21

COMMITTEE ON SUBORDINATE LEGISLATION

(2016-2017)

(SIXTEENTH LOK SABHA)

TWENTY - FIRST REPORT

RULES/ REGULATIONS FRAMED UNDER THE REAL ESTATE (REGULATION AND

DEVELOPMENT) ACT, 2016

LOK SABHA SECRETARIAT

NEW DELHI
August, 2017/Sravana, 1939 (Saka)

21
 COMMITTEE ON SUBORDINATE LEGISLATION
(2016-2017)

(SIXTEENTH LOK SABHA)

TWENTY - FIRST REPORT

RULES/ REGULATIONS FRAMED UNDER THE REAL ESTATE (REGULATION AND

DEVELOPMENT) ACT, 2016

(PRESENTED TO LOK SABHA ON 10.8.2017)

LOK SABHA SECRETARIAT

NEW DELHI
August,2017/Sravana, 1939 (Saka)
COSL No.

PRICE: Rs.

(C) 2016 BY LOK SABHA SECRETARIAT

Published under Rule 382 of the Rules of Procedure and Conduct of Business in Lok
Sabha (Fourteenth Edition) and printed by the Manager, Government of India Press, Minto
Road, New Delhi.
 CONTENTS

Para No. Page No.

COMPOSITION OF THE COMMITTEE…………………………………… (iii)

INTRODUCTION…………………………………………………………….. (v)

REPORT

PART-I

I. Report

PART-II

II. Observations/Recommendations of the Committee 14

APPENDICES

1. Minutes of the Twelfth Sitting (2016-17) held on 26.4.2017 and Extracts from Minutes of
the Nineteenth Sitting of the Committee (2016-17) held on 4.8.2017.
 COMPOSITION OF THE COMMITTEE ON SUBORDINATE LEGISLATION
(16th LOK SABHA)
(2016-2017)

1. Shri Dilipkumar Mansukhlal Gandhi Chairperson

Members
2. Shri Idris Ali
3. Shri Birendra Kumar Choudhary
4. Shri S. P. Muddahanumegowda
5. Shri Shyama Charan Gupta
6. Shri Jhina Hikaka
7. Shri Janardan Mishra
8. Shri Prem Das Rai
9. Shri Chandul Lal Sahu
10.Shri Alok Sanjar
11.Shri Ram Prasad Sarmah
12.Adv. Narendra Keshav Sawaikar
13.Shri V. Panneer Selvam
14.Shri Ram Kumar Sharma
15.Shri Nandi Yellaiah
SECRETARIAT

1. Smt. Sudesh Luthra - Additional Secretary

2. Shri Ajay Kumar Garg - Director
3. Shri Nabin Kumar Jha - Additional Director
4. Smt. Vidya Mohan - Committee Officer

(iii)
 INTRODUCTION

I, the Chairperson, Committee on Subordinate Legislation having been authorised by the

Committee to submit the report on their behalf, do present this Twenty- First Report on
Rules/Regulations framed under the Real Estate (Regulation and Development) Act, 2016.

2. The matters covered by this Report were considered by the Committee on Subordinate
Legislation at their sitting held on 26.4.2017 during which oral evidence of the representatives of
Ministry of Housing and Urban Poverty Alleviation was taken.

3. The Committee considered and adopted this Report at their sitting held on 4.8.2017.

4. Minutes of the Twelfth Sitting of the Committee (2016-17) held on 26.4.2017 and Extracts
from Minutes of Nineteenth Sitting of the Committee (2016-17) held on 4.8.2017 relevant to this
Report are appended to it.

DILIPKUMAR MANSUKHLAL GANDHI

New Delhi; Chairperson
August, 2017 Committee on Subordinate Legislation
Sravana, 1939 (Saka)

(v)
 REPORT
A. BACKGROUND
The real estate sector plays a catalytic role in fulfilling the demand for housing and
infrastructure in the country. While the sector has grown significantly in recent years, it has
largely been unregulated alongwith lack of professionalism, standardization and lack of
adequate consumer protection. Currently, the real estate and housing sector is largely
opaque, with consumers often unable to procure complete information, or enforce
accountability against builders and developers in the absence of effective regulation. The
biggest fallout affecting the sector is delay in project completion; diversion of funds collected
from buyers; one-sided contracts in the absence of adequate supply; reneging on
contractual commitments by both the developers and the buyers; and constraints in
financing and investment options available to the sector, thereby affecting its long-term
growth. Recently, the Prime Minister has set the year 2022 as a target for its ‘Housing
for All’ project and therefore, a pan India regulation of Real Estate Sector has been felt
earnestly.
1.2 Consequently, the Real Estate (Regulation and Development) Act, 2016 (RERA)
piloted by the Ministry of Housing and Urban Poverty Alleviation received Presidential
assent on 25 March, 2016 and was published in the Official Gazette on 26 March, 2016 for
general information. 59 Sections i.e. Section 2, Sections 20-39, Sections 41-58, Sections
71-78 and Sections 81-92 of the RERA, 2016 were notified for commencement w.e.f
1.5.2016 and the remaining 32 Sections i.e. Sections 3 to 19, Section 40, Sections 59 to 70,
Sections 79 to 80 of the Act were notified for commencement w.e.f 1.5.2017. The Act also
envisages dual responsibility of the Central Government and the State Governments with
independent roles as regards its implementation.

