RERA does not bar the ju­ris­dic­tion of NCDRC

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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.

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