Are you a homebuyer who is planning to take the builder to the court?
Table of Content:
- Abstract
- Introduction
- Background of the case
- Critical analysis of M/S Imperia Structure Ltd. Vs Anil Patni [(2020) SCC Online SC 894]
- Facts of the case
- Issues raised
- The contention of parties
- Judgment passed
- Conclusion
Abstract
Homebuyers are the person who buys a home or a registered as allottees. Generally, it has been seen that due to the loopholes present in the contract they signed they landed in big trouble, and sadly they have no remedy available to them. The judgment passed in the M/S Imperia Structure Ltd. Vs Anil Patni become a milestone for such claimants.
Introduction
In the concerned case, there was an appeal filed in Supreme Court in its civil appellate jurisdiction of the court but the main question raised over here is whether the NCDRC (National Consumer Dispute Redressal Commission) have a jurisdiction to try this case as the project must be governed under the RERA[Real estate (regulation and development) Act], 2016.
Background of the case
Around 2011, M/S Imperia Structure Ltd. Launched a Housing scheme known as ‘ESFERA’ in sector 13C of Gurugram, Haryana. The project was registered under the Haryana Real Estate Regulatory Authority under the RERA Act. Many homebuyers by taking the advantage of this scheme booked their apartments under the said scheme and signed the Builder Buyer Agreement. Such an agreement contain certain clauses which provided that if after signing and executing the Builder Buyer Agreement if the company failed to deliver the possession within 3 years then the company will terminate the contract at its discretion and refund the amount paid by them at the interest of 9% p.a. only and no other compensation will be awarded.
Agreement also provided that if the company is failed to execute the agreement and perform its obligation due to any act which beyond the company’s control such as the act of God, flood, in case of fire, war or explosion, etc. then the company will not be held liable for the same.
Critical analysis of M/S Imperia Structure Ltd. Vs Anil Patni [(2020) SCC Online SC 894]
Facts of the case
The respondent of the instant case booked an apartment and the apartment number was 1803 on the 18th floor of Tower no. ‘C’ under the scheme of the appellant company. The basic price for the apartment was Rs. 56, 01,750 plus the additional charges and the aggregate amount that has to be paid in total is Rs. 76, 43,000. After 4 years from the execution of the Builder Buyers Agreement company didn’t complete the allotment and the appellant moved to the National Consumer Dispute Redressal Commission. Meanwhile, the other allottees also approached the consumer commission for compensation.
The commission entertains this case along with all the other cases registered for the same cause of action. The commission held the appellate responsible and passed the order for awarding the refund of the amount paid by the plaintiffs – respondents with the simple interest of 9 % p.a. as mentioned in the agreement along with the Rs. 50,000 as the cost and the said amount has to be paid within four weeks from the date of this order. And if the company failed to comply with the order then the company has to pay the interest of 12 % p.a…
The defendant- appellate preferred an appeal in the Supreme Court by challenging the order passed by the National Consumer Dispute Redressal Commission.
Issues Framed
- Whether all the complainants in the instant case considered to be the “consumer”?
- Whether the court can interfere with the decision of the National Consumer Dispute Redressal Commission?
- Whether the national consumer redressal commission has a jurisdiction to try this case as this case comes under the ambit of the RERA Act?
The contention of parties
Arguments of the Appellant
- The appellant contended that part I of the agreement is already completed and under the part II only 437 allottees have left out of which only 59 allottees filed the complaint under the consumer protection act.
- It was further argued by the appellant that the company offered the accommodation to the said allottees but they denied and it clearly depicts that the apartments were booked for the investment purpose only.
- By adding in the above contention the appellant stated that the complaints cannot be said as a consumer under the consumer protection act as the booking was done for the investment for profit.
- It was contended that after the enactment of the RERA Act the said project must be governed under the RERA act and therefore, National Consumer Dispute Redressal Commission has no jurisdiction to try this.
Arguments by the Respondents
- By denying the arguments of the appellant, the respondents contended that said booking was done for the residential purpose only, and therefore, the respondents were very much falling under the definition of the consumer under the consumer protection act, 1986.
- There is no reasonable justification was provided for the aforesaid delay.
- The appellant does not raise any plea regarding the project has been registered under the provision of RERA. And therefore now the appellant has no opportunity to choose or raise the applicability of RERA.
- The respondents argued that though the agreement contains the provision regarding the compensation if the company fails to comply with the agreement the remedy in the form of compensation provided under the consumer protection act, 1986 is considered as an additional remedy and the respondents prayed for the same.
