High Court (India)

September 13, 2019

NCDRC Versus RERA: Homebuyers can approach both as their jurisdictions are concurrent: Delhi HC ruling

[ by Legal Era News Network ]


The Delhi High Court has ruled that aggrieved homebuyers can approach both the National Consumer Disputes Redressal Commission (NCDRC) and RERA against errant builders as their jurisdictions are “concurrent”.

The court ruled that the proceedings under the Consumer Protection Act 1986 can be initiated by homebuyers (or allottees of properties in proposed real estate development projects) against developers even after enactment of the Real Estate (Development and Regulation) Act, 2016 (RERA).

A batch of petitions was filed by 62 builders and developers across the National Capital Region who sought relief, arguing that once a homebuyer moved RERA, the cases pending earlier against them before the NCDRC couldn’t be heard and needed to be withdrawn.

The real estate firms contended that a homebuyer could only seek relief from RERA or from a consumer commission under the Consumer Protection Act, 1986 (CPA). They maintained that since RERA itself gives an option to an allotte to withdraw pending proceedings under the CPA, the same needed to be followed in cases filed elsewhere after RERA came into force.

The High Court however rejected the argument and upheld a decision of NCDRC, which said that the remedies provided under CPA and RERA are concurrent and the jurisdiction of the forums/commissions under CPA was not ousted by RERA.

Justice Jalan also cited a recent Supreme Court ruling in this regard which said that the relationship between proceedings under CPA and RERA have been considered and that there was no scope for any confusion, reiterating that parallel cases against the builder could proceed both under RERA and NCDRC for the benefit of the homebuyer.

However, the real estate firms claimed the Supreme Court ruling on them was not binding since litigation before the Apex Court was on question of options available to a homebuyer under RERA once a builder’s company became insolvent under the new Insolvency Code. But the Delhi High Court highlighted that “issues arising out of CPA proceedings were also brought to the attention of the apex court”.

RERA is focused on making it easier for the buyers by taking stricter actions against the developers who exploit the interest of the buyers. Before RERA, the buyers did not have any government-run organization where they could address their grievances.

The NCDRC only allowed the complaints to be filed if the value of the property was Rs 1 crore or above. If it involved property less than Rs 1 crore, then the consumer first had to district level authority then state-level authority to claim the justice before approaching the NCDRC. Unlike RERA, the NCDRC cannot file a complaint or start an investigation regarding the developer on its own.

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