LAW RELATING TO REAL ESTATE

ASSIGNMENT

ON
“EVALUATING THE ROLE OF THE INDIAN JUDICIARY IN RESOLVING”

FOR

ENDTERM SUMMATIVE ASSESSMENT

SUBMITTED TO:
ASSISTANT PROF. PRIYANKA TAKTAWALA

PREPARERD BY:
KUSHAL KUMAR
SEMESTER-IX-A
ENROLLMENT NO: 20190401055

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 Index

Index ............................................................................................................................................................ 2
Abstract ...................................................................................................................................................... 3
Research questions .................................................................................................................................. 4
Objectives ................................................................................................................................................... 4
Research methodology ........................................................................................................................... 4
Introduction ............................................................................................................................................... 5
Role of Indian Judiciary in Resolving Real Estate Disputes ...................................................... 6
CONCLUSION .............................................................................................................................................. 8
Bibliography .............................................................................................................................................. 9

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 Abstract

Given the importance of the real estate market in India, both in terms of supply and demand,
disputes are inevitable and will undoubtedly disrupt and transform the industry in many ways
related to the fundamental institutionalisation of the real estate business. It is of the highest
importance for the legal community to implement a system to deal with such conflicts, which
might range from minor to extremely insignificant.

Examining the development of real estate laws, the difficulties plaintiffs encounter, and the
effectiveness of the Indian legal system, this research examines the role of the Indian court in
settling real estate disputes. This study analyses the influence of court decisions on the real
estate market by reviewing pertinent cases and legal rules. It highlights the positive and
negative aspects of these rulings and lastly, the focus has been on the role of the judiciary in
providing alternate dispute resolution mechanism in resolving real-estate disputes.

Keywords: real estate; Indian Judiciary; Alternate Dispute Mechanism; Legislative Reforms;
RERA

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 Research questions

1. Throughout India's history, how has the country's judicial system shaped real estate laws?

2. Which important court rulings have changed the way real estate disputes in India have been
resolved?

3. When it comes to real estate issues, how effective are mediation and arbitration as
compared to the more conventional method of going to court?

Objectives

1. To chart the development of India's real estate laws across time, noting important legislative
moments and court rulings.

2. In order to better understand the real estate laws in India and how to resolve disputes, it is
necessary to review important court rulings.

3. The goal of this study is to evaluate the merits and drawbacks of various forms of alternative
dispute resolution as they pertain to property ownership conflicts.

Research methodology

1. To learn how India's real estate laws have changed throughout the years, it's important to
study the relevant academic papers, case law, and historical records.

2. Analyse real estate issues by looking at important cases and court announcements, drawing
conclusions about legal precedents and interpretations.

3. Review and analyse the content and implications for dispute resolution of recent real estate-
related legislation revisions and amendments.

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 Introduction

An integral part of India's economic development, the real estate market has experienced
revolutionary change due to the country's rapid urbanisation and unparalleled economic
growth. Its importance in the larger context of India's economy is highlighted by the sector's
inherent connection to GDP growth, job creation, and infrastructure improvement. 1 There has
been an equally dramatic increase in the variety and complexity of real estate conflicts, which
has happened in tandem with this astounding expansion. Judicial vigilance and responsiveness
are required to navigate the complex web of laws that govern real estate deals, contracts, and
regulatory compliance.

It is emphasized that on an average, the time period taken by the Judiciary in resolving the
disputes of real-estates nature has taken more than 20 years due to its complex nature 2 and the
lack of openness from the party which can be allowed in other dispute resolution mechanism.

With this background, the study delves into a thorough analysis of the function of the Indian
judiciary in negotiating the complex landscape of real estate dispute settlement. At its core, this
analysis is about the judiciary's role in defining the boundaries of real estate law and
government, rather than its role as an adjudicating authority. Judgement has a multi-faceted
role in real estate, from shaping the sector's direction to resolving disputes and delivering
justice, all of which are impacted by the sector's intricate web of legal, economic, and social
elements.

1
“Searle, Llerena Guiu. "Conflict and commensuration: contested market making in India's private real estate
development sector." Contesting the Indian city: Global visions and the politics of the local (2013): 65-90.
2
Bibek Debroy & Suparna Jain, Strengthening Arbitration, and its Enforcement in India – Resolve in India,
https://smartnet.niua.org/sites/default/files/resources/Arbitration.pdf accessed on 20 November, 2023.

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 Role of Indian Judiciary in Resolving Real Estate Disputes

Before delving into the role of Indian Judiciary, it is necessary to get an idea regarding the
mechanism in place to resolve real estate disputes. The evolution of real estate laws in India
traverses a transformative trajectory from the pre-independence Zamindari system to
contemporary legislative reforms. Pre-independence, the Zamindari system entrenched land
disparities, favouring elite landowners. Post-independence reforms dismantled this system,
implementing land ceilings, tenancy protections, and redistributive measures to empower
cultivators. The subsequent economic liberalization in the 1990s propelled urbanization but
also brought about complex real estate disputes.

