“Maharashtra and Gujarat are the only states that have issued rules contravening the act. Their rules say 70% of only the funds ‘to be realised’ need to be deposited in a separate account,” he said.
The Bombay high court was hearing Rustomjee, counsel for the Forum for People’s Collective Efforts, a pan-India body of home buyers that had intervened in support of the new law brought in to protect their interest.
The body says the constitutional challenge by nine builders to RERA provisions must fail. Some of their members have been coming to the court room of Justice Naresh Patil and Justice R G Ketkar, a special bench which will be the first in the country to decide on the validity of the central legislation.
He reasoned that RERA allows a flat buyer to withdraw from a consumer body, a pending case in a pending project over delayed possession and file a complaint under RERA, and in a case of refund he is eligible for interest from date of payment made to the builder, not from when RERA came into effect.
The body is the only intervener in the hearing that has been on since October 30.
“The act is not retrospective or retroactive. On the contrary it is fair to say it is prospective,” Rustomjee said. “Seventy per cent of all funds collected in the past, for ongoing projects, need to be deposited, after deducting the funds spent commensurate the work completed.”
The state rules dilute that section by allowing to account for court injunctions and other mitigating circumstances, that the authority deems fit. As a result, it has tampered with completion of the project, which is the essence of the act.