It has become a recurring phenomenon of Builders & Infrastructure Companies defaulting for various reasons. RERA was a great effort forward, however, it has not yielded the desired results due to reasons like lack of teeth, open to continued litigation challenges etc.
National Company Law Tribunal (NCLT) was formulated in 2016 for handling cases relating to insolvency and winding up of companies. However, it has been overburdened with more cases pertaining to land than any other. The Confederation of Real Estate Developers Association of India (CREDAI) indicated that 65% of the cases in the NCLT are identified with land ventures.
Litigation at various places & different forms have grinded numerous ventures to a halt and many have slowed down drastically, resulting in the projects becoming economically untenable for many businesses. Obviously, The Business Lobby has called for changes in the law.
As per reports, approximately 450 real estate projects and organizations are facing insolvency proceedings across the nation. It is under the insolvency bankruptcy code which is adding to the distress situation in the real estate sector.
It is therefore understandable that right from the Home Buyers to the Construction Services leaders, property developers, and the best construction companies in the nation are pushing for the Real Estate Regulatory Authority to become the principal point for redressal of grievances by the home buyers, so as to institutionalize and organize the real estate sector and get it out of the quagmire it is now in. By offering supremacy to the IBC over RERA, the very aim of the legislative enactment of RERA has been lost into oblivion.
Apart from the NPA chaos created in the Banking Industry due to the blatant political patronage enjoyed by the Builders during the boom of 2005-2012, the Banking Staff in connivance with them have duped millions of Home Buyers, who are being harassed by the Bank in terms of resale of same property to multiple buyers (there are cases wherein the same Bank has loaned on the same flat to 2 to 3 Buyers), Bouncing of Security Checks (NIA IPC 138), to DRT (Debt Recovery Tribunal). The poor Middle Class is being hounded whereas the real culprits- the Builders & the conniving Bank Staff are enjoying the Black Money earned, while the Banks did not even carry out the Basic Due Diligence for which the Common Man paid for loaning. CERSAI was circumvented by Bank Staff by purposefully filling incorrect & misguiding details while creating liens.
All financial creditors having any issue with the real estate developer the first remedy accessible ought to be RERA. To ensure that, it calls for the necessary amendments to keep RERA the first point of contact towards complaint redressal.
RERA need to be and can be empowered. How?
The remedies suggested by advisers are simple and doable .
Factors like growth GDP slow down and surplus liquidity in the system could be exploited to handle it, coupled with strict action against Defaulting Bank Staff. The Projects nearing completion could be first handled so as to resuscitate the real estate sector, a one-time rebuilding of loans, for all long-term feasible projects, should be introduced and encouraged. The recent declaration by the FM is a Great Step Forward. The government declared a Rs 25,000-crore realty fund to rescue stalled housing ventures.
With the present economic slowdown and challenge of liquidity crunch for Real Estate & Infra Sectors, it is imperative that New Out of the Box steps are taken for the real-estate business which is one of the Major Direction Provider for any country’s GDP.
RERA should become an all Powerful Instrument with the Govt to sort this mess out. By removing the need to go to NCLT & Courts ass a routine, if one agency is responsible for the entire Sector, litigation are ought to reduce while speedy delivery of Justice. A Major remolding is needed.