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The Supreme Court on Monday has 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 in regard to the Model Builder Buyer Agreement.

A bench of Justice DY Chandrachud and Justice Surya Kant has also directed Advocate Devashish Bharuka to assist the Court in the matter.

The Petition filed by Advocate Ashwini Kumar Upadhyay has stated that the directions are required to ensure accountability and develop a mechanism to weed out the criminal conspiracy for wrongful gain, criminal breach of trust and dishonest misappropriation of buyers money committed by promoters, builders, and agents.

Additional Solicitor General Aishwarya Bhati today submitted that the statutory rules have been framed and placed before the bench for the Union Territories, whereas, several States have notified except a few including the State of West Bengal and other States from the North East region." 

However, Senior Advocate Menaka Guruswamy appearing for the petitioners stated that there has to be a minimum set of guidelines for the protection of the consumers.

The bench, however, suggested Guruswamy to draft a minimum that is required. In addition to this, the bench asked Bhati that "You framed the rules and many had their own rules, have you applied your mind that the State rules are contrary to the one you sent?"

To which Bhati responded stating that "We'll do that exercise of examining the rules of state has the essence of the rules framed by the center."

In furtherance to this, Guruswamy suggested that "There is a central advisory committee, can Niti Aayog not pursue it in a more formal way. They could examine it and then submit a formal report."

The bench noted in its order that "at the present state it is necessary for the court to be apprised that the rules adopted by the Central Government, Whether there are any deviation with the rules notified by the States."

Earlier, the bench had asked Solicitor General Tushar Mehta to look into the matter and seek instructions on the same.

Background:

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

The petitioner has made a party to Central Government and Governments of all the States and Union Territories along with the Law Commission stating that as none of the States till date has notified and enforced RERA Act and framed 'Model Builder Buyers Agreement' and 'Model Agent Buyer Agreement' ensuring transparency and fair-play.

Earlier, the Court had asked Additional Solicitor General KM Nataraj to assist the Court in the plea seeking direction to the Central Government, to frame a 'Model Builder Buyer Agreement' and 'Model Agent Buyer Agreement'. 

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