Supreme Court slams RERA, says it only helps defaulting builders

The Supreme Court criticised real estate regulatory authorities, saying they mainly aid defaulting builders and fail homebuyers. Allowing Himachal Pradesh to shift its RERA office, the court urged states to rethink the institution’s functioning

New Delhi: The Supreme Court on Thursday said it is high time all states rethought the constitution of real estate regulatory authorities (RERAs), observing that the institution was doing little beyond facilitating defaulting builders.

A Bench of Chief Justice Surya Kant and Justice Joymalya Bagchi said the people for whom RERA was created were “completely depressed, disgusted and disappointed” and asserted that it would not mind if the institution was abolished.

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The observations came while the Bench permitted the Himachal Pradesh government to shift the state RERA office to a location of its choice.

The court issued notice on a plea filed by the Himachal Pradesh government and others challenging an order of the Himachal Pradesh High Court in a matter relating to the shifting of the RERA office from Shimla to Dharamshala.

Earlier, the high court had stayed a June 2025 notification on the shifting of the office. In an order dated December 30, 2025, it directed the continuance of the interim stay. The apex court has now stayed that direction.

“Except facilitating builders in default, this institution is doing nothing. Better abolish this institution, we do not mind that,” the Chief Justice said.

“It is high time that all states revisit and rethink even constituting this authority,” the Bench observed.

In its petition, filed through advocate Sugandha Anand, the state government said the decision to shift the RERA office was taken to decongest Shimla and was based purely on administrative considerations.

Senior advocate Madhavi Divan, appearing for the state, informed the court that the office was proposed to be shifted to Dharamshala.

An advocate appearing for the respondent submitted that around 90 per cent of the projects handled by RERA were located in Shimla, Solan, Parwanoo and Sirmaur, within a 40-km radius, and that nearly 92 per cent of pending complaints were from these districts. He said there were only about 20 projects in Dharamshala.

When informed that a retired IAS officer had been appointed in RERA, the Chief Justice remarked, “In every state, it has become a rehabilitation centre. These authorities are all occupied by such persons.”

“The people for whom this institution was created are completely depressed, disgusted and disappointed. None of them are getting any effective relief,” he added.

The court also observed that Shimla was “completely over-exhausted”.

While issuing notice, the Bench said the state was permitted to shift the RERA office to a place of its choice, subject to the final outcome of the writ petition pending before the high court.

The advocate general of Himachal Pradesh told the court that, as part of a policy decision, the state was developing Palampur, Dharamshala and other cities.

Questioning the appointment of retired bureaucrats, the Chief Justice said planners and environment-friendly architects familiar with the region were needed for sustainable development.

The Bench was informed that the principal district judge of Shimla hears appeals against RERA orders. To avoid inconvenience to litigants, the court directed that appellate powers may be shifted to the principal district judge of Dharamshala.

On February 9, in a separate matter, the apex court had set aside an interim order of the Himachal Pradesh High Court staying the state government’s decision to shift the OBC commission from Shimla to Dharamshala, observing that such policy decisions ordinarily fall outside judicial review.

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