BENGALURU: In a relief to developers and promoters, the Karnataka High Court quashed a circular issued on September 3, 2020, by RERA-K, mandating a “delay fee” for belated submission of quarterly updates and annual audit statements, without distinction to the scale of the project, the stage of development, or the peculiar circumstances surrounding it.
Justice M Nagaprasanna passed the order while allowing 75 petitions by builders, developers and promoters questioning the impugned circular. The court said if RERA wanted to impose a pecuniary burden on any citizen, however big or small, it cannot be presumed nor can it be implied; it must be through legislation.
If the legislation delegates such power, the delegation must be express, unambiguous and circumscribed within the boundaries of the legislation’s policy. Tested on the anvil of these principles, the impugned circular stands exposed as utterly failing of statutory parentage.
Reliance on Sections 11, 34 and 37 of the Real Estate (Regulation and Development) Act, 2016, by RERA is wholly misplaced. Therefore, from any of these provisions, the “delay fee” cannot be imposed. The circular to impose it is arbitrary, illegal and void.
The petitioners in all these cases become entitled to consequential benefits that would flow from the quashment of the circular. The quashment will not come in the way of legislation or imposition of subject fee in a manner known to law, the court said.