Court’s Observation
The question whether the remedies available to the consumers under the provisions of the CP Act would be additional remedies, was considered by this Court in some cases, the notable cases being:-
- i) In Secretary, Thirumurugan Cooperative Agricultural Credit Society vs. M. Lalitha (dead) through LRs. and others, this Court observed:-
“11. From the Statement of Objects and Reasons and the scheme of the 1986 Act, it is apparent that the main objective of the Act is to provide for better protection of the interest of the consumer and for that purpose to provide for better redressal, mechanism through which cheaper, easier, expeditious and effective redressal is made available to consumers. To serve the purpose of the Act, various quasi-judicial forums are set up at the district, State and national level with wide range of powers vested in them. These quasi-judicial forums, observing the principles of natural justice, are empowered to give relief of a specific nature and to award, wherever appropriate, compensation to the consumers and to impose penalties for non-compliance with their orders. 12.
As per Section 3 of the Act, as already stated above, the provisions of the Act shall be in addition to and not in derogation of any other provisions of any other law for the time being in force. Having due regard to the scheme of the Act and purpose sought to be achieved to protect the interest of the consumers better, the provisions are to be interpreted broadly, positively and purposefully in the context of the present case to give meaning to additional/extended jurisdiction, particularly when Section 3 seeks to provide remedy under the Act in addition to other remedies provided under other Acts unless there is a clear bar.”
The issue in this case was 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. Interpreting Section 3 of the CP Act, it was held that the remedy provided under the CP Act would be in addition to the remedies provided under the other Acts.
The Decision of the court
The Hon’ble Supreme Court passed the judgment in the favor of the respondent by upholding the judgment passed by the National Consumer Dispute Redressal Commission. The court further stated that in the ongoing dispute between the applicability of the RERA Act and Consumer Protection Act, 1986 the consumer court always has the power to try all those cases where the complainant falls under the definition of consumer under the consumer protection act irrespective of that the particular project is registered under the RERA act or not. The court put an emphasis on the point that the two enactments viz RERA act and Consumer Protection Act, 1986 are completely different and cannot be taken as a substitute for each other.
The court while answering the issues held that “At the outset, we must deal with two factual issues. It was concluded by the Commission that; (i) all the Complainants were ‘Consumers’ within the meaning of the Act and that; (ii) there was delay on part of the Appellant in completing the construction within time. The stand taken by the Appellant at various stages, itself acknowledged that there was delay but the Appellant tried to rely on certain events as mentioned in ground (c) quoted hereinabove. In our view, the conclusions drawn by the National Commission in relation to these issues are absolutely correct and do not call for any interference.”
Further the court stated that under RERA,
- Section 2 (d) defines the term “allotee” as:- means the person to whom a plot, apartment or building, as the case may be, has been allotted, sold (whether as freehold or leasehold) or otherwise transferred by the promoter, and includes the person who subsequently acquires the said allotment through sale, transfer or otherwise but does not include a person to whom such plot, apartment or building, as the case may be, is given on rent.
- Section 2 (zg) defines the “person” as (i) an individual; (ii) a Hindu undivided family; (iii) a company; (iv) a firm under the Indian Partnership Act, 1932 or the Limited Liability Partnership Act, 2008, as the case may be; (v) a competent authority; (vi) an association of persons or a body of individuals whether incorporated or not; (vii) a co-operative society registered under any law relating to co-operative societies; (viii) any such other entity as the appropriate Government may, by notification, specify in this behalf.
- Section 2(zj) defines “Project” as the real estate project as defined in clause (zn).
Further the other provisions including section 3, 4, 5, 18, 19, 22, 46, 71,79, 88, and 89 of RERA also deals with the instant case.
The court on response of parties contention stated 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.”
The court added that “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.”
The court be referring to the case Pioneer Urban Land and Infrastructure Limited and another vs. Union of India and another, stated that it has been considered that the provisions of Insolvency and Bankruptcy Code, 2016, RERA Act, and other legislatures includes the provisions of the Consumer protection Act.
Further the court by referring section 100 and section 107 of the 2019 act held that “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. Thus, the proceedings initiated by the complainants in the present cases and the resultant actions including the orders passed by the Commission are fully saved.”
The appeal was dismissed by the Hon’ble Supreme Court and the court gave various clarifications regarding the same and the court also specify that according to the section 79 of the RERA act which talks about the jurisdictional limit of the civil courts and consumer courts are not considered as the civil court.
Conclusion
The judgment is the need of the society as the agreement is popularly known as ‘Builder Buyer Agreement’ is a one sided agreement. This agreement is drawn in favor of the builders or the developers only and generally, the allottees would have to face great misery in the event of incompetency of the builder or the developer to fulfill the conditions and requirements of the said agreement.
With the help of this judgment, the supreme court makes it very clear that if any project is registered under the RERA then also it cannot snatch the jurisdiction of the consumer court to adjudicate the matter if the complainant falls under the ambit of the consumer protection act and this is also provided under section 2 (d) of the consumer protection act, 1986.
The decision passed by the National Consumer Dispute Redressal Commission will be binding upon the parties and the parties need to rely on such judgments.