In a recent legal case, the court delved into the intricate relationship between the Real Estate (Regulation and Development) Act (RERA) and the Consumer Protection Act. The analysis focused on the rights of allottees and the remedies provided under these two statutes. This blog post will highlight the court’s detailed legal examination of how allottees can seek redress against developers for delays and failures, within the framework of the RERA Act and the Consumer Protection Act.
Facts
- Complainants booked apartments for profit motive, not as consumers under CP Act.
- Mr. Himanshu Giri approached authorities under the RERA Act.
- OP stopped construction after extracting money from buyers.
- Ten Consumer Cases filed on the same day.
- Alternative accommodation offered by the Appellant to all allottees.
- Appellant launched ‘The ESFERA’ housing scheme in 2011.
- Appellant completed Phase-I of the project on time.
- Phase-II concerning 437 allottees was delayed.
- Specific case details of Consumer Case No.3011 of 2017 provided.
- The Project had RERA registration but construction delays persisted.
- Majority of allottees reposed faith in the Appellant for investment purposes.
- Appeals challenging NCDRC judgment on Consumer Cases.
- Delay in construction completion despite substantial time.
- RERA Act applicable for all Project-related issues post its enforcement.
- NCDRC’s jurisdiction questioned post Project registration under RERA.
- The Commission granted relief to the Respondents.
- The relief was given under certain terms.
- The decision was made after considering certain factors.
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Issue
- Clause 11.4 of the Agreement outlines the remedy available to the developer in case of failure to deliver possession within three years.
- If the developer abandons the scheme or is unable to give possession within the stipulated time, the agreement can be terminated.
- In such cases, the developer is liable to refund the amounts paid by the allottee with simple interest at 9% per annum.
- Alternatively, the developer may choose not to terminate the agreement and pay compensation to the original allottee at a rate of Rs. 5/- per sq. ft. per month for delays beyond three and a half years.
- Compensation is subject to certain conditions and the allottee not being in default under any term of the agreement.
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Arguments
- Forums under the Act cannot grant relief to the appellants
- Action taken by Respondent 1 was approved by authorities under the Cooperative Societies Act
- Authorities under the Cooperative Societies Act were not impleaded as parties in the complaints
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Analysis
- The Real Estate (Regulation and Development) Act, 2016 (RERA Act) grants rights and duties to allottees, outlining their entitlement to project information and their responsibility to make necessary payments as per the agreement.
- The Act establishes the Real Estate Regulatory Authority and sets the process for project registration, granting registration within 30 days or rejecting applications with reasons recorded.
- The Act specifies that no civil court shall have jurisdiction over matters determined by the Authority, the adjudicating officer, or the Appellate Tribunal.
- Sections in the RERA Act define key terms like Allottee, Person, Project, and Promoter, while setting out provisions for project registration and compensation in case of delays or failures by the promoter.
- The Act also addresses liabilities of allottees, outlining payment obligations and interest for delays, while providing avenues for compensation in case of defects or breaches by the promoter.
- The jurisdiction of the Consumer Protection Act (CP Act) in relation to the RERA Act and the permissibility of invoking CP Act remedies alongside RERA Act provisions are discussed.
- The Act repeals the Consumer Protection Act, 1986, outlining the finality of its orders and specifying that the RERA Act provisions are in addition to existing laws.
- The appointment qualifications for Chairperson and Members of the Appellate Tribunal are detailed, ensuring expertise and experience in relevant fields.
- The Consumer Protection Act, 1986 was enacted to provide better protection of consumer interests and to allow redressal against unfair trade practices.
- The provisions of the RERA Act and the CP Act can be utilized concurrently by allottees for seeking remedies.
- The RERA Act provides additional remedies to allottees and does not bar them from seeking remedies under the CP Act.
- The RERA Act allows allottees the choice to initiate proceedings under the CP Act or file applications under the RERA Act as per their discretion.
- The RERA Act gives allottees the right to withdraw from a project or claim a refund.
- The parliamentary intent is clear that allottees have the option to choose between the CP Act and the RERA Act for seeking remedies.
- The RERA Act’s provisions are to be interpreted broadly and positively to protect consumer interests effectively.
- The RERA Act does not restrict allottees from initiating proceedings under other laws, including the CP Act.
- The judgement highlights the interplay of the CP Act, RERA Act, and the specific rights of allottees in seeking remedies against builders or developers.
- The position of allottees, especially regarding delays in possession or completion, is outlined within the framework of the CP Act and the RERA Act.
- The remedies available under the CP Act are additional remedies and can be pursued alongside remedies under other statutes.
- The availability of an alternate remedy does not prohibit the filing of a complaint under the CP Act.
- Various cases have upheld the coexistence of remedies under different statutes, including the CP Act and special legislations.
- The CP Act ensures that individuals engaging in various activities, such as agriculture, have access to consumer protection.
- Farmers who purchase goods or services fall under the definition of ‘consumer’ in the CP Act and are entitled to its remedies.
- The CP Act should not be restricted in its application, and attempts to exclude certain groups, like farmers, may render the Act unconstitutional.
- Provisions in statutes like the RERA Act do not bar individuals from seeking redress under the CP Act if applicable.
- Section 100 is enacted with the intent to secure remedies under the 2019 Act for the protection of consumers.
- These remedies remain applicable even after the enactment of the RERA Act.
- The significance of Section 100 lies in its aim to safeguard consumer interests.
Decision
- The Appellant has been directed to pay Rs.50,000/- for each Consumer Case in addition to amounts payable to Complainants.
- Complainants are entitled to execute the orders in their favor.
- Alternative accommodation to be provided in Takshila Heights, Gurgaon.
- Directions issued for delay possession charges at 10.75% per annum from a specific date.
- Arrears of interest to be paid within 90 days and monthly interest payments thereafter.
- The fact that the Project was registered under RERA Act was not mentioned in the appeal memo.
- Proceedings initiated by the complainants and orders passed by the Commission are upheld.
- All submissions by the Appellant are rejected, and the appeals are dismissed.
Case Title: M/S IMPERIA STRUCTURES LTD. Vs. ANIL PATNI AND ANR. ETC. (2020 INSC 625)
Case Number: C.A. No.-003581-003590 / 2020
