The Supreme Court (SC), in its recent judgement, has held that despite there being the availability of the redressal under the Real Estate (Regulation and Development) Act (RERA), home buyers with grievances can call upon the National Consumer Disputes Redressal Commission (NCDRC) or any other appropriate consumer court.

The Honourable Supreme Court (SC) of India has now conclusively held by way of the recent pronouncement in the case of Imperia Structures Ltd. versus Anil Patni and another on November 2, 2020, that a complaint before Consumer Fora by allottees against builders is not barred by the Real Estate (Regulation and Development) Act, 2016 (RERA).

The bench also noted and emphasised upon the ruling in an earlier SC judgment of 2019 in the case of Pioneer Urban Land and Infrastructure Limited and another vs Union of India in which it had been observed that the remedies that are given to allottees of flats/apartments are concurrent remedies. Also, such allottees of flats/apartments are in a position to make use of the remedies available under the Consumer Protection Act, 1986, RERA and the IBC Code.

Following the principle of law settled in the case of Malay Kumar Ganguli vs Dr Sukumar Mukherjee, wherein it was held that a consumer forum/commission is not a civil court and the Honourable Supreme Court of India observed that Section 79 of RERA does not in any of the ways bar the Forum or Commission under the provisions of the Consumer Protection Act to entertain a complaint.

The court made specific mention of the following statutory provisions in RERA and thus clarified upon the misgivings otherwise prevailing concerning their interpretation:

  • That the Proviso to Section 71(1) of the RERA Act gives a right or an option to the concerned complainant but does not statutorily force him to withdraw such complaint. Also, RERA provisions do not create any method for transfer of such pending proceedings to authorities under this Act.
  • That section 79 of RERA disallows the jurisdiction of a Civil Court to entertain any proceeding or suit concerning any matter which the adjudicating officer or the Authority or the Appellate Tribunal is empowered under RERA to undertake.
  • That section 88 specifies that the provisions of RERA would be in addition to and not in derogation of the provisions of any other law. In contrast, with regards to Section 89, RERA provisions shall affect anything inconsistent contained in any of the other laws for the time it is in force.

The Honourable Supreme Court observed in paragraph 21 of the judgment that “It has consistently been held by this Court that the remedies available under the provisions of the CP Act are further remedies over and above the other remedies and include those which are made available under any statutes which are special; and that the availability of an alternative remedy is not a bar in entertaining any grievance under the CP Act.”

That the Honourable Supreme Court, while considering the propositions “whether the remedy so provided under RERA to an allottee is the only and exclusive modality to raise a grievance and whether the provisions of RERA bar consideration of the grievance of an allottee by other fora and went on to frame and answer the following questions:

  • Whether the bar particularised under Section 79 of RERA would be applicable to the proceedings which are initiated as under the provisions of the Consumer Protection Act; and
  • Whether there is anything irregular in the provisions of the Consumer Protection Act with that of RERA.

And went on to hold in paragraphs 27 and 28 of the judgment that:

  • On the strength of the law so declared, Section 79 of RERA does not in any way bar the Commission or Forum under the provisions of the CP Act to entertain any complaint.
  • The proviso to Section 71(1) of RERA empowers a complainant who had begun proceedings under the CP Act before RERA was implemented into force, to withdraw proceedings which are under the CP Act with the permission of the Commission or Forum and then file a proper application before the adjudicating officer under RERA. The Honourable Court went on to hold that Proviso to Section 71(1) of RERA gives a right or an option to the concerned complainant but does not statutorily force him to remove such a complaint. Also, the provisions of RERA do not create any method for transfer of such proceedings which are pending before authorities under RERA.

Therefore, the parliamentary intent is apparent that discretion or a choice is provided to the allottee as to whether he desires to file an application under the RERA or initiate proceedings under the Consumer Protection Act.

The Honourable Supreme Court further authoritatively rejected the contention made on behalf of the appellant builder that since RERA was enacted and considering the special expertise and the qualifications of the chairpersons and members of the Authority (Section 22) and the Appellate Tribunal (Section 46), such authorities alone must be held entitled to decide all issues concerning the Project(s) registered under RERA while observing:

“It is correct that special authorities are established under RERA for the promotion and regulation of the real estate industry, and the problems with regards to a registered project are particularly consigned to functionaries under RERA. But, for current purposes, we have to go according to the purport of Section 18 of RERA. As it gives a right “without any prejudice to any other remedy which is available’, in effect, such other remedy is recognised and saved and subject always to the applicability of a vital section, which is Section 79.”

It shall be pertinent to recall that the Honourable High Court of Delhi, while considering the issue of “whether proceedings under the Consumer Protection Act, 1986 could be commenced by home buyers (Or allottees of properties in proposed real estate development projects) against developers, after the commencement of the Real Estate (Development and Regulation) Act, 2016”, in terms of the pronouncement in the case of M/S. M3M India Private Ltd. and ANR. vs Dr Dinesh Sharma and ANR. on September 4, 2019, had ruled that the judgment in the case of Pioneer (supra) constituted the law declared by the Honourable Supreme Court of India under Article 141 of the Constitution wherein it is has been held that the remedies available to the homebuyers under CPA and RERA are concurrent.

Also, that the same is the crux of the ruling by the Honourable High Court of Punjab and Haryana at Chandigarh in the case of Experion Developers Private Ltd. vs the State of Haryana and others decided as recent as October 16, 2020.