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(Authored by Anil Nair) The Maharashtra Legislative Assembly recently passed the Maharashtra Housing (Regulation and Development) Bill. This is the first such Bill to be passed by any state, which sets up a housing regulator to regulate property transactions. The Bill seeks to set up a Housing Regulatory Authority to provide for relief to flat purchasers against sundry abuses, malpractices and difficulties related to the construction, sale, management and transfer of flats. According to news reports, the government felt that existing laws were not effective in protecting the interests of the flat purchasers and allowed the promoters to avoid statutory obligations imposed on them. The Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) Act, 1963 did not provide for an effective implementing arm for its various statutory provisions, as the buyers could only approach consumer forum or civil court for acts of omission or commission regarding its provisions. The current Bill passed by the Maharashtra Assembly proposes to repeal the 1963 Act. As per the Statement of Objects and Reasons of the Bill, the Regulatory Authority will strive to encourage growth and promotion of a healthy, transparent, efficient and competitive real estate market. The Bill specifies several conditions to be fulfilled by the developer to further transparency and fairness. All projects proposing to develop more than four flats or of land area exceeding 250 square meters have to submit and update details of the project on the website of the Housing Regulatory Authority. Developers would be required to disclose detailed information regarding the project including:
Failure to give possession of the flat on the agreed date would require repayment of the full amount paid by the buyer with interest. The Authority would also be empowered to penalise the developer up to an amount of one crore rupees for non-compliance with provisions in the Bill. Among other initiatives to assist the real estate industry, the Housing Regulatory Authority would promote rating of projects and of promoters, by the association of promoters, to improve the confidence level of investors and consumers through self-regulation. The full text of the Bill is available on the Government of Maharashtra website.
The Gujarat High Court is hearing an important case related to the appointment of the Lokayukta in Gujarat. The issue is whether the Governor can appoint the Lokayukta at his discretion or whether appointment can be made only upon obtaining the aid and advice of the Council of Ministers led by the Chief Minister. During the period 2006-2010, the Gujarat state government submitted names of two prospective appointees for the post of Lokayukta to the Governor. But no appointment was made during this period. On August 26, 2011 the Governor appointed retired judge R.A.Mehta as Lokayukta, whose name was not among those submitted by the state government. The Gujarat state government moved the High Court to quash the appointment on the ground that the Governor made the appointment without the aid and advice of the Council of Ministers led by the Chief Minister. Section 3 of the Gujarat Lokayukta Act, provides in part that “the Governor shall by warrant under his hand and seal, appoint a person to be known as Lokayukta”. The Governor acted under this section to make the appointment of Lokayukta. However, the state government has argued that section 3 has to be understood in light of Article 163(1) of the Constitution. Article 163(1) provides that the Governor shall be aided and advised in the exercise of his functions by a Council of Ministers with the Chief Minister at the head. Thus, as per this line of argument, the Governor violated the provision of Article 163(1) when she failed to take the aid and advice of the Council of Ministers led by the Chief Minister before exercising the function of appointing the Lokayukta. At the time of writing this post, news reports suggested that the two judges hearing the case are divided over the issue. It remains to be seen whether this issue will be referred to a larger bench. The outcome of this case could have wider implications on the constitutional role of governors if it sets guideposts on the extent to which they act independent of the advice of the council of ministers.