This article is written by Shalini Singh, pursuing Certificate Course in Real Estate Laws from LawSikho. The article has been edited by Ruchika Mohapatra (Associate, LawSikho) and Arundhati Das (Intern at LawSikho).
This article has been published by Abanti Bose.
Table of Contents
Introduction
Since the RERA Act has been enacted, the stance that the consumer forum has no right to deal with the complaints of home buyers has often been taken up as a legal argument in various cases. Often this question is raised before the courts as to whether the complainant can claim the benefits under the Consumer Protection Act if there is an alternative remedy available. The courts have often tried to offer an affirmative response to such questions. However, the court’s stance was not clear enough as far as the home buyers are concerned, because it was argued that RERA is special legislation to control the important matters, the remedy is often sought only as per the provisions of the Act.
Supreme Court’s ruling
The Supreme court has answered the above-mentioned question in a judgment dated 2nd November 2020, passed by the Supreme Court of India in the case of M/s Imperia Structures Ltd v Anil Patni & Another (Civil Appeal No. 3581-3590 of 2020), the Supreme Court held that the redressal mechanism/provisions under the Real Estate (Regulation and Development) Act 2016 (RERA) do not act as a bar to complaints under the Consumer Protection Act 1986 (CP Act). The principles laid down in this judgment by the Supreme Court, find a place in a range of earlier series of decisions passed by various High Courts as well as the National Consumer Disputes Redressal Commission (NCDRC) which has stated that allottees/homebuyers are well within their rights to avail remedies under the CP Act as well as RERA and even the Insolvency and Bankruptcy Code 2016 (IBC).
This judgment has definitely explained that the allottees have the freedom to choose among RERA and the Consumer Forum to litigate for their rights in a land project. As the land business keeps on wrestling with the uncommon difficulties introduced by steadily developing liquidity emergencies and the current pandemic, the postponed ventures should plan for longer fights in court by virtue of conceivable commencement of new cases before RERA or the Consumer Forum. This judgment also paves a path for ending the dominance of developers over buyers by virtue of money power in litigation matters.
In order to make a better decision, the author has provided detailed differences between both acts.
Difference between Consumer Court and RERA
| Consumer Court | RERA |
| Only registered purchasers and allottees can file complaints. Registered agency/purchaser here means ‘any voluntary consumer association registered under the Companies Act, 1956 or under any other law for the time being in force. On the other hand, any of the agencies reflects the unregistered association which cannot come within Section 2(7)(i)[1] of the act hence cannot file a complaint. | Aggrieved persons can file complaints under Section 31 (1) of the RERA Act. Section 31. (1) – Any aggrieved person may file a complaint with the Authority or the adjudicating officer, as the case may be, for any violation or contravention of the provisions of this Act or the rules and regulations made thereunder against any promoter allottee or real estate agent, as the case may be. For the purpose of this subsection, persons shall include the association of allottees or any voluntary consumer association registered under any law for the time being in force. The word person is defined under Section 2 (zg)[2]. |
| A complaint before Consumer Court needs to be filed on plain paper with documentary evidence. | There is a specified format for filing a complaint before RERA. Every state’s RERA official website will have its complaint section and the buyer has to fill in the requisite details in the form prescribed. |
| In the case of a consumer complaint, you have to file the complaint depending on the pecuniary limits. District commission can entertain complaints upto Rs. 1 crore and state commissions can entertain complaints only between Rs 1 crore and up to Rs 10 crore; In case the value of the property is more than INR 10 crore then you will have to approach NCDRC. | You can file a complaint before the regulatory authority of the state where your property is situated. There are no pecuniary limits while filing a claim under RERA. |
