2-DAY NATIONAL SEMINAR ON DISPUTE

RESOLUTION UNDER THE REAL ESTATE

REGULATION AND DEVELOPMENT ACT, 2016

Title: “Arbitratbility Of Real Estate Disputes In The

Contemporary Indian Context”
Presented By: Harsh Rai
College: Hidayatullah National Law University
The Paper discusses the following major
indicators:-
 The Emergence of Alternative Dispute Resolution as a Legal Subject.

 SIGNIFICANCE OF ADR IN REAL ESTATE SECTOR

 Analyses and landmark case laws in the growth of Dispute Resolution in

relation to Real Estate problems.

 The benefits and drawbacks of RERA in terms of Dispute Resolution as a final

method for dealing with Real Estate Sector Issues.
The Emergence of Alternative Dispute Resolution as a Legal
Subject
 ADR is defined as any process or procedure other than adjudication by
a presiding judge in court - litigation, in which a neutral third party
participates to assist in the resolution of issues in controversy.
 ADR is not a new concept it was in existence from the ancient period
in India what is new is the extensive promotion & proliferation of ADR
models
 Expansion of commercialization & Industrialization
 21st century era of Globalization, clogged court houses - people
inclined either to avoid litigation or to start resorting to extra judicial
remedies
 Presently ADR become sine quo non for justice delivery system.
 ADR not as alternative dispute resolution, but appropriate dispute
resolution.
. SIGNIFICANCE OF ADR IN REAL ESTATE SECTOR

 The Real Estate sector plays an integral role in fulfilling the need and demand
for housing and infrastructure especially in urban area.
 In the same way it has faced a fair share of blemishes and the mar of being
chiefly unregulated sector and lack professionalism and consumer protection
mechanisms.
 The real estate is indeed an integral and significant sector which contributes
heftily in country’s GDP and could grow to $853 billion by 2028.
 “RERA” (The Real Estate (Regulation and Development) Act, 2016) came into
effect in May 1, 2017.
 Due to, “The Real Estate (Regulation and Development) Act, 2016” (“RERA”)
Arbitration clauses, which are common in all other types of consumer
contracts, have also made their way into Buyer Contracts for real estate
transactions known as 'Take it or leave it contracts'.
Analyses and landmark case laws in the growth of Dispute Resolution in
relation to Real Estate problems.

 AFTAB SINGH V. EMAAR M.G.F. LAND LTD. & ANR

 Case was filed for non delivery of Villa/Flat on time.
 Petitioner asked for a refund, but defendant stated there has been an amendment in Section 8 of
Arbitration Act, 1996. hence tribunal lack jurisdiction.
 N.C.D.R.C favoured towards the petitioner mentioning the main motive of the act was to protect
consumer right.
 By virtue of Section 2(3) thereof, the Arbitration Act itself excludes from its purview certain disputes,
which fall within the public law regime and with respect to which statutory remedies are put into place
to sub serve a public policy. Since consumer disputes would fall within the umbrella of the said
provision, they were not intended to be covered by the amendment to Section 8 of the Arbitration Act.
 The said judgment given seems to follow the views and inspirations taken by the Hon’ble Supreme Court
in the Natraj Studios (P.) Ltd. v. Navrang Studios20, wherein it was held that in the presence of specific
statutes enacted for social welfare and with an intent of public policy objective was of the more
practical viewpoint. The underlying hypothesis was that one should not be permitted to contract out of
a statute, especially when the legislation has been enacted to curtail certain social objectives.
The benefits and drawbacks of RERA in terms of Dispute Resolution as a
final method for dealing with Real Estate Sector Issues.
 Benefits:  Drawbacks:
 RERA establishes a centralized Real Estate regulatory  The description of carpet area is well mentioned in
authority, a specific adjudicatory authority, and a RERA but, in order to better grasp the net functional
Central Advisory Council. area, it should also include the area sold to the
allottees for their individual use.
 With the current act, the risk-bearing is transferred
from Customers to Developers by including liability  Also Section 3 of the RERA mandates for every
of promoters, builders, developers, real estate potential project to be registered under the Act. RERA
agents, etc. also bars pre-launches in the absence of authorization
by the agency concerned. This leads to the inevitable
 The Act sets out a process for real-estate
occurrence of challenges during several phases include
transactions in which the maintenance of a separate
the construction of a real estate project and then
bank account for each project is compulsory. 30%
approval is to be obtained for each project.
may be appropriated, 70% must be for same project.
 In most states, full implementation of the RERA Act
 Prior registration with the concerned authority is a
2016, began in May 2017. However, as in 2020, there
must for any sale or advertisement of any real estate
are still several states and Union Territories that are
project.
not equipped with their respective Real Estate
 There is much clarity in reference to the rights, Authority’s websites. States such as Assam, Arunachal
responsibilities and functions of all parties to the Pradesh, Tripura, Lakshadweep, Kerala, and so on are
project. a perfect example of this graph.
The benefits and drawbacks of RERA in terms of Dispute Resolution as a
final method for dealing with Real Estate Sector Issues.

 Considerable decrease of malpractices, penalty  Insufficiency with respect to recovery powers

provisions and penalties for offenses committed by
promoters, real estate agents allotted persons and
companies.
 The Act supersedes all State legislation which is
incompatible with the Central Act and also
delegates the power to the Member States to draw
up their own legislation on real estate in accordance
with the Central Act.
 RERA developed a timely grievance redressal
medium. The commission’s regulator/adjudication
officer has been empowered to investigate
consumer or suo moto concerns regarding
infringement of the Act.
associated with RERA are hard to miss, these often
tend to be a big lacunas that fails to comply with all
the orders issued in favour of homebuyers by the RERA
authorities of their respective states.
 The challenge occurs as several phases include the
construction of the real estate project then the
approval is to be obtained for each project. The
project’s progress will face hindrance due to the lack
of a single-window clearance and be delayed.
 The conflicting reading of certain sections is surely a
lacuna with respect RERA act. Section 89 of the REA
clearly provides for an overriding effect. Thus, both
the sections, on a mere unadorned reading, suggests
that the implications of the REA would prevail over the
Arbitration Act.
THANK YOU!!!