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MUMBAI GRAHAK PANCHAYAT Submissions to Hon’ble Governor on Maharashtra Housing (Regulation & Development) Bill 2012 Adv. Shirish V. Deshpande Chairman, Mumbai Grahak Panchayat

Submissions to Hon’ble Governor on Maharashtra Housing (Regulation & Development) Bill 2012

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MUMBAI GRAHAK PANCHAYAT. Submissions to Hon’ble Governor on Maharashtra Housing (Regulation & Development) Bill 2012. Adv. Shirish V. Deshpande Chairman, Mumbai Grahak Panchayat. - PowerPoint PPT Presentation

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Page 1: Submissions to  Hon’ble  Governor  on Maharashtra Housing (Regulation & Development) Bill 2012

MUMBAI GRAHAK PANCHAYAT

Submissions to Hon’ble Governor on

Maharashtra Housing (Regulation & Development) Bill 2012

Adv. Shirish V. DeshpandeChairman, Mumbai Grahak Panchayat

Page 2: Submissions to  Hon’ble  Governor  on Maharashtra Housing (Regulation & Development) Bill 2012
Page 3: Submissions to  Hon’ble  Governor  on Maharashtra Housing (Regulation & Development) Bill 2012
Page 4: Submissions to  Hon’ble  Governor  on Maharashtra Housing (Regulation & Development) Bill 2012

Ref/Ref/ /mgp/2014 /mgp/2014 6 6 thth February February

20142014  APPEAL BY MUMBAI GRAHAK PANCHAYATAPPEAL BY MUMBAI GRAHAK PANCHAYATTO ALL CO-OPERATIVE HOUSING SOCIEITIESTO ALL CO-OPERATIVE HOUSING SOCIEITIESIN THE INTEREST OF FLAT PURCHASERSIN THE INTEREST OF FLAT PURCHASERS Objectionable provisions in theObjectionable provisions in theMaharashtra Housing (Regulation & Development) Bill 2012Maharashtra Housing (Regulation & Development) Bill 2012 Dear Sir/ Madam,Dear Sir/ Madam,Mumbai Grahak Panchayat (MGP) is a registered voluntary consumer organisation engaged in consumer protection and consumer education Mumbai Grahak Panchayat (MGP) is a registered voluntary consumer organisation engaged in consumer protection and consumer education activities for last 39 years. MGP has tackled various consumer protection issues in the interest of consumers.activities for last 39 years. MGP has tackled various consumer protection issues in the interest of consumers.We have carefully studied the We have carefully studied the Maharashtra Housing (Regulation & Development) Bill - 2012Maharashtra Housing (Regulation & Development) Bill - 2012 . We are extremely concerned with certain . We are extremely concerned with certain provisions in the said Housing Bill which has been sent to the Hon'ble President of India for his assent. It is also noteworthy that the Central provisions in the said Housing Bill which has been sent to the Hon'ble President of India for his assent. It is also noteworthy that the Central Government’s Government’s Real Estate (Regulation & Development) Bill - 2013,Real Estate (Regulation & Development) Bill - 2013, which is presently before Rajys Sabha, contains comparatively better which is presently before Rajys Sabha, contains comparatively better provisions. In fact the original Real Estate (Regulation & Development) Bill - 2011 had much better provision of consumer protection.provisions. In fact the original Real Estate (Regulation & Development) Bill - 2011 had much better provision of consumer protection.Some of the objectionable provisions of this Bill are as follows: Some of the objectionable provisions of this Bill are as follows: FLATS-OWNERS IN OLD BUILDINGS GOING FOR RE-DEVELOPMENT DENIED PROTECTION IN THE NEW LAW. (Central Real Estate Bill - FLATS-OWNERS IN OLD BUILDINGS GOING FOR RE-DEVELOPMENT DENIED PROTECTION IN THE NEW LAW. (Central Real Estate Bill - 2013 covers Flat owners undergoing Re-development).2013 covers Flat owners undergoing Re-development). EXISTING PROVISIONS OF IMPRISONMENT FOR BUILDERS DROPPED. (Presently MOFA provides 3 to 5 years imprisonment)EXISTING PROVISIONS OF IMPRISONMENT FOR BUILDERS DROPPED. (Presently MOFA provides 3 to 5 years imprisonment) STATE HOUSING DEVELOPMENT AUTHORITIES (MHADA/CIDCO) EXCLUDED. (Central Real Estate Bill includes them) STATE HOUSING DEVELOPMENT AUTHORITIES (MHADA/CIDCO) EXCLUDED. (Central Real Estate Bill includes them) BUILDERS ALLOWED TO COLLECT 20 % WITHOUT AGREEMENT. (Central Bill allows to collect 10% only). BUILDERS ALLOWED TO COLLECT 20 % WITHOUT AGREEMENT. (Central Bill allows to collect 10% only). HARSH PENALTIES FOR FLAT BUYERS & SOFT TREATMENT FOR ERRANT BUILDERS. (Central Bill soft on buyers & provides heavy HARSH PENALTIES FOR FLAT BUYERS & SOFT TREATMENT FOR ERRANT BUILDERS. (Central Bill soft on buyers & provides heavy penalties for builders)penalties for builders)CEILING OF 15 % ON INTEREST PAYABLE BY BUILDER TO THE FLAT PURCHASER BUT NO CEILING ON INTEREST TO BE CHARGED CEILING OF 15 % ON INTEREST PAYABLE BY BUILDER TO THE FLAT PURCHASER BUT NO CEILING ON INTEREST TO BE CHARGED BY THE BUILDER. (The Central Bill provides similar ceiling)BY THE BUILDER. (The Central Bill provides similar ceiling)