B. OBJECTIVES
1.3 The main objectives of the Real Estate (Regulation and Development) Act, 2016 is:
(i) to induct professionalism and standardization in the sector paving the way
for accelerated growth and investments in the long run;
(ii) to ensure consumer protection; transparency; and fair and ethical business
practices in matters relating to the sale and purchase of properties in the
real estate sector; and also
 (iii) to ensure the balance of interests of all the stakeholders concerned without
adding another stage in the procedure for sanctions.

C. SALIENT FEATURES OF THE RERA, 2016

1.4 Some of the Salient features of the RERA, 2016 are given as under:
 Act extends to residential and commercial real estate.
 Registration of Real Estate Projects with Regulatory Authority - above 500 square
meters or more than 8 apartments.
 Registration of Real Estate Agents who intend to sell any plot, apartment or building
- registered with the Regulatory Authority.
 Promoter to make disclosure of all relevant project information for public view such
as - layout plan, land status, statutory approvals, number of parking, time period for
project completion etc., proforma of agreements, names and addresses of agents,
contractors, architect, engineer etc.
 Promoter to comply with the following - adhere to approved plans, obligations
regarding authenticity of advertisement/prospectus, rectify structural defects, refund
money in cases of default, deposit of 70% of amount realized from allottees in a
separate account.
 Act provides for establishment of Regulatory Authority in each State/UT or one
Authority for two or more States/UTs, by Appropriate Government.
 Regulatory Authority to - act as the nodal agency towards implementation of the Act,
coordinate efforts regarding development of Sector; and render necessary advice to
the appropriate Government.
 Act provides for establishment of Appellate Tribunal to hear appeals from the orders
of the Authority & adjudicating officer.
 Act provides for appointment of one or more adjudicating officers by Regulatory
Authority, based upon need- to settle disputes and impose compensation and
interest.
 Act provides for establishment of Central Advisory Council to advise Central
Government on - implementation of Act, major questions of policy, protection of
consumer interest, growth and development of sector.
1.5 Section 84 of the Act provides for notifying Rules by the Appropriate Government
(States and Union of India) for their respective jurisdictions by 31.10.2016 (within 6 months
of commencement). In the absence of a Regulator, the home buyer was literally at the
mercy of the builder. Although RERA has come into effect nationwide from 1.5.2017, all
States are not completely ready for it and several States have failed to adhere to it. Some of
the States even diluted the Act through their Rules in favour of builders hurting consumers
and their interest by giving new definition to 'ongoing project' against the provisions of the
Act by putting arbitrary and whimsical conditions so as to ensure that maximum possible
ongoing projects remain out of the ambit of Real Estate Regulatory Authority. Amongst
other things, the Committee also in their sitting held on 26.04.2017 raised the issues during
the discussions held on the subject with the Ministry of Housing and Urban Poverty
Alleviation regarding the status of implementation of the Act, establishment of Real Estate
Regulating Authority, Real Estate Appellate Tribunal by appropriate Governments,
appointment of Interim Regulator, establishment of Central Advisory Council, impact of
provisions of RERA in case of delay on the part of the Builder to hand over the possession
of flats/plots to the buyers, delivery of incomplete flats, awareness programmes etc.,. These
issues along with other aspects of the Act have further been deliberated by the Committee
in the succeeding Paragraphs:-
 CHAPTER-II
STATUS OF IMPLEMENTATION OF ACT - DELAY IN FRAMING OF RULES BY
VARIOUS STATES
As per instructions, Rules under an Act should ordinarily be framed as soon as
possible after the commencement of the Act and in no case this period should exceed six
months. The Real Estate (Regulation and Development) Act, 2016 envisages dual
responsibility of the Central Government and the State Governments with independent roles
as regards the implementation of the Act. Section 84(1) of the Real Estate (Regulation and
Development) Act, 2016 states: "The appropriate Government shall, within a period of
six months of the commencement of this Act, by notification, make rules for carrying
out the provisions of this Act". Section 84 was notified for commencement w.e.f 1 May,
2016, consequently the time period for making Rules came to an end on 31 October, 2016.
2.2 As regards the status of framing of Rules on Real Estate (Regulation and
Development) Act, 2016, the Ministry of Housing and Urban Poverty Alleviation deposed
before the Committee on 26.04.2017 as under:-
i. Rules Notified - 12 States / UTs
Uttar Pradesh; Gujarat; Odisha; Andhra Pradesh; Maharashtra; Madhya Pradesh;
NCT of Delhi (by Mo/UD); Andaman & Nicobar Islands; Chandigarh, Dadra & Nagar
Haveli; Daman & Diu; Lakshadweep
ii. Draft Rules Prepared - 16 States / UTs
Assam; Tripura; Karnataka; Kerala; Tamil Nadu; Punjab; Haryana; Himachal
Pradesh; Mizoram; Bihar; Jharkhand; Telangana; Chhattisgarh; Rajasthan;
Uttarkhand; Puducherry
iii. States which have Constitutional Issues - 4 States
Sikkim; Arunachal Pradesh; Meghalaya; Nagaland
iv. States from which no information received - 3 States
Manipur; West Bengal; Goa
2.3 As regards the four States namely Sikkim, Arunachal Pradesh, Meghalaya and
Nagaland, which have not framed rules relating to Real Estate (Regulation and
Development) Act, 2016 due to constitutional issues, the Ministry of HUPA replied as
under:-
"The States of Sikkim; Arunachal Pradesh; Meghalaya; Nagaland have informed the
Ministry during the regional consultations held on 27th March, 2017 that ‘land
ownership in these States is either with the Autonomous Councils or is owned by the
community’. These States have stated that they are in the process of seeking
opinion from the Legal Department and would soon settle the issues".

