Can a Consumer Approach RERA and NCDRC Simultaneously?

A frequently asked question in real estate disputes is whether a homebuyer or consumer can file complaints simultaneously before the Real Estate Regulatory Authority (RERA) and the National Consumer Disputes Redressal Commission (NCDRC) or other consumer courts for the same grievance. Both forums provide legal remedies against errant builders, but the issue of dual filings has been the subject of legal scrutiny and debate.

Understanding the Jurisdiction and Role of RERA and NCDRC

RERA was enacted in 2016 to bring transparency, accountability, and efficiency in the real estate sector. It regulates real estate projects and protects homebuyers by ensuring timely possession, proper disclosures, and fair practices by developers. RERA tribunals can grant compensation for delays, direct refunds with interest, and order specific performance. They are designed to be speedy and specialised forums for real estate disputes.

On the other hand, the Consumer Protection Act, 2019 establishes consumer courts across district, state, and national levels, including the NCDRC at the apex level. These courts address grievances relating to deficiency in goods or services, which includes real estate transactions as “services”. Consumer forums have wider jurisdiction to award damages, compensation for mental agony, litigation costs, and more. The procedures, while relatively informal, may take longer than RERA proceedings.

Thus, both RERA and consumer forums offer remedies for homebuyers but under different statutory frameworks.

The Statutory Provision: Section 18 of RERA and Its Interpretation

Section 18 of RERA states that the remedies available under the Act are “without prejudice to any other remedy available to any aggrieved person under any other law for the time being in force.” On a literal reading, this clause appears to permit consumers to seek relief under RERA as well as under other laws, such as the Consumer Protection Act.

Many consumers have thus attempted to file complaints in both forums simultaneously, hoping to maximise their chances of a favourable outcome. However, courts and tribunals have clarified that this provision does not override the fundamental legal principle of election between remedies.

The Doctrine of Estoppel by Election

The legal principle that governs this issue is known as estoppel by election. It means that if a party chooses one remedy from among several available for the same grievance, they cannot later adopt a contradictory remedy in another forum.

Key aspects of this doctrine are:

• The remedies must be mutually exclusive or inconsistent.
• The party must make a clear and conscious choice.
• The election is binding to avoid multiplicity of litigation and contradictory judgements.

This principle ensures judicial efficiency and fairness to the opposite party who might otherwise face parallel proceedings over the same issue.

Landmark Judicial Ruling: A Infrastructure Ltd v. Macrotech Developers Ltd (NCDRC, 2023)

A recent authoritative judgement by the NCDRC in the case of A Infrastructure Ltd v. Macrotech Developers Ltd illustrates the application of estoppel by election in this context.

Facts

Kanoria Energy & Infrastructure Ltd contracted to purchase flats in a Mumbai project developed by Macrotech Developers. The company filed two complaints before the Maharashtra RERA seeking refunds, which were dismissed. 

Appeals against these decisions were pending. Subsequently, Kanoria filed a consumer complaint before the NCDRC alleging deficiency of service. The developer challenged this complaint, arguing that pursuing remedies under both RERA and consumer forums simultaneously was impermissible.

NCDRC’s Analysis and Conclusion

The NCDRC held that since the complainant had already elected to pursue remedies before RERA, filing a complaint before the consumer forum on the same issue was barred by the doctrine of estoppel by election. The Commission rejected the complainant’s reliance on Section 18 of RERA, stating that it cannot be read to permit parallel proceedings that would result in multiplicity of litigation and conflicting judgements. The consumer complaint was thus dismissed as not maintainable.

This ruling firmly establishes that a consumer must choose between RERA and consumer courts for the same cause of action and cannot maintain proceedings simultaneously in both forums.

Why Can’t Consumers Approach Both Forums at the Same Time?

1. Avoidance of Conflicting Decisions: Different forums adjudicating the same dispute simultaneously can give rise to conflicting orders, leading to confusion and injustice.
2. Prevention of Multiplicity of Litigation: Courts seek to minimise repetitive or parallel proceedings on identical issues, reducing burden on judicial resources and litigants.
3. Fairness to Opposite Parties: Developers should not be compelled to defend against the same complaint in multiple forums simultaneously, which could be oppressive.
4. Judicial Economy: Concentrating disputes in a single forum encourages efficient and final resolution.

Differences Between Remedies Under RERA and Consumer Forums

While both forums protect homebuyers, their remedies differ, which impacts the choice of forum:

Conclusion

The ability to seek justice in real estate disputes has been strengthened with the advent of RERA and modern consumer protection laws. However, the choice between these forums is not optional in parallel proceedings. 

The NCDRC’s ruling in A Infrastructure Ltd v. Macrotech Developers Ltd clarifies that consumers cannot pursue the same complaint simultaneously before RERA and consumer courts. The doctrine of estoppel by election mandates that a consumer must select one remedy and adhere to it to avoid multiplicity of litigation and conflicting judgements.