The Real Estate sector
has seen a significant growth the past years, however it was unregulated. The
absence of any regulation created a havoc in the sector as the developers were
unable to complete the projects in the stipulated time and provide timely possession
to the homebuyers. The aggrieved homebuyer was left with an option to approach
the Consumer forum which fell inadequate to address all the concerns of buyers
and promoters in that sector. The Real Estate (Regulation and Development) Act 2016 (hereinafter referred to
as “RERA Act”) came into force on May 01, 2016, with the objective to bring
relief for homebuyers and developers will have to give timely possession for
projects. In the judgement dated April 17,
2019 “Ajay Nagpal Vs. Today Homes &
Infrastructure Pvt Ltd[1]”
the National Consumer Disputes Redressal Commission (hereinafter referred to as
“NCDRC”) has held that RERA Act 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 as
stipulated in the builder-buyer agreement.
The inference was drawn from the judgement
passed by the Hon’ble Supreme Court of India in “Aftab Singh v. Emaar MGF Land
Limited & Anr in Consumer Case No. 701 of 2015” on December 10, 2018 reiterated the well-established law that valid
arbitration agreements do not bar the jurisdiction of National Consumer
Disputes Redressal Commission (“NCDRC”) and other
consumer forums.
In “Aftab Singh v. Emaar MGF Land Limited & Anr in Consumer Case No. 701
of 2015” passed by NCDRC in December 2017., the
dispute was between a group of home owners (“Buyers”) and Emaar MGF Land Private Limited (“Builder”), who failed to
complete the construction and deliver the villas within the timeline stipulated
terms and conditions in the builder buyer agreement between the parties. The
Builder filed an application under Section 8 of the Arbitration and
Conciliation Act, 1996 (provides that a judicial authority shall, on the basis of
the arbitration agreement
between the parties, direct the parties to go for arbitration) to refer the case for
arbitration as the agreement contained a valid arbitration clause. The Buyers,
on the other hand, contended that the jurisdiction of consumer forums available
to them through the Consumer Protection Act, 1986.
The summary of conclusions
of the judgment passed by the Hon’ble NCDRC in “Aftab Singh v. Emaar MGF Land Limited & Anr” are as follows:
1. 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 redressal 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.
2. 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 Consumer
Protection Act. Even though 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.
.
It was observed that the Arbitration
agreement does not bar a consumer complaint as held by the National Consumer
Disputes Redressal Commission (NCDRC) while referring to the Supreme Court decision
in “Emaar MGF Land Ltd. vs. Aftab Singh,
Review Petition (C) No’s. 2629-2630 of 2018 in Civil Appeal No’s
.23512-23513 of 2017”, the
Commission held that the fact that Arbitration can be proceeded under the
Arbitration and Conciliation Act, 1996 is not a ground to restrain the Consumer
Fora from proceeding with the Complaints.
Conclusion
From this judgment, the inference we can withdraw is
that years back we were left with only an option to file a case in consumer court but after the
advent of RERA, an aggrieved homebuyer has now an option to initiate legal
proceedings against the errant developer/builder in both RERA Forum as well as Consumer
Courts, but it has to be seen whether these complaints are timely concluded and
or some relief is provided to the aggrieved homebuyer.
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