Position of RERA vis-a-vis Companies Act


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The most common and possible conflict between The Real Estate (Regulation and Development) Act, 2016  (RERA)  and Companies Act, 2013 arises when Section 279 of Companies Act 2013 (formerly Section 446 under Companies Act 1956)is invoked which reads as under:-

“279. Stay of suits, etc., on winding up order.— (1) When a winding up order has been passed or a provisional liquidator has been appointed, no suit or other legal proceeding shall be commenced, or if pending at the date of the winding up order, shall be proceeded with, by or against the company, except with the leave of the Tribunal and subject to such terms as the Tribunal may impose:

 Provided that any application to the Tribunal seeking leave under this section shall be disposed of by the Tribunal within sixty days.

 (2) Nothing in sub-section (1) shall apply to any proceeding pending in appeal before the Supreme Court or a High Court.”

Therefore, the question is whether leave of the Tribunal is necessary to commence or continue legal proceeding against the non-complainant company, before the authorities constituted under RERA.

The same question had come up before the Rajasthan Real Estate Regulatory Authority in Kuldeep Kaur and Ors. v.  M.V.L Ltd[1] and while giving a common order it answered the above question in the ‘negative’.

In order to ascertain and understand the answer to the above question, it is essential to understand the nature of both the statutes.

General Law and Special Law

General Law is that which is unrestricted as to time, is applicable throughout the territory subject to the power of the legislature that enacted it, and applies to all persons in the same class. Whereas, special law is a law that applies to a particular place or especially to a particular member or members of a class of persons or things in the same situation but not to the entire class.[2]

Recently, the Bombay High Court had held in Raj Shipping Agencies and Ors. v. Barge Madhwa and Ors. [3] that the ‘Admiralty Act which is a Special and later Act prevails over Companies Act which is a general Act. Therefore, no leave is necessary under S.446(1) Companies Act for commencing a suit under Admiralty Act or proceeding with a pending suit against the Company under the Admiralty Act, when a winding up order has been made or official liquidator is appointed as the Provisional Liquidator’. It was observed by the court that ‘when one statute is a general statute covering a large number of matters in general and another covering only some of them, the latter should prevail as regards these matters whilst the former would prevail as regards the rest of the matters’.

Special Law v. Special Law

In Allahabad Bank v. Canara Bank and Another [4] the principle laid down was that when there are two special laws, the latter will normally prevail over the former if there is a provision in the latter special Act giving it overriding effect. Thus, in that case, the later special Act i.e. RDB Act (The Recovery Of Debts Due To Banks And Financial Institutions Act, 1993), by virtue of Section.34 (non-obstinate clause) [5] gave overriding effect (on an even stronger footing) over the former special Act that was the Companies Act. Therefore, in view of Section 34 of the RDB Act, the said Act was held to override the Companies Act, to the extent there is anything inconsistent between the Acts.

However, there can be a situation in law where the same statute is treated as a special statute vis-a-vis one legislation and again as a general statute vis-a-vis yet another legislation.  Such situations do arise as held in Life Insurance Corporation of India v. D.J. Bahadur. [6]  It was observed in this case that for certain cases, an Act may be general and for certain other purposes, it may be special. For example, a Rent Control Act may be a special statute as compared to the CPC. But vis-a-vis an Act permitting eviction from public premises or some special class of buildings, the Rent Control Act may be a general statute.

RERA 2016 & Companies Act 2013

The provisions of RERA seek to protect the allottees and simplify the remedying of wrongs committed by a promoter. The intention of RERA is to bring the complaints of allottees before one Authority and simplify the process.[7]

S.89 which is a non obstinate clause of RERA provides that the Act shall have overriding effect. It reads: - “The provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force”.

Section 79 of RERA further shows that it is a self sustained code. It reads as under - “no civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Authority or the adjudicating officer or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act.”

As stated above whether a statute is general or special differs from case to case. Companies Act is general law for companies as is held in various cases. However, even if it is regarded special act along with RERA, the latter being enacted later and consisting of  non obstinate clause shall prevail over the former.

In Kuldeep Kaur’s case above, the authority observed that RERA Act is a special Act as it was enacted with a special purpose of regulating and promoting the real estate sector, for protecting the interests of the consumers and for establishing an adjudicating mechanism for speedy disposal. Its special nature is also borne out of Section 79 as well as Section 89. It was further observed that even if it is not a special Act, since it is a later Act having an overriding provision, it shall prevail over all earlier laws as well as general laws including Companies Act 2013.

Therefore, in view of the above principles, it is apparent that RERA being a special Act and enacted later in time than the Companies Act, shall have an overriding effect and no leave of the tribunal under Section 279 of the Companies Act 2013  shall be necessary to commence or continue proceedings under RERA.


[1] Complaint No. RAJ-RERA-C-2018-2127, decided on 09-05-2019.

[2] Meriam Webster law dictionary.

[3] CS66/2018 in Admirality Suit 6/2015.

[4] (2000) 4 SCC 406.

[5] Save as provided under subsection (2), the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act.

[6] (1981)1 SCC 315.

[7] Neelkamal Realtors Suburban Pvt. Ltd. V. Union Of India and ors.  (2018) 1 AIR Bom R 558.

"This article is written by Ms. Krupa Thakkar from Government Law College, Mumbai. You can reach out to her at krupat97@gmail.com"


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