In this article, Nawlendu Bhushan of Campus Law Centre discusses whether RERA bars the original jurisdiction of NCDRC or not.

Introduction

In order to ensure accountability towards allottees and protect their interest as well as infuse transparency, ensure fair play and reduce delays the Government has passed the Real Estate (Regulation and Development) Act, 2016 (hereinafter “the Act”). A common issue faced by the homebuyers after passing of the new real estate law is regarding the place where they have to approach for getting their grievances settled. Either the Consumer Forum or the Real Estate Tribunal. The article clears the doubt.

Aggrieved homebuyers and RERA

Section 31 of the Act states that any aggrieved person may file a complaint with the Authority 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. It explains that the word “person” includes an association of allottees and any voluntary consumer association.

In case of any structural defect or defect in quality or provision for services as per agreement for sale, the allottees are entitled to get it rectified by the promoter within thirty days of the complaint. Allottees can bring such complaints within five years from the date of possession. In case the promoter fails to rectify the defects, allottees can claim compensation by filing a complaint to the RERA.  

So, an aggrieved homebuyer or allottee may file a complaint against any promoter or real estate agent in case they violate their obligations fixed by the Act.

The Real Estate Appellate Tribunal

Any person or the Appropriate Government aggrieved by any direction or decision or order made by the Authority or by an adjudicating officer under this Act may prefer an appeal before the Real Estate Appellate Tribunal. Such tribunals are to be established by the Appropriate Governments. The appeal can be made within a period of 60 days from passing of the direction or decision or order.

The tribunal is guided by the principles of natural justice. Orders made by the Appellate Tribunal are executable as a decree of a Civil Court.

Appeal against decision or order of the tribunal lies in the High Court.

NCDRC and its jurisdiction in case of foul play by promoters

The National Consumer Dispute Resolution Commission (NCDRC)  is established under the Consumer Protection Act, 1986. Apart from having an appellate jurisdiction against the orders of any State Commission, the NCDRC has original jurisdiction in entertaining complaints where the value of goods or services or compensation exceeds INR 1 crore.

The Supreme Court and NCDRC have already made it clear that a group of consumers having a common interest or common grievance and seeking a similar relief against the same person can come together without forming any association to file a case in NCDRC with a claim of INR 1 crore or more. Consumers can approach the district forum if their claim is not above INR 20 lakh and the state commission if their claim is in the range of INR 20 lakh to INR 1 crore.[1]

Does RERA bar the original jurisdiction of NCDRC?

An aggrieved person has two options to seek redressal for his grievances one to approach the RERA and the other to approach appropriate consumer forum. In case, the individual claim is less than INR 1 crore, the homebuyer can bring his claim to the NCDRC along with other homebuyers seeking similar relief from the same person if the aggregate claim exceeds INR 1 crore. But, only upcoming and ongoing projects fall within the ambit of the RERA. For existing projects where completion certificate has been granted only appropriate consumer forum has jurisdiction.

Most of the States’ legislations related to the RERA has an express clause that for filing a complaint to the RERA, the complainant has to ensure that no other complaint is pending in any other court or Authority. This restricts the options for aggrieved homebuyers as well as reduces the chance of multiple litigations on the same cause.

To appreciate which is a better forum, RERA or NCDRC, let’s compare the power, process and efficiency of these two.[2]

Conclusion

From the above comparison, it is clear that an aggrieved allottee of a project, where completion certificate has been granted, can approach the NCDRC or appropriate consumer forum only. Aggrieved allottees of an ongoing or upcoming project have both the options available. The provisions in the State enactments, which put a condition on the filing of a complaint that no complaint should be pending, make it clear that the aggrieved can choose only one recourse. In this way, the Act does not bar the original jurisdiction of the NCDRC but ensures minimum litigation on the same matter. Considering past records of the consumer courts and faster finality of NCDRC order (only one stage of appeal) against the backdrop of the real estate specific jurisdiction of the RERA, stricter penal provisions in the Act, it can be inferred that choosing either of the two depends upon the future course of litigations in the RERA.

References

[1]http://www.moneycontrol.com/news/business/real-estate/ncdrc-restricts-complaints-to-rwas-here-are-the-legal-options-for-homebuyers-2274327.html (Date of visit 20/02/2018, time of visit 12:35 IST)

[2]https://housing.com/news/rera-versus-ncdrc-will-protect-home-buyers-better/(Date of visit 20/02/2018, time of visit 12:35 IST)