days.
3. Regulatory Authorities has to dispose ofcomplaints in 60 days.

30
WHO CAN APPEAR BEFORE THE APPELLATE TRIBUNAL OR THE REGULATORY
AUTHORITY OR THE ADJUDICATING OFFICER, AS THE CASE MAY BE

a. “Chartered Accountant”

b. “Company Secretary” who has obtained a certificate of practice under sub-section

(1) of section 6 Company Secretaries Act, 1980.

c. “Cost Accountant” who has obtained a certificate of practice sub-section (1) of

section6 of Cost and Works Accountants Act, 1959.

d. “Legal practitioner” means an advocate, vakil or an attorney of an any High court,

and includes a pleader in practice.

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 ROLE OF COMPANY SECRETARIES UNDER RERA

Company Secretaries - One Stop Professional Advisory Services for Real

EstateProjects

Company Secretaries holding Certificate of Practice by becoming an expert in the actcan

indulge in providing advice in respect of:

1. Financial Advisory Services

2. Various applicable provision particular on real estate project
3. Registration and extension procedure of real estate project with
competentauthority
4. Various obligation, functions and duties of promoter in a real estate project
5. Penal Provisions under the act
6. Funding Options for Real Estate Project
7. Taxation aspects for Real Estate Project
8. Legal & Regulatory Compliances

Company Secretaries – As a Legal Representative

As per Section 56 of the act, a Company Secretary holding certificate of practice canappear
before Appellate Tribunal or a Regulatory Authority or Adjudicating Officer onbehalf of
applicant or appellant as the case may be.

Hence a Company Secretary holding certificate of practice can –

1. Represent a person (promoter) before any real estate regulatory authority

forregistration of real estate project.
2. Represent a person before real estate appellate tribunal.
3. Represent a person before any other competent authority for any other
purposeunder Real Estate (Regulation and Development) Act, 2016.

32
 OFFENCES, PENALTIES AND ADJUDICATION

I. Punishment prescribed for non-registration of a project under the Act:

As per section 59, where under the Act, it is obligatory for the promoter to register aproject
with the Authority, and the promoter fails to do the same, he shall be liable toa penalty upto
ten percent of the estimated cost of the real estate project.

However, in case the promoter consistently defaults or does not comply with the directions
/ orders of the Authority as regards registration of the project with the Authority, heshall
be liable to additional fine of ten percent of the estimated cost of the real estateproject or
imprisonment upto 3 years or both.

II. Penalties:

(a) Penalty for contravention of section 4(Application for registration of real

estateprojects):

If any promoter provides false information or contravenes the provisions of section 4,he
shall be liable to a penalty which may extend up to five per cent of the estimatedcost of the
real estate project, as determined by the Authority.

(b) Penalty for contravention of other provisions of the Act:

If any promoter contravenes any other provisions of the Act, other than that
providedunder section 3 or section 4, or the rules or regulations made thereunder, he shall
beliable to a penalty which may extend up to five per cent. of the estimated cost of thereal
estate project as determined by the Authority.

(c) Penalty for non-registration and contravention under sections 9 and 10:

If any real estate agent fails to comply with or contravenes the provisions of section 9
orsection 10 he shall be liable to a penalty of ten thousand rupees for every day
duringwhich such default continues, which may cumulatively extend up to five per cent of
thecost of plot, apartment or buildings, as the case may be, of the real estate project,
forwhich the sale or purchase has been facilitated as determined by the Authority.

(d) Penalty for failure to comply with orders of Authority by promoter:

If any promoter, who fails to comply with, or contravenes any of the orders or directionsof
the Authority, he shall be liable to a penalty for every day during which such
defaultcontinues, which may cumulatively extend up to five per cent., of the estimated cost
ofthe real estate project as determined by the Authority.

33
(e) Penalty for failure to comply with orders of Appellate Tribunal by promoter:

If any promoter, who fails to comply with, or contravenes any of the orders, decisions
ordirections of the Appellate Tribunal, he shall be punishable with imprisonment for aterm
which may extend up to three years or with fine for every day during which suchdefault
continues, which may cumulatively extend up to ten per cent. of the estimatedcost of the
real estate project, or with both.

(f) Penalty for failure to comply with orders of Authority by real estate agent:

If any real estate agent, who fails to comply with, or contravenes any of the orders
ordirections of the Authority, he shall be liable to a penalty for every day during whichsuch
default continues, which may cumulatively extend up to five per cent., of the estimatedcost
of plot, apartment or building, as the case may be, of the real estate project, for whichthe
sale or purchase has been facilitated and as determined by the Authority.

