Bombay High Court Leaves Challenge To Goa RERA Enforcement Rule Open, Dismisses Sunstar Homes' Pleas

The Bombay High Court at Goa has declined to decide Sunstar Homes' challenge to the validity of Rule 4 of the Goa Real Estate (Regulation and Development) Rules, 2017.

It found that the question had become academic in the facts of the case.

“Though the vires of the provisions of Rule 4 has been challenged before us, in the aforementioned scenario, where the decree has partly been executed, and the proceedings pending under the Land Revenue Code are well within the powers of the Revenue Authorities under sub-section 1 of Section 40 of RERA, We do not propose to enter into the questions raised in challenge to the vires of Rule 4 of the Goa Rules. This would be only an academic matter in the facts of these Petitions, and we leave this challenge to be addressed in an appropriate Petition,” a Division Bench of Justice Valmiki Menezes and Justice Amit S. Jamsandekar observed.

The dispute arose from an order passed by the Goa Real Estate Regulatory Authority against Sunstar Homes. The developer was directed to hand over possession of certain premises to the complainants and pay interest and penalty.

Sunstar Homes challenged the order before the RERA Appellate Tribunal. The appeal was dismissed, and the original RERA order was confirmed.

The developer then approached the High Court through four writ petitions. It mainly challenged the validity of Rule 4 of the Goa Rules.

The challenge concerned the two ways in which RERA orders can be enforced under Section 40 of the Real Estate (Regulation and Development) Act, 2016.

Section 40(1) deals with orders requiring payment of interest, penalty or compensation. These amounts can be recovered as arrears of land revenue.

Section 40(2) deals with directions requiring a person to do something or refrain from doing something. Such directions are enforced in the manner prescribed by the Rules.

Sunstar Homes argued that Rule 4 effectively provided one method for enforcing both kinds of orders. It contended that the Rule required execution before a Civil Court under the Code of Civil Procedure, even for amounts covered by Section 40(1).

The High Court did not decide that challenge.

The complainants had approached the Civil Court under Order XXI of the Code of Civil Procedure and Rule 4 to enforce the possession direction. The Civil Court completed the execution, and possession had been handed over by the time the High Court considered the petitions.

The complainants pursued the interest and penalty separately before the Mamlatdar under the Goa Land Revenue Code, 1971. The Revenue Authorities had quantified the amounts, but those proceedings were still pending.

The court found that the complainants had taken the correct routes for the two parts of the RERA order. The possession direction fell under Section 40(2) and was executed through the Civil Court, while the interest and penalty component under Section 40(1) was pursued before the Revenue Authorities.

The four petitions were dismissed without costs, and the Rule was discharged. The court left the validity challenge to Rule 4 open for consideration in an appropriate petition.

For Petitioner (Sunstar Homes): Advocates Harshad Bhadbhade and Tabitha Liza Tayag Souto.

For Respondent (State of Goa): Additional Government Advocates N. Vernekar, S. Priolkar, T. Gawas and G. Shetye.

For Respondent (Goa Real Estate Regulatory Authority): Additional Government Advocate D. Shirodkar.