2.4 Further, as regards, non-furnishing of the requisite information by the three states
namely Manipur, West Bengal and Goa, the Ministry of HUPA furnished their reply as
under:-
"The Ministry of HUPA has written two letters to these states, subsequently to the
notification for commencement of the remaining sections of the Act which was
notified in the Gazette of 19th April, 2017. In particular, a letter has been written by
HM, HUPA on 1.5.2017 to all the States that have not yet drafted the Rules".

2.5 On being further asked to clarify the word 'shall' used in sub-section 1 of Section
84 of the Real Estate (Regulation and Development) Act, 2016, which mandate the
respective Government to frame rules within the prescribed time frame, the Ministry of
Housing and Urban Poverty Alleviation submitted in their post evidence reply dated 18 May,
2017 as under:-

"As per Section 84 of the Act, the ‘appropriate Government’ was required to notify
the Rules with six months of its commencement. Section 84 was notified for
commencement with effect from 1st May, 2016, consequently the time period for
making Rules came to an end on 31st October, 2016. The Ministry for Housing &
Urban Poverty Alleviation, is the ‘appropriate Government’ for the Union Territories
without Legislature, namely – Andaman & Nicobar Islands, Chandigarh, Dadra &
Nagar Haveli, Daman & Diu and Lakshadweep. The Ministry notified the Real Estate
(Regulation and Development) (General) Rules, 2016 and the Real Estate
(Regulation and Development) (Agreement for Sale) Rules, 2016, for the UTs
without Legislature, on 31st October, 2016. As per information available with the
 Ministry, the States of Uttar Pradesh; Gujarat; Odisha; Andhra Pradesh;
Maharashtra; Madhya Pradesh; Bihar; Chhattisgarh; Rajasthan; Uttarakhand; Assam
have notified the Rules under the Act. In addition, Rules have also been notified for
the Union Territories of Delhi, Andaman & Nicobar Islands, Chandigarh, Dadra &
Nagar Haveli, Daman & Diu and Lakshadweep. Since the passage of the Act, the
Ministry has written letters to the States at various levels. HM, HUPA has written
twice to the Chief Ministers to seek their personal attention in the matter. The
Secretary of the Ministry has written to the Chief Secretaries on various occasions. A
national level consultation was held on 17th January, 2017 which was inaugurated
by HM, HUPA in order to, inter-alia, request the States to notify the Rules and to
establish the Authorities / Tribunals within the time provided under the Act. This was
followed up by a meeting in the North-East with the North-East and Eastern States
on 27th March, 2017, which was chaired by the Secretary of the Ministry.
Furthermore, various consultations have been held during the Ministry’s review
meetings with States, urging the States to implement the Act in time. Specifically
meetings were held with States of Haryana, Karnataka, Jharkhand and Tamil Nadu
to expedite notification of Rules and implementation of the provisions of the Act."

2.6 When enquired about the consequences as to how the provisions contained in the
Act would be applicable to the States which have not yet framed the rules to meet their
regular business under the Act, the Secretary of HUPA deposed before the Committee as
under:-

"States which have not set up regulators and States which have not finalized their
Rules will not be able to register any new real estate project"

2.7 When asked further about the course of action the Government is planning to take
especially in case of States which have not framed their Rules for their respective
jurisdiction, the representative of the Ministry of HUPA submitted as under:-

"The Ministry is undertaking review of implementation of various Schemes / Missions

by the States/UTs by travelling to the States. One of the important agenda during
these meetings is to take stock of the implementation of the Real Estate Act, 2016.
In addition, the Ministry would again be writing to the States which have not framed
the Rules yet, to take immediate action."
 CHAPTER III

ESTABLISHMENT OF REAL ESTATE REGULATORY AUTHORITY (RERA) AND REAL

ESTATE APPELLATE TRIBUNAL (REAT) BY APPROPRIATE GOVERNMENT

3.1 Section 20(1) of the Real Estate (Regulation and Development) Act, 2016 states:
"The appropriate Government shall, within a period of One year from the date of
coming into force of this Act, by notification, establish an Authority to be known as
the Real Estate Regulatory Authority." Further, two or more, States or UTs may set up a
common RERA. A State or UT may also establish more than one RERA.

3.2 Further Section 43(1) of the Real Estate (Regulation and Development) Act, 2016
states:
’'The appropriate Government shall, within a period of One year from the date of
coming into force of this Act, by notification, establish an Appellate Tribunal to be
known as the - (name of the state/Union Territory) Real Estate Appellate Tribunal
(REAT)".
As these two Sections were notified for commencement from 1 May, 2016,
the Authority/Tribunal was required to be established maximum by 30.4.2017.

