RERA does not bar the jurisdiction of NCDRC

In a judgement dated 17 April 2019, in the case of Ajay Nagpal versus Today Homes & Infrastructure, NCRDC held that RERA did not bar the filing of a complaint under Consumer Protection Act against a builder/developer.

The bench headed by Justice RK Agrawal was dealing with a batch of complaints filed by homebuyers for compensation from Today Homes & Infrastructure for not delivering possession of flats as stipulated in the builder-buyer agreement. The NCDRC, drawing inference from a judgement that had been passed by the Supreme Court in 2015 in the case of Aftab Singh versus Emaar MGF Land Limited and Others, stated that if the consumer was not seeking remedy under RERA, it was well within their right to reach out to a consumer forum.

In the case of Aftab Singh versus Emaar MGF, Emaar had failed to complete the construction and deliver the villas within the timeline stipulated in the builder-buyer agreement. The builder filed an application under Section 8 of the Arbitration and Conciliation Act, 1996, wherein a judicial authority, on the basis of the agreement between the parties, direct the parties to go for arbitration. The buyers on the other hand contended that they would rather seek remedy under Consumer Protection Act, instead of arbitration. In May 2016, the Government of India passed The Real Estate (Regulation and Development) Act, commonly known as RERA, with the objective of bringing relief to homebuyers and ensuring that developers gave timely possession and completed projects as per stipulated datelines. For a section of legal professionals as well as consumers, RERA created several confusions. For example, would all ongoing cases in consumer forums have to be moved to civil courts? Did RERA supersede the Consumer Protection Act and would the authority of consumer courts to deliver judgements on erring developers get compromised?

The Supreme Court in its judgement stated:

1. The Consumer Protection Act, 1986, is a supplement Act and not in derogation of any other Act. The consumer fora constituted under Consumer Protection Act are not civil courts. A consumer cannot pursue two remedies for the same cause of action. However, if a consumer has not approached for redressal of its grievance under the particular statute, he or she can approach the consumer fora under Consumer Protection Act. But if the consumer had already approached the authority under the relevant statute, he or she cannot simultaneously file any complaint under Consumer Protection Act.

2. Mere availability of a right to redress the grievance in a particular statute will not debar the complainant/consumer from approaching the consumer fora under Consumer Protection Act.

Moreover, Section 71 of RERA, which gives the power to adjudicate, does not expressly or impliedly bar any person from invoking the provisions of Consumer Protection Act. It has also given liberty to the person whose complaint is pending before the consumer fora to withdraw it and file before the RERA Authorities.

Builder to pay Rs 1.5 crore for not delivering flat on time

While pronouncing its judgement on a complaint filed by Ashok Kumar Taneja who had booked an apartment with Orris Infrastructure Private Limited in Gurugram, NCDRC said the housing developer’s action of relying on the clause of force majeure, while retaining the amounts deposited by complainant, was an act of deficiency of service and unfair trade practice.

According to the complainant, after breaking many promises, the developer had committed to hand over the possession of the apartment in December 2015. Overall, seven years had lapsed from the date of agreement and that he was paying instalment of the loan for the property that he never got.

The NCDRC bench, comprising president RK Agrawal and member M Shreesha, held as ‘extremely unfair’ and ‘one-sided’ the force majeure clause along with others such as the developer charging interest at 18 per cent for any delay in payments made by flat purchasers, but at the same time if the project was abandoned the refund would be made at an interest of 9 per cent only.

The commission allowed Taneja’s plea and directed the developer to refund the principal amount, that is, over Rs 1.15 crore, with interest at 12 per cent per annum.

The counsel appearing for the developer submitted that the time given for completion of the project before RERA was 30 June 2020. However, Taneja contested the same, saying that he was not willing to wait until then for taking possession, as the promised date of delivery of possession was way back in December 2015.

Forum overrules Tata AIG claim rejection on basis of delay in intimation

One Jawadkar from Nanded, Maharashtra, had lost his eight-month-old-pregnant wife Kalpana due to an accidental fire in the kitchen when he and their daughter were away.

Although police treated the incident as a case of accidental death, a complaint was lodged by Kalpana’s brother and a criminal case was registered against Jawadkar. Jawadkar was immediately arrested but was released on bail a month later.