| The Central Consumer Protection Authority (CCPA) has an investigation wing, headed by a Director-General, which may conduct an inquiry or investigation into consumer law violations, as given under Section 15 (1)[3] of Consumer Protection Act 2019. The CCPA has been granted wide powers to take suo-moto actions, recall products, order reimbursement of the price of goods/services, cancel licenses and file class-action suits if a consumer complaint affects more than 1 (one) individual. | Investigations can be conducted on a complaint by a buyer or suo moto against the builder. Section 35(1)[4] of the Act empowers the Real Estate Regulatory Authority to make an inquiry and investigate in relation to the promoter, allottee or the real estate agent, as the case may be. Section 35(1) of the Act provides that the Real Estate Regulatory Authority can either suo moto or on a complaint, initiate any inquiry and investigation into allegations against the promoter, allottee or the real estate agent, as the case may be. It is at the discretion of the Real Estate Regulatory Authority to appoint one or more persons to make an inquiry in relation to the affairs of the promoter, allottee or the real estate agent, as the case may be. |
| Under Section 41, any person aggrieved by an order made by the District Commission may prefer an appeal against such order to the State Commission on the grounds of facts or law within a period of forty-five days from the date of the order, in such form and manner, as may be prescribed. Under Section 51 (1) Any person aggrieved by an order made by the State Commission in the exercise of its powers conferred by sub-clause (i) or (ii) of clause (a) of sub-section (1) of Section 47 may prefer an appeal against such order to the National Commission within a period of thirty days from the date of the order in such form and manner as may be prescribed: Provided that the National Commission shall not entertain the appeal after the expiry of the said period of thirty days unless it is satisfied that there was sufficient cause for not filing it within that period. This implies that the finality of orders is faster under Consumer Court. | Under Section 43(5)[5] of the RERA Act, 2016 any person aggrieved by an order passed by the Real Estate Regulatory Authority (RERA) can file an appeal. Such an appeal must state the grounds of fact and law on the basis of which the RERA order is challenged. As stated in Section 44(2)[6] of the Act, the Appeal must be heard and disposed of within sixty days of filing. If this time limit is exceeded, the Real Estate Appellate Tribunal (REAT) will have to give reasons to justify the delay. Thus, the Real Estate Appellate Tribunal is under a statutory duty to dispose of cases in a time-bound manner and not keep them pending. Under Section 58(1), any person aggrieved by any decision or order of the Appellate Tribunal may file an appeal to the High Court, within a period of sixty days from the date of communication of the decision or order of the Appellate Tribunal, to him, on any one or more of the grounds specified in Section 100 of the Code of Civil Procedure, 1908:Provided that the High Court may entertain the appeal after the expiry of the said period of sixty days if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal in time. |
Conclusion
Accordingly, it can be said from the court’s ruling that this judgment has clarified the legal position of the option of choosing a forum for starting grievances against the builder must lie with the homebuyers and they must be at liberty in order to select between both RERA and/or the Consumer Forum. Thus, now the homebuyers cannot be forced to select a forum of adjudication as per the suitability of the builders. A balanced approach has been adopted to identify the interest of the homebuyers and balance it with the promoter’s interests. However, through the recent amendment of the Consumer Protection Act, the monetary limits to approach the consumer forum has been raised from the previous amount, which in a way provides a big relief to Builders in restricting the homebuyers to approaching the consumer forum frequently. Although the efficiency of RERA may seem to be challenged, it is merely an illusion as there lie other exclusive jurisdictions with RERA. Thus, in a nutshell, the RERA regime continues to be a force to be reckoned with and promises to deliver stellar services in the real estate space and in its domain and jurisdiction, in close coordination with the Consumer Protection Act and other laws in force.
Reference
1.https://main.sci.gov.in/supremecourt/2019/9796/9796_2019_34_1502_24555_Judgement_02-Nov-2020.pdf
2. https://www.indiacode.nic.in/bitstream/123456789/2158/1/A2016_16.pdf
3. National Seeds Corporation Limited vs. M. Madhusudhan Reddy and Another; Secretary, Thirumurugan Cooperative Agricultural Credit Society vs. M. Lalitha
4. Pioneer Urban Land and Infrastructure Ltd & Anr v Union of India & Ors SCC Online SC 100
5. https://www.indiacode.nic.in/bitstream/123456789/2158/1/A2016_16.pdf
6. http://ncdrc.nic.in/bare_acts/Consumer%20Protection%20Act-1986.html
7. https://www.mca.gov.in/Ministry/pdf/TheInsolvencyandBankruptcyofIndia.pdf
9. https://www.mca.gov.in/Ministry/pdf/Companies_Act_1956_13jun2011.pdf
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