Real Estate (Regulation and Development) Act (hereinafter referred to as the “Act’) got the assent of the President of India on June 25, 2016, and the major provisions of the Act, including Section 3, came into effect on May 1, 2016 and May 1, 2017.
The proviso to Section 3 of the Act states that “for projects that are under way on the date of commencement of this Act and for which a completion certificate has not been issued, the promoter shall make an application to the Authority for registration of the said project.”

Bare perusal of this proviso makes it mandatory for an ongoing project to be registered on the date of commencement of the Act, thereby giving retrospective effect to the provisions of the Act, qua the project only.

Further, in terms of Section 5 of the Act, the promoter has to obtain an occupation or completion certificate within the time line, as declared by it under Section 4 of the Act for grant of registration.

Rera Consultant Delhi provide legal advise on any query related to RERA.

However, the Act is completely silent over the status of the timeline written in a private agreement to sell or purchase, entered into between the promoter and an allottee, for a unit in an on-going project, which was entered into between the promoter and the allottee before the date of commencement of the Act.

Section 18(1)(a) of the act specifically states that a claim for the return of an amount can be filed by an allottee “if the promoter fails to complete or is unable to give possession of an apartment, plot, or building: – in accordance with the terms of the agreement for sale or, as the case may be, duly completed on or before the date specified therein;

Further, Section 18(2) of the Act states that the claim of an allottee against the promoter shall not be barred by any limitation provided under any law for the time being in force, provided the said claim is for the payment of compensation for any loss caused to the allottee due to defective title on land on which the project is being developed or has been developed.

Apart from that, Section 88 of the Act says that “Application of other laws is not barred. The provisions of this Act shall be in addition to, and not in derogation of, the provisions of any other law for the time being in force.”

Considering all the aforesaid provisions of the Act, in a hypothetical situation where a promoter entered into an agreement to sell a unit to an allottee in the year 2010, and in terms of the said agreement, the unit was assured to be completed in the year 2012, but the project is delayed (not abandoned), Further, the promoter has failed to complete the unit and project to date, and the promoter has given the date of completion of the project at the time of registration with RERA as 2020. In an ideal situation, a cause of action arose against the promoter and in favor of an allottee in 2012, and no new cause of action arose thereafter. However, the allottee remains silent over his right to sue the promoter to date. Now, after 8 long years, in the year 2020, the allottee approaches RERA for a refund of his money. The question is whether the claim of the allottee filed before the RERA is time barred or not, which is otherwise barred in terms of Article 27 of the Limitation Act of 1963.

Similar issues arose when the Insolvency and Bankruptcy Act Code, 2016 (I&B Act) came into effect on May 28, 2016. On the commencement of the I&B Act, various creditors, be they financial or operational, started approaching the National Company Law Tribunal (NCLT) against their debtors for their claims, which were otherwise barred by limitation. The said creditors started claiming that the I&B Act, now in effect, has given a fresh cause of action to such time-barred claims.

However, the controversy came to a rest when the Hon’ble Supreme Court of India, in the matter of B.K. Educational Services Private Limited vs. Parag Gupta and associates (Civil Appeal No. 23988 of 2017), held that the Limitation Act, 1963, will apply to such acts that do not have a specific provision of limitation under the Act.

It is a matter of fact that the majority of projects that were on-going and registered with RERA on its commencement had different timelines to complete their on-going projects in comparison to the timelines given by them to individual allottees in their agreements to sell, entered into before the commencement of the Act.

Therefore, taking such cases into consideration, the controversy arises as to whether, if the cause of action in favor of an allottee to file a complaint before RERA under Section 31 arises when the promoter has breached the time line given to an allottee to complete the project in the agreement to sell, such cases are time barred or not in terms of the provisions of the Limitation Act, 1963. However, if the time line given by the promoter to complete an ongoing project at the time of registration is to be taken into consideration, then an allottee can approach RERA before the lapse of the said time line. If so, then the interest awarded in the form of a penalty by RERA shall be w.e.f. from RERA coming into effect or from the lapse of the date given by the promoter to complete the project at the time of registration with RERA.