The Supreme Court of India held on November 2, 2020, in the case of M/s Imperia Structures Ltd v Anil Patni & Others (Civil Appeal No. 3581-3590 of 2020), that the redressal mechanism / provisions under the Real Estate (Regulation and Development) Act 2016 (RERA) do not act as a bar to complaints under the Consumer Protection Act 1986. (CP Act). The Supreme Court’s principles are supported by a number of previous decisions by various High Courts and the National Consumer Disputes Redressal Commission (NCRDRC), which have stated that allottees / homebuyers are well within their rights to seek relief under the CP Act, RERA, and even the Insolvency and Bankruptcy Code 2016. (IBC).
- Facts of the case-
The case before the Supreme Court stemmed from an appeal from an NCDRC ruling regarding a collection of complaints filed by homebuyers. Due to the builder’s delay in handing over ownership of the flats, the homeowners filed complaints under the Consumer Protection Act. These objections were made barely a week before the project was registered with the relevant RERA regulator, in this case the Haryana Real Estate Regulatory Authority (Haryana Authority).The builder (the Appellant before the Supreme Court) contested the NCDRC’s jurisdiction, claiming that the flats had been reserved for business uses and that the homebuyers (the Respondents before the Supreme Court) were not “consumers” as defined under the CP Act. The Appellant made no mention of the project being registered under RERA before the NCDRC. The NCDRC granted the Respondents’ complaint and, in an order dated September 12, 2018, ordered a return of the homebuyers’ money, plus interest and fees. The project registration letter issued by the Haryana Authority was submitted when the Appellant filed his appeal with the Supreme Court. An decision dated 17 January 2019 issued by the Haryana Authority in response to an RERA complaint made by another homebuyer in relation to this project was also presented, in which the Haryana Authority instructed payment rather than return of money to be paid.
- Issues Raised–
• Whether all of the complainants qualified as “consumers” under the Act?
• Is it necessary for the court to intervene in the findings reached by the national law commission?
- By the Petitioner
• Phase I of the project was finished on time, and Phase II of the project, which involved 437 allottees, was completed on time. Only 59 people submitted complaints under the Consumer Protection Act.
• Alternative lodging was provided to all allottees but was declined by all complainants, indicating that the flats had been rented for investment purposes.
• The Complainants were not “consumers” as defined by the Consumer Protection Act since the flats were hired for a business motive.
• After the RERA Act went into effect in 2016, all problems pertaining to the Project, including those relating to construction and completion, would be under the sole supervision of the RERA Act’s authorities, and they would be the only ones with authority over such issues.
• Mr.Himanshu Giri contacted the RERA Act’s officials. As a result, the bulk of the allottees put their trust in the Appellant.
• In the instance of Himanshu Giri, the court ordered the payment of interest at a rate of 10.75 percent per annum, but did not require a refund of funds.
The strategy taken would be beneficial to the completion of work while also balancing the budget.
• The Commission’s orders should be set aside in accordance with the requirements of the RERA Act. instead of adhering to the ruling in the Himanshu Giri case. The Compla nants be awarded interest at a rate of 10.75 percent per annum on the money they deposited; this will allow the Project to be finished without placing the Appellant under financial stress, while also providing relief in the form of investment interest.
- By the Respondent
• The complainants purchased the flats for their own use. As a result, the question of the Complainants not being “consumers” as defined by the Consumer Protection Act was correctly determined in their favour.
• There was no reasonable justification given for the delay caused by force majeure.
• There was no complaint filed with the Commission about the Project’s registration under the RERA Act. As a result, the Appellant would be unable to make any arguments concerning the RERA Act’s application.
• As interpreted by the Court. The CP Act’s remedy would be an extra recourse for a consumer.
- The objective and meaning of Section 79 of the RERA were explained by the Hon’ble Court. It was decided that the relevant statute, Section 79, is only concerned with the jurisdictional boundaries of Civil Courts, and therefore Consumer Forums are not Civil Courts.
- Referring to Section 18 of RERA, the Supreme Court stated that the clause in question does not exclude the aggrieved from seeking other remedies and that alternative remedies are also available. The Hon’ble Court’s decision is further supported by RERA sections 88 and 89. Because the laws specified under RERA are accessible in addition to other laws in effect, they cannot compel an infraction.
• The decision in favour of the Homebuyers was made. upholding the National Consumer Dispute Resolution Commission’s judgement.
• It was also determined that, notwithstanding current proceedings at RERA, RERA and the Consumer Protection Act are two separate statutes. The consumer forum will always have the authority to hear cases in which the homebuyers meet the criteria of “consumers.”
• This appeal was dismissed, and several clarifications to the legislation relating to it were made, such as S. 79 of the RERA Act, which only refers to the jurisdictional boundaries of Civil Courts. Consumer forums, on the other hand, are not Civil Courts.
This decision was a watershed moment for one-sided buyer-builder contracts that benefited the builder/developer in the case of incompetence. Also, even if a project is registered under the RERA Act of 2016, the consumer forum has jurisdiction in those matters since homebuyers are customers as well, according to Section 2(d) of the Consumer Protection Act. Consumers’ rights were clarified, and the law was clarified.
In this instance, the commission’s ruling was upheld, and the aggrieved were awarded relief of a refund with interest as instructed by the commission, and M/s lmperia Structures Ltd.’s appeal was dismissed.