The Bombay High Court’s recent order is aimed at safeguarding the interests of homebuyers by ensuring transparency and easy access to information. A PIL was filed by an architect, seeking the Court’s intervention to prevent fraudulent real estate practices and protect homebuyers in Maharashtra. It was argued that lack of coordination between Maharashtra Real Estate Regulatory Authority (MahaRERA) and local authorities contravenes the Real Estate (Regulation and Development) Act, 2016. The petition cited instances of unauthorized constructions and forged documents and sought a Court-ordered framework to verify essential documents and prevent wrongful project registrations.
In response to the Court’s notice, MahaRERA had submitted an affidavit, stating that it had exercised its powers under Section 7(1) of the RERA Act to revoke project registration in cases of fraudulent documentation. MahaRERA has also urged the government of Maharashtra to establish a centralized digital platform for inter-agency verification of milestone approvals, such as commencement and occupation certificates. This platform would enable both MahaRERA and the public to cross-verify the authenticity of documents, upholding the RERA Act’s objectives. MahaRERA has also coordinated with the Urban Development Department of the state to implement a mechanism for uploading statutory documents issued by planning authorities on their respective websites. The authority has also initiated proceedings to cancel registrations for 64 projects under Section 7(1) of the RERA Act, reinforcing its commitment to curb fraudulent practices.
To ensure uniform compliance across Maharashtra, MahaRERA’s website has been integrated with the Municipal Corporation of Greater Mumbai, enabling real-time document verification within Mumbai’s jurisdiction. Similar integrations with other municipal bodies are ongoing. The government of Maharashtra has also mandated all municipal corporations, municipalities, and urban local bodies to integrate their websites with MahaRERA’s website by March 31 2023, thus creating a unified platform for verifying commencement and occupation certificates.
Maharashtra has made significant progress in integrating its Building Plan Management System with MahaRERA’s platform, aiming to enhance transparency in real estate registrations. According to the affidavit submitted by the state government, as of now, 454 local bodies display commencement and occupation certificate details on the system, although 26 planning authorities still need to comply. This integration is crucial for effective regulatory supervision, as mandated by Sections 32 and 34 of the RERA Act, emphasizing transparency and accountability.
The municipal commissioner of Kalyan Dombivli has taken proactive measures to prevent misuse by requesting verification of sanctioned plans uploaded on their website. A toll-free number is also available for public inquiries to promote transparency under Section 11 of the RERA Act. Further, enforcement actions have been initiated against 65 projects with fraudulent commencement certificates, with notices issued under Section 260 of the Maharashtra Municipal Corporation Act, 1949. FIRs were filed for 57 projects, resulting in the demolition of six structures, partial demolition of four, and ongoing occupation of 48 structures.
The municipal commissioner has also directed police authorities to facilitate the removal of occupants from these structures, enabling the municipal corporation to proceed with demolition, highlighting the stringent enforcement mechanism under the MMC Act. This underscores the need for ongoing coordination among planning authorities to safeguard against unauthorized constructions. The integration is expected to be completed within two months, enabling MahaRERA to verify developers’ claims regarding commencement and occupation certificates.
In the present case, the division bench of Chief Justice Devendra Kumar Upadhyaya and Justice Amit Borkar of the Bombay High Court noted that the RERA aims to safeguard homebuyers and promote transparency in real estate transactions. The primary objective of the RERA Act is to address consumer grievances by establishing accountability mechanisms for developers, minimizing fraud, and reducing delays. The RERA Act mandates prior registration of real estate projects with RERA, prohibiting any advertisement or sale without proper registration. The promoter is required to apply for registration in a prescribed manner, with accompanying documents, including an authenticated copy of approvals and the commencement certificate from the competent authority. The promoter must also submit the sanctioned plan, layout plan, and project specifications.