Page 5: Submissions to  Hon’ble  Governor  on Maharashtra Housing (Regulation & Development) Bill 2012

HOUSING REGULATORY AUTHORITY & APPELLATE TRIBUNAL TO BE BOUND BY Civil Procedure Code & Indian Evidence Act WHICH HOUSING REGULATORY AUTHORITY & APPELLATE TRIBUNAL TO BE BOUND BY Civil Procedure Code & Indian Evidence Act WHICH WOULD LEAD TO LONG DELAYS IN DISPOSAL OF COMPLAINTS. (Central Bill specifically mentions that C.P.C. & Evidence Act not WOULD LEAD TO LONG DELAYS IN DISPOSAL OF COMPLAINTS. (Central Bill specifically mentions that C.P.C. & Evidence Act not applicable to Regulatory Authority & Appellate Tribunal which will ensure speedy disposal of complaints. )applicable to Regulatory Authority & Appellate Tribunal which will ensure speedy disposal of complaints. )..We, strongly feel the Hon’ble President should not give his assent to this bill and should return it back to Maharashtra Legislature for re-We, strongly feel the Hon’ble President should not give his assent to this bill and should return it back to Maharashtra Legislature for re-consideration or alternatively let the Real Estate (Regulation & Development) Bill initiated by the Central Government be made applicable to consideration or alternatively let the Real Estate (Regulation & Development) Bill initiated by the Central Government be made applicable to Maharashtra State. Maharashtra State. We are attaching herewith the specimen draft letter to be sent to Hon’ble President with a request to Chairman & Secretary of all co-op housing We are attaching herewith the specimen draft letter to be sent to Hon’ble President with a request to Chairman & Secretary of all co-op housing societies to send this letter to Hon’ble President on their letterheads, preferably with names & signatures of as many society members as possible.societies to send this letter to Hon’ble President on their letterheads, preferably with names & signatures of as many society members as possible.We are sure this collective strength of flat purchasers & society members will persuade President of India to return this anti-consumer Bill to back to We are sure this collective strength of flat purchasers & society members will persuade President of India to return this anti-consumer Bill to back to Maharashtra.Maharashtra.Thanking you,Thanking you, Yours sincerely,Yours sincerely, Shirish V. Deshpande Varsha RautShirish V. Deshpande Varsha RautChairman Head - Advocacy & Campaign Chairman Head - Advocacy & Campaign Encl.: As above Encl.: As above P.S.: P.S.: For more details visit our website For more details visit our website http://mumbaigrahakpanchayat.org . . After sending your letter to President of India, After sending your letter to President of India, kindly inform us on kindly inform us on [email protected]@mumbaigrahakpanchayat.org

Page 6: Submissions to  Hon’ble  Governor  on Maharashtra Housing (Regulation & Development) Bill 2012

