Status as on 18/01/2020
Quite often homebuyers stuck with delayed projects are confused and daunted with the question-
- whether to move consumer court or approach RERA?
- whether the Homebuyers with cases pending before Consumer forum should continue with consumer forum or approach RERA?
Which forum can provide quick remedy & speedy justice to them?
The position is quite clear now with the plethora of judgments that homebuyers can seek redressal of their grievances either before consumer forum or RERA or both at the same time to seek reliefs in case of an issue with the delayed project. Both the authorities have concurrent jurisdiction. Homebuyers have the option of withdrawing the pending consumer complaint and file before appropriate RERA authorities. But what is necessary is that homebuyers must get relief in a timely concluded manner.
RERA over Consumer Courts
- Conciliation Forums
MahaRERA was the first to start a conciliation forum in February 2018. Maharashtra Conciliation and Dispute Resolution Forum were established vide Circular No: 15/2018 dated 29th January 2018, to facilitate the resolution of disputes amicably.
If homebuyers want to escape the lengthy litigation process then compromise is a better and a viable solution. It is the best opportunity for aggrieved homebuyers of getting speedy justice cost-effectively.
Procedure to approach conciliation forum is as follows:
- Log on to State RERA Website and register on the conciliation forum to fill an online application form for Conciliation.
- After the filing of an application, the other party will be intimated through SMS and e-mail, after receiving confirmation the allottee has to make payment of a minimal fee which is Rs. 1000/-.
- After payment is received, a conciliation bench will be allocated and the same will be intimated to both the parties through SMS and e-mail and hearing will begin at the location decided by MahaRERA.
- The bench will try to resolve disputes after hearing both the parties. If both the parties reach agreement on a settlement of a dispute, the Bench will ask both parties to sign a conciliation agreement, which shall be binding on both the parties. If both parties fail to reach a settlement, the conciliation process would stand canceled and the parties can approach MahaRERA for adjudication.
Till this year, 930 conciliation requests were received, of which in 447 consent was provided by another party, of which 314 were disposed. MahaRERA shall enhance and encourage this alternative dispute redressal mechanism.
Pecuniary Limits & Jurisdiction
Homebuyers can file a complaint before MahaRERA or other authority where his/her property is situated whereas in of a consumer complaint you have to file the complaint depending on the pecuniary limits. State commissions can entertain complaints only up to the limit of INR 1 crore. So in case if the value of your property is more than INR 1 crore then you will have to approach NCDRC. But according to this case of the Supreme Court in M/S Amrapali Sapphire Developer Private Limited v M/s Amrapali Sapphire Flat Buyers Welfare Association, homebuyers can directly approach NCDRC and can file group complaints against developer if the cost involved is more than 1 Crore. On the contrary, there are no pecuniary limits or jurisdictional issues while filing a claim under RERA.
Consumer forums are a consumer-centric act so it focuses more on protecting the interest of consumers and can only pass orders of Refund and compensation. Whereas RERA, on the other hand, can impose a fine or imprisonment up to 3 years or both on defaulting developer. Consumer forums do not have any power to imprison a defaulting developer.
Government revival program
Recently, to improve the conditions of the real estate sector the government announced a Rs 25,000 crore bailout package to revive stalled real estate projects. This will be routed through an Alternative Investment Fund (AIF), with the government contributing Rs 10,000 crore and financial institutions like LIC and SBI bringing in the remaining Rs 15,000 crore. The AIF will be managed by SBI Cap Ventures. As per industry estimates, 90% of the stalled projects are under the affordable and middle-income segment groups, about 1509 housing projects are comprising of approximately 4.58 lakh housing units in the stalled category. Projects meeting the investment eligibility criteria will be financed. The maximum finance for any single project will be INR 400 crore.
This government funding scheme aims at affordable and middle-income housing group. It applies only to the flats priced at Rs. 2 Crore in Mumbai and having carpet area up to 200 sq. meter. Moreover, this fund will only be provided the projects which are stalled due to lack of proper funds but their net worth should be positive. Projects that are close to completion will get the priority in funding. This government measure is a welcome move to boost the real estate sector, to protect the interest of stuck homebuyers and to finally put the plight of many homebuyers at rest.
There is no bar to approach consumer court at any point of time but since RERA act is a special enactment formed with the main objective to ensure the completion of projects, because only the completion of a real estate project will bring relief to all the stakeholders, including the homebuyers, institutional finance companies, and all others associated with the project. In addition to this, the Conciliation forum is an added advantage for a speedy solution. In contrast to consumer forum, RERA also provides relief to buyers if a developer changes a project plan without informing the buyers, if requisite permissions are lacking, or if there were misrepresentations/false promises.
Therefore, homebuyers will be advised to approach RERA to get faster redressal to their concerns/issues.
Disclaimer – the above article is based on the personal interpretation of related laws, which may differ from person to person. The readers are expected to take expert opinion before relying on this article. For more clarification, the readers can be expected at firstname.lastname@example.org or email@example.com