Orissa HC Directs State Govt To Give Wide Publicity To RERA Act

Cuttack: The Orissa High Court has directed the state government to give wide publicity to the provisions of the said RERA Act, 2016 in order to prevent unnecessary litigations arising out of builder-buyer relations.

Justice SK Panigrahi of the High Court issued the direction while granting bail to the managing director and two others of a real estate company who were arrested for not returning an investment amount to an investor.

As per the case, Debasis Dagara had invested Rs 1.89 crore in B.N. Infra Services Ltd. He had made the payment in two instalments in 2015 and 2016. But the company did not return the amount as per agreement.

Following this, he lodged an FIR before the SP, Economic Offence Wing (EOW), Bhubaneswar against Mahasweta Biswal, MD of the real estate company, Binapani Biswal, director and Biswa Bhusan Biswal, the husband of Mahasweta Biswal who was managing the affairs of the company.

The EOW registered a case against three accused for the offences under Sections 406/420/120-B of the IPC read with Section 6 of the Odisha Protection of Interests of Depositors (OPID) (in Financial Establishments) Act, 2011.

After the three accused were arrested on December 1, 2019, they applied for bail before the Trial Court but was rejected on January 9, 2020. Later, they moved the High Court for bail.

After hearing the contention of the counsels of both parties, Justice Panigrahi held that the Act in question (OPID Act) was never intended to real estate transactions simpliciter and doing so is nothing but misplaced or misadventurous experimentation with the Act. It is, in essence, a social protection enactment and its application to real estate transactions will lead to absurd and unintended consequences.

Stating that the case is a classic example of a transaction gone awry which has been strenuously given the colour of criminal offence, Justice Panigrahi said, “The relevant law tailor-made for such situations would be the Real Estate (Regulation and Development) (RERA) Act, 2016 which caregorically caters to such situation. However, this court laments to note that the provisions of the said Act which, despite being a well thought out code by itself, is not being resorted to. Instead, such circuitous proceedings are being resorted which is neither to the benefit of homebuyers nor to the real estate sector at large.”

The provisions of RERA Act, in fact, provide for umpteen fail-safe mechanisms to prevent most of the maladies associated with such cases, Justice Panigrahi said.

“It is thus suggested that the state government will do well to give wide publicity to the provisions of the said RERA Act, 2016 in order to injuct any such unnecessary litigations arising out of builder-buyer relations,” the judge said.

“The state will do well to ensure that the Regulatory Authority functioning under such an Act must be aided by all means possible. The state will also give wide publicity to the provisions of the Act to enable the lay and laity to seek refuge under the appropriate law,” Justice Panigrahi said.