As far as the legislations pertaining to solving the real estate disputes are concerned, it is largely
unregulated. The respite to the homebuyers is provided under “the Consumer Protection Act,
1986”, however the same leads to the long-lasting litigations. 3 To overcome this, the enactment
of “the Real Estate (Regulation and Development) Act, 2016.”[“REA”] is done. The REA's
principal goal is to protect buyers' rights and provide them a fast way to resolve disputes. The
Real Estate Regulation Authority ('RERA')4 and the Adjudicating Officer 5 are two forums that
the REA has set up to help achieve this goal.

While, the legislation did play their role in developing a robust mechanism to overcome the
lengthy and time-consuming disposal of real estate disputes, it is worth looking at the way the
same is being handled by the Indian Judiciary. The Indian judiciary plays a complex and crucial
role in real estate issues, shaping the law, interpreting statutes, and setting precedents that affect
real estate disputes nationally and internationally. Within the complex web of law, the judiciary
is responsible for more than just making decisions; it also interprets laws, protects property
rights, and ensures justice.

Real estate contracts have had their boundaries defined in large part by judicial interventions.
matter law from 2011 dealt with real estate fraud in the matter of Suraj Lamp & Industries Pvt.
Ltd. v. State of Haryana.6 Due diligence in real estate transactions is paramount, as this ruling
underlined, and a clear chain of title is essential. By taking a stand in these types of instances,

3
E.T. Realty, Homebuyers Can Now Move NCDRC Directly Against a Builder, October 13, 2016, available at
http://realty.economictimes.indiatimes.com/news/regulatory/homebuyerscan-now-move-ncdrc-directly-against-
a-builder/54823235, accessed on 20 November, 2023.
4
The Real Estate (Regulation and Development) Act, 2016, s20.
5
The Real Estate (Regulation and Development) Act, 2016, s2(a).
6
Suraj Lamp & Industries Pvt. Ltd. v. State of Haryana, (2012) 1 SCC 656.

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the judiciary promotes honesty and openness in the real estate market while simultaneously
strengthening the validity of property transactions.

Both instances of illegal construction and those involving compliance with building laws place
a heavy burden on the judiciary. The authority of local governments to tear down illegal
buildings was defined by the court in the case of Lucknow Development Authority v. M.K.
Gupta7 (1994). This instance highlighted the significance of following regulations and making
sure that development follows all the rules. Decisions made by the judiciary in these cases help
to keep urban planning and development honest and serve as a warning against dishonest
practises.

The courts have also been instrumental in interpreting and implementing environmental
regulations, which has been crucial in resolving the intricacies of real estate conflicts.
Environmental law reached a turning point with the 1986 case of M.C. Mehta v. Union of
India.8 Although this lawsuit did not pertain specifically to real estate, it did lay the groundwork
for PIL and highlighted the role of the judiciary in protecting environmental interests. In
subsequent decisions, the judiciary has attempted to find a middle ground between economic
development and ecological preservation by incorporating environmental concerns into real
estate proceedings, impacting development projects, and moulding the regulatory framework.

While it has already been discussed in various research paper that Alternate Dispute Resolution
[“ADR”] is the best possible manner to handle the real estate disputes as provided in the
literature review, no mention of the role of Indian Judiciary in recognizing the mechanism of
ADR is made. The Indian Supreme Court strongly supported mediation in the case of Salem
Advocate Bar Association v. Union of India 9 ("Salem II"). The first official framework for
mediation was established as a result of the design of model norms and the formation of court
annexed mediation facilities. Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co.
(P) Ltd.,10 a decision of the Supreme Court, further defined the following case types as being
acceptable for alternative dispute resolution:

(i) “any matter involving business, contracts, or trade;

(ii) any matter stemming from a strained relationship, like a marriage;

7
Lucknow Development Authority v. M.K. Gupta, 1994 AIR 787.
8
M.C. Mehta v. Union of India, 1987 SCR (1) 819.
9
Salem Advocate Bar Association v. Union of India, AIR 2005 SC 3353.
10
Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd., (2010) 8 SCC 24.

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 (iii) any matter requiring the maintenance of an existing relationship, like a
disagreement between neighbours or members of a society;
(iv) any matter involving tortious liability, like claims involving motor accidents; and
(v) any matter involving disputes involving consumers.”

Moreover, in regard to the real estate dispute specifically, certain amendments in the
legislations have been suggested by the NITI Aayog Report11 for the preparedness of the same,
various members of the judiciary has been consulted. The changes that have been suggested
are:

a. To gradually roll out mandatory pre-litigation mediation for the dispute categories
which includes real estate disputes.
b. To amend Real Estate (Regulation and Development) Act, 2016 and Rules made
thereunder by the Central Government and State Governments and bring provisions for
mediation and settlement of disputes between developers and allottees though ICT.

