“Consumer courts still better place to resolve real estate complaints”

May 8, 2022

The House panel head by BJP leader Jagadambika Pal is reviewing the functioning of RERA in urban areas

Consumer Commissions are a more accessible and affordable option for redressal of complaints of home buyers compared to Real Estate Regulatory Authority (RERA) and the National Company Law Tribunal (NCLT), according to a note circulated by the Department of Consumer Affairs to the members of the Parliament Standing Committee on Urban Development and Housing.

The panel, headed by veteran BJP leader Jagadambika Pal, is reviewing the functioning of RERA in urban areas. The panel has recently met the ministries of Finance, Urban Development and the Consumer Affairs Department on the matter. Sources closely tracking the panel indicate that it will table a report during the monsoon session of Parliament detailing the challenges faced by RERA as an institution.

A member said the panel is studying the problems faced by home buyers and the industry players after six years of implementing the Real Estate (Regulation and Development) Act. He said the Consumer Affairs Department compared the Consumer Commissions, NCLT and the RERA and told the panel that Commissions are accessible to home buyers. “They told us that the consumers (homebuyers) can easily and conveniently approach a District Commission which is available within the range of a few kilometers from the residence of the consumers, whereas under the RERA the adjudicating agencies established are one or two in each State. There is no fees for filing complaint where consideration paid is upto ₹5 lakh.

The Consumer Protection Act also provides for establishment of Mediation Cell attached with each consumer commission, the member pointed out. “The National Commission empowered to declare one sided agreements as unfair contract under Section 59(2) of the Act. Home buyers can directly approach NCDRC and can file group complaints against a developer if consideration paid is more than ₹ two crore,” he said.

At present, in case of any dispute, a consumer can approach RERA, NCLT and the Consumer Commissions as allottee, financial creditor or consumer, respectively.

The Ministry is learnt to have told the panel that though RERA provides a complete umbrella of safeguards under the Real Estates (Development & Regulation) Act for home buyers, it does not mean that the buyers cannot approach the consumer courts to seek relief under the Consumer Protection Act.

The panel was also told that 12,089 consumer complaints on housing disputes were filed in the National Consumer Disputes Redressal Commission since 2008, of which 5,993 have been disposed off. “Out of the 5,993 consumer complaints disposed of so far, 1,467 complaints were disposed within six months of their filing; 784 within six months to one year of their filing; 1,847 within one to two years, and 1,895  after two years. The pendency of the consumer complaint relating to housing disputes is 6,218 as of now,” the member said.

Since the enactment of the RERA, the commission received 1,889 cases in 2016, 3,475 in 2017, 2,404  in 2018, 1,955  in 2019, 734 in 2020, 74 in 2021 and 64 in 2022. “The decline in the filing of cases since 2020 is particularly because of outbreak of Covid 19 and, thereafter, for the new Consumer Protection Act, 2019 coming into being where after the pecuniary jurisdiction has changed and most of the cases relating to real estates are now being filed before the District Commissions. Even after the enactment of RERA, there is no steep fall in the number of filing of real estate matters in the National Commission in particular, and in the consumer commissions as a whole,” he added.

Published on

May 07, 2022

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