3.3 On being asked as to how many States/UTs have established Real Estate
Regulatory Authority (RERA) and Real Estate Authority Tribunal (REAT) so far, the Ministry
submitted as under:-
"The permanent Regulatory Authority has been set up in Madhya Pradesh. However,
interim Regulatory Authorities have been set up in Kerala, Maharashtra, Punjab,
Rajasthan, Mizoram, Haryana, NCT of Delhi, Andaman & Nicobar Islands, UT of
Chandigarh. The UT of Chandigarh has desired that the permanent Authority and
Appellate Tribunal may be tied up with the UT of Delhi. Similarly, The UT of Dadra &
Nagar Haveli and Daman & Diu have desired that the permanent Authority and
Appellate Tribunal may be tied up with the State of Maharashtra. Also, the UT of
Andaman & Nicobar Islands has desired that the permanent Authority and Appellate
Tribunal may be tied up with the State of Tamil Nadu."
3.4 Further the Ministry in their post evidence reply submitted as under:-

"The State of Madhya Pradesh has established the permanent Authority. In addition,
the States/UTs of - Kerala; Maharashtra; Punjab; Rajasthan; Mizoram; Haryana;
NCT of Delhi; Andaman & Nicobar Islands; Chandigarh; Bihar; Uttar Pradesh have
set up interim Authority. Interim Tribunal has been set up in the States/UTs of -
Puducherry; Chandigarh; Haryana; Bihar. The States/UTs of - Odisha; Jharkhand;
Assam; Tamil Nadu; Andhra Pradesh; Telangana; Tripura; Dadra & Nagar Haveli
(Tie up with Maharashtra); Daman & Diu (Tie up with Maharashtra); Andaman &
Nicobar Islands (Tie up with Tamil Nadu); Chandigarh (Tie up with Delhi) are in
advanced stage of setting up the Authority and Tribunal. "

3.5 When asked to state the reasons as to why the other States/UTs were not able to
establish their Regulatory Authority in time, the Ministry of Housing and Urban Poverty
Alleviation submitted as under:-

"The Ministry is undertaking review of implementation of various Schemes / Missions

by the States/UTs by travelling to the States. One of the important agenda during
these meetings is to take stock of the implementation of the Real Estate Act, 2016.
In addition, the Ministry has been writing to the States which have not set up the
Authority / Tribunal, to take immediate action."

APPOINTMENT OF INTERIM REGULATOR

3.6 Section 20 of the Act also empowers appropriate Government to appoint the interim
Regulator until the establishment of Full Time Regulatory Authority under the provisions of
the Act. The Ministry of Housing and Urban Poverty Alleviation vide their reply submitted as
under:-
"The interim Regulatory Authorities have been set up in Kerala, Maharashtra,
Punjab, Rajasthan, Mizoram, Haryana, NCT of Delhi, Andaman & Nicobar Islands,
and UT of Chandigarh"
3.7 The Ministry further clarified as under:-

"The Ministry had convened a National Consultation with all the State/UT
Governments on 17th January, 2017 and a regional consultation with North-East and
Eastern States requesting for timely implementation of the Act including on the
appointment of Appellate Tribunals."

3.8 In the absence of the appointment of the interim Regulator or Full Time Regulatory
Authority or Appellate Tribunal, the implementation of the Act would be affected. When
asked to furnish their opinion and steps taken, the Ministry vide their reply submitted as
under:-
"The Ministry has been conscious of the difficulties that would be faced on the
ground if the Authorities and the Appellate Tribunals are not constituted on time.
Consequently, during the National Consultation with all the State/UT Governments
on 17th January, 2017 and a regional consultation with North-East and Eastern
States, the Ministry has informed the States/UTs that upon the full Act coming into
force with effect from 1st May, 2017, in the absence of Authorities and Appellate
Tribunal, there would be a vacuum in the State/UT. This has also been reiterated
through the communications sent by the Ministry to the States/UTs at various levels."
 CHAPTER IV
ESTABLISHMENT OF CENTRAL ADVISORY COUNCIL

4.1 Section 41(1) of RERA, 2016 states: "The Central Government may, by
notification, establish with effect from such date as it may specify in such
notification, a Council to be known as the Central Advisory Council."
4.2 Defining the function of Central Advisory Council, Section 42(1) of RERA, 2016
states:
The function of the Central Advisory Council shall be to advice and recommend the
Central Government -
(a) on all matters concerning the implementation of this Act;
(b) on major questions of policy;
(c) towards protection of Consumer Interest;
(d) to foster the growth and development of the Real Estate Sector;
(e) on any other matter as may be assigned to it by the Central
Government.
4.3 When asked to state whether the Council has been constituted, the Ministry of
Housing and Urban Poverty Alleviation in their written reply submitted as under:-
"The Central Advisory Council has not been constituted."
4.4 Citing the reasons for not constituting the council, the Ministry in their post evidence
reply submitted as under:-
"The Ministry is in the process of notifying the constitution of the Central Advisory
Council, which would be notified soon"
 CHAPTER V
DILUTION OF RULES BY VARIOUS STATES/UTS

5.1 The Real Estate (Regulation and Development) Act, 2016 envisages dual
responsibility of the Central Government and the State Government with independent roles
as regards implementation of the Act. Article 254 of the Constitution specifically provides:

"(1) If any provision of a law made by the Legislature of a State is repugnant to any
provision of a law made by Parliament which Parliament is competent to enact, or to
any provision of an existing law with respect to one of the matters enumerated in the
Concurrent List, then, subject to the provisions of clause (2), the law made by
Parliament, whether passed before or after the law made by the Legislature of such
State, or, as the case may be, the existing law, shall prevail and the law made by the
Legislature of the State shall, to the extent of the repugnancy, be void.