Out on bail, Jawadkar, who had taken an Accident Guard Policy from Tata AIG, requested the company to process his claim (the policy premium was Rs 17,110 and it covered him, his wife and their daughter to the extent of sum assured of Rs 1 crore, Rs 50 lakh and Rs 10 lakh, respectively) but he could not follow through the process as he was defending the criminal case simultaneously. The sessions court at Nanded declared Jawadkar innocent and he was acquitted of all charges.

Jawadkar approached the insurer, but his claim was rejected on the grounds of late intimation and submission of documents. The insurance company also alleged that his wife’s death was a suicide and not an accident.

Jawadkar filed a complaint at the Maharashtra State Commission. The latter held that there was no adequate evidence with the insurer to prove that Kalpana had committed suicide and that they could not oversee the judgement of the district court on the basis of their assumptions. It also added that the reasons for the delay in intimation were genuine and valid.

Tata AIG dragged Jawadkar to the National Commission, which in its May 2019 decision ruled that the reasons for delay in intimation were justified. It also brought to light a circular issued by IRDAI directing insurers to admit and pay claims when the delay in intimation was caused by legitimate reasons.

As per the State Commission’s decision, the insurer is now liable to pay Rs 55 lakh for Kalpana’s death and Rs 5 lakh towards educational expenses of her daughter. If the insurer fails to pay the amount within 60 days, an interest of six per cent will be chargeable.

Also, the National Commission, on consideration of Jawadkar’s appeal, has directed the insurer to pay interest for repudiation of claim from date of repudiation, along with litigation cost of Rs 25,000. On failure to make the above payments within a span of four weeks, an interest of nine per cent will be charged.

Voice Outreach Tobacco intervention

Over 1,000 doctors, 90 public health organizations, and 1,000 school students and teachers from across India have appealed to the prime minister for ensuring effective enforcement of the ban on electronic nicotine delivery systems (ENDS) including e-cigarettes. Concerned about the aggressive promotion and marketing of ENDS as a safe means for quitting smoking, they have urged the prime minister and the union health ministry to put a check on the growing popularity of these products, especially among the youth.

Consumer Voice and their state partners garnered support from media and on social media platforms.

Electronic cigarette (e-cigarette, e-cig) is a battery-powered vaporizer that simulates the feeling of smoking, but without burning tobacco. Using an e-cigarette is called vaping. The user puffs on the mouthpiece of a cartridge. This causes a vaporizer to heat the liquid inside the cartridge. This liquid contains nicotine, flavourings and other chemicals. The heated liquid turns into the vapour (aerosol) that is inhaled. The primary types of e-cigarettes are disposable and reusable e-cigarettes. Disposable e-cigarettes look like traditional cigarettes and contain liquid, battery and heating device. Reusable e-cigarettes also consist of similar elements, except that the battery is rechargeable and liquid can be refilled. Most e-cigarette consumers prefer reusable e-cigarettes. The device costs anywhere between Rs 1,500 and Rs 10,000. The liquid needs to be purchased separately on a regular basis. In India, a number of online retailers sell e-cigarette devices, accessories and liquids. These are purchased without any restriction, including in states where e-cigarettes are banned. The offline market seems to be less evolved; these products are not easily available in traditional stores selling tobacco products. The use and sale of e-cigarettes and e-hookahs is banned in Bihar, Himachal Pradesh, Haryana, Karnataka, Kerala, Jammu and Kashmir, Jharkhand, Maharashtra, Mizoram, Puducherry, Punjab, Tamil Nadu and Uttar Pradesh under the Drugs and Cosmetics Act, 1940, and Food Safety & Standards (Prohibition and Restriction on Sales) Regulation, 2011. The Union government is likely to ban e-cigarettes following an expert committee’s conclusion that they have cancer-causing properties, are highly addictive, and do not offer a safer alternative to tobacco-based smoking products. There are no requisite provisions to ban it under the Cigarettes and Other Tobacco Products Act (COTPA). A study conducted by Consumer Voice in five major cities (Delhi, Mumbai, Kolkata, Bengaluru and Lucknow) found that 36 brands of e-cigarette are available for purchase.