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Need To Frame Model Builder-Buyer Agreement Under RERA: Hon’ble SC [READ ORDER]

While hearing the petition of Ashwini Kumar Upadhyay v. Union of India, the Hon’ble Supreme Court mentioned that framing of a model builder-buyer agreement under RERA is a significant issue of public interest & Consumer protection. Subsequently, Hon’ble SC asked ASG K.M. Nataraj to assist the Court in the pertaining issue in hand

By: Hemani Khadai                                                                    

A bench of Justices D. Y. Chandrachud and A. S. Bopanna heard a slew of petitions under Article 32 alleging flat purchasers’ concerns. The bench pointed that without uniform Builder-Buyer and Agent-Buyer Agreements, buyers remain at the discretion of developers when it comes to the terms and restrictions enforced.

Retrospectively on October 4, the bench of Justices D. Y. Chandrachud and B.V Nagarathna, while hearing these petitions filed by Advocate Ashwini Upadhyay, A Group of DLF Homebuyers & others recorded that these petitions seek directions to the central government for framing a model BBA and ABA to impose fairness & transparency in addition to enhancing the aims & objectives of RERA, 2016.

Consequently, the Court issued a notice to the center on October 4 with respect to the aforementioned pleas.

On November 8, 2021, the bench was informed that no Vakalatnama had been submitted on behalf of the center.

Then, Justice Chandrachud asked ASG Nataraj to assist the Court, appearing before the bench on an unrelated subject.

Addressing the ASG, Justice Chandrachud said, “This is an important matter where the issue is about the need to frame a model builder-buyer agreement under the RERA. The government has the power to do so…a group of homebuyers has come to Court. This is not an adversarial matter. This is very important issue of public interest, kindly help us.”

The judge ordered that the ASG be served with a copy of the petition. The bench then decided to postpone the case for another two weeks in order to give the ASG enough time to prepare.

“Senior Advocates Vikas Singh, Maneka Guruswamy and Anupam Lal Das, for the petitioners, have drawn the attention of the Court to certain provisions of the RERA- section 41 provides for the establishment of a Central Advisory Council by the central government. Section 42 provides for the functions of the said Council, one of which is to advice and recommend to the central government on 

(1) Implementation of the Act; 

(2) Major questions of policy

(3) Protection of consumer interest; and 

(4) Growth and development of real estate; 

(5) Any other matter. Sub-section (2) of section 42 provides that
the central government has the rule-making power to effectuate the recommendations of the Council. 

The Act has sufficient enabling powers for the central government to frame the model agreements to sub-serve the public interest in ensuring buyers are nor exploited by framing standard form agreement”, said the bench while issuing notice.

Justice Chandrachud remarked, “This is an important issue of consumer protection, which is put on back-foot. There is no uniformity at all. It has to be achieved in the country. Builders can put in any clauses. We recently dealt with a case where the state of West Bengal enacted a law identical to the RERA and said there is no conflict as it is identical to RERA. We struck it down saying that there is still repugnancy.”

Justice Nagarathna said, “There will be more contracting-out clauses otherwise if there is no model agreement.”

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