(2) Where 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:

Provided that nothing in this clause shall prevent Parliament from enacting at any
time any law with respect to the same matter including a law adding to, amending,
varying or repealing the law so made by the Legislature of the State."

5.2 The proviso to this Article gives plenary powers to Centre to amend, vary or repeal
the State Law so made by the Legislature of the State. Accordingly, RERA, 2016 has an
over-riding effect on conflicting laws being made by some States by virtue of entries 6 and 7
in List III of Concurrent list of the Seventh Schedule of the Constitution of India. When the
Ministry of Housing and Urban Poverty Alleviation asked to furnish their opinion in the
matter, it was submitted as under:-

"As per the proviso to Article 254(2) of the Constitution of India, the Central
Government has the power to amend / vary / repeal any State law which has
previously received Presidential assent. In exercise of the powers conferred by the
 proviso to Article 254(2) of the Constitution of India, the Real Estate Act, 2016, vide
Section 92 repealed ‘The Maharashtra Housing (Regulation and Development) Act,
2012’, which had received Presidential assent"

5.3 When asked to state whether the Ministry of Housing and Urban Poverty Alleviation
are aware of the fact that Rules notified by some of the States are contrary to the
provisions of the Act, the Ministry in their written submission stated as under:-
"The Ministry has received representations from consumer associations about some
States having prepared Rules, wherein certain provisions are beyond the scope of
the Act.
The Ministry has communicated to the States, during the National Consultation held
with all the States/UTs on 17th January, 2017 and during the Regional Consultation
(East and North East) on 27th March, 2017 to adhere to the letter and spirit of the
Act. The Ministry had prepared a Frequently Asked Questions (FAQs) on the Act,
which was circulated to the participants during the said two meetings. In addition,
letters have been written by the Ministry, at various levels, to the States/UTs
requesting them to adhere to the letter and spirit of the Act."
 CHAPTER VI

Registration of ongoing Projects and Completion Certificate:

Accordingly to the frequently appearing reports in the media, few States like the
States of Uttar Pradesh, Haryana and Gujarat, the requirement of compulsory registartion of
all ongoing projects with the RERA Authority within three months of the commencement of
the Act is not being adhered to and the developers/builders are taking partial completion
certificate and handing over the flats to the applicants without fulfilling the obligatory
requirement of handing over the flats in complete shape. According to such media reports,
the completion norms are being flouted by the builders in UP, Haryana and Gujarat, which is
resulting in enormous mental agony and financial hardship to the buyers who had invested
their hard earned money for a living. There is a tendency among builders/developers, and
have a common practice that a specific society or project is developed in phases by the
developers. This results in buyers getting entrapped in the deal though RERA Act is very
clear and says that where the real estate project is to be developed in phases, every such
phase shall be considered a standalone real estate project, and the promoter shall obtain
registration under this Act for each phase separately. Particularly, the States of Uttar
Pradesh, Haryana and Gujarat had excluded ongoing projects and home buyers are
suffering at the hands of the developers/builders. According to media reports, Haryana and
Uttar Pradesh’s RERA rules have saved a majority of the ongoing real estate projects in
NCR outside the ambit of real estate law, as the number is very high in Gurugram.
Similarly, the figures from Noida city is worst hit by delays in delivery of flats as both the
States Haryana and Uttar Pradesh have used the same yardstick for ongoing projects,
which have not been included in Real Estate (Regulation and Development) Act. From the
media reports it is given to understand that in Noida and Greater Noida together a large
number of ongoing builder projects, will be outside the purview of RERA Act as the States of
Uttar Pradesh and Haryana have excluded ongoing projects from registration, similarly, in
Gurugram a large number of flats are in the various stages of construction or completion,
have either received occupancy certificate or have received part-completion (unoccupancy
on paper). This is resulting in home buyers getting delayed possession of their flats
because of the violation of main Act by these States.
 CHAPTER VII

AWARENESS PROGRAMME
7.1 For effective implementation of the Act, it was pointed out during the evidence
of the Ministry of HUPA before the Committee on 26.4.2017 to make publicity about the
Act and bring awareness among the public. In this connection, the Chairperson, COSL
(Committee on Subordinate Legislation, Lok Sabha) suggested that the provisions of
RERA and the Rules are needed to be given vide publicity across all the States by
means of 'Akashwani' and 'Doordarshan' so as to develop a feeling of trust amongst
the masses about the Real Estate Sector. Even the housing association should also be
involved in spreading public awareness about the RERA law. Moreover, it should be
mandatory for housing advertisement by builders to mention about the details like the
Laws of launching the housing project/scheme, what works will be done under the
scheme, so that people become aware of the details.

