RERA and SARFAESI conflict: single-member complaint assignment valid, pre-existing mortgages protected, and enforcement triggers RERA jurisdiction.

Regulation 9 of the Rajasthan Real Estate Regulatory Authority Regulations, 2017 and the related resolution allowing complaints to be heard by single benches were valid, because they regulated assignment of matters and were consistent with the statutory power to delegate. RERA complaints could be maintained against a bank only where the bank, as secured creditor, had invoked measures under section 13(4) of SARFAESI and thereby stepped into the promoter-linked dispute. RERA does not retrospectively unsettle pre-existing mortgages or security interests, except where fraud or collusion is shown. Where RERA and SARFAESI conflict, the protective scheme under RERA prevails to the extent of inconsistency.

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Issues: (i) Whether Regulation 9 of the Rajasthan Real Estate Regulatory Authority Regulations, 2017 and the corresponding resolution providing for hearing of complaints by single benches were valid. (ii) Whether the RERA authority could entertain complaints against a bank claiming security interest in the project land. (iii) Whether RERA provisions could affect mortgages or security interests created before the enactment of the RERA Act. (iv) Whether RERA or SARFAESI would prevail in case of inconsistency. (v) Whether a bank becomes amenable to RERA jurisdiction when it invokes measures under section 13(4) of the SARFAESI Act.

Issue (i): Whether Regulation 9 of the Rajasthan Real Estate Regulatory Authority Regulations, 2017 and the corresponding resolution providing for hearing of complaints by single benches were valid.

Analysis: The power of the authority to frame regulations had to be read with its statutory power to delegate functions to members. The regulation merely regulated the manner in which adjudication matters could be assigned for hearing and did not create any power contrary to the parent Act. The statutory scheme also permitted delegation to a member, and the Supreme Court had already upheld delegation of complaints to a single member under the Act.

Conclusion: Regulation 9 and the related resolution were held valid and not ultra vires the parent Act.

Issue (ii): Whether the RERA authority could entertain complaints against a bank claiming security interest in the project land.

Analysis: A complaint under the Act is generally maintainable against a promoter, allottee or real estate agent. A bank is not ordinarily within those categories. However, the Act defines promoter inclusively, and the question turned on whether the bank had stepped into the promoter's shoes by operation of law after invoking statutory enforcement measures.

Conclusion: The authority could entertain a complaint against the bank only when the bank, as secured creditor, had invoked measures under section 13(4) of the SARFAESI Act.

Issue (iii): Whether RERA provisions could affect mortgages or security interests created before the enactment of the RERA Act.

Analysis: The obligation in section 11(4)(h) creates a new protection for allottees and cannot ordinarily operate retrospectively to unsettle completed pre-existing mortgage transactions. Such application would reopen closed lender-borrower transactions. An exception was recognised where the creation of security interest was fraudulent or collusive.

Conclusion: RERA was held not to apply retrospectively to pre-existing mortgages or security interests, except where fraud or collusion is established.

Issue (iv): Whether RERA or SARFAESI would prevail in case of inconsistency.

Analysis: Both enactments contain overriding clauses, but the later special law ordinarily prevails where there is inconsistency. The protective scheme for homebuyers under RERA was treated as controlling in the field to the extent of conflict with SARFAESI.

Conclusion: In case of conflict, the provisions of RERA were held to prevail over SARFAESI.

Issue (v): Whether a bank becomes amenable to RERA jurisdiction when it invokes measures under section 13(4) of the SARFAESI Act.

Analysis: Once the secured creditor takes recourse to the statutory measures under section 13(4), it effectively steps into the borrower's shoes in relation to the secured asset by operation of law. That statutory assignment brings the bank within the scope of the promoter-linked dispute concerning the project property for purposes of the Act.

Conclusion: The bank becomes amenable to RERA jurisdiction after invoking measures under section 13(4) of the SARFAESI Act.

Final Conclusion: The common challenge to the validity of the regulation and the single-member adjudicatory arrangement failed, while the Court carved out limits on RERA's reach over pre-existing secured interests and clarified jurisdiction once SARFAESI enforcement measures are undertaken.

Ratio Decidendi: A RERA authority may validly regulate assignment of complaints to single members, but RERA does not retrospectively unsettle pre-existing mortgages unless fraud or collusion is shown, and a secured creditor becomes subject to RERA-linked proceedings once it enforces its rights under section 13(4) of SARFAESI.

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