Secured Creditors Are Amenable To RERA Jurisdiction

1. INTRODUCTION

A divisional bench of the Rajasthan High Court ("Rajasthan HC") recently in a writ petition¹ clubbed over seventy different petitions that dealt with certain key issues involving: (i) the retrospective application of Real Estate Regulatory Act, 2016 ("RERA Act"); (ii) the conflict between RERA Act and Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("SARFAESI Act") and (iii) the authority of Real Estate Regulatory Authority ("RERA") to issue directions to banks/financial institutions who claim security interest over the properties of home-buyers. The Rajasthan HC held that complaints against banks can be filed before the RERA if the bank (lender) has taken possession of a project as a secured creditor pursuant to the default of the promoter in paying its dues. The Rajasthan HC has also held that in the event of conflict between the RERA Act and the recovery of proceedings of the bank under the