Date: Date: Hon’ble President of India,Hon’ble President of India,Rashtrapati Bhavan, Rashtrapati Bhavan, New Delhi - 110 004New Delhi - 110 004Email: [email protected]: [email protected] Subj: Subj: Plea To ReturnPlea To Return Maharashtra Housing (Regulation & Maharashtra Housing (Regulation & Development) Bill -2012 for ReconsiderationDevelopment) Bill -2012 for Reconsideration Hon’ble President,Hon’ble President,We are extremely concerned with certain provisions of the We are extremely concerned with certain provisions of the Maharashtra Housing (Regulation & Development) Bill 2012. Maharashtra Housing (Regulation & Development) Bill 2012. This BillThis Bill is reportedly is reportedly forwarded to you for your assent. forwarded to you for your assent. Following are some of the objectionable provisions in the said Bill which merit your kind attention: Following are some of the objectionable provisions in the said Bill which merit your kind attention: LAKHS OF FLAT- OWNERS IN OLD BUILDINGS GOING FOR RE-DEVELOPMENT DENIED PROTECTION IN THE NEW LAW. LAKHS OF FLAT- OWNERS IN OLD BUILDINGS GOING FOR RE-DEVELOPMENT DENIED PROTECTION IN THE NEW LAW. EXISTING PROVISIONS OF IMPRISONMENT OF ERRANT BUILDERS DROPPED. EXISTING PROVISIONS OF IMPRISONMENT OF ERRANT BUILDERS DROPPED. SOFT TREATMENT FOR DEFAULTING BUILDERS BUT HARSH PENALTIES FOR FLAT BUYERS.SOFT TREATMENT FOR DEFAULTING BUILDERS BUT HARSH PENALTIES FOR FLAT BUYERS. BUILDERS ALLOWED TO COLLECT 20 % WITHOUT ENTERING INTO AGREEMENT WITH NO PROVISION FOR IMPRISONMENT IN CASE BUILDERS ALLOWED TO COLLECT 20 % WITHOUT ENTERING INTO AGREEMENT WITH NO PROVISION FOR IMPRISONMENT IN CASE OF DEFAULT / MIS-APPROPRIATION OF FUNDS.OF DEFAULT / MIS-APPROPRIATION OF FUNDS. STATE HOUSING DEVELOPMENT BOARDS (MHADA / CIDCO ) EXCLUDED FROM THE BILL THEREBY DENYING BENEFIT TO LAKHS STATE HOUSING DEVELOPMENT BOARDS (MHADA / CIDCO ) EXCLUDED FROM THE BILL THEREBY DENYING BENEFIT TO LAKHS OF CONSUMERS BUYING FLATS FROM SUCH STATE HOUSING BOARDS.OF CONSUMERS BUYING FLATS FROM SUCH STATE HOUSING BOARDS. The The Real Estate (Regulation & Development) Bill-2013Real Estate (Regulation & Development) Bill-2013 , which is presently before the Rajya Sabha, contains comparatively better provisions of , which is presently before the Rajya Sabha, contains comparatively better provisions of consumer protection compared to consumer protection compared to Maharashtra Housing Bill-2012Maharashtra Housing Bill-2012. Maharashtra Bill fails to adequately protect consumers from various mal-. Maharashtra Bill fails to adequately protect consumers from various mal-practices of the builders. In fact the original Real Estate (Regulation & Development) Bill – 2011 had much better provision of consumer practices of the builders. In fact the original Real Estate (Regulation & Development) Bill – 2011 had much better provision of consumer protection. protection. We therefore fully supportWe therefore fully support Mumbai Grahak Panchayat’s Petition and URGE YOU TO PLEASE RETURN THE SAID MAHARASHTRA Mumbai Grahak Panchayat’s Petition and URGE YOU TO PLEASE RETURN THE SAID MAHARASHTRA HOUSING BILL- 2012 FOR RE-CONSIDERATION BY THE STATE LEGISLATURE or HOUSING BILL- 2012 FOR RE-CONSIDERATION BY THE STATE LEGISLATURE or alternatively let the Real Estate (Regulation & alternatively let the Real Estate (Regulation & Development) Bill initiated by the Central Government be made applicable to Maharashtra State.Development) Bill initiated by the Central Government be made applicable to Maharashtra State. Yours faithfully, Yours faithfully,

Page 7: Submissions to  Hon’ble  Governor  on Maharashtra Housing (Regulation & Development) Bill 2012

REAL ESTATE (REGULATION & DEVELOPMENT) BILL 2011CENTRAL BILL

MAHARASHTRA HOUSING (REGULATION & DEVELOPMENT) BILL 2012 - STATE BILL

Central Bill expressly proclaims Protection of Consumer Interest as one of its objective

State Bill is silent on Consumer Protection

Bill defines “Allottee” and also includes person who subsequently acquires allotment thru transfer or otherwise. [Sec 2(b)]

Bill does not define “Allottee” at all.

