Remedies Available Under Consumer Protection Act And RERA Are Concurrent: Delhi HC [Delhi HC]

The Delhi High Court on Wednesday 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.

Background

In the petition titled "M/s M3M India Pvt. Ltd. & Anr. v. Dr. Dinesh Sharma & Anr." along with a batch of similar petitions, Justice Prateek Jalan was faced with the question whether proceedings under the CPA could be commenced by home buyers against developers, after the commencement of RERA. The high court had decided to hear the matter filed against the order of National Consumer Disputes Redressal Commission, earlier this year.

The NCDRC had decided 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".

Section 79 of RERA provides that no civil court shall have jurisdiction over matters empowered to be decided by RERA under the Act and no court shall grant injunction in pursuance of any power conferred by or under this Act.

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. vs. Union of India & Ors., 2019 SCC OnLine SC 1005. The court had held therein 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, M/s M3M India Pvt. Ltd. and other real estate developers, 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 inter-relationship between RERA and CPA was neither raised nor argued before the Supreme Court. Moreover, 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.

In the alternative it was submitted 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 thus, was not binding.

Findings

The court was of the view that judgment in Pioneer (supra) was binding on the high court with regard to the issue in question in as much as:

1. While it was correctly pointed out by the Respondent that the litigation before the Supreme Court principally raised the question of remedies under IBC and RERA, the issues arising out of CPA proceedings were also brought to the attention of the Court. In fact, it had recorded 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." Thus, it could not be said that any of those conclusions are obiter dicta or made as passing observations, and not intended to be followed.
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".

Thereby the court concluded that "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."

Arguments for the Petitioners were advanced by Senior Advocate Jayant Bhushan and Advocates Vivek Sibal and Vivek Kohli and the Respondents by Advocate Manish Bishnoi.

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