The RERA Act empowers RERA to revoke registration on grounds of default or violation of regulatory provisions. The Real Estate Regulatory Authority is established under Chapter V of the RERA Act, and is vested with broad powers to regulate the real estate sector. RERA can promote transparency and efficiency within the industry, make recommendations to the appropriate government for the protection of allottees, promoters, and real estate agents, and call for information, conduct investigations, and address complaints or initiate actions suo motu if deemed necessary. The Act emphasizes the importance of verifying the authenticity of documents proactively. The term “authenticated” implies a level of verification beyond merely accepting documents on their face value. Therefore, it is imperative that RERA insists on verifiable, legally authenticated documents to substantiate the claims made by the promoter. Advances in digital governance can enhance RERA’s coordination with local authorities, enabling real-time verification of commencement and occupation certificates, and preventing forgery and protecting consumers’ interests.
The legislative intent behind the RERA Act is to strengthen regulatory supervision, reduce fraud, and foster trust in the real estate sector. The Act provides a framework for ensuring accountability, deterring fraudulent practices, and safeguarding the interest of stakeholders. By establishing a system of real-time verification of documents, RERA can effectively prevent forgery and protect consumers’ interests in line with the Act’s objectives.
The Court’s decision on the petitioner’s (architect) request for scrutiny of real estate projects in 27 villages in Kalyan has been addressed by the revocation of registrations for 64 projects. This decision was made after the assistant town planner confirmed that 65 commencement certificates were not issued by their office. The counsel argued for the re-scrutiny of all registration certificates issued by the RERA across Maharashtra. However, the Court held that the petitioner must present prima facie evidence substantiating claims of forgery or fraud specific to identified projects. The Court further emphasized that speculative inquiries lacking substantive factual basis fall outside the scope of judicial review.
The RERA Act provides sufficient remedies for affected parties to initiate proceedings for redressal upon submission of credible material indicating the use of forged certificates. Sections 7 and 11 of the Act empower MahaRERA to revoke or suspend registrations if prima facie evidence of fraud, misrepresentation, or use of forged documents in obtaining commencement certificates is established.
With a view to safeguarding the interests of homebuyers and ensure transparency in real estate project registrations, the Court issued the following directions:
(1) The state of Maharashtra shall ensure rigorous compliance with the government resolution, dated February 23, 2023, issued by the Urban Development department. This resolution mandates standardized procedures for the issuance and publication of commencement and occupation certificates, ensuring transparent access to information for stakeholders. Compliance shall be monitored periodically to uphold the integrity of project documentation.
(2) All municipal corporations, municipalities, and urban local authorities in Maharashtra shall link their respective websites with the MahaRERA portal within three months from the date of this judgment. Such integration is imperative for establishing a streamlined process for verifying the authenticity of certificates submitted in real estate registrations, as envisaged under Section 4 of the RERA Act.
(3) Until full integration is achieved, all municipal corporations, municipalities, and urban local authorities must ensure that commencement and occupation certificates are uploaded on their respective websites within 48 hours of issuance, to maintain interim transparency and public access.
(4) Effective from June 19, 2023, MahaRERA shall verify the authenticity of all commencement certificates submitted by promoters during project registration. Only upon verification should registrations be granted, in compliance with order dated May 15, 2023. This verification process aligns with Sections 4 and 5 of the RERA Act, ensuring that only projects with genuine and verified documentation are registered.
(5) Maharashtra shall complete the integration of the Building Plan Management System (BPMS) with MahaRERA’s online system within three months from the date of this judgment. This integration will enable MahaRERA to cross-verify certificates against records in BPMS, mitigating the risk of fraudulent submissions and enhancing regulatory oversight.
(6) MahaRERA shall carry out the demolition of illegal structures in accordance with the law. The concerned police station is directed to provide all necessary assistance to municipal corporation officials in removing occupants, as requested by authorized officers, to ensure that the demolition process is conducted without hindrance. The entire demolition procedure shall be completed within three months from the date of this judgment.
The Supreme Court has made several significant rulings regarding RERA. One key judgment was passed on November 11, 2021, which clarified various provisions of RERA to protect homebuyers. The top court addressed several issues, including whether RERA has retroactive application, the powers vested with the Real Estate Regulatory Authority, and the validity of pre-deposit under Section 43(5) of the Act.
—By Shivam Sharma and India Legal Bureau
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