Bill Defines “Interest” [Sec 2(u)] Bill does not define “interest”Bill further provides that “interest” chargeable from allottee shall not be more than the “interest” that Promoter would be liable to pay to the allottee in case of default. [Sec 2(u)]

No such provision in State Bill

“Promoter” includes Housing Authorities and also Housing Societies which construct houses for its members.

State Bill excludes MHADA/BHADA from the purview of this Act. (Sec 54).Bill silent about CIDCO and Housing Societies

Promoter cannot apply for Registration unless he has obtained approval/sanction from the Competent Authority

Promoter can apply for Registration without obtaining such approval/sanction

Promoter has to give declaration that 70 % of the amounts realized from allottees would be deposited in the Scheduled Bank in a separate accountwithin 15 days of its realization [Sec 4(3) (b) (v)] .

No such Declaration required under the State Bill

Real Estate Regulatory authority has powers to revoke the Registration of the Promoter, among other things, also for his adopting Unfair Practices or irregularities

No such power to the Housing Regulatory Authority under the State Bill.Registration can be cancelled only in case agreement deriving his right to develop the real estate is declared invalid by any court of law.

Promoter cannot accept any sum of money unless he enters into written agreement for sale (sec 11)

Promoter allowed to collect 20 % of the sale price without entering into an agreement for sale. (Sec 9)

Amount to be refunded with interest by the Promoter will be a charge on the land & structures thereon [Sec 15(2)]

Such provision which was present in the original draft bill has been mysteriously dropped in the amended Bill (Sec 16)

In case of Promoter’s default, Interest shall be payable from the dates he received such sums. [Sec 15(2)]

Such provision which was present in the original draft Bill has been mysteriously dropped in the amended Bill (Sec 16)

Real Estate Regulator shall take measures to make recommendations to Govt or Competent Authority on protection of interest of allottees.

No such provision in the State Bill

If Promoter fails to comply with Sec 3 he is punishable with imprisonment for term upto 3 year or penalty upto 10 % of the project cost or both

No such imprisonment or even heavy penalty in State Bill.

MUMBAI GRAHAK PANCHAYATDIFFERENCE BETWEEN CENTRAL & STATE HOUSING BILL

Page 8: Submissions to  Hon’ble  Governor  on Maharashtra Housing (Regulation & Development) Bill 2012
Page 9: Submissions to  Hon’ble  Governor  on Maharashtra Housing (Regulation & Development) Bill 2012

ABOUT MUMBAI GRAHAK PANCHAYAT

Largest Registered Voluntary Consumer Organisation since 1975 with Membership of 32,000 families.

Operates unique Distribution System for its Members on “No Loss, No Profit” basis.

Member of Governing Council of Consumers International - London.

Accredited Observer Member of ECOSOC and UNCTAD as a Civil Society Organisation.

Assisting Government of Fiji in drafting Consumer Protection Law and Real Estate Law under EU Project.

Page 10: Submissions to  Hon’ble  Governor  on Maharashtra Housing (Regulation & Development) Bill 2012

ABOUT MUMBAI GRAHAK PANCHAYAT

Recipient of National Award of Government of India for outstanding contribution in Consumer Protection & CFBP Award

for Ethical Practices. Representing Consumer Interest on MERC, CERC, FSSAI,

CGRFs of BEST, TATA Power & MSEDCL. Global recognition as a Role Model for promoting Sustainable

Consumption and Sustainable consumer organization.Complaints on behalf of 800 flat purchasers against the Builder in

the final stage of securing refund + compensation worth Rs 24 crores.

Page 11: Submissions to  Hon’ble  Governor  on Maharashtra Housing (Regulation & Development) Bill 2012

Why Maharashtra Housing (Regulation & Development) Bill

2012 needs to be returned

to the Legislature?

Page 12: Submissions to  Hon’ble  Governor  on Maharashtra Housing (Regulation & Development) Bill 2012

Why The Maharashtra Housing (Regulation & Development) Bill 2012 needs to be returned to

the Legislature?

The Bill dilutes the existing provisions in the Maharashtra Ownership Flats Act (MOFA).

The Bill excludes MHADA / BHADA who are major Promoters / Developers.

The Bill does not specifically include CIDCO which is another major Promoter / Developer.

The Bill fails to achieve its objective of protecting public interest vis-à-vis the Promoters.

Page 13: Submissions to  Hon’ble  Governor  on Maharashtra Housing (Regulation & Development) Bill 2012

Why The Maharashtra Housing (Regulation & Development) Bill 2012 needs to be returned to

the Legislature?

The Bill fails to ensure adequate transparency in transactions of Promoters.

