Status as on- 04.11.2020

In a recent case of M/S Imperial Structures Ltd vs Anil Patni and another Hon’ble Supreme Court held that RERA Act, 2016 does not prohibit the National Consumer Disputes Redressal Commission (NCDRC) from entertaining any complaint under Consumer Protection Act, 1986.

Background

A housing project was underway in Gurugram since 2011. The complainants are the allottees who booked their respective apartments and paid the booking amount as per Builder Buyer Agreement. However, the project was left incomplete even after payment of substantial amounts and a group of homebuyers approached the NCDRC for remedy in 2017.

In November, 2017, the builder got the project approved by RERA and challenged the jurisdiction of NCDRC on the ground that the homebuyer would not come under the definition of ‘Consumer’ u/s 2(d) of the Consumer Protection Act as the apartments have been booked for commercial purpose.

The NCDRC, rejecting the pleas, held the builder guilty and ordered to refund the amounts of each complainant along with interest at 9% per annum and Rs. 50,000 towards costs. The builder filed an appeal in Supreme Court against the order of NCDRC.

Supreme Court’s Verdict

The two-judge bench consisting of Justices UU Lalit and Vineet Saran delivered the judgement that real estate real estate allottees can approach NCDRC apart from RERA as there is no provision under RERA Act which bars initiation of consumer complaint under Consumer Protection Act.

The Supreme Court, in its judgement, noted that Section 79 of RERA Act bars the jurisdiction of a civil court to entertain any suit concerned under RERA. But, relying on the judgement of Malay Kumar Ganguli v. Dr. Sukumar Mukherjee, NCDRC cannot be considered a civil court under the code of civil procedure. Thus, Section 79 of RERA Act does not bar the consumer forum in any way to to entertain any complaint under the Consumer Protection Act.

Further, the Court substantiated that the proviso of Section 71(1) of the RERA Act which entitles a complainant who had initiated proceedings under Consumer Protection Act before the RERA Act came into force to withdraw the proceedings and file a fresh complaint under RERA. Therefore, the proviso gives a right or an option to the complainant and does not statutorily force him to withdraw the complaint. Likewise, there is nothing in the RERA Act which bars the initiation of proceedings under Consumer Protection Act even after the provisions of RERA Act came into force.

Thus, the parliamentary intent is clear that a choice or discretion is given to the allottee whether he wishes to initiate appropriate proceedings under the Consumer Protection Act or file an application under the RERA Act.

Conclusion

The aforementioned judgement by hon’ble Supreme Court will set a landmark for homebuyers in regards to availability of remedy. It will broaden the scope and options to seek remedies for unsatisfied homebuyers and may expand the availability of forums. However, it may create contradictions as to question of jurisdiction if not segregated carefully.

Disclaimer: The above article is based on the interpretation of the related laws and judicial pronouncements. The readers are expected to take legal advice before relying on this article. The author can be reached at support@centrik.in