A Calcutta High Court judgment appears to have given more teeth to the Real Estate Regulatory Authority (RERA), reinforcing its power to enforce contracts and expanding the ambit of protection for home buyers from errant developers.

A bench of Justice Harish Tandon and Prasenjit Biswas ruled that the powers of the RERA is not only restricted to penalty or compensation but the orders passed by the authority can be executed as a decree as if it was passed by a civil court which shall also include the right to enforce specific performance.

The case relates to a dispute between homebuyer Deepak Mawandia and developer Shree RSH Projects Private Ltd involving a project on Prince Golam Mohammed Shah Road in south Calcutta.

The buyer had entered into an agreement for sale with the developer in December 2016 for the purchase of a residential flat along with car parking space. Thereafter, the buyer paid the developer as per contract but the latter allegedly could not hand over the flat within the stipulated time.

Aggrieved by this, the buyer filed a complaint against the developer before the West Bengal Real Estate Regulatory Authority (RERA). Even as the builder took part in the proceedings before the RERA, it also filed a suit before the civil court in Alipore, seeking principal relief that the buyer be directed to pay the balance of the consideration amount and to execute the deed of conveyance.

The civil court passed an ex-parte ad-interim order of injunction restraining the buyer from taking possession of the residential flat until payment of the balance consideration.

The buyer preferred an appeal before the HC where the counsels for the allottee Rishad Medora and Ramya Hariharan, founder of Citadel Law Chambers, argued that the civil court was barred from taking the developer’s suit and passing the order of injunction in view of section 79 of the Real Estate (Regulation and Development) Act, 2016 that provides that no civil court shall have jurisdiction to entertain any suit or proceedings or grant injunction in any matter which the authority/appellate tribunal under the RERA Act is empowered to determine.

Further, it was argued on behalf of the allottee that the obligation of the homebuyers to make payment of the consideration amount in terms of the agreement for sale is evidently present in section 19(6) of the RERA Act. Therefore, the RERA Act is a complete act in itself and the RERA authority has jurisdiction to pass reliefs as claimed by the developer.

The bench observed that RERA Act is a self- contained code and a complete mechanism is provided for redressal of the dispute not only of the allottee (buyer) but also of the promoter and therefore, an equilibrium is created amongst the respective rights of the parties.

Further, the HC observed orders passed by RERA can be executed as a decree and held that the RERA Act excludes the jurisdiction of civil court from entertaining developer-allottee disputes and the right to pass any order be it in a form of ex-parte, interim or temporaryinjunction.

“The order is significant in the sense that it clarifies that RERA’s powers are not limited to merely directing payment of penalties but also includes the power to enforce specific performance of contract,” counsel for buyer Ramya Hariharan said.

The HC set aside ad-interim order of injunction passed by the Alipore Court. The developer has filed an appeal against the HC order in the Supreme Court.