Bombay HC Rules RERA Disputes Non-Arbitrable

06 Jan 2025 CW Team

The Bombay High Court has delivered a landmark ruling, affirming that disputes between an individual allottee and a promoter covered by the Real Estate (Regulation and Development) Act, 2016 (RERA) are non-arbitrable. Even if an agreement contains an arbitration clause, the jurisdiction of RERA remains intact, the court ruled.

Justice Madhav Jamdar stated that the special provisions under RERA are meant to protect homebuyers, and the jurisdiction of RERA cannot be bypassed through private arbitration. This judgment ensures that RERA tribunals, not arbitration, will handle buyer-builder disputes.

The case stemmed from a dispute where a builder, Rashmi Realty Builders Pvt Ltd, had agreed to refund ?12 lakh to a buyer but sought arbitration, citing an MoU. However, the High Court held that the MoU’s arbitration clause did not override RERA's jurisdiction.

The HC's ruling upholds the intent of RERA to provide homebuyers with legal protection and ensure disputes are heard within the framework established by the law.

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