SC Questions Effectiveness Of RERA;Allows Himachal To Shift Office

In a sharp and candid observation on Thursday, the Supreme Court remarked that it may be time for states to seriously reconsider how Real Estate Regulatory Authorities (RERA) are functioning, saying the institution appears to be failing the very homebuyers it was meant to protect.

A Bench led by Chief Justice of India Surya Kant and Justice Joymalya Bagchi expressed strong dissatisfaction over the working of RERA bodies across states. The court said that instead of safeguarding buyers, the authorities seem to be offering little effective relief and, in some cases, merely facilitating defaulting builders.

“Except facilitating the builders in default, this institution is doing nothing. Better abolish this institution, we don’t mind that,” the Chief Justice remarked during the hearing. The Bench went on to say that the people for whom RERA was created are “completely depressed, disgusted and disappointed” due to the lack of meaningful redress.

The observations came while the court was hearing a plea filed by the Himachal Pradesh  government challenging an order of the Himachal Pradesh High Court that had stalled the shifting of the state’s RERA office from Shimla to Dharamshala.

The High Court had earlier stayed a June 2025 notification issued by the state government proposing the relocation. In a subsequent order dated December 30, 2025, it directed that the interim stay would continue until further orders. The Supreme Court has now stayed that December 30 direction and permitted the state to shift the RERA office to a location of its choice, subject to the final outcome of the writ petition pending before the High Court.

Appearing for the state, senior advocate Madhavi Divan submitted that the decision to relocate the office was based purely on administrative considerations. The government argued that the move was part of a broader effort to decongest Shimla and promote the development of other cities such as Dharamshala and Palampur.

However, counsel for the respondent opposed the relocation, pointing out that nearly 90 per cent of the real estate projects handled by the authority are located in Shimla, Solan, Parwanoo and Sirmaur, all within a short radius of the state capital. Around 92 per cent of the pending complaints before RERA, it was submitted, originate from these districts, while Dharamshala has only a limited number of projects.

During the hearing, the Bench also took note of the fact that a retired IAS officer had been appointed to the authority. The Chief Justice questioned the logic behind such appointments, remarking that in many states these bodies have “become rehabilitation centres” for retired officials.

“What is the logic of having a retired bureaucrat? How will he help in developing Palampur or Dharamshala?” the CJI asked, suggesting that professionals such as architects with knowledge of local terrain and environmental concerns might be better suited to such roles.

The court was also informed that appeals against RERA’s orders are currently heard by the Principal District Judge in Shimla. Taking into account the proposed relocation, the Bench directed that appellate powers may be shifted to the Principal District Judge at Dharamshala to ensure that litigants are not inconvenienced.

The court further observed that Shimla is “completely over exhausted,” indicating the need for administrative decentralisation in the hill state.

Notably, the Supreme Court’s comments come against the backdrop of a recent decision on February 9, when it set aside an interim order of the Himachal Pradesh High Court that had stayed the state government’s decision to shift the OBC Commission from Shimla to Dharamshala. In that case, the apex court had underlined that such matters typically fall within the realm of policy decisions and are not ordinarily subject to judicial interference.

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