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Despite RERA, Buyers Can Approach Consumer Forums, Rules SC

Despite RERA, Buyers Can Approach Consumer Forums, Rules SC

Despite RERA, Buyers Can Approach Consumer Forums, Rules SC

In a move that settles the question of whether homebuyers can approach consumer protection bodies to seek justice, in matters of project completion and delays, the Supreme Court, on November 2, 2020, ruled that buyers are free to take any legal remedy between the real estate regulatory authority and the consumer rights protection bodies. The presence of the RERA, said the SC, in no way stops the buyer from approaching the consumer rights forums.

“The RERA does not statutorily force a person to withdraw any such complaint, nor do the provisions of the RERA Act create any mechanism for transfer of such pending proceedings to authorities under the RERA Act,” a two judge bench of the SC said.

The court order came on an appeal made by Delhi-based builder, Imperia Structures, in which it had opposed a 2018 order of the NCDRC. In its order, the NCDRC had directed the builder to refund money to 10 buyers of the builder’s Gurgaon-based project, the Esfera, over delay in giving possession. Subsequently, the builder moved the SC, saying that the forum should not have entertained the buyers’ application owing to the presence of the RERA, which is now a sector-specific body to deal with project delays and such issues.

While stating that the parliamentary intent is clear that a choice or discretion is given to the allottee, whether he wishes to initiate appropriate proceedings under the CP (Consumer Protection) Act or file an application under the RERA Act, the top court said that Section 79 of the RERA Act does not in any way bar the (consumer) commission or forum under the provisions of the Consumer Protection Act, to entertain any complaint.

“In so far as cases where such proceedings under the Consumer Protection Act are initiated after the provisions of the RERA Act came into force, there is nothing in the RERA Act which bars such initiation. The absence of bar under Section 79 to the initiation of proceedings before a fora which cannot be called a Civil Court and express saving under Section 88 of the RERA Act, make the position quite clear,” it said.

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Delhi HC Verdict: Buyers Can Register Complaints In NCDRC As Well As RERA

Stuck with a delayed project? Should you approach the Real Estate Regulatory Authority (RERA) or the National Consumer Disputes Redressal Commission (NCDRC)? As per the Delhi High Court (HC), anguished homebuyers can take defaulting developers to both, the RERA as well as the NCDRC. This comes as a big win for those homebuyers who have been split between whether to take the NCDRC route or approach the state RERA.

It was in February 2017 when the Supreme Court had set the record straight regarding homebuyers complaints by allowing individual buyers to approach the NCDRC collectively in case of a disagreement with a developer and if the cost involved is more than Rs 1 crore. Therefore, in many cases, groups of buyers approached the NCDRC. RERA on the other hand, allows individual homebuyers to escalate their grievances and of late has seen many favouring the state regulatory body. However, builders insisted that pending cases against them should be withdrawn from NCDRC in case a buyer registered a complaint against him in RERA. Justice Prateek Jalan has quashed 62 petitions from builders with such requests. The Delhi HC has ruled that cases can run in parallel because the jurisdiction of RERA and NCDRC is 'concurrent.'

Regulatory body’s take

Some time back, state RERAs had come together to raise a demand to prevent homebuyers to go to consumer forum against real estate developers or projects. According to the Chairman of Madhya Pradesh RERA, Anthony de Sa, “The real estate regulators take care of both aspects of protecting consumers interest and also how to complete the project, consumer forums only consider protecting the interest of consumers and pass orders for refund and compensation.”

Apart from this, RERA chief of Gurgaon bench of Haryana RERA, KK Khandelwal reiterated the body's latest statement, “Haryana RERA won’t allow any buyer to get a refund if a project is 40-50 per cent complete.”

Read more: Buyer Associations Can Approach Apex Consumers' Panel Against Builders, Rules SC

The RERA chairpersons had also urged the housing ministry to amend the law which might also dilute the consumer rights, fear homebuyers associations.  However, this is not the first time that the RERA authorities are being seen as anti-homebuyers. Earlier, UP RERA had asked homebuyers to come up with a financial plan to complete a stalled housing project in Noida. This would require pooling in extra money from the homeowners over and above the flat cost.

Last Updated: Sat Jan 16 2021

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