Recently, a two-judge bench of the Supreme Court comprising Uday Umesh Lalit and Vineet Saran JJ vide judgment dated November 02, 20201 held that there is nothing in the Real Estate (Regulation and Development) Act, 2016 (RERA) which bars initiation of proceedings under the Consumer Protection Act after the provisions of RERA Act came into force.
The said decision was passed in connected appeals filed against common judgment and order2 passed by Ld National Consumer Disputes Redressal Commission (NCDRC). The grievance raised in connected matters pertained to delay in handing over of possession of flats by the developer.
The complainants had booked the apartments around the year 2011-2012 and the Builder Buyer Agreement was entered into in November 2013. As per the Agreement, the possession had to be delivered within 42 months; however, the said period expired and there were no signs of the construction being complete. The project was registered under the provisions of the RERA Act on 17th November 2017, which was beyond the period of 42 months. As a result, the consumer complaints were preferred seeking refund of the amounts deposited towards the bookings which were allowed by the NCDRC ordering refund of amounts along with simple interest @9% from the respective dates of deposits till the date of realization together with costs of Rs.50,000/- to be paid to each of the complainants. The rate of interest was to be construed @12% if the Developer failed to comply with the directions within four weeks of date of receipt of the order.
The two legal issues that arose in the present case were: 1) whether the bar specified under Section 79 of the RERA Act would apply to proceedings initiated under the provisions of the Consumer Protection Act; and 2) whether there is anything inconsistent in the provisions of the Consumer Protection Act with that of the RERA Act.
The apex court analyzed the statutory provisions of the RERA Act to consider whether the remedy so provided under the RERA Act to an allottee is the only and exclusive modality to raise a grievance and whether the provisions of the RERA Act bar consideration of the grievance of an allottee by other fora.
The court took note that Section 79 of the RERA Act bars jurisdiction of a civil court to entertain any suit or proceeding in respect of any matter which the authority or the adjudicating officer or the appellate tribunal is empowered under the RERA Act to determine. Section 88 specifies that the provisions of the RERA Act would be in addition to and not in derogation of the provisions of any other law, while in terms of Section 89, the provisions of the RERA Act shall have effect notwithstanding anything inconsistent contained in any other law for the time being in force.
The court relied on Malay Kumar Ganguli v. Dr. Sukumar Mukherjee3 wherein it was held that the National Commission is not a civil court within the meaning of provisions of the Code of Civil Procedure. It may have all the trappings of the civil court yet it cannot be called a civil court. Based on this settled position, the Supreme Court observed that Section 79 of the RERA Act does not in any manner bar the Commission or Forum under the provisions of the Consumer Protection Act to entertain any complaint.
The court observed that the proviso to Section 71(1) entitles a complainant who had initiated proceedings under the CP Act before the RERA Act came into force, to withdraw the proceedings under the CP Act with the permission of the Forum or Commission and file an appropriate application before the adjudicating officer under the RERA Act. The court said:
"The proviso thus gives a right or an option to the concerned complainant but does not statutorily force him to withdraw such complaint nor do the provisions of the RERA Act create any mechanism for transfer of such pending proceedings to authorities under the RERA Act. As against that the mandate in Section 12(4) of the CP Act to the contrary is quite significant.
Again insofar as cases where such proceedings under the CP Act are initiated after the provisions of the RERA Act came into force, there is nothing in the RERA Act which bars such initiation. The absence of bar under Section 79 to the initiation of proceedings before a fora which cannot be called a Civil Court and express saving under Section 88 of the RERA Act, make the position quite clear. Further, Section 18 itself specifies that the remedy under said Section is "without prejudice to any other remedy available". 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 CP Act or file an application under the RERA Act."
Further, the court rejected the contention raised by the appellant that going with the objective with 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) and such authorities must be held entitled to decide all issues concerning the project registered under the RERA Act. The bench observed:
"It is true that 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 court also referred to earlier decision in Pioneer Urban Land and Infrastructure Limited and another v. Union of India and another4 wherein it was held that remedies given to allottees of flats/apartments are therefore, concurrent remedies, such allottees being in a position to avail of remedies under the Consumer Protection Act, 1986, RERA as well as the triggering of the Insolvency and Bankruptcy Code.
The court took note of the provisions of the Consumer Protection Act, 2019 and observed that Section 100 of 2019 Act is akin to Section 3 of the CP Act and Section 107 saves all actions taken or purported to have been taken under the CP Act. It is significant that Section 100 is enacted with an intent to secure the remedies under 2019 Act dealing with protection of the interests of consumers, even after the RERA Act was brought into force. It further held that the proceedings initiated by the complainants in the present cases and the resultant actions including the orders passed by the commission are fully saved.
The court, therefore dismissed the appeals, imposing costs of Rs.50,000 to be paid by the appellant builder in respect of each of the consumer case over and above the amounts directed to be made over to the complainants.
1 Civil Appeal No. 3581-3490 of 2020
2 Consumer Case No. 3011, 3012, 3013, 3014, 3015, 3016, 3017, 3018, 3019 and 3020 of 2017
3 (2009) 9 SCC 221
4 (2019) 8 SCC 416
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.