RERA or Consumer Commission: Where Should Homebuyers Go When A Project Goes Wrong?

A delayed flat, a builder who keeps pushing the possession date or a refund that never comes can leave a homebuyer with little choice but to seek legal help. But even before taking the developer to court, buyers face another question: should they approach RERA or a consumer commission?

Both offer legal remedies, but they serve somewhat different purposes. The choice depends on what has gone wrong, what the buyer wants from the developer and how much time and effort the dispute may involve.

There is also a catch. Although the law allows homebuyers to seek remedies under both RERA and the Consumer Protection Act, pursuing the same dispute before both forums at the same time may not be permitted.

Can A Homebuyer Approach Both Forums?

The short answer is that the remedies are concurrent, but that does not mean buyers can pursue identical claims in two forums simultaneously.

“A homebuyer does not have to approach RERA just because the dispute involves a real estate project. The Supreme Court settled this question in M/s Imperia Structures Ltd. v. Anil Patni [(2020) 10 SCC 783], holding that buyers can also seek relief from consumer commissions. The court's reasoning was that Section 79 of RERA bars civil courts from hearing matters covered by the Act, but does not prevent consumer commissions from taking up such complaints. Section 88 also allows buyers to seek remedies available under other laws,” says Piyush Kumar Ray, Associate Partner, AQUILAW.

But does this mean a buyer can file cases in both places? Not necessarily.

“In Ireo Grace Realtech Private Limited v. Abhishek Khanna [(2021) 3 SCC 241], the Supreme Court explained the doctrine of election of remedies. Essentially, when the law offers two routes to address the same grievance, a buyer may have to pick one. The same principle came up again in M/s Kabra and Associates & Ors. v. Rekha Rajkumar Hemdev & Ors. (Civil Appeal No. 6936 of 2023),” informs Ray.

This means a buyer cannot assume that filing a complaint before RERA leaves the door open to starting another case before a consumer commission for the very same dispute. Doing so could invite objections over duplication of proceedings and overlapping relief.

Where the complaints concern genuinely different grievances, the position may be different and will depend on the facts and reliefs involved. Merely giving the claims different names, however, may not be enough to justify approaching both forums.

Which Forum Is Better Suited To The Complaint?

The first thing a buyer should ask is: what do I want the developer to do?

If the main concern is delayed possession, non-completion of a project or getting a refund with interest, RERA may be the more direct option. It is specifically designed to deal with real estate disputes and provides remedies under the Act.

A consumer commission may be worth considering when the complaint goes beyond delay or non-delivery. Cases involving deficiency in service, unfair trade practices and claims for compensation for the losses suffered by the buyer can also be taken up under consumer law.

The nature of the complaint, therefore, matters more than simply choosing the forum that appears more convenient.

Will RERA Resolve The Dispute Faster?

For someone paying rent as well as a home loan EMI on a flat that is nowhere near completion, time is a major concern.

RERA has an advantage in that it deals exclusively with real estate matters. Its specialised nature can make it a more direct route for disputes involving possession, refunds and delayed projects.

However, buyers should not assume that every RERA complaint will be resolved quickly. Much depends on the workload of the state authority, the complexity of the case and how efficiently the regulatory machinery functions.

Consumer commissions also deal with homebuyer complaints, though cases involving several allegations, detailed evidence or substantial compensation claims may take longer to resolve.

Where Can A Buyer Get Better Compensation?

The answer depends on the loss suffered and the relief being sought.

“Under Section 18 of RERA, an allottee may seek a refund with interest and compensation in specified circumstances when a promoter fails to complete or hand over possession in accordance with the agreement. Buyers who choose to remain in the project may also be entitled to interest for the period of delay, subject to the applicable provisions,” says Ray.

Consumer commissions can award compensation where a developer is found guilty of deficiency in service or an unfair trade practice. Depending on the circumstances, a buyer may also seek compensation for the financial loss and hardship caused by the developer.

So, it is not simply a question of which forum awards more money. Buyers need to look at the nature of their loss and which law provides the more appropriate remedy.

Don't Overlook The Limitation Period

A homebuyer who has been waiting for years may assume there is no hurry to file a complaint. That can be a mistake.

Under the Consumer Protection Act, a complaint should ordinarily be filed within two years from the date the cause of action arises. A consumer commission can condone the delay if the buyer provides sufficient reasons.

RERA does not prescribe a specific limitation period for complaints filed under Section 31(1). But this does not mean a buyer can approach the authority whenever they choose. Depending on the nature of the claim, questions of delay, laches and general limitation principles may still arise.

It is, therefore, better not to put off legal action indefinitely.

Think Before Filing

“A buyer's decision should depend on the problem at hand. If the flat has not been delivered and the buyer wants possession or a refund, RERA is one option. If the complaint is about poor service or unfair practices by the builder, the consumer commission is another,” suggests Ray.

But buyers need to make this choice before filing a case. Approaching both forums over the same dispute could create complications, particularly in view of the Supreme Court's observations on the doctrine of election.

After waiting for years for a home, a buyer would not want to spend more time fighting over which forum should hear the complaint. A little care before filing can help avoid that situation.