Whether simultaneous Complaints can be filed before RERA and Consumer Court

The genesis of the proposition is in a judgment rendered by the Hon’ble Punjab and Haryana High Court in the matter of Experion Developers Pvt. Ltd vs State of Haryana and Ors¹ whereby the High Court paved the way for Homebuyers to simultaneously pursue their Complaints before the RERA and the Consumer Courts. Prior to the aforementioned judgment, the Supreme Court, in the matter of Pioneer Urban Land and Infrastructure Ltd.& Ors. Vs Union of India & Ors.² [“Pioneer”] held in categoric terms that the remedies under the Real Estate (Regulation and Development) Act, 2016 [“the RERA”], the Consumer Protection Act, 2019 [“the Consumer Act”] and the Insolvency and Bankruptcy Code, 2016 are concurrent. The Pioneer judgment was followed by the Supreme Court in the matter of Imperia Infrastructure v. Anil Patni & Ors.³ [“Imperia”] wherein the Supreme Court gave the following interpretation of various provisions of RERA and Consumer Act before allowing the Homebuyers to simultaneously pursue their remedy under the respective Acts.

Section 18 of RERA permits the Homebuyers to file a Complaint before RERA for refund of their amount and further reserves their right to pursue any other remedy that may be available. Section 88 of the RERA is para materia to Section 100 of the Consumer Act which makes the provisions under the respective Acts in addition to and not in derogation of any other law for the time being in force. Section 79 of RERA bars jurisdiction of Civil Courts to entertain any suit or proceeding in respect of any matter over which the RERA has jurisdiction. The Supreme Court in the matter of Malay Kumar Ganguli vs Dr. Sukumar Mukherjee⁴ held that Consumer Courts cannot be called a Civil Court. Therefore, a conjoint reading of the aforementioned Sections and the decision of the Supreme Court in Mala Kumar (Supra) would elucidate that a Homebuyer can pursue its remedies simultaneously before RERA and the Consumer Courts.

However, while pursuing complaints simultaneously, it must be borne in mind that the remedies being exercised by the homebuyers are not on the same cause of action and only additional. If a Homebuyer has filed a Complaint before Consumer Court for refund of amount along with interest, then before RERA the homebuyer can simultaneously file and pursue a claim for compensation u/s 12 of the RERA. If the homebuyers files a Complaint before RERA and Consumer Courts for same relief viz refund along with interest, then it would give rise to an anomalous situation and not only amount to abuse of process of law but also forum shopping which is against public policy. Therefore, it is imperative that the Complaints filed by the Homebuyers are not on the same cause of action to claim the benefit of pursuing their remedies simultaneously.

The Supreme had occasion to further clarify the law in the matter of IREO Grace Realtech Pvt. Ltd. vs Abhishek Khanna & Ors.⁵ [“IREO”] wherein a judgment rendered by National Consumer Disputed Redressal Commission [“NCDRC”] was at odds with a judgment rendered by RERA on similar facts and circumstances viz. a set of Homebuyers filed complaint before Consumer Court for refund and a homebuyer of the same project filed his Complaint before RERA for refund. While the Consumer Court allowed the Complaint of the set of Homebuyers and ordered refund, however, the RERA refused to refund the amount to the Homebuyer and only ordered interest for delay caused by the builder. Therefore, a fundamental question arose whether the provisions of RERA must be given primacy over the Consumer Act.

While recognizing the law laid down in Imperia (supra) that remedies under the RERA and the Consumer Act are additional, the Supreme Court invoked doctrine of election in cases wherein two remedies are exercised by the Homebuyers for the same cause of action. The Supreme Court held that a homebuyer may elect or opt for one out of the remedies provided by law for redressal of its injury or grievance. An election of remedies arises when two concurrent remedies are available and the aggrieved party chooses to exercise one, in which event he loses the right to simultaneously exercise the other for the same cause of action. As mentioned above, if a homebuyer has filed a consumer complaint before a consumer court seeking refund of his amount along with interest, then he is denuded of filing a similar complaint before RERA for the same cause of action viz. refund along with interest as in that case the Complaint would be hit by estoppel by doctrine of election. The Supreme Court in the matter of Transcore vs Union of India⁶ held that there are three elements of election viz.-

