RERA Act does not bar remedies under Consumer Protection Act: Supreme Court

The Supreme Court on Monday ruled that the Real Estate (Regulation and Development) Act, 2016 does not preclude the National Consumer Disputes Redressal Commission (NCDRC) or the Consumer Forum from entertaining any complaint under Consumer Protection (CP) Act. (M/S Imperial Structures Ltd vs Anil Patni and another)A two-judge bench of the court consisting of Justices UU Lalit and Vineet Saran held that real estate allottees can approach NCDRC apart from authorities under the RERA and there is no provision under RERA which bars initiation of a consumer complaint under CP Act. .The judgment was rendered in an appeal arising out of the September 2018 decision of the NCDRC which had directed the developer, Imperia Structures to refund the purchase amount along with interest to the buyers for violating the terms of the builder-buyer agreement..A housing project was being developed by the developer in Gurugram sometime in 2011 and all the complainants had booked their respective apartments by paying the booking amount and executing builder-buyer agreements..However, the project was not completed even after payment of substantial amounts prompting a group of buyers to approach the NCDRC in 2017. Later in November 2017, the builder got the project approved by RERA.The builder on this basis challenged the jurisdiction of NCDRC, inter alia, on the ground that the apartments having been booked for commercial purposes, the buyers would not come within the definition of “the consumer” under Section 2(d) of the Consumer Protection Act..The NCDRC, however, held the developer guilty and directed refund of the amounts deposited by each of the complainants along with simple interest at 9 percent per annum from the respective dates of deposit along with Rs. 50,000/- towards costs..The Supreme Court, in its judgment, noted that Section 79 of the RERA Act bars the jurisdiction of a civil court to entertain any suit or proceeding concerning a matter that RERA can decide..However, the top court stated that it needs to see: a) whether the bar specified under Section 79 of the RERA Act would apply to proceedings initiated under the provisions of the CP Act and; b) whether there is anything inconsistent in the provisions of the CP Act with that of the RERA Act..To decide the above issues the court placed reliance on its judgment in the 2009 case of Malay Kumar Ganguli v. Dr. Sukumar Mukherjee in which it had ruled that NCDRC cannot be considered a civil court under the Code of Civil Procedure though it has all the trappings of a civil court..“On the strength of the law so declared, Section 79 of the RERA Act does not in any way bar the Commission or Forum under the provisions of the CP Act to entertain any complaint,”the judgment stated. .Substantiating its reasoning, the top court stated that the proviso to Section 71(1) of the RERA Act entitles a complainant who had initiated proceedings under the CP Act before the RERA Act came into force, to withdraw the proceedings under the CP Act with the permission of the Forum or NCDRC and file an appropriate application before the adjudicating officer under the RERA Act..The proviso, the court clarified, gives a right or an option to the concerned complainant but does not statutorily force him to withdraw 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..Likewise, where such proceedings under the CP 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 judgment said. ."Thus, 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 Act or file an application under the RERA Act,"the court ruled. .The Supreme Court also stated that the RERA act provides a remedy to an allottee who wishes to withdraw from the project or claim return on his investment and held that the remedy so provided under the RERA Act to an allottee is not the only and exclusive modality to raise a grievance..(Read judgment)