UP-RERA’S RECOVERY CERTIFICATE: A LEGAL TRIUMPH

UP-RERA’S RECOVERY CERTIFICATE: A LEGAL TRIUMPH

Section 40(1) of the Uttar Pradesh Real Estate Regulatory Authority (U.P. RERA) Act establishes a strong mechanism for enforcing financial obligations. Defaulting promoters, allottees, or real estate agents failing to meet obligations face strict consequences. Failure to pay interest, penalties, or compensation converts these liabilities into recoverable arrears of land revenue. The provision mandates clear directives, subjecting defaulters to land revenue recovery proceedings. The recovery citation or certificate becomes a powerful instrument in such cases. This mechanism ensures accountability and compliance within the real estate sector under U.P. RERA.

In consonance with the statutory framework, the issuance of a recovery citation becomes vital to the recovery process. The recovery citation, akin to a legal instrument of consequence, acts as the formal pronouncement by the U.P RERA signaling the commencement of measures to recoup the outstanding amounts as arrears of land revenue. It serves as the official assent for the initiation of proceedings aimed at compelling compliance with the financial obligations delineated under the RERA Act and its attendant legal framework.

As per the UP Revenue Code, 2006, all land, with few exceptions, is subject to assessment and payment of land revenue to the state government annually. Failure to pay by the specified date leads to the unpaid amount becoming an arrear. Section 40 of the RERA Act designates a promoter as a defaulter of land revenue, initiating the recovery process outlined in the Revenue Code. This involves issuing a recovery citation and forwarding it to revenue officials led by the Collector, who recover the arrears following procedures outlined in the Revenue Code and associated Rules of 2016.

Upon the issuance of a recovery citation by the U.P. Real-estate Regulatory Authority (RERA) and subsequent transmission to the Collector, the onus shifts to the Collector to carry out the enforcement in accordance with the procedures delineated in the U.P. Revenue Code of 2006,particularly outlined in Chapter XII spanning Sections 169 to 205. Unpaid arrears of land revenue, lingering beyond the stipulated period as specified in the demand notice, can be pursued for recovery through one or more of the following processes:

  1. Arrest and Detention
  2. Attachment and Sale of Movable Property
  3. Attachment of Bank Account or Locker
  4. Attachment of Land
  5. Lease or Sale of Land
  6. Attachment and Sale of Other Immovable Property
  7. Appointment of a Receiver

 

Upon issuance of the Recovery Citation by U.P. RERA, the Collector forwards it to the relevant Tahsildar, who issues a 'writ of demand 'against the defaulter. The defaulter must appear or make payment within a specified timeframe. Failure to comply may lead to revenue officials initiating recovery proceedings. Revenue officers have the discretion to detain the defaulter for up to 15 days in the Tahsil Lock Up to prompt payment, with exceptions for certain individuals. The decision to detain is made by a Revenue officer of at least Assistant Collector rank, and the arrest warrant is executed by authorized officials.

A Sub-divisional Officer has the authority to attach and sell movable properties of the defaulting promoter, including vehicles, artwork, computers, helicopters, etc., soon after the time limit specified in the writ of demand. Attachment of the defaulter's bank account can be initiated through a garnishee order served on the bank manager. In the case of a rented locker, it shall be sealed in the presence of the manager, who will then prepare an inventory for eventual disposal, following orders from the Sub-Divisional Officer.

As per Rule 24 of the U.P. RERA Rules, 2016, U.P. RERA is duty-bound to conduct execution proceedings promptly when a promoter fails to comply with its order. The process should mirror civil court execution proceedings, with periodic reports sought from the Collector on the progress of recovery certificates.

If after 4 weeks, the District Magistrate deliberately fails to comply with the Recovery Certificate issued by RERA or neglects to respond to the allottee's representation or reminder, the allottee can approach the High Court. Filing a Writ Petition under Article 226 of the Indian Constitution, the allottee seeks a Writ of Mandamus directing the DM to complete the recovery process in compliance with the Recovery Certificate within a specified period. It is crucial to note that moving a representation before the District Magistrate before approaching the High Court is a vital step. The High Court ensures, before issuing the writ, which the petitioner had previously engaged with the concerned authority, ensuring effective and time-bound compliance with the Recovery Certificate. To alleviate buyer harassment, the Hon’ble High Court may issue a Writ of mandamus, directing either U.P. RERA to initiate execution proceedings as per Rule 24 or the Collector to enforce the recovery citation within a specified timeframe.

Get In Touch
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Map footer
1601, Tower A, ATS Bouquet, Sector 132, Noida, Uttar Pradesh.
Phone Footer
+91-7830111116
Email footer
crm@realestatedesk.in
Social Media IconSocial Media IconSocial Media IconSocial Media Icon
Copyright   2024 Real Estate Desk Designed by Drabito Technologies. All rights reserved