7.2 The Ministry of Housing and Urban Poverty Alleviation in their post evidence
reply dated 18.5.2017 submitted the following regarding the awareness programmes:-
"The Ministry is planning to come out with advertisements on the Act to create
awareness among the public. In addition, the Ministry is making an endeavour to
attend as many public functions as possible on the subject to create awareness."
 PART - II
Observations/Recommendations

Delay in framing of Rules under RERA, 2016 by various States

The Committee note that India's real estate sector has been marred by
inordinate project delays, poor quality of construction and lacks transparency. To
overcome these shortcomings, the Real Estate (Regulation & Amendment) Act, 2016
has been enacted with the objective of promotion of the real estate sector in an
efficient and transparent manner and to protect the interest of the consumers as well.
In this regard, the Committee note that as per Section 84(1) of the Real Estate
(Regulation and Development) Act, 2016, the appropriate Government (both Central
and State Governments) are required to notify the Rules for their respective
jurisdiction within six months of commencement of the Act i.e. by 31.10.2016 as the
Act was notified for commencement w.e.f 01.05.2016. In this context, the Ministry of
Housing and Urban Poverty Alleviation had submitted to the Committee that as per
the available information with them, only 12 States/UTs had notified their Rules, 16
States/UTs were in the process of notifying Rules, 4 States had constitutional issues
and 3 States have not furnished any information on the notification of rules under the
Real Estate (Regulation and Development) Act, 2016. As per the information
furnished by the Ministry, there are three States namely Manipur, West Bengal and
Goa which have not even furnished any information and four States namely Sikkim,
Arunachal Pradesh, Meghalaya and Nagaland have some constitutional issues over
the land ownership as informed to the Ministry during regional consultations held on
27.03.2017. The Committee express their dismay over the fact that even after a lapse
of one year and two months, many of the States have not notified the Rules so far.
The Committee see the Real Estate ( Regulation & Development ) Act, 2016 as a
landmark reform for the real estate sector in the country and its successful
enactment largely depends upon the timely framing of the Rules under the Act by all
the States. The Committee are of the considered opinion that any delay in framing of
Rules thereunder will have the effect of depriving the public the legitimate rights
intended to be conferred on them under the provision of the Act. The Committee,
therefore, recommend that the progress made by States particularly the above
mentioned Seven States be monitored regularly and the Ministry should ensure that
all the concerned States frame and implement the Rules within the said time frame
as contemplated under the Act.

Recommendation No. 1
 Establishment of RERA and REAT

The Committee note that Section 20 to 40 of the RERA deals with the
establishment of Real Estate Regulatory Authority (RERA) and it functions for
promotion of Real Estate Sector besides power to impose penalties in case of
disputes between promoters, allottees and Real Estate agents etc. Section 20(1)
envisage the formulation of RERA by the appropriate Government and was required
to be formed within one year of coming into force of the Act i.e. by 30 April, 2017.

Similarly, Sections 43 to 58 of the RERA Act relate to the Real Estate Appellate
Tribunals (REAT) which are required to be established by the appropriate
Governments within one year of coming into force of the Act i.e. by 30.04.2017.

In this regard, the Committee feel concerned to find that so far only on State
Madhya Pradesh has set up permanent Authority and 11 States/UTs namely Kerala,
Maharashtra, Punjab, Rajasthan, Mizoram, Haryana, NCT of Delhi, Andaman and
Nicobar Islands, Bihar, Chandigarh, UP had set up interim Authority, four states/UTs
namely Puducherry, Chandigarh, Haryana and Bihar have set up interim Tribunal and
11 States/UTs are in advanced stage of setting up the Authority and Tribunal. In the
opinion of the Committee, any delay in establishment of such statutory bodies
mandated with the core tasks will severely affect the implementation of the RERA,
2016. Though the Ministry has impressed upon the States/UTs during the National
Consultation with all the States/UT Government on 17.01.2017 and a regional
consultation with North East and Eastern States but it has not yielded the desired
result. The Committee, therefore, desire that the Ministry should make all out efforts
and give a time bound target to the concerned States/UTs as per the provisions for
the Act for the establishment of RERA and REAT under the RERA, 2016 without any
further delay. Till such time these States should appoint an interim Authority or
appoint the Secretary of the Department dealing with housing as per Section 20(1) of
the Act. Similarly, for the State which have not appointed REAT, the Ministry insist
upon them to appoint an interim REAT or delegate powers for the time being to any
existing Tribunal already functioning in the State as per Section 43(1).

Recommendation No. 2
 Dilution of Rules by various States/UTs.

The Committee note that RERA, 2016 has an overriding effect on conflicting
laws being made by some States by virtue of entries 6 & 7 under the Concurrent list
of the Seventh Schedule of the Constitution of India and therefore, as per the proviso
to Article 254(2) of the Constitution of India, the Central Government has the power to
amend, vary, repeal any State law which has previously received Presidential assent.
On this basis the Ministry has repealed the Maharashtra Housing (Regulation &
Development) Act, 2012. The Committee, however, note with concern that rules
notified by some of the States are not in consonance with the spirit of the Act and
have resulted in the dilution of the effectiveness of the Act while observing that such
works have been skewed in favour of builders hurting consumer interests
particularly in areas like definition of ongoing projects, penalties for non-compliance
with the Act and dealing with structural defects etc. In this context, the Ministry have
informed the Committee that they have taken up the matter with the concerned States
during the National Consultation held with all the States/UTs on 17th January, 2017
and during the Regional Consultation (East and North East) on 27th March, 2017 to
adhere to the letter and spirit of the Act. In addition, letters have also been written by
the Ministry, at various levels, to the States/UTs requesting them to adhere to the
letter and spirit of the Act. The Committee are distressed to note that the Ministry
have not clearly spelt out the ways and means in this regard. The Committee while
recognizing that each State have their respective development laws, sanctioning
procedures, and other land related unique issues, recommend that the Ministry of
Urban Poverty Alleviation should strictly instruct the States to either amend their
Rules or re-notify them in line with the letter and spirit of the Act. The Committee
may also be apprised of the action taken on this recommendation as this legislation
is going to have a great impact on Real Estate Sector.

