The Supreme Court today emphasised on the need of “model builder-buyer and agent-buyer” agreements with uniform terms and conditions of sale and purchase of residential flats. It asked the Centre to frame a model “model builder-buyer and agent-buyer” agreement to ensure fair play. It has granted two weeks to the Solicitor General of India to take a considered view on the need to formulate a Model Builder-Buyer Agreement at the Central level.
The bench of Justice D.Y. Chandrachud and Justice Surya Kant observed, “This is an important PIL whose whole purpose of this is that there should be a Model Builder-Buyer Agreement which can be formulated by the council so there is some uniformity in the basic terms and conditions and most importantly, the flat buyers are not exploited. By the order of 4th of October, the court had indicated why is it important to have this agreement.”
The Court was hearing batch of pleas including a PIL filed by BJP spokesperson and Advocate Ashwini Kumar Upadhyay seeking directions to the Centre to frame the ‘Model Builder-Buyer Agreement’ and ‘Model Agent-Buyer Agreement’ to infuse transparency, ensure fair play, reduce fraud and deliberate delays, restrain promoters and agents from indulging in arbitrary unfair and restrictive trade practices and to protect the rights and interests of customers of real-estate.
Senior Advocate Dr Menaka Guruswamy, who appeared for the petitioner, submitted, “The Union of India through the affidavit conveyed 3 points, one is Section 41 and 42 of RERA, under this a central advisory committee is set up and the Union is tasked with implementing the provisions of RERA. In the reply of the Union filed, the Unions tells that under Section 84 of RERA this is now the responsibility of the State Government. The Union ignored Sections 41 and 42 of RERA which are actually stated by the court in the order”
She further requested the Solicitor General if he could take instructions on this point that there is Section 41 and 42 of RERA, a Central Advisory committee has been established. The Union is tasked with implementing and formulating RERA. The rulemaking power falls with the Union.
Solicitor General Tushar Mehta sought an adjournment and assured the bench that he will come back with some counter.
“We are keen that instead of leaving this to all individual states, for instance, there is a judgement of Calcutta High Court which has passed an order identical to RERA, word by word. So, there is a law that says it is occupied with the Central legislation. So, the Union of India can consider whether the Central Advisory Committee can use its power to sort of formulating a Model Builder buyer agreement which can form a National Model because what is happening is, across the country builders can put whatever terms they want and please the buyers. We should step in and request the Government of India and formulate the agreement. We are concerned about the broader public interest of middle-class home buyers. We just want a Central National Model to be there”, the bench states.
Advocate Ashwini Kumar Upadhyay also sought basic things to be added to the agreement for easy understanding for the buyers. He proposed the agreement should be in two languages one is English and another one in the local language as hardly 15% of the people understand the agreement with all technical terms.
The petition focuses on the role of the Centre to issue a model or a fixed agreement so that each and every state adopts it and there is no conflict between buyers and promoters. It is stated that buyers lodge complaints but police don’t register FIRs, citing arbitrary clauses of the agreement. Builders issue revised delivery schedules again and again, and adopt arbitrary unfair restrictive trade practices.
The petition covers the harsh reality stating that registration of a project with the regulatory authority has been mandatory before it is launched for sale and for registration, the basic prerequisite is that promoter must have all the requisite approvals. Thus, the buyer is protected as the project is ring-fenced from vagaries of non-approvals or delays in approvals which are one of the major causes of delay for the project. However, many developers across the country still follow the fraudulent practice of pre-launching projects without requisite approvals from authorities and are termed as ‘soft launch’ or ‘pre-launch’ thus violating RERA Act but no action has been taken against them to date.
The hearing in the matter has been adjourned for two weeks.