Published on: Feb 27, 2017 @ 21:04
The Supreme Court (SC) on Tuesday has upheld the order of the National Consumer Disputes Redressal Commission (NCDRC) that home buyers can jointly approach it in case of a dispute with a builder. In a major relief for aggrieved home buyers, the apex court has held that they can directly drag builders to the NCDRC.
The SC passed this order in reference to a petition filed by the Amrapali Sapphire Developers Pvt Ltd. The builder had submitted before the bench, challenging the NCDRC decision on the ground that a plea can be filed directly before the NCDRC if the total value of the disputed deal is over Rs one crore. Moreover, the realtor told the bench that since the cost of each flat was less than Rs one crore, so the 43 buyers were individually ineligible to directly approach the NCDRC. They should approach district consumer forums before finally coming to the NCDRC.
According to the Consumer Protection Act, a plea can be filed in NCDRC directly only if the cost involved is more than Rs 1 crore otherwise complainant has to first file the plea at the district consumer forums. Disputes between buyers and sellers need to be first raised at state- or district-level consumer rights panels.
The SC bench, which included Justice A M Khanwilkar and Justice M M Shantanagoudar and headed by Justice Dipak Mishra, rejected the appeal of Amrapali Sapphire Developers Pvt Ltd and observed that it was the grievances of homebuyers that needs to be looked into.
In fact, in May 2016, around 100 buyers of Amrapali Sapphire project in Noida filed a complaint against the builder before NCDRC. Thereafter, Amrapalli challenged the complaints on two grounds – one that in order to file a complaint under the Consumer Protection Act, 1986 an association should receive recognition from the Bureau of India Standards and second, flats in the project were priced lesser than Rs 1 crore, thus the owners were individually disqualified to approach the NCDRC directly.
Then, 43 buyers got together and formed Amrapali Sapphire Flat Buyers Welfare Association. Thereafter, they moved the NCDRC in May 2016 and filed complaints against the builder for delayed possession of their flats.
In August 2016, the NCDRC dismissed the arguments of the builder and ruled in favour of the 43 flat owners in Amrapali’s Sapphire housing project. NCDRC said in its order that an association registered under the Companies Act or any other law in force is a voluntary association as per the law. Therefore, they could form an association to achieve the pecuniary limit of Rs 1 crore for approaching it directly. The NCDRC had said if the aggregate value of services in respect of the flat buyers, on whose behalf this complaint was filed, was taken, then it exceeded Rs one crore and hence, it has the jurisdiction to entertain their plea.
Thereafter, Amrapali approached the Supreme Court and got a stay on the NCDRC order. The SC also issued notice to the buyers’ association to file a response. The association in its response said the appeal is merely a tactic adopted by Amrapali to delay the proceedings before NCDRC.
The apex court ruling comes as a great relief to many home buyers, stuck with delayed possession of their flats to approach the apex consumer commission in a similar manner. Realtors body CREDAI expressed concern that the Supreme Court judgement that flat buyers can jointly approach the apex consumer commission NCDRC will open the floodgates of legal cases against builders.
The decision is very significant since it would allow home buyers to directly approach the NCDRC by forming a registered association, saving their time and money. The decision of SC along with the new administrative structure being brought in by the real estate regulatory law (RERA) will come as a boon to home buyers.
Ajay Verma, founder and writer of TheHousingWorld, a real estate and mortgage news website. He has over fifteen years of rich experience in the above mentioned industries.