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The provisions of rera section 6 regarding the extension of real estate project registrations due to force majeure or reasonable circumstances. Explanations of the section, relevant rules, and a court case that challenged the constitutionality of the provision. It also touches upon the balance between the interests of promoters and allottees in the context of the real estate sector.
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Shyam Sunder Legal Intern MJ & Partners RERA- Section 6 Bare provision: - The registration granted under section 5 may be extended by the Authority on an application made by the promoter due to force majeure, in such form and on payment of such fee as may be specified by regulations made by the Authority: Provided that the Authority may in reasonable circumstances, without default on the part of the promoter, based on the facts of each case, and for reasons to be recorded in writing, extend the registration granted to a project for such time as it considers necessary, which shall, in aggregate, not exceed a period of one year: Provided further that no application for extension of registration shall be rejected unless the applicant has been given an opportunity of being heard in the matter. Explanation. - For the purpose of this section, the expression "force majeure" shall mean a case of war, flood, drought, fire, cyclone, earthquake, or any other calamity caused by nature affecting the regular development of the real estate project. Two types of extensions are provided in the section 6-
Neelkamal Realtors Suburban Pvt. Ltd. v. Union of India, 2017 SCC OnLine Bom 9302 (Before Naresh H. Patil and R.G. Ketkar, JJ.) The first proviso to Section 6 has been challenged by the petitioners as being contrary to Articles 14 and 19(1)(g). The court held in its finding that this provision required serious attention. It is possible that a genuine promoter, after making good efforts may fail to complete the project in time due to reasons stated by the petitioner (already mentioned). But again, on behalf of UOI it was held that if the provision was made directory instead of mandatory then it would open floodgates for promoters and allottees to delay the project in one way or another for self-interests. The Court held in such cases the entire purpose of RERA would get defeated. The court held that this provision cannot be approached one sidedly and the aggregate scheme is to protect private transactions in the Real Estate sector and keeping this in mind, the aggregate Act has to be taken into consideration for preserving the interests of both parties. The provision of section 7 refers to revocation of registration. This provision confers wide powers on the authority to regulate conduct of the promoter but only in deserving cases, cancel the registration. The authority shall be entitled to take into consideration reasons and circumstances and give an opportunity to both parties to be heard. The court found that a balanced approach should be adopted, keeping in mind the purpose of the enactment. The court held that just on the basis of plea of the petitioners, this provision cannot be held to be violative of Art. 19 (1) (g) and Art. 14.A and therefore, harmonious and balance construction of the provisions shall suffice to uphold the constitutionality.