RERA applies retroactively to ongoing projects that do not have completion certificate: Supreme Court2 min read


The retroactive application of the Real Estate (Regulation and Development) Act, 2016 to the ongoing real estate projects was upheld by the Supreme Court of India on Friday.

The three-judge bench of Justices Uday Umesh Lalit, Ajay Rastogi, and Aniruddha Bose noted that the RERA act can not be applied to the projects that were already completed or had been granted completion certificate at the time of the commencement of the Act. This observation was made in a plea (Newtech Promoters And Developers Pvt. Ltd. vs. State of UP | LL 2021 SC 641) that contended the first proviso to section 3(1) of the Act to be violative of Article 14 and 19(1)(g) of the Constitution of India. The given proviso reads: Provided that projects that are ongoing on the date of commencement of this Act and for which the completion certificate has not been issued, the promoter shall make an application to the Authority for registration of the said project within a period of three months from the date of commencement of this act.

The plea was an appeal to a writ petition that was dismissed by the High Court. The apex court, inter alia, took up the issue of the RERA act being retrospective or retroactive in its operation and the constitutionality of the same if tested on the anvil of the Constitution of India.

The Centre argued against the contention of the Estate developer (the plaintiff) that the retroactive application of the law is valid and the provisions to section 3(1) make it clear that it operates in the future, however, it is based upon the character and status that were done earlier and the presumption against retrospectivity is ex­-facie rebuttable in this case.

The bench observed that the retroactive nature of the statute was enacted by the legislature consciously, as it is competent to make such laws, and the same cannot be said to be violative of Article 14 and 19(1)(g) of the Constitution of India. Hence, it was held that the RERA act is retroactive in nature and the parliament is empowered to make laws with prospective/retrospective effect, the same cannot be violative of the Constitution of India.

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