Haryana Rera Changes Rules Once Again; Authority to Decide Refund Cases

PARENT ACT 

The Real Estate (Regulation and Development) Act, 2016 (henceforth denoted as RERA Act, 2016) was enacted in the year 2016 for the purpose of regulating the real estate sector and also to protect the aggrieved homebuyers. Henceforth, for the purposes of carrying out the provisions of the Act and implementation of the Law, under Section 84 of the RERA Act, all the states are required to formulate State Level Rules within 6 months of the RERA Act being enforced. 

HARYANA REAL ESTATE (REGULATION AND DEVELOPMENT) RULES, 2017 

The State of Haryana, in order to implement the law at state level brought in the RERA Rules, 2017 wherein a detailed procedure for establishment of authorities/Adjudicating officers and their powers are listed out. 

Since the implementation of the Act, RERA authorities at Gurugram and Panchkula were vested with the power of granting refunds along with interest and possession with interest (as per section 18 of RERA Act). Further, power was vested with a separate judicial body i.e. the Adjudicating Officer appointed by the RERA Authority under Section-71 of the Act for trying such quantum of compensation which exceeded the given remedies of refund and possession. 

PROBLEMS ARISING DUE TO THE ILL DRAFTED STATE RULES 

After the implementation of the Rules (HARYANA REAL ESTATE (REGULATION AND DEVELOPMENT) RULES, 2017), a large number of builders started opposing the power sharing structure formulated under the RERA Act and contended that the power of refund must solely be vested with the Adjudicating Officer instead of the RERA Authorities. 

On 02/05/2019, in the matter of Sameer Mahawar V. MG Housing, the Haryana RERA Tribunal ruled in favour of the builders and held that the power to grant refund vests with the Adjudicating Officer appointed under Section-71 of the Act. 

This ruling of the Haryana RERA Tribunal created a storm and the entire Real Estate market of the state had come to a fix. Following the judgement, all the cases filed under RERA pertaining to grant of the refund started being referred to the adjudicating officer appointed under Section-71 of the RERA Act. 

The tribunal’s ruling resulted in establishing a new procedure at the end of both the authorities. This created a huge burden on the authorities and consumed a lot of time in the procedure implementation. 

PRESENT AMENDMENT 

On 12/09/2019, the Government of Haryana via its official Gazette carried out certain amendments to the HARYANA REAL ESTATE (REGULATION AND DEVELOPMENT) RULES, 2017. 

• Rule-28 which implements Section-31 of the RERA Act. That post amendment clause(e) of amended rule 28 read with Sub-rule 2(k) states that once an inquiry is conducted by the RERA Authority for violation of act, rules or regulations and liability is established then refund or possession along with prescribed interest shall be granted by the Authority. 
• Sub-rule 2(m)of Rule 28 has clearly laid down that compensation before the Adjudicating Officer can only be claimed once a complaint as to the contravention is decided by the Authority. Thus, this lays down that a complaint shall be primarily be filed before the RERA Authority and then after its ruling before the Adjudicating Officer. 
• The RERA Authority has also been granted the power to send the complaint where the component of compensation is the sort to the Adjudicating officer once it is established the contravention of the promoter/developer. 
• Rule 28 sub-rule 2(l) the Authority has been now granted the power to initiate suo-moto penal proceedings in case gross violations are made by the promoter/developer or real estate agent as the case may be. 

CONCLUSION 

By bringing out these changes, it is hoped that the state shall put its best foot forward to protect the interest of home buyers and uphold the intent of the legislature. In the long run, the clarity provided to the rules by the present amendments is believed to improve the functioning of both the bodies (authorities and adjudicators) established under the RERA act.