Bombay High Court mandates linking with local bodies for buyer protection

The Bombay HC issued key directives to streamline real estate transparency. Representation pic

To safeguard the interests of homebuyers and ensure transparency in real estate project registrations, the division bench of the Bombay High Court recently passed a six-point directive, which includes: linking all municipal corporations, municipalities, and urban local authority websites with MahaRERA portal within three months and uploading Commencement Certificate (CC) and Occupation Certificate (OC) issued certificate within 48 hours on their respective websites etc.

The Public Interest Litigation

Sandeep Patil, an architect from Dombivli, and whistleblower turned petitioner, contends that under Sections 32 and 34 of the RERA Act, MahaRERA is vested with powers to facilitate an effective regulatory mechanism, which includes devising methods to ensure the verification of documents submitted by developers.

The petitioner has argued that the lack of coordination between MahaRERA and local authorities contravenes the fundamental objectives of the RERA Act, particularly the protection of home buyers from fraudulent real estate practices.

Mandatory norms

The petitioner emphasised that the RERA Act requires developers to obtain a valid registration certificate by submitting genuine project details, including approvals from competent authorities. This is crucial for safeguarding potential buyers, in line with the objectives of the RERA Act. Additionally, the Government Resolution dated September 20, 2019, restricts the registration of projects that lack RERA certification or a completion certificate, reaffirming the intent to prohibit the registration of projects developed without requisite approvals. These measures reflect a legislative and administrative commitment to protect the public interest, and the petitioner argues that the respondents must implement them to prevent malpractices in the real estate sector.

Unauthorised constructions

The petitioner submitted that the project by M/s Sai Builders and Developers, Kalyan (East), allegedly registered on October 15, 2020, based on a forged commencement certificate, illustrates a larger issue of developers exploiting regulatory loopholes.

The petitioner pointed to widespread unauthorised construction in approximately 27 villages within Kalyan and Ambernath Talukas, suggesting that developers circumvent compliance requirements by creating forged documents.

The petitioner argued that under Section 7 of the RERA Act, MahaRERA possesses the authority to revoke registrations obtained through fraudulent means, and thus a coordinated mechanism is essential to detect and deter such malpractice.

MahaRERA response

In response to the court's notice, MahaRERA in its affidavit stated that it has exercised its powers under Section 7(1) of the RERA Act, which authorises the authority to revoke project registration in cases of fraudulent documentation.

The authority's decision to revoke the project registration empowers MahaRERA to freeze accounts related to non-compliant projects, preventing further transactions that could affect innocent purchasers. MahaRERA further submits that it has urged the Government of Maharashtra to establish a centralised digital platform facilitating inter-agency verification of milestone approvals like commencement and occupation certificates.

MahaRERA also received a list of 65 fraudulent commencement certificates from the assistant town planner, KDMC were used by other developers. In light of this, MahaRERA has initiated proceedings to cancel registrations for 64 projects under Section 7(1) and froze bank accounts u/s 7 (4) (C)of the RERA Act.

Court directives

The division bench comprising of Devendra Kumar Upadhyaya, Chief Justice of Bombay High Court and Justice Amit Borkar, after hearing all the sides passed six points directives, which include:

1. Compliance with GR: The State of Maharashtra must enforce strict adherence to the February 23, 2023, resolution ensuring standardized processes for issuing and publishing commencement and occupation certificates.

2. Website integration: All municipal bodies in Maharashtra must link their websites with the MahaRERA portal within three months.

3. Interim transparency: Until integration, municipal bodies must upload commencement and occupation certificates on their websites within 48 hours of issuance.

4. Document verification: From June 19, 2023, MahaRERA will verify commencement certificates before approving project registrations, as per the RERA Act and Order No. 45 of 2023.

5. System integration: The Building Plan Management System (BPMS) must be linked with MahaRERA's online system within three months to prevent fraudulent certificates.

6. Demolition of illegal structures: The KDMC Commissioner must demolish illegal structures as per the affidavit dated August 26, 2024, with police support. The process must be completed in three months.

Petitioner speak

"We are satisfied with some of the directives that the high court has passed and hope that this would bring in some form of transparency and safeguard the flat buyers. Our main contention was to have a single web portal, as practiced in London, UK, where every detail of a particular residential/ commercial project is made available right from building approval to building completion, registration of any unit in the said project, taxes paid and legal compliances, etc is available on the tip of the finger, but such a practice is yet lacking in Maharashtra/ India," said architect Sandeep Patil.