Recommendation No. 3
 Constitution of Advisory Council

The Committee are dismayed to note that even after the commencement of the
Act, the Central Advisory Council has still not been constituted. As per the provision
contained in the Act, the Central Advisory Council is required to be established to
advice and recommend the Central Government on major question of policy and
protection of consumer interests to foster the growth and development of Real Estate
Sector on all matters concerning the implementation of the Act. However the Ministry
of HUPA is still in the process of notifying the Central Advisory Council. The
Committee express their unhappiness over the lackadaisical attitude of the Ministry
towards this important issue. This proves beyond doubt that the Ministry's approach
is very casual and it has not paid any serious attention towards the constitution of
Central Advisory Council expeditiously. The Committee, therefore, strongly
emphasize the Ministry to take urgent steps to constitute the Central Advisory
Council under the Act so that the functions under Section 42 of the Act can be taken
forward by the Council. The Committee would also like the Ministry to furnish a copy
of the notification, under the provision of Sections 41 (1) and 42 (2) of the Real
Estate (Regulation & Development) Act, 2016.
Recommendation No. 4
 Registration of ongoing Projects

The Committee note that in terms of section 3 (1) of the RERA Act, the on-
going and under construction projects are required to be registered with the
Authority and are thereby supposed to come under the regulator's ambit. It has been
clearly specified therein that the promoters of all those projects, which have not
received the completion certificate prior to the commencement of the Act should also
come under the purview of the Act and they shall get the project registered with the
regulatory authority of the State within three months from the date of
commencement of Act making it amply clear that all under construction projects are
needed to be registered. In this context, the Committee feel perturbed from the
frequently appearing reports in the media that in some States particularly in Uttar
Pradesh, Haryana and Gujarat, the same is not being adhered to and the
developers/builders are resorting to taking partial completion certificates and
handing over the flats to the applicants without fulfilling the obligatory requirement
of handing over the flats in complete shape. According to the media reports, Haryana
and Uttar Pradesh’s RERA Rules have saved a majority of the ongoing real estate
projects in NCR outside the ambit of real estate law as these States have excluded
ongoing projects from registration. Similarly, in Gurugram, a large number of flats
under various stages of construction or completion, have either received occupancy
certificate or have received part-completion (unoccupancy on paper). This is
resulting in home buyers getting delayed possession of their flats because of the
violation of main Act by these States. Further, there is a tendency among
builders/developers to develop a specific society or project in phases resulting in
buyers getting entrapped in the deal, though RERA Act very clearly says that where
the real estate project is to be developed in phases, every such phase shall be
considered a standalone real estate project, and the promoter shall obtain
registration under this Act for each phase separately.
 In the opinion of the Committee the builder/developer is supposed to give
possession of the flat only after completion of all facilities like finishing work, water
supply, sewerage disposal, electricity, installation of generators, operational lifts and
common entry-exit areas etc. The Committee feel that these essential requirements
cannot be overridden by resorting to the practice of part-completion certificate as
the same tantamount to violation of RERA Act and also serves as an escape route to
the builder/developer from fulfilling the requirement of registration besides resulting
in enormous mental agony and financial hardship to the buyers who had invested
their hard earned money for a living. The Committee feel such kind of malpractices
should not go unchecked as the purpose of establishing a RERA act will only be
served if it is implemented in its entirety by all the stakeholders. The Committee,
therefore, strongly recommend that the Government must take all possible remedial
measures for ensuring all such ongoing projects are registered and executed under
the provisions of RERA Act in order to extend the stipulated benefits to the home
buyers under the RERA. The Committee further recommend that the provisions of the
RERA Act should be uniformly applicable all across the country and any flouting of
norms is to be severely dealt with under the penal provisions of the RERA Act for
ensuring that the developers and the builders timely complete the project in all
respects and hand over possession of flats/plots to home buyers and saving them
from mental agony, harassment , cost overrun etc. at the hands of the builders/
developers. In this context, the Committee desire that the Ministry may also ask the
States to amend / formulate their Rules by including the definition of 'ongoing
projects' for doing away with any kind of ambiguity.

