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

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

The Supreme Court has 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 the Consumer Protection Act (CPA).

The Court was hearing 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 in 2011 and all the complainants had booked their respective apartments by paying the booking amount and executing builder-buyer agreements.

However, the project got stalled and was left incomplete even after payment of substantial amounts. Following this, a group of buyers approached the NCDRC in 2017. Later in November 2017, the builder got the project approved by RERA.

The builder challenged the jurisdiction of NCDRC, inter alia, on the ground that since the apartments had 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% per annum from the respective dates of deposit along with Rs. 50,000/- (Rupees fifty thousand) towards costs.

When the case reached the Apex Court, Justice Uday Umesh Lalit 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 Apex Court stated that would have to observe two key points viz., – whether the bar specified under Section 79 of the RERA Act would apply to proceedings initiated under the provisions of the CPA and secondly whether there is anything inconsistent in the provisions of the CPA with that of the RERA Act.

The court relied on its 2009 judgment in the 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.

The Supreme Court observed that the proviso of Section 71(1) of the RERA Act entitles a complainant who had initiated proceedings under the CPA before the RERA Act came into force, to withdraw the proceedings under the CPA with the permission of the Forum or NCDRC and file an appropriate application before the adjudicating officer under the RERA Act.

The Court 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 CPA or file an application under the RERA Act".

The Supreme Court also held that the RERA Act offers a remedy to an allottee who wants to withdraw or claim a return on his investment from the project.

The Court thus rejected the submissions of the Developer and permitted all simultaneous proceedings under the CPA. It held that all the Complainants were entitled to execute the orders passed by the NCDRC in their favor, in accordance with law.