(g) Penalty for failure to comply with orders of Appellate Tribunal by real
estateagent:

If any real estate agent, who fails to comply with, or contravenes any of the
orders,decisions or directions of the Appellate Tribunal, he shall be punishable with
imprisonmentfor a term which may extend up to one year or with fine for every day during
whichsuch default continues, which may cumulatively extend up to ten per cent. of
theestimated cost of plot, apartment or building, as the case may be, of the real
estateproject, for which the sale or purchase has been facilitated, or with both.

(h) Penalty for failure to comply with orders of Authority by allottee:

If any allottee, who fails to comply with, or contravenes any of the orders, decisions
ordirections of the Authority he shall be liable to a penalty for the period during whichsuch
default continues, which may cumulatively extend up to five per cent. of the plot,apartment
or building cost, as the case may be, as determined by the Authority.

(i) Penalty for failure to comply with orders of Appellate Tribunal by allottee:

If any allottee, who fails to comply with, or contravenes any of the orders or directionsof
the Appellate Tribunal, as the case may be, he shall be punishable with imprisonmentfor a
term which may extend up to one year or with fine for every day during whichsuch default
continues, which may cumulatively extend up to ten per cent of the plot,apartment or
building cost, as the case may be, or with both.

34
III. Offences by companies:

Where an Offence under the Act has been committed by a company, every personwho, at
the time, the offence was committed was in charge of, or was responsible tothe company
for the conduct of, the business of the company, as well as the company,shall be deemed to
be guilty of the offence and shall be liable to be proceeded againstand punishedaccordingly
-

However nothing contained in this sub-section, shall render any such person liable toany
punishment under the Act if he proves that the offence was committed without
hisknowledge or that he had exercised all due diligence to prevent the commission ofsuch
offence.

Where an offence under the Act has been committed by a company, and it is provedthat the
offence has been committed with the consent or connivance of, or is attributableto, any
neglect on the part of any director, manager, secretary or other officer of thecompany, such
director, manager, secretary or other officer shall also be deemed to beguilty of that offence
and shall be liable to be proceeded against and punished accordingly.

IV. Compounding of offences:

Notwithstanding anything contained in the Code of Criminal Procedure, 1973, if anyperson

is punished with imprisonment under the Act, the punishment may, eitherbefore or after
the institution of the prosecution, be compounded by the court on suchterms and
conditions and on payment of such sums as may be prescribed.However the sum
prescribed shall not, in any case, exceed the maximum amount ofthe fine which may be
imposed for the offence so compounded.

V. Power to adjudicate:

For the purpose of adjudging compensation under sections 12, 14, 18 and
section19(Section 12 deals with obligations of promoter regarding veracity of the
advertisementor prospectus, Section 14 deals with Adherence to sanctioned plans and
projectspecifications by the promoter, Section 18 deals with Return of amount and
compensation,Section 19 deals with Rights and duties of allottees), the Authority shall
appoint inconsultation with the appropriate Government one or more judicial officer as
deemednecessary, who is or has been a District Judge to be an adjudicating officer for
holdingan inquiry in the prescribed manner, after giving any person concerned a
reasonableopportunity of being heard.

Any person whose complaint in respect of matters covered under section(s) 12, 14, 18and
section 19 is pending before the Consumer Disputes Redressal Forum or theConsumer
Disputes Redressal Commission or the National Consumer RedressalCommission,
established under section 9 of the Consumer Protection Act, 1986, on orbefore the
commencement of the Act, he may, with the permission of such Forum orCommission, as

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thecase may be, withdraw the complaint pending before it and file anapplication before the
adjudicating officer under this Act.

The application for adjudging compensation shall be dealt with by the adjudicatingofficer
as expeditiously as possible and dispose of the same within a period of sixty daysfrom the
date of receipt of the application. Where any such application could not bedisposed of
within the said period of sixty days, the adjudicating officer shall record hisreasons in
writing for not disposing of the application within that period.

While holding an inquiry the adjudicating officer shall have power to summon andenforce
the attendance of any person acquainted with the facts and circumstances ofthe case to
give evidence or to produce any document which in the opinion of theadjudicating officer,
may be useful for or relevant to the subject matter of the inquiryand if, on such inquiry, he
is satisfied that the person has failed to comply with theprovisions of any of the sections
i.e., sections 12, 14, 18 and section 19, he may directto pay such compensation or interest,
as the case any be, as he thinks fit in accordancewith the provisions of any of those sections.

VI. Bar of jurisdiction:

No civil court shall have jurisdiction to entertain any suit or proceeding in respect of
anymatter which the Authority or the adjudicating officer or the Appellate Tribunal
isempowered by or under the Act to determine and no injunction shall be granted by
anycourt or other authority in respect of any action taken or to be taken in pursuance of
anypower conferred by or under the Act.

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