The Rajasthan Real Estate Regulatory Authority has said that a winding up order on a company will not bar the proceedings of the Real Estate (Regulation and Development) Act, 2016. A winding up order issued by court, forces an insolvent company into compulsory liquidation. The court appoints a liquidator to facilitate the liquidation wherein all assets are liquidated so as to pay the creditors. 

 

RERA came into force on 1st May 2016, to regulate and promote the interest of the consumers in real estate sector. It also facilitates speedy dispute redressal mechanism for the aggrieved.

 

The current case was in relation to an application filed by the real estate builder seeking a stay on the proceedings of Delhi High Court which had appointed a liquidator for the builder while the proceedings under RERA were still pending. 

 

The builder argued that as per Section 279 of the Companies Act, no suit or legal proceedings can be started or continued against the company after the winding up order is being passed. It also added further that it could be done only with the permission of National Company Law Tribunal.

 

But the Authority observed that no winding up order has been passed. It also held that even in case winding up order is passed, it will not impact the proceedings of RERA.

 

The provisions of Section 31 of RERA will will prevail over Section 279 of Companies Act since the former is a special act of Parliament and came into effect after the Companies Act,2013.