The Bill does not provide any measures to ensure smooth & speedy construction of flats & buildings.

The Bill does not utter a word about the rampant practice of Black Money (Cash Transactions) in the Housing Industry.

Page 14: Submissions to  Hon’ble  Governor  on Maharashtra Housing (Regulation & Development) Bill 2012

Why The Maharashtra Housing (Regulation & Development) Bill 2012 needs to be returned to the

Legislature?

The Bill inconsistent with and at times, contrary to the proposed Real Estate (Regulation & Development) Bill-2011 of the Central

Government (hereinafter referred to as ‘Central Bill’)

The Central Bill is more vocal than the State Bill in protecting consumer interest in Real Estate Sector.

Welcome provisions in the Central Bill need to be incorporated in the State Bill for protecting Consumer Interest.

Page 15: Submissions to  Hon’ble  Governor  on Maharashtra Housing (Regulation & Development) Bill 2012

Why The Maharashtra Housing (Regulation & Development) Bill 2012 needs to be returned to the Legislature?

The State Bill does not define either the “flat owner” or the “allottee” for whose benefit this Bill is claimed to have been

drafted.

The State Bill does not include “landlord” in the definition of “Promoter” whereas the Conveyance of the property in favour of the Society is not complete without support & co-operation of the

landlord.

The State Bill covers only “Sale Component” of the Re-development Projects. “Rehab Component” excluded. Lakhs of

tenants / flat owners to suffer.

Page 16: Submissions to  Hon’ble  Governor  on Maharashtra Housing (Regulation & Development) Bill 2012

Why The Maharashtra Housing (Regulation & Development) Bill 2012 needs to be returned to the

Legislature?

No Compensation provided in case of delayed possession by Promoters.

The Bill prescribes a cap on the Interest payable by the Promoter to the flat purchaser in case of delay, but no such cap

is prescribed on the Interest payable by the flat purchaser in case of his delay in payment of installment to the Promoter.

Page 17: Submissions to  Hon’ble  Governor  on Maharashtra Housing (Regulation & Development) Bill 2012

Why The Maharashtra Housing (Regulation & Development) Bill 2012 needs to be returned to the Legislature?

The Bill has allowed defaulting & errant Promoters to go scot-free by just paying fine. Punishment of imprisonment is

dropped to favour the Promoters.

The Bill fails to diagnose the real problems of the Flat purchasers.

The major problems like delayed possession, failure to form Co-operative Society, failure to obtain Occupation Certificate,

failure to execute Conveyance are treated very lightly by dropping punishment of imprisonment.

Page 18: Submissions to  Hon’ble  Governor  on Maharashtra Housing (Regulation & Development) Bill 2012

Why The Maharashtra Housing (Regulation & Development) Bill 2012

needs to be returned to the Legislature?

Absence of punishment of imprisonment makes the Bill toothless. Flat purchasers will continue to remain vulnerable to

exploitation by Promoters.

The Bill fails to empower the Housing Regulatory Authority with adequate powers to adjudicate the complaints of flat

purchasers.

The Bill fails to make out a comprehensive Law whereby any aggrieved stake holder can get speedy, inexpensive & fair

redressal in the Real Estate Sector.

Page 19: Submissions to  Hon’ble  Governor  on Maharashtra Housing (Regulation & Development) Bill 2012

Why The Maharashtra Housing (Regulation & Development) Bill 2012 needs to be returned to

the Legislature?

The Bill needs drastic improvements to ensure adequate Consumer Protection.

The Bill ignores UN Guidelines for Consumer Protection which requires the Government to make legislations to adequately

protect and empower Consumers against powerful players in the Market.

(The changes required in the Bill, clause wise, are provided separately.)

Page 20: Submissions to  Hon’ble  Governor  on Maharashtra Housing (Regulation & Development) Bill 2012
Page 21: Submissions to  Hon’ble  Governor  on Maharashtra Housing (Regulation & Development) Bill 2012
Page 22: Submissions to  Hon’ble  Governor  on Maharashtra Housing (Regulation & Development) Bill 2012
Page 23: Submissions to  Hon’ble  Governor  on Maharashtra Housing (Regulation & Development) Bill 2012
Page 24: Submissions to  Hon’ble  Governor  on Maharashtra Housing (Regulation & Development) Bill 2012
Page 25: Submissions to  Hon’ble  Governor  on Maharashtra Housing (Regulation & Development) Bill 2012

Thank You

Presented by:

Adv. Shirish Deshpande,

Chairman, Mumbai Grahak Panchayat