Model Builder Buyer Agreement: Top Court permits states to submit their responses to Housing Ministry

The Supreme Court today asked the States to submit their responses to the compendium submitted by the Ministry of Housing and Urban Development on the model builder buyer agreement.

CJI Chandrachud thus ordered that the matter will now be taken up in the last week of March.

When the matter was taken up today, Devashish Bharuka, amicus curiae, informed the Supreme Court that a Module-A has been prepared which may be followed by all states across the country, and another Module-B which may be followed by the states as per their concerns.

Noting that the compendium has been circulated to all the states and industry associations, the bench also comprising Justice Narasimha ordered thus,

"We permit states to file replies before the Ministry of Housing and Urban Development and all such suggestions will be taken into account while developing the common code across the country and the one which states can incorporate."

Last year, a Supreme Court bench of Justices Chandrachud and Bopanna had asked the Centre to prepare a road map for the implementation of a model /uniform builder buyer agreement.

The bench had also asked the amicus curiae and the government to do so, after considering the responses forwarded by the States/Union territories, so that to the extent it is feasible, a model agreement for sale can be uniformly made applicable while leaving a certain degree of flexibility to the individual needs of the States/UTs.

The Supreme Court, in October 2021, issued notice in the plea filed by Ashwini Kumar Upadhyay seeking direction to the Central Government to frame a 'Model Builder Buyer Agreement' and 'Model Agent Buyer Agreement' to infuse transparency, ensure fair play, reduce frauds in the spirit of objects of the RERA Act 2016 and Constitution of India.

The court, in February 2022, directed the Ministry of Housing and Urban Affairs, Government of India to assess whether the rules adopted by the Central Government deviate from the rules notified by the States regarding the Model Builder Buyer Agreement.

Background:

Upadhyay's plea alleged that the injury caused to the public is extremely large because builders, promoters, and agents use arbitrary and one-sided agreement that does not place customers on an equal platform with them.

The plea sought directions from the court to provide compensation to the buyers who suffer losses due to inordinate delays on the part of promoters, builders, and agents.

The plea stated, "There have been many cases of deliberate inordinate delay in handing over possession. Buyers lodge complaints but the police don't register FIRs, citing arbitrary clauses of the agreement."

Upadhyay made the Central Government and governments of all the States and Union Territories along with the Law Commission a party to the litigation stating that none of the States has yet notified and enforced the RERA Act and framed 'Model Builder Buyers Agreement' and 'Model Agent Buyer Agreement' ensuring transparency and fair-play.

Case Title: Ashwini Kumar Upadhyay vs. Union of India & Ors.