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Supreme Court hears plea for framing ‘Model Builder Buyer Agreement and Agent Buyer Agreement

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The Supreme Court on Monday, heard the PIL filed by Ashwini Kumar Upadhyay in interest of flat buyers seeking apex court for giving centre direction to frame a ‘Model Builder Buyer Agreement and Agent Buyer Agreement to infuse transparency, ensuring fair play, reducing the frauds and deliberate delays, restraining the builders, promoters and agents from indulging into Arbitrary unfair and restrictive trade practises and to protect the rights and interests of customers in view of Rera Act 2016 and Article 14, 15, 21 of Indian Constitution.

Today, the apex court has passed direction to Chief Secretaries of States UTs to circulate information sought by Secretary, Ministry of Housing and Urban Affairs.

Counsel Devashish Bharuka, appearing as amicus curiae submits before the bench that in view of apex court directions passed in earlier hearings, ministry is underway in preparing comprehensive report.


The two Judges Bench had appointed Mr Devashish Bharuka, learned counsel to assist this Court as Amicus Curiae and directed amicus curiae to assist Union Ministry of Housing in preparing the report for submission and gave 2 months’ time to complete the exercise.


On the last date of hearing dated 14.02.2022, the bench opined that an exercise to be carried out by the Union Ministry of Housing which shall scrutinize the State rules and place a report before this Court on whether they comply with the substratum of the Rules of 2016 which have been framed by the Union government.


Secondly, an exercise shall be carried out by consulting the Ministries of Housing of every state. Any provisions which deviate from the rules framed in 2016 must be identified State-wise so that they can be rectified.


On behalf of UOI, a compilation of additional documents containing a tabulated statement indicated the State-wise implementation of rules under the Real Estate (Regulation & Development) Act 2016 was filed.


On 4 November 2016, the Secretary to the Government of India in the Ministry of Housing and Urban Poverty Alleviation addressed a communication to all the Chief Secretaries stating that the Union government being the appropriate government for Union Territories without Legislatures has notified the Real Estate (Regulation and Development) (General) Rules 2016 and the Real Estate (Regulation and Development) (Agreement for Sale) Rules 2016. All the States were requested to forward copies of the rules as notified by them.


The court also noted that it is necessary for the Ministry of Housing to apprise the Court on whether the rules which have been framed by the States (i) contain the essential norms which have been adopted by the Union government in the Rules of 2016 referred to above; and (ii) whether there are any deviations which detract from the rights of flat purchasers.

Ms Aishwarya Bhati, ASG submitted that in some states, such as Maharashtra there are variations occasioned by conditions prevalent and schemes such as the Slum Rehabilitation scheme. The states undoubtedly have to make provisions which tailor to conditions prevalent in each of them. But the basic protections afforded to purchasers must be across the country in accordance with the salutary purpose of the RERA.


The writ petition raises grievance of flat buyers i.e., in the absence of a uniform or model builder-buyer agreement and agent-buyer agreement, flat purchasers are left to the mercy of developers in respect of the terms and conditions which are imposed at the time of entering into such agreements.


Flat purchasers are left to be exploited as a result of one-sided agreements and conditions which protect the interest of developers, observes by the bench while issuing notice, as stated in the writ petition.


Vikas Singh, Ld. Senior counsel appeared for Petitioner in WP (C) No 1216 of 2020 and Dr Menaka Gurusamy and Mr Anupam Lal Das, learned senior counsel appearing on behalf of the petitioners in the connected writ petitions referred to provisions of RERA Act.
The court also noted on 4.10.2021 that in connected writ petitions, besides seeking the above relief, reliefs have also been sought against the developers, such as the payment of compensation for delay.
The apex court held that as far as prayer (c) is concerned, we are not entertaining the petitions, but leave it open to the petitioners to pursue their remedies against the builder/developer before the competent forum in accordance with law.
The prayer (c) of the writ petition which asks the apex court to pass directions to compensate buyers for losses incurred due to inordinate delays on the part of promoters and to recover the money, misappropriated by Promoters and Agents under garb of taxes or interests, penalties and other charges.

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