2025 (1) TMI 994 - HC - Companies Law

Seeking Court s intervention to direct respondents to adopt a rational policy framework to prevent registration of illegal buildings and to verify the authenticity of documentation submitted for project registration - HELD THAT - It is pertinent to note the legislative intent behind the Real Estate (Regulation and Development) Act 2016. The RERA Act introduced in 2013 and enacted in 2016 was born out of the need for regulatory measures in a sector that had seen substantial growth but lacked adequate consumer protections. As stated in the Act s Statement of Objects and Reasons of the Act the primary objective is to safeguard home buyers and promote transparency in real estate transactions. This regulatory framework was envisioned to address consumer grievances by establishing accountability mechanisms for developers minimizing fraud and reducing delays. Section 3 of the RERA Act mandates prior registration of real estate projects with RERA prohibiting any advertisement or sale without proper registration thus reflecting the legislature s intent to curtail unscrupulous practices in the real estate sector. The legal position is well settled that under Article 226 of the Constitution courts should not engage in speculative or roving inquiries. In A. Hamsaveni Ors. v. State of Tamil Nadu 1994 (8) TMI 322 - SUPREME COURT the Supreme Court held that a petitioner must independently establish a prima facie case and that court proceedings should not be used as a means to conduct speculative investigations. Similarly in N.K. Singh v. Union of India 1994 (8) TMI 315 - SUPREME COURT the Court emphasized that a speculative inquiry is neither warranted nor justified under judicial review particularly when private rights are at issue. The principle was reiterated in Ratan Chandra Sammanta v. Union of India 1993 (5) TMI 202 - SUPREME COURT where it was held that a writ should only be issued when the petitioner has an established right and that speculative inquiries unsupported by evidence are impermissible. Conclusion - The integration of local authority websites with MahaRERA s portal is directed within three months to enhance document verification. The commencement and occupation certificates be uploaded within 48 hours of issuance until full integration is achieved. The PIL petition is hereby disposed of.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

• Whether the Maharashtra Real Estate Regulatory Authority (MahaRERA) and local planning authorities have failed to coordinate effectively, leading to fraudulent real estate practices, and if so, whether a writ of mandamus should be issued to enforce statutory compliance.
• Whether the lack of verification of documents submitted by developers contravenes the Real Estate (Regulation and Development) Act, 2016 (RERA Act), and if a policy framework is needed to prevent registration of illegal buildings.
• Whether the measures undertaken by MahaRERA and local authorities are sufficient to address the grievances regarding fraudulent registrations based on forged documents.
• What legal remedies and directions are appropriate to ensure transparency and accountability in real estate transactions under the RERA Act?

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Coordination between MahaRERA and Local Authorities

• Relevant Legal Framework and Precedents: Sections 32 and 34 of the RERA Act empower MahaRERA to establish regulatory mechanisms and coordinate with local authorities to protect homebuyers.
• Court's Interpretation and Reasoning: The Court noted that the lack of coordination undermines the RERA Act's objectives, emphasizing the need for a unified approach to document verification.
• Key Evidence and Findings: The petitioner highlighted unauthorized constructions and forged documents in multiple villages, indicating systemic issues.
• Application of Law to Facts: The Court recognized the necessity for a coordinated verification system to prevent fraudulent registrations.
• Treatment of Competing Arguments: Respondents argued that steps have been taken to integrate systems and ensure compliance, which the Court acknowledged but found insufficient.
• Conclusions: The Court directed the integration of local authority websites with MahaRERA's portal to enhance document verification and compliance.

Issue 2: Verification of Developer Documents

• Relevant Legal Framework and Precedents: Sections 3, 4, and 5 of the RERA Act require developers to submit genuine project details for registration.
• Court's Interpretation and Reasoning: The Court emphasized the importance of verifying commencement and occupation certificates to prevent fraud.
• Key Evidence and Findings: The affidavit from MahaRERA revealed ongoing efforts to revoke registrations based on fraudulent documents.
• Application of Law to Facts: The Court found that the current verification processes were inadequate and required enhancement.
• Treatment of Competing Arguments: Respondents claimed progress in verification measures, but the Court mandated further integration and transparency.
• Conclusions: The Court ordered the implementation of a comprehensive verification framework to ensure document authenticity.

Issue 3: Adequacy of Measures Taken by MahaRERA and Local Authorities

• Relevant Legal Framework and Precedents: Section 7 of the RERA Act allows for revocation of registrations obtained through fraudulent means.
• Court's Interpretation and Reasoning: The Court recognized the steps taken but highlighted the need for a more robust system to prevent future fraud.
• Key Evidence and Findings: The integration of MahaRERA's website with local authority systems was underway but incomplete.
• Application of Law to Facts: The Court found that the measures were a step in the right direction but required full implementation.
• Treatment of Competing Arguments: Respondents argued for the sufficiency of current measures, which the Court partially accepted but insisted on further action.
• Conclusions: The Court mandated specific timelines for integration and verification processes to ensure compliance and transparency.

3. SIGNIFICANT HOLDINGS

Verbatim Quotes of Crucial Legal Reasoning:

• "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."
• "It is imperative that RERA insists on verifiable, legally authenticated documents to substantiate the claims made by the promoter."

Core Principles Established:

• The necessity for a coordinated and integrated verification system between MahaRERA and local authorities to prevent fraudulent registrations.
• The importance of verifying the authenticity of documents submitted by developers to protect consumer interests under the RERA Act.

Final Determinations on Each Issue:

• The Court directed the integration of local authority websites with MahaRERA's portal within three months to enhance document verification.
• Mandated that commencement and occupation certificates be uploaded within 48 hours of issuance until full integration is achieved.
• Ordered MahaRERA to verify the authenticity of all commencement certificates submitted by promoters during project registration.
• Directed the demolition of illegal structures as specified, with police assistance to ensure compliance.

The Court's judgment emphasizes the need for enhanced coordination and verification processes to uphold the objectives of the RERA Act, ensuring transparency and accountability in real estate transactions.