Recommendation No. 5
 Awareness Programme

The Committee note that public are not fully aware of the Real Estate
(Regulation & Development) Act, 2016. In this regard, Committee have been informed
that the Government are planning to come out with advertisements on the Act to
create awareness among the public and making an endeavour to attend as many
public functions as possible on the subject. The Committee are of the opinion that
more efforts are needed to give wider publicity to this Act highlighting the requisite
formalities, rights and duties of all the stake holders involved in any particular
scheme. The Committee, therefore, urges the Ministry that special
measures/mechanisms be put in place including organising of awareness
programmes to help the public to gain knowledge about their rights. The Committee
also feel that the Central Advisory Council could be entrusted with the task of
implementation of the awareness programmes. All appropriate Governments should
also take action in this regard.
Recommendation No. 6

New Delhi; DILIPKUMAR MANSUKHLAL GANDHI

Chairperson
August, 2017 Committee on Subordinate Legislation
Sravana, 1939 (Saka)
 MINUTES OF THE TWELFTH SITTING OF THE COMMITTEE ON
SUBORDINATE LEGISLATION (2016-2017)

The Twelfth sitting of the Committee (2016-2017) was held on Wednesday, the
26th April, 2017 from 1000 to 1230 hours in Committee Room 'D', Parliament House
Annexe, New Delhi.

PRESENT

Shri Dilipkumar Mansukhlal Gandhi Chairperson

MEMBERS

2. Shri Idris Ali

3. Shri Birendra Kumar Chaudhary

4. Shri S.P. Muddahanume Gowda

5. Shri Shyama Charan Gupta

6. Shri Chandulal Sahu

7. Shri Alok Sanjar

8. Shri Ram Prasad Sarmah

9. Shri Ram Kumar Sharma

SECRETARIAT

1. Smt. Sudesh Luthra - Additional Secretary

2. Shri Ajay Kumar Garg - Director
3. Shri Nabin Kumar Jha - Additional Director
4. Smt. Jagriti Tewatia - Deputy Secretary
 WITNESSES

Ministry of Housing and Urban Poverty Alleviation

1. Dr. Nandita Chatterjee : Secretary

2. Shri Rajiv Ranjan Mishra : Joint Secretary (Housing)

3. Shri Satinder Pal Singh : Director (Housing)

4. Shri Sailesh Jogiani : Under Secretary (Housing)

5. Shri Nagendra Goel : Legal Adviser

2. At the outset, the Chairperson welcomed the Members of the Committee. Thereafter,
representatives of the Ministry of Housing and Poverty Alleviation were called in. The
Chairperson then welcomed the representatives of the Ministry of Housing and Poverty
Alleviation to the sitting of the Committee and also drew their attention to Direction 55(1) of
the Directions by the Speaker regarding confidentiality of the proceedings. The Committee
then had a briefing by the representatives of the Ministry of Housing and Poverty Alleviation
on the dilution and tardy implementation of the Real Estate (Regulation and Development)
Act, 2016 by various States and Union Territories, establishment of Real Estate Regulatory
Authority and Appellate Tribunal, appointment of interim Regulator etc.

3. The representatives of the Ministry in the beginning made a power point presentation
on the subject and briefed the Committee about salient features of the Act, status of
notification of various sections of the Act and their implementation etc. Thereafter, the
Committee deliberated on various issues broadly covering aspects such as non-notification
of some of the sections of the Act, status of Rules framed by various States/Union
Territories, publicity of the provisions of Act/Rules, Real Estate Regulatory Authority and
Regulatory Tribunal, affordable housing scheme, dilution of Rules by various States/Union
Territories, procedure regarding registration of the projects, penal provision in case of non
registration etc.

4. The representatives of the Ministry furnished clarifications to the queries raised by

the Committee. On some of the points, the information on which was not readily available
with the representatives of the Ministry, the Chairperson asked them to furnish written
replies to those points within 15 days to the Lok Sabha Secretariat.

5. The Chairperson then thanked the representatives of the Ministry for presenting their
inputs on the subject before the Committee.

6. The witnesses then withdrew.

7. Thereafter, the Committee decided to undertake study visit during the last week of
May, 2017 / first week of June, 2017.

8. The verbatim proceedings were kept on record.

The Committee then adjourned.

EXTRACTS FROM MINUTES OF THE NINETEENTH SITTING OF THE COMMITTEE ON
SUBORDINATE LEGISLATION (2016-2017)
___
The Nineteenth sitting of the Committee (2016-2017) was held on Friday, the
4thAugust, 2017 from 1500 hours to 1600 hours in Chairperson’s Chamber, Room No.
146, Third Floor, Parliament House, New Delhi.

PRESENT

Shri Dilipkumar Mansukhlal Gandhi Chairperson

MEMBERS

2. Shri Idris Ali

3. Shri Birendra Kumar Chaudhary
4. Shri Shyama Charan Gupta
5. Shri Jhina Hikaka
6. Shri Janardan Mishra
7. Shri Prem Das Rai
8. Shri Chandulal Sahu
9. Shri Alok Sanjar
10. Shri Ram Prasad Sarmah
11. Adv. Narendra Keshav Sawaikar
SECRETARIAT
1. Smt Sudesh Luthra - Additional Secretary
2. Shri Ajay Kumar Garg - Director
3. Shri Nabin Kumar Jha - Additional Director
4. Smt Jagriti Tewatia - Deputy Secretary
2. At the outset, the Chairperson welcomed the Members to the sitting of the Committee.
The Committee then considered the following draft Reports:-

(i) XX XX XX
(ii) Draft Twenty-first Report on the Rules / Regulations framed under the Real
Estate (Regulation and Development) Act, 2016.
(iii) XX XX XX
(iv) XX XX XX

3. After deliberations, the Committee adopted the same without any modification. The
Committee also authorized the Chairperson to present the same to the House.
The Committee then adjourned.

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**Omitted portion of the Minutes are not relevant to this Report