Supreme Court Delivers Scathing Critique of Real Estate Regulatory Authority
The Supreme Court of India issued a strongly worded criticism of the Real Estate Regulatory Authority (RERA) on Thursday, stating that it is high time for all states to reconsider the very constitution of this institution. A bench comprising Chief Justice Surya Kant and Justice Joymalya Bagchi expressed deep dissatisfaction with RERA's performance, noting that it appears to be doing little more than "facilitating" defaulting builders rather than protecting homebuyers.
'Better Abolish This Institution'
"The people for whom RERA was created are completely disappointed," the bench observed during a hearing concerning the shifting of the Himachal Pradesh RERA office. In a striking remark, Chief Justice Surya Kant stated, "Better abolish this institution, we don't mind that." The court's comments came while permitting the Himachal Pradesh government to relocate its RERA office to a location of its choice, though this decision remains subject to the final outcome of a pending writ petition.
The bench emphasized that states should "revisit and rethink of even constituting this authority," highlighting systemic failures in its current implementation across the country.
RERA as 'Rehabilitation Centre' for Retired Bureaucrats
When informed that a retired IAS officer had been appointed to the RERA authority, the Chief Justice responded with sharp criticism: "In every state, it has become a rehabilitation centre. These authorities are all occupied by these persons." The court questioned the logic behind appointing retired bureaucrats to positions requiring specialized expertise in urban development and real estate matters.
"What is the logic of having a retired bureaucrat? How will he be able to help in developing Palampur?" the CJI asked during arguments about Himachal Pradesh's development plans for cities like Palampur and Dharamshala. "You need to avail services of some architect who is environment friendly, knows Palampur, Dharamshala and these areas. Only those persons will help."
Himachal Pradesh RERA Office Shift Controversy
The Supreme Court was hearing a plea filed by the Himachal Pradesh government challenging a High Court order regarding the shifting of the state RERA office from Shimla to Dharamshala. The state government argued that the decision was taken to "decongest" Shimla and was based purely on administrative considerations.
However, opposing counsel presented data showing that approximately 90% of projects handled by the authority are located in Shimla, Solan, Parwanoo, and Sirmaur districts, all within a maximum radius of 40 kilometers. Furthermore, about 92% of complaints pending before RERA originate from these districts, with only 20 projects situated in Dharamshala.
Homebuyers' Plight and Systemic Failures
The bench expressed particular concern about the institution's failure to deliver justice to homebuyers. "The people for whom this institution was created, they are completely depressed, disgusted and disappointed," the court observed. "None of them are getting any effective relief. For whom this institution actually is now serving, you will find out when you meet these people."
The court also noted that Shimla is "completely over exhausted," acknowledging the administrative challenges facing the region while simultaneously questioning RERA's effectiveness in addressing homebuyers' grievances.
Court's Directions and Appellate Mechanism
In its order, the Supreme Court stayed the High Court's December 30, 2025 direction that had maintained an interim order against shifting the RERA office. The bench permitted the state government to proceed with the relocation while making it subject to the final outcome of the pending petition.
Additionally, the court addressed concerns about accessibility to justice, noting that the Shimla district judge currently hears appeals against RERA orders. To ensure affected parties don't face inconvenience, the bench directed that appellate powers may be shifted to the principal district judge of Dharamshala, creating a more accessible mechanism for those impacted by RERA decisions.
The Supreme Court's strong remarks represent a significant judicial intervention in India's real estate regulatory framework, calling into question the fundamental structure and effectiveness of an institution created specifically to protect homebuyers' interests.
