Homebuyers have the right to choose between RERA and Consumer Forum

Since the advent of the Real Estate (Regulation and Development) Act, 2016 (RERA), real-estate companies have reiterated that homebuyers cannot file complaints against them in the Consumer Forum. Along the same lines, real-estate firm Imperia Structures had raised the contention that once RERA came into force, all queries related to construction and completion of the property had to be handled under this law. 

In a recent ruling, the Supreme Court declined this contention.

Imperia Structures had filed an appeal against the judgement of the National Consumer Disputes Redressal Commission (NCDRC) on the complaint of 10 homebuyers of its housing scheme, ESFERA, in Sector 13 C, Gurgaon, Haryana. The project was launched in 2011; the complainants had booked their apartments in 2011-12 by paying the booking amounts and later approached the NCDRC alleging that despite the lapse of 42 months, there was no chance for them to get possession of their homes.

While deciding on the appeal, the Supreme Court made it clear that despite the enactment of RERA, homebuyers can approach the Consumer Forum for refund and compensation against real-estate firms. And imposed costs of `50,000 have to be paid by the builder with respect to each consumer case. One of the conclusions of the Court was: “RERA is to be read harmoniously with the Code, as amended by the Amendment Act. It is only in the event of a conflict that the Code will prevail over RERA. Remedies that are given to allottees of flats or apartments are therefore concurrent remedies, such allottees of flats or apartments being in a position to avail of remedies under the Consumer Protection Act, 1986, RERA, as well as the triggering of the Code.”

The bench comprising justices UU Lalit and Vineet Saran in its judgement mentioned, “RERA does not statutorily force a person to withdraw any 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. Again, insofar as cases where such proceedings under the Consumer Protectoin 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 forum which cannot be called a Civil Court and express saving under Section 88 of the RERA Act, makes the position quite clear.”

This can be construed as a landmark judgement for homebuyers because it highlights the fact that they can choose between RERA and the Consumer Forum to initiate complaints against the builder.