The Supreme Court vide judgement dated 02.11.2020 held that the Real Estate (Regulation and Development) Act, 2016 does not preclude the National Consumer Disputes Redressal Commission (NCDRC) or the Consumer Forum from entertaining any complaint under the Consumer Protection Act.

The said judgement was passed in an appeal arising out of the September 2018 decision of the NCDRC which had directed the developer, Imperia Structures to refund the purchase amount along with interest to the buyers for violating the terms of the builder-buyer agreement.

A housing project was being developed by the developer in Gurugram sometime in 2011 and all the complainants had booked their respective apartments by paying the booking amount and executing builder-buyer agreements.

However, the project was not completed even after payment of substantial amounts prompting a group of buyers to approach the NCDRC in 2017. Later in November 2017, the builder got the project approved by RERA.

The builder on this basis challenged the jurisdiction of NCDRC, inter alia, on the ground that since the apartments having been booked for commercial purposes, the buyers would not come within the definition of “the consumer” under Section 2(d) of the Consumer Protection Act.

The NCDRC, however, held the developer guilty and directed refund of the amounts deposited by each of the complainants along with simple interest at 9 percent per annum from the respective dates of deposit along with Rs. 50,000/- (Rupees fifty thousand only/) towards costs.

Justice Uday Umesh Lalit in the present matter noted that Section 79 of the RERA Act bars the jurisdiction of a civil court to entertain any suit or proceeding concerning a matter that RERA can decide.

However, the Apex Court stated that it needs to see:

  1. 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;
  2. b) Whether there is anything inconsistent in the provisions of the CP Act with that of the RERA Act.

To decide the above issues the court placed reliance on its judgment in the 2009 case of Malay Kumar Ganguli v. Dr. Sukumar Mukherjee in which it had ruled that NCDRC cannot be considered a civil court under the Code of Civil Procedure though it has all the trappings of a civil court.

In support of its reasoning, the Supreme Court claimed that the proviso of Section 71(1) of the RERA Act entitles a  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 NCDRC and file an appropriate application before the adjudicating officer under the RERA Act.Justice Lalit also stated as follows, “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”.

The Supreme Court also held that the RERA Act offers a remedy to an allottee who wants to withdraw or claim a return on his investment from the project and held that the remedy given to an allottee under the RERA Act is not the sole and exclusive means of raise a grievance.

Therefore, all the submissions advanced by the Appellant were rejected, thereby permitting all simultaneous proceedings to this effect. It was held as follows, “All the Complainants are entitled to execute the orders passed by the Commission in their favor, in accordance with law.”

Order: MS_Imperial_Structures_Ltd_vs_Anil_Patni_and_another