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RERA ACT DOES NOT BAR REMEDIES UNDER CONSUMER PROTECTION ACT

April 9, 2021

By Nihit Nagpal and Anuj Jhawar

Introduction

The Hon’ble Supreme Court in a landmark judgment dated November 02, 2020 in the case of M/s Imperia Structures Ltd v Anil Patni & Another[1] held that the Real Estate Regulatory Authority Act does not restrict the jurisdiction granted under Consumer Protection Act, 1986 to handle and deal with the complaints filed by consumers (homebuyers) of real estate projects registered under The Real Estate (Regulation and Development) Act, 2016 (“RERA”).

RERA does not bar remedies under Consumer Protection Act

An appeal was preferred by Imperia Structures (“Builders/Developers/Appellant”) in the Hon’ble Supreme Court against an order passed by National Consumer Dispute Redressal Commission (“NCDRC”) with regard to complaints made by homebuyers/allottees. The homebuyers, collectively, had approached NCDRC and filed a complaint under the Consumer Protection Act, 1986 for unfair trade practice and deficiency in services owing to delay in handing over of possession of the concerned property/apartments.

Further, Imperia Structures challenged the jurisdiction of NCDRC. They put forth the issue that homebuyers/allottees have booked and bought the property/apartment for commercial purposes and hence, the said homebuyers would not qualify as consumers within the definition imparted under Section 2(d) of the Consumer Protection Act. However, the NCDRC accepted the complaint filed collectively by homebuyers and vide order dated September 12, 2018 directed Respondents (i.e., builders/developer company) to return the amount paid by homebuyers along with litigation costs i.e., 50,000 and 9% interest per annum.

Consequently, the developers/builders approached and appealed against the order dated September 12, 2018 passed by NCDRC in the Hon’ble Supreme Court. They contended that as the said project is registered under the provision of The Real Estate (Regulation and Development) Act, 2016 (“RERA”) and lacks jurisdiction under Section 79[2] of RERA the concerned homebuyers/allottees do not have the right and authority to approach NCDRC. They further contended the issue that homebuyers bought the property for commercial purposes and hence, do not qualify as consumers within the definition of consumers under Section 2(d) of the Consumer Protection Act, 1986. The builder/developer company also contended that NCDRC does not have jurisdiction to entertain issues/complaints with regard to delay in possession, as the same falls under the purview of RERA.

Judgment and analysis

  • The Hon’ble Supreme Court passed the verdict in favour of the Homebuyers/allottees, upholding the decision of NCDRC. The Hon’ble Apex Court further held that RERA and Consumer Protection Act are two different legislations and despite ongoing case at RERA, a consumer forum will always have the power to entertain cases wherein the homebuyers qualify as ‘consumers’ within the definition mentioned under the Consumer Protection Act, 1986. The whole idea behind Consumer Protection Act is to safeguard consumers and listen to their grievances.[3]
  • With regard to Section 79 of the RERA, the Hon’ble Court clarified its purpose and meaning. It held that the concerned provision i.e., Section 79 talks merely about the jurisdictional limits to Civil Courts, while Consumer forums are not Civil Courts.
  • Referring to Section 18 of RERA, the Apex Court observed that the concerned provision does not bar the aggrieved from perusing any other remedy and further recognizes others available remedies as well. Section 88 and 89 of RERA further justifies this finding of the Hon’ble Court. The laws enumerated under RERA are available in addition to other laws in force and hence, the same cannot compel an individual to withdraw his/her case or complaint from other forums.
  • Reference was laid on a judgment passed by the Hon’ble Supreme Court, wherein the bench held that coexisting and parallel remedies are provided to aggrieved under RERA, Consumer Protection Act and Insolvency and Bankruptcy Code, 2016.[4]

Conclusion

This judgment passed by the Hon’ble Supreme Court is a milestone for homebuyers/allottees. The same can be concluded by number of findings in the present judgment such as concurrent remedies under RERA as well as Consumer Protection Act, recognition of additional remedies etc. It further lays down attention on the newly enacted Consumer Protection Act, 2019 which also incorporates and provides similar stance and rights to the homebuyers/allottees.

[1] (Civil Appeal No. 3581-3590 of 2020)

[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 1005

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