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Whom should homebuyers/ allottees approach – Consumer Forum, RERA, NCLT?

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In order to choose between Consumer Forums and Courts, following material considerations as covered under different heads are important:

1. TIME: Adjudication of disputes is relatively faster in RERA as compared to consumer forums. Also, there are 2 stages of appeal in Consumer forums as compared to only one stage in RERA which also makes the proceedings before RERA more time effective.
2. ACCESS: District Consumer Forums can adjudicate disputes upto Rs. 1 crore and they are present in each district. In contrast, RERA operates only from few places in a state. In terms of access, the consumer forums are better placed.
3. RELIEFS GRANTED: The Consumer Forums can order refund of the amount, removal of deficiency in the construction, etc, grant compensation for loss and injury, can grant punitive damages. RERA can impose penalty, can order refund of the amount, can grant compensation for delay in possession, and can direct completion of the project.
4. CONTROL: Consumer Forums are presided by a retired Judicial Officer or a person from legal background whereas RERA is manned by retired administrative officials in most of the states.
5. JURISDICTION: Consumer Forums can entertain complaints only from “consumers” and only for “deficiency in service” whereas RERA can adjudicate the dispute from any allottee. Purchasers of property for commercial purpose are not considered consumers and they cannot approach Consumer Forums. Purchase of multiple houses for investment or purchase of a commercial shop or office in a project not for one’s own use is considered as commercial purpose.

Depending on the above considerations, the suitability of a particular forum would vary on a case-to-case basis. However, in general:

• In case the buyer is a consumer, it is advisable to approach Consumer Forums. Consumer Forums can grant compensation, can order refund of the amount paid, can order removal of any deficiency and can direct performance of obligations under the Buyers Agreements. Over the years, the Consumer Forums have evolved law and procedures so as to make them more consumer-friendly.
• In case the buyer is not a consumer, it is advisable to approach RERA. RERA can grant compensation and penalty for contravention of provisions of Real Estate (Regulation & Development) Act. RERA can also direct refund of the amount paid by the buyer in case of delay in possession.
• In case the project is near completion and the buyers wishes to retain the flat/property but wants to seek compensation for delay in possession, RERA is more effective as it takes lesser time to get the matter resolved in RERA.
• NCLT should be approached only when the builder/developer is in poor financial position and the likelihood of the completion of the project by the same builder and the recovery of the amount with interest is minimal and chances of recovery of money with interest is also minimal. In such cases, the remedy provided by Insolvency and Bankruptcy Code, 2016 (IBC) becomes relevant in order to recover maximum amount of money invested along with Interest. In other cases, the remedy provided by IBC is not relevant.