The West Bengal Real Estate Appellate Tribunal (REAT) by its order has referred to the provisions of the Real Estate (Regulation and Development) Act, 2016 (RERA) and limited the extension period for the housing project's registration to just one year. The Tribunal's decision comes after the developer's request for an additional extension of the three-month period, where he cited the Covid-19 pandemic and court cases as the reasons.
Essense, the project by Periwal Constructions LLP, was the source of the dispute and was first registered by the West Bengal Housing Industry Regulatory Authority (WBHIRA) from September 6, 2019, to June 30, 2024.
The project had several interruptions during its period. The Howrah Municipal Corporation (HMC) stopped the construction in September 2022 citing the need for the regulatory compliance check. However, the Supreme Court overturned the decision in September 2024.
Due to these extraordinary events, Periwal Constructions sought an extension of the project registration term from March 31, 2025, to December 31, 2026.2 the West Bengal Real Estate Regulatory Authority (WBRERA) also approved the extension. But this decision was opposed by Suman Bhaumik, a project allottee, who filed a notice of appeal raising the issue that the extension went beyond the one-year limit as per Section 6 of the RERA Act.
The tribunal comprising Chairperson Justice Rabindranath Samanta and Administrative Member Subrat Mukherjee thoroughly examined the Supreme Court ruling 2021, which declared the West Bengal Housing Industry Regulation Act, 2017, unconstitutional and also looked into Section 6 of the RERA Act. The tribunal noted that the first part of Section 6 speaks about extensions being allowed in indispensable situations without indicating any time limit, however, the second part of the same section limits extensions to one year only. Hence, the tribunal ordered a change in the WBRERA directions limiting the extension of registration to March 31, 2026.
The tribunal recognized the delays of the project due to the pandemic and legal interventions, but it rejected Bhaumik's request for compensation and also penalties against the promoter. The reasons put forward were that there had been no formal complaint made under Section 31 of the RERA Act and no previous decision by the regulatory authority which is a precondition to the tribunal awarding compensation.
The tribunal's decision reaffirms the permissible legal limits of a project registration extension under RERA even if situations like the current pandemic had caused delays which couldn't have been avoided. Industry insiders say that this may become a benchmark for other cases that are waiting for a decision in West Bengal thus stressing the importance of developers closely following the statutory timelines and obtaining the necessary regulatory approvals on time.
Background:
The goal of the Essense project by Periwal Constructions LLP was to get the West Bengal Housing Industry Regulatory Authority's approval by registering in September 2019. It could not do so since the outbreak of the Covid-19 viral infection and a series of legal disputes delayed the project. In September 2022, the Howrah Municipal Corporation stopped the construction, but the Supreme Court annulled the order in September 2024. Due to these changes, the developer requested an extension of the project registration, turning the issue into a legal challenge according to the sixth section of the RERA Act.
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