Registration of Project under RERA no bar to initiate proceedings under Consumer Protection Act

Registration of Project under RERA no bar to initiate proceedings under Consumer Protection Act. Its choice or discretion of the allottees

ABCAUS Case Law Citation
ABCAUS 3418 (2020) (11) SC

Important case law relied upon by the parties:
Malay Kumar Ganguli vs. Dr. Sukumar Mukherjee
Secretary, Thirumurugan Cooperative Agricultural Credit Society vs. M. Lalitha
National Seeds Corporation Limited vs.     M. Madhusudhan Reddy and another
Virender Jain vs.  Alaknanda Cooperative Group Housing Society Limited and others

In the instant case, appeal was filed under Section 23 of the Consumer Protection Act, 1986 (the CP Act) against the judgement passed by the National Consumer Disputes Redressal Commission.

The appellant had launched a Housing Scheme. The Complainants booked apartments in the Scheme by paying the booking amounts and executing Builder Buyer Agreement (the Agreement) with the Appellant.

The agreement had a clause dealing with the delay due to reasons beyond the control of the Developer/Company and failure to deliver possession due to Government Rules, Orders, Notifications, etc.

The Real Estate (Regulation and Development) Act, 2016 (the RERA Act) came into force from 01.05.2016.

When even after four years there were no signs of the   Project getting completed. The respondent filed a Consumer Case before the Commission alleging that despite taking a substantial amount towards the consideration, the builder company deliberately did not construct the towers in which apartment/house of the complainant was situated.  The entire site was just abandoned with semi constructed structure.

Subsequently the Project was registered with the State Real Estate Regulatory Authority.

The appellant company challenged the jurisdiction of   the Commission inter alia, on the ground that the apartment having been booked for commercial purposes, the Respondents would not come within the definition of “the consumer” under Section 2(d) of the CP Act.

However, the commission allowed the appeals of the consumers by granting relief of refund of the amounts deposited with interest along with costs.

The Hon’ble Supreme Court stated that it has consistently held by that the remedies available under the provisions of the CP 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 CP Act.

The Hon’ble Supreme Court stated that on a plain reading of Section 79 of the RERA Act, an allottee who did not   fulfil the requirements of being a “consumer” would stand barred from invoking the jurisdiction of a Civil Court.  However, as  regards  the  allottees  who  can  be  called   “consumers” within the meaning of the CP Act, two questions would arise;

(a) whether the bar specified under Section 79 of the RERA Act would apply to proceedings initiated under the provisions of the CP Act; and

(b) whether there is anything inconsistent in the provisions of the CP Act with that of the RERA Act. 

Relying on its own decision, the Hon’ble Supreme Court stated that Section 79 of the RERA Act does not in any way bar the Commission   or Forum under the provisions of the CP Act to entertain any complaint.

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The Apex Court stated that Proviso to Section 71(1) of the RERA Act 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 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.

It was clarified that Again, insofar as cases where such proceedings under the CP Act were initiated after the provisions of the RERA Act came into force, there is nothing in the RERA Act which bars such initiation.

The Hon’ble Supreme Court pointed out that Section 18 of RERA Act 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.

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