On Monday, 2nd November 2020, the bench comprising of Justice Uday Umesh Lalit and Justice Vineet Saran in its judgment held that Section 79 of the RERA Act does not in any way bar the Commission or Forum under the provisions of the Consumer Protection Act to entertain any complaint.
Supreme Court on Monday ruled that homebuyers can approach consumer forum as well as RERA if a builder fails to deliver a real estate project on time. Home buyers who have not got possession of their houses within the contract time period are free to approach the consumer forum for compensation from the builder in addition to Real Estate (Regulation and Development) Act proceedings, says Supreme Court.
It was, however, urged that going by the objective or the purpose for which the RERA Act 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 registered under the RERA Act. It was submitted that if the allottees were to be permitted to initiate parallel proceedings before the fora under the Consumer Protection Act, the financial drain on the promoter would render completion of construction an impossibility and, therefore, the RERA Act in general and Section 89 in particular be construed in such a way that all the issues pertaining to the concerned project be decided only by the authorities under the RERA Act. Even with acceptance of such interpretation, the allottees would still be entitled to approach the authorities under Section 18 of the RERA Act.
Apex court said that it is true some special authorities are created under the RERA Act for the regulation and promotion of the real estate sector and the issues concerning a registered project are specifically entrusted to functionaries under the RERA Act. But for the present purposes, we must go by the purport of Section 18 of the RERA Act. Since it gives a right “without prejudice to any other remedy available’, in effect, such other remedy is acknowledged and saved subject always to the applicability of Section 79.”
The bench has said that if the contract has been violated, the rights of the homebuyers cannot be said to be deferred simply because the registration period under RERA still continues.
It has consistently been held by this Court that the remedies available under the provisions of the Consumer Protection Act are additional remedies over and above the other remedies including those made available under any special statutes; and that the availability of an alternate remedy is no bar in entertaining a complaint under the Consumer Protection Act, Observed the bench, which also pointed out that the section 100 of the Consumer Protection Act 2019 which specifically says that the provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.
The judgment was passed in a case filed by real estate developer M/S Imperia Structures Ltd, which had launched a housing project in Sector 13C Gurgaon. The homebuyers approached the National Consumer Disputes Redressal Forum in 2017, as no construction had been started on the project even after 4 years. The NCDRC passed its Judgment in 2019, and directed the developer to refund the amounts deposited by the petitioners with simple interest of 9% pa from the respective dates of deposits till the date of realisation plus Rs 50,000 to both Consumers as cost of litigation.
The company approached the Supreme Court claiming that since the project was registered under RERA, the homebuyers could not have approached the Consumer Forum. In addition, the company argued that the “homebuyers” were not “Consumers” under the definition of the Consumer Protection Act, since they had purchased the properties as investment for commercial purpose and not for residential purpose. Both the arguments were rejected by the Supreme Court. The Apex court also imposed additional costs of litigation on the developer, directing them to pay 50,000 rupees each to the homebuyers, in addition to the cost imposed by the Consumer Forum.
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