Introduction
While
the Real Estate (Regulation and Development) Act, 2016 (RERA) has
come as a big relief for all the aggrieved home buyers across
India protesting long delays in the delivery of their homes and
other issues, it has left stakeholders unclear about certain
provisions.
This alert covers clarifications provided by the Punjab and
Haryana High Court on some of such issues.
Background
On
16 October 2020, the Punjab and Haryana High Court passed a
judgment on forty-four writ petitions filed in relation to the
different provisions of RERA (Judgment).
The Punjab and Haryana High Court has in detail discussed the
provisions in relation to: (a) the condition of a pre-deposit for
the appellate tribunal to entertain appeal under section 43(5) of
RERA; (b) scope and powers of adjudicating officers and the
authority under RERA; and (c) remedies available under the
Consumer Protection Act, 1986 (CPA) and provided its views on
these issues.
Summary of the key findings in the Judgment
- (a) Pre-deposit for appeal to the appellate tribunal
A challenge was made against the constitutional validity of
the condition for pre-deposit under the proviso to section
43(5) of the RERA for filing an appeal by the promoter
before the appellate tribunal against any order of an
adjudicating officer.
Proviso to section 43(5) prescribes that "where a promoter
files an appeal with the Appellate Tribunal, it shall not be
entertained, without the promoter first having deposited
with the Appellate Tribunal at least thirty percent of the
penalty, or such higher percentage as may be determined by
the Appellate Tribunal, or the total amount to be paid to
the allottee including interest and compensation imposed on
them, if any, or with both as the case may be before the
appeal is heard.
The division bench of the High Court in this regard relied
on the view given by the Supreme Court of India in one if
its judgments that the right to appeal was not a vested
right and was a creature of the statute and that conditions
can be imposed for filing appeal.
The Court further stated that the Appellate Tribunal is not
obliged to proceed to “entertain” or hear an appeal that has
been filed before it, if the promoter, who has filed such an
appeal, fails to comply with the direction for making the
pre-deposit in terms of the proviso to section 43 (5) of the
RERA.
In light of the above, the High Court held that the
condition to pre-deposit for appeal as provided under
section 43(5) cannot be held as unreasonable or arbitrary.
- (b) Scope and powers of the appellate tribunal and
adjudicating officers
The Court discussed and cleared the ambiguity with regard to
the issue of power to adjudicate the compensation under
sections 12, 14, 18 and 19 of the RERA.
The High Court read section 71 of the RERA with sections 12,
14, 18 and 19 of the RERA. The Court stated that section 71
of the RERA titled “Power to adjudicate” is specific to the
adjudicating officer. Further, section 71(1) opens with the
words “For the purpose of adjudicating compensation under
sections 12, 14, 18 and 19”.
The High Court held that the adjudicating officer could
determine rates of compensation and interest payable on a
default by a promoter. It further held that under section 71
the adjudicating officer has the power to adjudicate only
the compensation and interest. If an allottee wished for
other remedies, they would have to approach the authority,
who was bestowed with a wider range of powers under the
RERA.
It was further stated that RERA gave the authority the power
of a court, and authorized it to issue directions and
interim orders, the Court stated. Thus, in the case of
compensation and interest alone the person should approach
the adjudicating officer.
- (c) Remedies under CPA can be pursued simultaneously
The High Court while dealing with various provisions of RERA
observed that the remedies available to the allottees under
RERA and CPA can also be pursued simultaneously.
The Court further observed that it is not mandatory that a
person, whose complaint is pending before the consumer
forum, should have it transferred to the adjudicating
officer under the RERA.
The Court noted that the proviso to section 71(1) is an
enabling proviso, which enables a person whose complaint is
pending in the consumer forum under CPA to decide to
withdraw such complaint to go before the adjudicating
officer.
The judgment also refers to section 88 of RERA in this
regard, which clarifies that the provisions of the RERA
would be in addition to, and not in derogation of, the
provisions of other laws in force.
The Court however clarified that if a complaint before the
consumer forum is withdrawn and presented before the
adjudicating officer, the scope of the relief would be
limited to the compensation or interest. Therefore, the
complainant withdrawing the complaint from the consumer
forum should take a conscious decision, in light of the
above clarification, i.e., they would only be entitled to
compensation/interest, as opposed to obtaining a
refund/other relief.
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