Amended Consumer Protection Act, 2019, continues to be bottleneck for the home buyers, even after the new rules being notified to ensure equitable distribution of cases and make the litigation faster. Track2Realty speaks to cross section of stakeholders.
Case Study 1: Ranjeet Kumar, a home buyer in Noida, had filed a case against the builder in the District Consumer Commission. His purchase cost has been INR 40 lakh and hence the case was filed with the District Forum. It took 5 years for him to get justice in his favour. But before he could get the possession of his dream home, along with the delayed penalty, the builder challenged the judgment before the State Commission. It is more than 3 years now that Ranjeet is wondering as to how long will it take to get justice.
Case Study 2: Meena Kumari, home buyer of Gurugram, had approached the State Consumer Commission since her purchase cost was INR 1.5 crore. However, her wait for justice has been more harassing than having been harassed by the builder. At times she just wonders that when the case is just black & white in terms of project delay and less than promised amenities being delivered, how come it takes such a long time to get the judgment delivered.
Case Study 3: Prarthna Sharma has seen it all, right from the District Consumer Forum to State Commission and now before the NCDRC (National Consumer Disputes Redressal Commission). It is an ongoing over a decade old battle for her. It takes 7-8 long months to even get a fresh date with the NCDRC nowadays and the builder continues to get dates after the dates.
Now that the government has notified new rules for consumer commission, all the three home buyers having the brutal experience of slow legal proceedings are just wondering whether it will change their fortunes. The amended Consumer Protection Act, 2019, has envisaged disposal of consumer grievances in the 3 months where analysis is not required and 5 months where it takes thorough analysis.
Consumer Protection Act, 2019
For the records, the government has notified new rules to revise pecuniary jurisdiction for entertaining consumer complaints at District, State and National level commissions. The new rules stipulate that the District Commissions will have jurisdiction to entertain complaints up to INR 50 lakh as against the earlier limit of up to INR 1 crore. State Commissions will now have jurisdictions for more than INR 50 lakh and up to INR 2 crore, as against the earlier threshold of INR 1-10 crore. Jurisdiction of National Commission is only when paid consideration exceeds INR 2 crore.The move is aimed at equitable distribution of cases to ensure fast disposal of consumer grievances. The legal fraternity by and large has welcomed the move and even termed it as a new year gift for the consumers.
Advocate Devesh Ratan points out that Sections 34, 47 and 58 of the Consumer Protection Act, 2019 empowers the Central Government to revise the pecuniary jurisdiction of the District, State and National Commissions respectively. Accordingly, the Central Government has notified the Consumer Protection (Jurisdiction of the District Commission, the State Commission and the National Commission) Rules, 2021, which came into effect on 30.12.2021. The pecuniary jurisdiction of all 3 Commissions has been reduced, and this is undoubtedly, a consumer-friendly step taken by the government.
“Since the time the Consumer Protection Act, 2019 had come into force, the pecuniary jurisdiction of the Consumer Commissions had become a cause of major concern among litigants and lawyers. The workload of the District & State Commissions, which were already over-burdened, had drastically increased. The very object of providing for a speedy resolution mechanism to the consumers was being defeated due to the high pecuniary jurisdiction provided in the 2019 Act. This is a welcome move, and it will help improve consumer confidence in the adjudicatory process,” says Devesh.
However, as the experience of the above 3 case studies suggest the real pain points of the home buyers are elsewhere. Real estate, unlike any other consumer goods, is of different nature; is life’s costliest purchase; purchased when the product is not even ready; and more often than not the buyer approaches the court only when one has not got the promised product. Hence, the grey zones and the pain points of the home buyers have yet not been addressed.
Real issues for the home buyers
CC Act, 2019, has not changed ground realities
Equitable workload on each court valid argument for judiciary only
3-Tier quasi-judicial mechanism should not be a ladder of lengthy litigation
Most complaints in sub INR 50 lakh
Amount in consideration is total paid amount and not total value of the project
Real issue is fast disposal of cases
District Commission judgments should be challengeable only on case-to-case basis
Multiple litigation an issue
Most of the consumer cases in the housing market emanate in the affordable housing projects below the price of INR 50 lakh. The buyer profile in this segment is too weak to afford lengthy & expensive litigation, as pointed out in a recent Supreme Court judgment as well. For an average buyer of an affordable house it is quite challenging to contest the builder from District Forum to the State Commission.
Unless there is a full-proof mechanism of fast track and time-bound judgment against consumer grievances the builder continues to have the upper hand. The amended Consumer Protection Act, 2019 seems to have failed to address this anomaly for the home buyers.
Home buyers point out that it is not only lengthy litigation that defeats their cause but also the fact that the builder continues to challenge the orders of the District Commission in higher courts. Over and above that the builder can also file multiple false cases against the harassed home buyers. The home buyers hence demand that the way NCDRC admits the challenged judgment of the State Commissions on a case-to-case basis, the State Commissions should also adopt the same practice.
Furthermore, the amount for case consideration should be the cost of the house and not the amount being paid at the time of conflict. But in reality it is the contrary and also the appeal against the adverse District Forum judgment to the State Commission is the statutory right of the builder. The State Commission, unlike the NCDRC, cannot take it as conditional and evaluate whether its intervention is required.
Ravi Sinha
@RaviTrack2Media
Track2Realty is an independent media group managed by a consortium of journalists. Starting as the first e-newspaper in the Indian real estate sector in 2011, the group has today evolved as a think-tank on the sector with specialized research reports and rating & ranking. We are editorially independent and free from commercial bias and/or influenced by investors or shareholders. Our editorial team has no clash of interest in practicing high quality journalism that is free, frank & fearless.
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