RERA or Consumer Forum: Where Should You File Your Complaint Against a Builder?
Introduction:
Consumers in India have been bestowed with several rights, including the right to safety, the right to be informed, the right to choose, the right to be heard, and the right to seek redressal against unfair trade practices by the service providers. To ensure effective grievance redressal, a three-tier quasi-judicial system has been established at the district, state, and national levels, commonly known as “Consumer Commission.” These Commissions have the jurisdiction to adjudicate complaints from consumers regarding defects in purchased goods, deficiencies in availed services, or any unfair trade practices adopted by service providers.
Can a consumer case be filed against a Builder?
In India, buying property is a costly affair, and for most middle-class households, such transactions occur only once in a lifetime. Innocent homebuyers, hoping to own a home or commercial space for their business, are often misled by the false promises of builders and eventually find themselves deceived. In many cases, homebuyers struggle to get possession of their properties. Sometimes, construction is completely halted, leaving the buyer’s life savings stuck indefinitely.
In such circumstances, homebuyers have multiple legal remedies, including approaching RERA Authorities or Consumer Commissions. While both avenues are legally effective, many buyers lose faith in RERA Authorities due to their inefficiency in executing orders. Though RERA is vested with broad powers to enforce its orders, these are rarely exercised. In contrast, Consumer Commissions do not rely on third parties, such as District Magistrates or Collectors, for the execution of their orders. They are generally more effective in getting orders implemented. Therefore, approaching a Consumer Commission may be a better alternative in such cases.
(Read in detail about the powers of RERA Authorities to execute their orders.)
Jurisdiction of Consumer Commission:
Before filing a consumer complaint against a builder, a homebuyer must know which consumer forum to approach. The Consumer Commissions operate at three levels, District, State, and National, and have jurisdiction based either on the value of goods or services (Pecuniary Jurisdiction) or the location of the dispute (Territorial Jurisdiction).
As per the hierarchy, the District Consumer Disputes Redressal Commission (DCDRC) is the lowest level. The State Consumer Disputes Redressal Commission (SCDRC) is the intermediate level and hears appeals from District Commissions. The highest authority is the National Consumer Disputes Redressal Commission (NCDRC), which hears appeals from the State Commissions. Therefore, it is important to understand where a complaint should be filed.
What is Territorial Jurisdiction of Consumer Commission?
Territorial jurisdiction refers to the geographical area where a consumer can file a complaint. For example, a consumer can file a consumer complaint against a service provider at the place where the service provider either resides or carries on business, or where the cause of action (the reason for the complaint) arises, or where the Consumer himself resides.
What is Pecuniary Jurisdiction of Consumer Commission?
In simple terms, Pecuniary Jurisdiction refers to the monetary value of the goods or services involved in a dispute, which determines the appropriate forum (District, State, or National) that has the authority to hear the complaint. As per the Consumer Protection Act, 2019, pecuniary jurisdiction is determined based on the value of goods or services paid as consideration:
- If the value does not exceed ₹50 lakh, the complaint lies with the District Consumer Commission, subject to the appropriate territorial jurisdiction.
- when the value exceeds ₹50 lakh but does not exceed ₹2 crore, the complaint can be directly filed before the State Consumer Commission of the concerned state.
- If the value exceeds ₹2 crore, the complaint lies directly before the National Consumer Commission.
Can a complaint be filed directly in the National Consumer Commission, aka NCDRC?
Most often, the question arises whether a real estate allottee can directly approach the NCDRC (National Consumer Disputes Redressal Commission) if the value of the goods or services paid by the individual allottee is less than ₹2 crores. The answer is yes. This can indeed be done, and there is more than one way to achieve it. Section 35 of the Consumer Protection Act, 2019, deals with this issue and provides three different options:
- Class Action: In consumer litigation, a class action can be filed by one or more consumers if the total amount paid by them exceeds ₹2 crores. This complaint is filed in a representative capacity, meaning the complainants file it on behalf of all similarly placed consumers. Even those who are not a party to the complaint can benefit from the final judgment.
- Voluntary Consumer Association: Consumers can also form a voluntary consumer association, which can file a complaint in a representative capacity. It is not necessary for the specific consumer alleging defective goods or services to be a part of the association.
- Joint Complaint: Consumers who are aggrieved by the service provider can come together and file a complaint in their personal capacities, provided the total amount collectively paid by them exceeds ₹2 crores. This is not a representative complaint, and the judgment applies only to the complainants who are party to the proceedings. Moreover, having a common or similar interest is not a requirement for filing a joint complaint.
Conclusion:
Before filing a complaint against a builder, a homebuyer must carefully assess the appropriate Consumer Commission based on the nature of the dispute. Jurisdiction is determined either by the value of goods or services involved (Pecuniary Jurisdiction) or the location of the dispute (Territorial Jurisdiction). The Consumer Commissions follow a three-tier structure, District, State, and National, for effective grievance redressal. Additionally, in cases where multiple consumers come together, a joint or class action can be filed directly before the National Consumer Disputes Redressal Commission (NCDRC).
