Jurisdiction of Consumer Forums not barred by RERA but rather only power to grant Injunction taken away by express provision of Section 79 of RERA Act, 2016 NCDRC

Posted On - 28 May, 2019 • By - Vaidya Gopikrishnan

After the introduction of the RERA (Real Estate Regulation and
Development) Act, 2016 (hereinafter referred to as “RERA”) adjudication of real estate matters whether registered or
non-registered with the RERA were categorically held to fall within the scope
of the Act as per the judgment in the case of Simmi Sikka v. M/s Emmar MGF Land Limited[1].
The order of HARERA (Haryana Real Estate Regulatory Authority) clarified that
the projects registered previously with the Director of Town and Country
Planning (hereinafter referred to as “DTCP”)
before commencement of the Act can be adjudicated by RERA. In the present case the
developer M/s. Today Homes and Infrastructure Pvt. Ltd. (hereinafter referred
to as “developer”) registered the
project titled as “Canary Greens”[2]
with the DTCP, Haryana. The Complainant Ajay Nagpal had purchased a flat in the
said project whereas delivery of possession was not handed over to the
Complainant. The Complainant filed case before the NCDRC New Delhi for which
preliminary issues were raised by the developer with respect to maintainability
of the complaint since the inception of RERA, disputes relating to real estate
matters where specifically brought within the purview of RERA Act, 2016. The
Commission in the present case has distinguished the powers and jurisdiction of
RERA from that of the Consumer Forums instituted under Consumer Protection Act,
1986 (hereinafter referred to as the CPA, 1986) and whether filing a consumer
complaint before the consumer forums by itself would be barred by specific
provision of section 79 of the RERA Act, 2016.      


Mr. Ajay Nagpal in the
present case along with 48 others[3] filed a series of batch
complaints (Buyers/Allottees) before the NCDRC New Delhi against the developer for
non-delivery of possession of flats as per the buyer – agreement despite
payment of initial booking amount. After the initial payments made by the
Complainants there was no development of the said plots for a period of seven
years by the developer even though as per the agreement entered between the
buyer and the developer the physical possession of the plots were to be
delivered within a period of three years. The Complainants further stated the
agreement was also a one sided and that non-payment of any amount overdue on
the part of the buyers would be charged 18% interest by the developer whereas
no steps were taken by the developer to deliver physical possession of the
plots to the buyers. Upon claim of refund of the initial amount made by the
Complainants, the Opposite party – developer raised preliminary objections
before the NCDRC stating that the civil courts and consumer forums were
expressly barred as per section 79[4] of the RERA Act, 2016 and
that the present batch of complaints needs to be dismissed as the same subject
matter of dispute was pending before the Real Estate Regulatory Authority,
Haryana. The developer further reiterated that the Complainants being
signatories to the buyer – developer agreement are well aware of the
arbitration clause inserted in the agreement and that as per amendment to
section 8 of the Arbitration and Conciliation Act, 1996 only the Arbitrator has
powers to adjudicate the dispute and therefore the same would specifically bar
the jurisdiction of the Consumer Forums from hearing the present matter.      


  1. Whether the presence of an arbitration
    clause in an agreement would bar the Consumers from seeking remedy under the CPA,
  2. Whether the enactment of RERA, Act 2016
    expressly bars civil courts from exercising jurisdiction in real estate matters
    to the extent that the consumer forums also fall within the definition of
    “civil courts”?                                                                                               


The NCDRC upon hearing the
submissions made by the developer with respect to applicability of RERA, Act 2016
over the CPA, 1986 primarily compared the statement of object and reasons of
both the acts and observed that the RERA Act, 2016 was enacted to provide
effective consumer protection in the real estate sector whereas the CPA, 1986
was enacted for better serving the interest of the consumers. The Commission in
furtherance also noted the fact that section 3 of the CPA, 1986 clarified that
the Act is in addition to and not in derogation of any other law for the time
being in force hence the purpose of the Act is to provide for speedy and
expeditious remedy to the consumers through setting up of district, state and
national level forums as an additional/ jurisdiction in excess to the remedy
provided under other Acts.[5] With respect to the first
issue regarding the argument made by the builder/ developer’s counsel regarding
the presence of an arbitration clause inserted in the buyer-developer agreement
the NCDRC referred to the case adjudicated by the Hon’ble Supreme Court in the
case of Fair Air Engineering Pvt. Ltd.
and another vs. N.K. Modi – (1996) 6 SCC 385
wherein  it was laid down that
section 34[6] of the Arbitration and
Conciliation Act, 1996 does not confer any automatic rights over the exercise
of authority towards relegating the matters to arbitration and that it is the
discretion of the consumer forums to try the matter since the remedy provided
under the CPA, 1986 is in addition to any other law for the time being in force.
The next issue framed before the NCDRC was with respect to whether the consumer
forums are civil courts and if whether they are barred from entertaining
disputes concerning real estate matters as per section 79 of the RERA, Act
2016. The counsel for the builder – Opposite Party submitted that the powers
conferred under RERA[7] clearly and expressly bars
the jurisdiction of the consumer forums and that the intent of the legislation
could not be to provide concurrent jurisdiction so as to provide execution of
orders simultaneously granted under both the Acts[8] therefore would render the
objective of RERA baseless. The Commission upon hearing the judgements placed
by the learned counsel for the complainant and the builder/ developer held that
the Consumer Forums are not civil courts[9] and that only the power to
grant injunction was taken away by the express provision under section 79 of
RERA, Act 2016. The Commission further reiterated that there was no provision
in the CPA, 1986 which was inconsistent with RERA, 2016 and that both the
legislations are supplemental to each other therefore did not notice any
preliminary issue with respect to maintainability of the complaint filed under
CPA, 1968 by the Allottees/Buyers.              


The NCDRC in the present
ongoing case has resolved through its order dated 15.04.2019 that a consumer
case cannot be barred on the grounds that a remedy is already available in law
to the complainant and has also stated that unless a similar matter is not filed
by the consumer before any other forum the same is not liable to be dismissed. Through
the present order the NCDRC has also clarified that a dual remedy cannot be
pursued by the Complainant and that the obligations of promoters under section
14, 15, 18 and 19[10] of RERA are not in
derogation of the rights vested to an Allottee/ Buyer to approach the consumer
forum for additional remedies. Further it was held that the provision of
section 71 of the RERA Act which allows for withdrawal of the complaint filed
by the consumer before consumer forum and to file the said complaint before
RERA is not an express bar of the jurisdiction of the consumer forum, as stated
earlier and that the forum based on the facts of the case may direct the
parties to be appear before the appropriate forum for adjudication.     

Contributed By – Vaidya Gopikrishnan
Designation – Associate

[1] Haryana Real Estate regulatory Authority, Gurugram order dated 21.08.2018

[2] Consumer Case No. 1764 of 2017 Ajay Nagpal and others v. M/s Today Homes & Infrastructure Pvt. Ltd.<https://drive.google.com/viewerng/viewer?url=https://www.livelaw.in/pdf_upload/pdf_upload-360063.pdf>

[3] Section 79- 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.                                                                                                                                                                         

[4] Thirumurugan Cooperative Agricultural Society; National seeds Corporation vs. M. Madhusudhan Reddy and another – (2012) 2 SCC 506

[5] Application for setting aside arbitral award by courts.

[6] Section 14 – Adherence of sanctioned plans and project specifications by the promoter, section 15 – Obligations of promoter in case of transfer of a real estate project to a third party, Section 18 – Return of amount and compensation by the promoter, Section 19 0 rights and duties of Allottees.

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