2020 (11) TMI 189 - SC - Indian Laws

Supreme Court Affirms Consumer Rights Over Delayed Real Estate Projects

Imperia Structures Ltd. Versus Anil Patni And Others

The Supreme Court affirmed the National Consumer Disputes Redressal Commission's decision in a case involving jurisdiction under the Consumer Protection ... Jurisdiction of the Consumer Forum / Commission - Buyers of Flat - consumer or not - applicability and effect of the RERA Act - statutory remedies available under the Haryana Cooperative Societies Act, 1984 as against those under the CP Act - effect of registration of the Project under the RERA Act - whether in the face of Section 156 of the Tamil Nadu Cooperative Societies Act, 1983 the concerned persons could avail remedies under the CP Act? - HELD THAT:- It has consistently been held by this Court 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. In terms of Section 18 of the RERA Act, if a promoter fails to complete or is unable to give possession of an apartment duly completed by the date specified in the agreement, the Promoter would be liable, on demand, to return the amount received by him in respect of that apartment if the allottee wishes to withdraw from the Project. Such right of an allottee is specifically made 'without prejudice to any other remedy available to him'. The right so given to the allottee is unqualified and if availed, the money deposited by the allottee has to be refunded with interest at such rate as may be prescribed. The proviso to Section 18(1) contemplates a situation where the allottee does not intend to withdraw from the Project. In that case he is entitled to and must be paid interest for every month of delay till the handing over of the possession. It is upto the allottee to proceed either Under Section 18(1) or under proviso to Section 18(1). - It is, therefore, required to be considered whether the remedy so provided under the RERA Act to an allottee is the only and exclusive modality to raise a grievance and whether the provisions of the RERA Act bar consideration of the grievance of an allottee by other fora. 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 - Again, insofar as cases where such proceedings under the CP 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 fora which cannot be called a Civil Court and express saving Under Section 88 of the RERA Act, make the position quite clear. Further, Section 18 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. It is true that some special authorities are created under the RERA Act for the Regulation and promotion of the real estate sector and the issues concerning a registered project are specifically entrusted to functionaries under the RERA Act. But for the present purposes, we must go by the purport of Section 18 of the RERA Act. Since it gives a right 'without prejudice to any other remedy available', in effect, such other remedy is acknowledged and saved subject always to the applicability of Section 79 - Section 100 of 2019 Act is akin to Section 3 of the CP Act and Section 107 saves all actions taken or purported to have been taken under the CP Act. It is significant that Section 100 is enacted with an intent to secure the remedies under 2019 Act dealing with protection of the interests of Consumers, even after the RERA Act was brought into force - the proceedings initiated by the complainants in the present cases and the resultant actions including the orders passed by the Commission are fully saved. Appeal dismissed. Issues Involved:1. Jurisdiction of the Consumer Protection Act (CP Act) vis-à-vis the Real Estate (Regulation and Development) Act (RERA Act).2. Definition of 'Consumer' under the CP Act.3. Delay in the completion of the housing project.4. Force majeure and its applicability.5. Remedies available to the allottees under the CP Act and RERA Act.6. Validity of the National Consumer Disputes Redressal Commission (NCDRC) order.Detailed Analysis:1. Jurisdiction of the CP Act vis-à-vis the RERA Act:The Supreme Court analyzed whether the remedies available under the CP Act would be additional remedies over and above those provided under the RERA Act. It was concluded that the CP Act provides additional remedies and the availability of an alternative remedy does not bar the entertaining of a complaint under the CP Act. The Court referred to Section 88 of the RERA Act, which states that its provisions are in addition to and not in derogation of any other law. The Court emphasized that the RERA Act does not bar the jurisdiction of the Consumer Fora under the CP Act, even after the RERA Act came into force.2. Definition of 'Consumer' under the CP Act:The Court upheld the NCDRC’s conclusion that the complainants were 'Consumers' within the meaning of the CP Act. The complainants had purchased the apartments for self-use, and not for commercial purposes, which qualified them as consumers under Section 2(d) of the CP Act.3. Delay in the Completion of the Housing Project:The NCDRC found that there was a significant delay in the completion of the project, which was not justified by the developer. The Supreme Court agreed with this finding, noting that the developer had acknowledged the delay but attempted to justify it with reasons such as demonetization and labor shortages, which were not accepted as valid force majeure events.4. Force Majeure and its Applicability:The Court rejected the developer’s argument that events such as demonetization and labor shortages constituted force majeure. It was noted that the developer failed to provide evidence supporting these claims. The NCDRC correctly concluded that these events did not qualify as force majeure under the terms of the Builder Buyer Agreement.5. Remedies Available to the Allottees under the CP Act and RERA Act:The Supreme Court confirmed that the remedies under the CP Act are additional to those under the RERA Act. Section 18 of the RERA Act provides remedies for allottees who wish to withdraw from the project or seek compensation for delays. However, the CP Act also offers a parallel remedy, allowing consumers to seek redressal under both statutes.6. Validity of the NCDRC Order:The Supreme Court upheld the NCDRC’s order, which directed the developer to refund the amounts deposited by the complainants with simple interest at 9% per annum from the respective dates of deposits till realization, along with costs of Rs. 50,000 to each complainant. The Court found no merit in the developer’s arguments against the NCDRC’s jurisdiction and the applicability of the RERA Act.Conclusion:The Supreme Court dismissed the appeals, affirming the NCDRC’s decision. It was held that the remedies under the CP Act are in addition to those under the RERA Act, and the complainants were rightly considered consumers under the CP Act. The developer was ordered to comply with the NCDRC’s directions and pay additional costs of Rs. 50,000 per consumer case.