Remedies Available To Homebuyers Under Consumer Protection Act And RERA Are Concurrent: Delhi HC [Read Judgment]

The Delhi High Court on September 4, 2019, in the case of M/S M3M India Pvt. Ltd. & Anr v. Dr. Dinesh Sharma & Anr., has reiterated that remedies available to home buyers under the Consumer Protection Act, 1986 (CPA) and Real Estate (Development and Regulation) Act, 2016 (RERA) are concurrent.

The order was passed by a Single Judge Bench of JusticePrateek Jalan in a batch of petitions moved by several real estate companies (petitioners) against an order passed by the National Consumer Disputes Redressal Commission.

The question for consideration was whether proceedings under the Consumer Protection Act, 1986 can be commenced by home buyers against developers, after the commencement of the Real Estate (Development and Regulation) Act, 2016.

The NCDRC in its order stated that "remedies provided under CPA and RERA are concurrent, and the jurisdiction of the forums/commissions constituted under CPA is not ousted by RERA, particularly Section 79 thereof.”

Arguments

The respondents (home buyers) urged that the issue raised in these petitions had already been decided against the petitioners by the Supreme Court in Pioneer Urban Land and Infrastructure Ltd. & Anr. v. Union of India & Ors., 2019 SCC OnLine SC 1005. The top court in this case had held that "remedies given to allottees of flat/apartments are concurrent, and such allottees are in a position to avail of remedies under CPA, RERA, as well as trigger the provisions of the Insolvency and Bankruptcy Code, 2016 (IBC).”

The petitioners, on the other hand, argued that the issue involved in Pioneer (supra) was of the relationship between the remedies provided under IBC and RERA and that the question of interrelationship between RERA and CPA was neither raised nor argued before the Supreme Court. Therefore, if at all the judgment was to be regarded as having held that CPA and RERA provide concurrent remedies, the finding to that effect was only made with regards to Section 71 of RERA and not Section 79 of RERA; thus the judgment to this extent was per incuriam, the petitioners submitted.

In was also argued in the alternative that the conclusion recorded in Pioneer (supra) regarding the concurrent nature of remedies under CPA and RERA, neither formed ratio decidendi nor obiter dicta and therefore, not binding.

Findings

After hearing both the parties, the court did not agree with the submissions of the petitioners. On the basis of the below mentioned reasons, the court held that the judgment in Pioneer (supra) was binding on the High Court with regard to the issue in question.

The reasons given by the court are:

1. Although the petitioners appear to be right in submitting that the litigation before the Supreme Court principally raised the question of remedies under IBC and RERA, it is clear that issues arising out of CPA proceedings were also brought to the attention of the Court. The top court had arrived at the conclusion that "Remedies that are given to allottees of flats/apartments are therefore concurrent remedies and connected matters such allottees of flats/apartments being in a position to avail of remedies under the Consumer Protection Act, 1986, RERA as well as the triggering of the Code."
2. While examining the operation of remedies under RERA and IBC, the Supreme Court had drawn on Section 71(1) as another illustration that the remedies under RERA were not intended to be exclusive, but to run parallel with other remedies. The citing of an example could not lead to the conclusion that the Court intended to reach a conclusion only with regard to pending CPA complaints, and not ones instituted in the future.
3. The High Court could not disregard the judgment of the Supreme Court as being per incuriam based on its perception regarding the arguments considered therein. Reliance was placed on Sundeep Kumar Bafna v. State of Maharashtra & Anr., (2014) 16 SCC 623, wherein the Supreme Court gave a "salutary clarion caution to all courts, including the High Courts, to be extremely careful and circumspect in concluding a judgment of the Supreme Court to be per incuriam.”

Thus, the Court concluded that “the judgment in Pioneer (supra) constitutes the law declared by the Supreme Court under Article 141 of the Constitution, even in respect of the question raised in these petitions. Following the said judgment, therefore, it is held that the remedies available to the respondents herein under CPA and RERA are concurrent, and there is no ground for interference with the view taken by the National Commission in these matters.”

[Read Judgment]