CONCLUSION

Finally, the intricate interaction between legal principles, societal expectations, and economic
concerns culminates in the multi-faceted and essential role of the Indian judiciary in settling
real estate disputes. When it comes to real estate disputes, the Indian judiciary has shown itself
to be a strong and effective tool for resolving these complex issues in a fair and equitable
manner. An important part of the judiciary's job is making sure the law is followed. Disputes
frequently emerge in real estate purchases as a result of unclear contracts, problems with title,
or allegations of breach of agreement. The real estate industry relies on the judiciary's careful
interpretation of legal requirements and precedents to resolve disputes and uphold the sanctity

11
NITI Aayog, Designing the future of Dispute Resolution the ODR policy plan for India, <
https://www.niti.gov.in/sites/default/files/2023-03/Designing-The-Future-of-Dispute-Resolution-The-ODR-
Policy-Plan-for-India.pdf> accessed on 20 November 2023.”

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of contracts. A more open and predictable real estate market is the result of this dedication to
legal standards, which in turn inspires trust among all parties involved.

In addition, protecting the rights of property owners and occupants is an important

responsibility of the Indian judiciary. Judgement is a check on arbitrary property seizures and
a means for equitable resolution of disputes among parties with competing claims. In a nation
where land is becoming increasingly scarce due to population increase and fast urbanisation,
this function becomes even more important. By ensuring stakeholders have a legal framework
to protect their interests, the judiciary helps keep the real estate market stable and attracts
investments. The Judgement in real estate disputes also depends on the court's ability to adapt
to changing social mores. Judicial jurisprudence has shown flexibility in response to new
challenges, such as shifting property ownership dynamics and sustainable development. This
flexibility shows that the court is sensitive to modern issues and wants to make sure that its
rulings support larger causes like social justice and environmental preservation.

Although there have been positive developments in the Indian judiciary's handling of real estate
disputes, there are still obstacles to overcome. Constant focus should be given to the case
backlog, limited resources, and the requirement for real estate-specific knowledge. court efforts
to improve the efficiency of real estate dispute settlement can be bolstered by exploring
alternative conflict resolution processes, streamlining procedures, and increasing court
capacity. However, to overcome the same, in the recent times, the efforts is being made by both
the judiciary as well as the legislature to include online dispute resolution to resolve real estate
disputes.12

Bibliography

1. Searle, Llerena Guiu. "Conflict and commensuration: contested market making in

India's private real estate development sector." Contesting the Indian city: Global
visions and the politics of the local (2013): 65-90.

12
Ejaz Kaiser, ‘Chhattisgarh organises India’s first e-Lok Adalat’ (The New Indian Express, 11 July 2020)
accessed 20 November 2023.

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2. Bibek Debroy & Suparna Jain, Strengthening Arbitration, and its Enforcement in India
– Resolve in India
https://smartnet.niua.org/sites/default/files/resources/Arbitration.pdf.
3. Patel, Mukul B., and D. A. Patel. "Empirical Analysis of Real Estate Disputes." Journal
of Legal Affairs and Dispute Resolution in Engineering and Construction 15.1 (2023):
04522037.
4. Ajar Rab, Redressal Mechanism under the Real Estate (Regulation and Development)
Act 2016: Ouster of the Arbitration Tribunal, 10 NUJS L. REV. 1 (2017).
5. Oluleye, Ifeoluwa Benjamin, Abiodun Kolawole Oyetunji, and Mukaila Bamidele
Ogunleye. "Dispute resolution in real estate transactions: Examining factors
determining the selection of strategies used." International Journal of Real Estate
Studies 14.1 (2020): 1-8.
6. eCommittee, Supreme Court of India, ‘Phase II Objectives Accomplishment report as
per Policy Action Plan Document’ (2019).
7. Ejaz Kaiser, ‘Chhattisgarh organises India’s first e-Lok Adalat’ (The New Indian
Express, 11 July 2020).
8. Lebovits, Gerald, and Lucero Ramirez Hidalgo. "Alternative dispute resolution in real
estate matters: The New York experience." Cardozo J. Conflict Resol. 11 (2009): 437.
9. E.T. Realty, Homebuyers Can Now Move NCDRC Directly Against a Builder, October
13, 2016, available at
http://realty.economictimes.indiatimes.com/news/regulatory/homebuyerscan-now-
move-ncdrc-directly-against-a-builder/54823235.
10. Sekhri, Desh Gaurav, and NITI OSD. "Designing the future of dispute resolution: The
ODR policy plan for India." Message posted to< https://www. thehinducentre.
com/publications/policywatch/article34777275. ece/binary/Draft-ODR-Report-NITI-
Aayog-Committee. pdf (2020).

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