On 01.05.2017, although The Real Estate (Regulation and Development) Act, 2016 (hereinafter referred to as the RERD Act) came into full force for the regulation and promotion of the real estate sector especially as regards the correlation between Promoters, Allottees and Real Estate Agents, states in India were already regulating their affairs of the same nature with pre-existing legislations such as local Apartment Ownership Acts, Ownership of Flats Act amongst others. As a result, there arose a confusion with regard to the applicability of the provisions of RERA and their overriding effect in case of conflicting provisions with pre-existing legislations.
This discrepancy is solved by Section 88 of the RERD Act which states that the provisions of the Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force. It is also pertinent to refer to Article 254(2) of The Constitution of India which states that a law made by the Legislature of a State with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then, the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State. On 4th May 2021, while deciding a Writ Petition, the Hon’ble Apex Court has held that Section 89 read with the proviso to Article 254(2) impliedly repeals such provisions to the extent to which they overlap with the RERA.
Discrepancy as regards the Formation of Association of Allottees with specific reference to Karnataka:
Looking at the position in Karnataka, there seems to be an overlap as regards the provisions relating to the formation of Association of Allottees prescribed in Section 11(4) (e) of The RERD Act and the state enactment i.e., Karnataka Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) Act, 1972 on a plain reading of these enactments. Nevertheless, on a careful analysis, it is understood that the RERD Act clearly acknowledges the validity of local laws when it comes to the formation of Association of Allottees. The proviso to Section 11(4)(e) states that in the absence of local laws, the association of allottees, by whatever name called, shall be formed within a period of three months of the majority of allottees having booked their plot or apartment or building, as the case may be, in the project. Hence, when there exists a local law and we are concerned with the formation of Association of Allottees, the same can be formed as per the provision of The Karnataka Ownership Flats (Regulation Etc.) Rules, 1975 which states that the Promoter shall submit an application to the Registrar for registration of the Co-operative Society or the Company within 4 months from the date on which the minimum number of persons required to form such organization has taken flats. A fair conclusion that can be drawn keeping in view the above discussion is that the provisions of RERD Act will have an overriding effect on the provisions of the Karnataka Ownership Flats Act, 1972 unless otherwise provided under the RERD Act.
This blog is written by Adv. Jasleen Kaur (Partner, Smriti Legal) & Farooqui Abdur Raqeeb (Student, St. Joseph’s College of Law, Bengaluru).
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