Existence of two or more remedies,
Inconsistencies between such remedies and
A choice of one of them

The ratio laid down in IREO (supra) was followed by a three judge bench Supreme Court in the matter of Vodafone Idea Cellular Ltd. vs Ajay Kumar Agarwal⁷ wherein a Complaint was filed before the Consumer court against a telecom service provider company and a objection was raised that jurisdiction of Consumer Court is ousted due to Section 7B of the Telegraph Act 1885 which provides resolution of dispute by way of arbitration. The Supreme Court did not cede to the aforementioned argument and held as follows:

Relying upon Emaar MGF Land v. Aftab Singh⁸ , the Court held that Arbitration agreement shall not oust the jurisdiction of Consumer Courts as remedies under the Consumer Act are additional and not in derogation of any other law being in force;
Although the Telegraph Act provides reference of dispute to Arbitration, however, there is no compulsion upon the consumer to opt the remedy of arbitration;
Relying upon IREO (supra) the Court held that the Consumer can elect remedies of either Arbitration or filing complaint before the Consumer Court. By choosing to elect filing complaint before consumer court, axiomatically he is denuded to simultaneously pursue arbitration proceedings.

The ratio in IREO was also followed in a case before the NCDRC in the matter of Shailesh Gupta and Anr. Vs Puri Construction Pvt. Ltd.⁹ In the facts of the said case, the Homebuyer withdrew his Complaint from NCDRC and filed the same before RERA u/s 18 of RERA for refund of his amount. The RERA dismissed his complaint, however, the homebuyer filed a Complaint before the NCDRC again for refund of his amount. The NCDRC invoked doctrine of election and held that by exercising his remedy before the RERA for refund of his amount, the Complainant is denuded to file a complaint again before the NCDRC for same cause of action. Not to mention that the subsequent filing of Complaint before NCDRC was also hit by the principles of Res Judicata.

In a recent judgment rendered by the NCDRC in the matter of A.Infrastructure Ltd. vs Macrotech Developers Ltd.¹⁰, the NCDRC has finally put the issue at rest and categorically held that a homebuyer cannot simultaneously file complaints before RERA and the consumer Courts on the same cause of action. The court held that in order to avoid multiplicity of proceedings and contradictory judgements on same issue between the parties, estoppel by election of remedy has to be applied. Recently, a division bench of Delhi High Court, in the matter of Harmeet Singh Kapoor & Anr. vs M/s Neo Developers Pvt. Ltd.¹¹ inter alia held that once remedies under RERA are exercised, the Complainant is not barred from exercising its remedies under the Arbitration and Conciliation Act, 1996, provided the reliefs in both the cases are different and not the same. In this case few individuals had filed complaints before RERA pertaining to a real estate project inter alia seeking relief of payment of assured returns, execution of sale deed, restraining Respondent from entering into lease deed with third party till completion of project and handing over of the possession of the units to the Complainants. Subsequently, the Complainants filed Petition under Section 9 of the Arbitration and Conciliation Act, 1996, before the District Court inter alia seeking injunction against the Respondent/Builder from leasing out the properties to any third party. The Respondent argued that since the Complainants have already exercised remedy under RERA, therefore, invoking provisions of Arbitration Act is barred by doctrine of estoppel according to the ratio laid down in IREO (supra). However, the Delhi High Court held that the reliefs sought by the Complainants before RERA and Arbitration were different, exercised at different stages and not on the same cause of action therefore, therefore, the ratio laid down in IREO (supra) would not be applicable to this case.

Conclusion

There is no gainsaying that the remedies provided under RERA and Consumer Acts are additional and not in derogation of any other law for time being in force. The Supreme Court has recognised the same vide landmark judgments in the matters of Pioneer, Imperia Infrastructure and IREO (supra). The difficulty arises when the homebuyers, by wrongly interpreting the aforementioned judgments file simultaneous complaints before the RERA and Consumer Courts on the same cause of action, citing remedies being additional and not in derogation. It is not only estopped by doctrine of election but also amounts to abuse of process of law and forum shopping.

By Daksh Pandit