RERA Does Not Bar Homebuyers' Complaint Under Consumer Protection Act Against Builder/Developer: NCDRC [Read Order]

RERA Does Not Bar Homebuyers

Both, the Consumer Protection Act, 1986 and the Real Estate (Regulation and Development) Act, 2016 are supplemental to each other and there is no provision in the Consumer Protection Act which is inconsistent with the provisions of RERA.

The National Consumer Disputes Redressal Commission(NCDRC) has held that Real Estate (Regulation and Development) Act 2016(RERA) does not bar filing of a complaint under the Consumer Protection Act 1986 against a builder/developer.

The bench headed by Justice R K Agrawal was dealing with a batch of complaints filed by homebuyers for compensation from Today Homes & Infrastructure Pvt Ltd for not delivering possession of flats within the stipulated time.

The builder/developer raised preliminary objections against the maintainability of complaints on two grounds :

  • After the commencement of RERA, consumer complaint was not maintainable, as Section 79 of RERA bars jurisdiction of civil courts.
  • The arbitration clause in the agreements with buyers excluded jurisdiction of consumer forum.

Rejecting these objections, the Commission held that Consumer Protection Act was a special enactment, which provided a special remedy to an aggrieved consumer. The authorities under Consumer Protection Act cannot be regarded as "civil courts" and hence Section 79 of RERA did not apply.

It was held :

"Section 79 of RERA only prohibits the jurisdiction of Civil Court from entertaining any suit or proceeding in respect of any matter which can be decided by the Authorities constituted under the RERA. As the Consumer Fora are not Civil Courts, the provisions of Section 79 which bar the jurisdiction of Civil Courts, will not be attracted. So far as to grant injunction is concerned, only that power has been taken away by Section 79. But, it does not, in any manner, effect the jurisdiction of the Consumer Fora in deciding the Complaints.

Both, the Consumer Protection Act, 1986 and the Real Estate (Regulation and Development) Act, 2016 are supplemental to each other and there is no provision in the Consumer Protection Act which is inconsistent with the provisions of RERA".

The summary of conclusions of the NCDRC are as follows :

  • The Consumer Protection Act, 1986 is a supplement Act and not in derogation of any other Act;
  • The Consumer Fora constituted under the Consumer Protection Act, 1986 are not Civil Courts.
  • A Consumer cannot pursue two remedies for the same cause of action. However, if a Consumer has not approached for redressel of its grievance under the particular Statute, the Consumer can approach the Consumer Fora under the Consumer Protection Act. But, if the Consumer had already approached the Authority under the relevant Statute, he cannot simultaneously file any complaint under the Consumer Protection Act.
  • Mere availability of a right to redress the grievance in a particular Statute will not debar the Complainant/Consumer from approaching the Consumer Fora under the Act
  • Even though under Sections 14, 15, 18 and 19 of RERA, various provisions have been made which are to be followed by the Developer/Promoters and the rights and duties and the return of amount as compensation as also rights and duties of Allottees, yet same cannot mean to limit the right of the Allottee only to approach the Authorities constituted under the RERA, he can still approach the Consumer Fora under the Consumer Protection Act.
  • Section 71 of RERA which gives the power to adjudicate, does not expressly or impliedly bar any person from invoking the provisions of the Consumer Protection Act. It has also given a liberty to the person whose Complaint is pending before the Consumer Fora to withdraw it and file before the RERA Authorities.

Arbitration agreement does not bar consumer complaint.

Referring to the recent SC decision in Emaar MGF Land Ltd. vs. Aftab Singh, the Commission held that the fact that Arbitration can be proceeded under the Arbitration and Conciliation Act, 1986 is not a ground to restrain the Consumer Fora from proceeding with the Complaints.

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