RERA provisions challenged in HC by Nagpur builders

Four builders from Nagpur have challenged the provisions of RERA pertaining to restricting sale of real estate, opening of escrow account and registration of existing projects with Real Estate Regulatory Authority (RERA) before the Nagpur bench of Bombay High Court. Terming these provisions as unconstitutional, the petitioners, Swapnil Promoters and Developers Private Limited (SPD), Swapnil Associates (SA), Sukhyog Construction Private Limited (SCPL), and Guru Construction (GC), said that they were facing many difficulties while completing their ongoing projects since the Act was notified. A division bench comprising justices Bhushan Dharmadhikari and Rohit Deo, on Tuesday, issued notices to respondents including union secretary for department of urban, housing and poverty alleviation, state urban development department, and Real Estate Regulatory Authority (RERA). The builders argued about the Section 3 of RERA Act claiming it to be unconstitutional on the grounds that if a project is carried out in phases, then each phase will be considered a separate project and the developer would have to register them accordingly. However, the provisions of RERA are not applicable to small projects on lands measuring less than 500 square meters. They also challenged the provision of the Act making it mandatory for land developers to open a separate account in a scheduled bank in which 70% of the amount received from the customers should be deposited.