Illegal Structures to Face Demolition: Bombay HC Directs Strict Action Against Unauthorized Constructions

Bombay High Court in a significant judgment addressed systemic lapses in Maharashtra's real estate sector, particularly the submission of forged documents for project registration under the Real Estate (Regulation and Development) Act, 2016 (RERA). The Court directed the Maharashtra Real Estate Regulatory Authority (MahaRERA) and other state agencies to implement a more integrated and transparent verification process.

The judgment reflects on key statutory mandates under RERA, emphasizing accountability and transparency in real estate project approvals. It also provides a roadmap for stakeholders to address fraudulent practices that undermine homebuyers' trust.

"RERA's Role in Ensuring Verified Real Estate Practices Is Central to Consumer Protection"

The petitioner, an architect, alleged non-compliance with RERA provisions by developers in Kalyan and Ambernath Talukas, particularly the submission of forged commencement certificates. The plea highlighted approximately 27 villages affected by unauthorized constructions, urging the Court to direct the State and MahaRERA to adopt stringent verification measures for project approvals.

The Court examined several key legal questions:

The enforcement of Sections 3, 4, and 5 of the RERA Act, mandating developers to submit authenticated commencement certificates for registration.

MahaRERA’s powers under Sections 7 and 34 to revoke registrations and recommend systemic reforms.

The integration of local authority databases with MahaRERA to prevent fraudulent document submissions.

The Court underscored that RERA's primary objective is to safeguard homebuyers by ensuring the authenticity of project documentation. Section 4(2)(c) mandates authenticated commencement certificates, and Section 7 allows for revocation of registrations obtained fraudulently. MahaRERA’s recent revocations for 64 projects based on forged documents were noted as positive steps.

The Court directed the integration of municipal databases with MahaRERA's platform by March 2023 to allow real-time verification of certificates. It noted that 454 local bodies had commenced such integration, though 26 planning authorities were yet to comply.

The Court commended enforcement measures, such as demolitions and freezing of bank accounts linked to fraudulent projects. It directed authorities to complete demolitions of identified illegal structures within three months.

The Court refused to mandate a statewide re-scrutiny of all RERA registrations, citing the absence of prima facie evidence for widespread fraud. It stressed that petitioners must provide specific instances to warrant such investigations.

Mandatory Integration: Municipalities and MahaRERA must integrate their systems within three months.

Immediate Publication: Certificates must be uploaded online within 48 hours of issuance until integration is complete.

Verified Registrations: MahaRERA must verify all commencement certificates before approving new project registrations.

Demolition Enforcement: Authorities are to ensure timely removal of illegal structures with police assistance.

Monitoring Mechanisms: Regular compliance checks on the transparency measures mandated under RERA.

The judgment reiterates the judiciary's commitment to enforcing RERA’s consumer protection framework while holding developers and regulatory authorities accountable. By mandating integration and verification measures, the Court aims to enhance transparency and curb fraudulent practices in the real estate sector.

Date of Decision: November 19, 2024