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Invoking Force Majeure For Covid-19 Pandemic Secon...
Factual and Procedural Background
The opinion addresses the impact of the COVID-19 pandemic, specifically the nationwide lockdown starting March 2020 and the subsequent second wave in April 2021, on the construction activities of real estate projects in Maharashtra. Due to reverse migration of laborers and disruption in supply chains, construction was severely affected. The Ministry of Housing and Urban Affairs issued an advisory on 13 May 2020 for extension of registration and statutory timelines under the Real Estate (Regulation and Development) Act, 2016 (RERA). Following this, MahaRERA issued an order on 18 May 2020 extending project registration validity by six months from 15 March to 14 September 2020. With the more severe second wave in 2021 causing further stoppage of construction and government restrictions including penalties, promoters requested another extension. In response, MahaRERA exercised its powers under the RERA Act to declare a further six-month force majeure period from 15 April to 14 October 2021, extending registration validity and compliance timelines for affected projects.
Legal Issues Presented
The opinion addresses a procedural matter and does not frame distinct legal issues.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The court's reasoning is grounded in the recognition of the COVID-19 pandemic as a force majeure event severely impacting the construction sector. Noting the prior advisory by the Ministry of Housing and Urban Affairs and the earlier MahaRERA order extending project timelines, the court acknowledged the second wave's intensified disruptions, including labor shortages and supply chain breakdowns. Exercising powers under sections 37, 34(a), 34(f), and 34(g) of the Real Estate (Regulation and Development) Act, 2016, the court declared an additional six-month force majeure period. The court emphasized that the extensions apply to projects with completion dates on or after 15 April 2021 and that allottees' rights under the Act remain unaffected. The decision reflects a balance between regulatory flexibility to accommodate pandemic-induced delays and protection of stakeholders' rights.
Holding and Implications
The court held that a six-month extension of the force majeure period from 15 April to 14 October 2021 is granted for MahaRERA registered projects affected by the COVID-19 second wave.
This extension automatically prolongs the validity of project registrations and compliance timelines for projects with completion dates on or after 15 April 2021. The decision directly benefits promoters by acknowledging pandemic-related delays and ensures that allottees' rights under the Real Estate (Regulation and Development) Act, 2016 remain intact. No new legal precedent was established; rather, the order operationalizes the statutory provisions in light of extraordinary pandemic circumstances.
Vasant Prabhu, Secretary:— Whereas, in view of COVID-19 (Corona Virus) Pandemic and consequent nation-wide lockdown with effect from March, 2020, reverse migration of labourers to their native places and break in supply chain of construction material, the construction activities of real estate projects across the country had been severely impacted.
2. Whereas Ministry of Housing and Urban Affairs had issued Advisory regarding extension of registration of real estate projects and concurrently extending timelines of all statutory compliances due to ‘Force Majeure’ under the provisions of Real Estate (Regulation and Development) Act, 2016 (RERA), on 13 May 2020 and subsequently MahaRERA had revised project registration validity by 6 months.
Whereas, MahaRERA accordingly had issued an order under no. 14/2020 dated 18.05.2020 granting an extension of a period of six months, from 15.03.2020 to 14.09.2020, in compliance of the directives of GOI.
Whereas, second wave of Covid-19 pandemic started in April 2021 and construction work places came to stand still due to non-availability of labours and construction on movement of building material etc. and this wave especially was more predominant in Maharashtra.
Whereas, Government of Maharashtra took decision and issued orders vide no.DMU/2020/CR.92/DisM-l, dated 13/04/2021, imposing various restriction on construction activity amongst other including penalty for default,
Whereas, many promoter organization have represented to MahaRERA to extend timeline by at least another six months due to second wave crippling the entire construction industry.
3. Whereas Second wave was much more devastating than first wave and has caused great loss to human lives as well as economy. And consequent lockdowns have caused disruption of supply chains for obtaining construction material, Labour work force migration and slowdown in pace of construction.
4. Therefore, in order to aid government efforts in controlling the damage coused due to COVID-19 and ensure that completion of MahaRERA registered projects does not get adversely affected, it has been decided to issue this order.
5. In exercise of the powers under section 37 read with Section 34(a), 34(f) and 34(g), a force majeure period of six months, from 15 April to 14 October, 2021 is being declared and the following directions are issued with immediate effect:
• For all MahaRERA Registered projects where completion date, revised completion date or extended completion date expires on or after 15 April 2021, the period of validity for registration of such projects shall be extended by six months. MahaRERA shall accordingly issue project registration certificates, with revised timelines for such projects, at the earliest. The above automatic extension shall not apply to projects that was to be completed before 15 April, 2021.
• The time limits for compliances under Section 11, which become due anytime during force majeure period, shall stand automatically extended for a period till the expiry of force majeure period.
• The above extensions shall not affect the rights of the allottees as may be available to the allottees under the provisions of the Real Estate (Regulation and Development) Act, 2016, the Rules and Regulation made thereunder.
6. As approved by Authority.
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