Introduction:

Right from planning to own a home to actually owning one, it all takes a common man’s each and every penny earned from the hard work he has done in his life. Affording fraud or cheating played by the unscrupulous builders  and real-estate companies is out of the thinking power of an owner. Since the last decade, the cases of such victims playing with the owners are on the upsurge. Usually, the builders and the real-estate companies take the large sum of the compensation from the owners promising to allot the possession within time but they themself does not follow the time schedule and cause delay in possession, which leads to mental agony and physical distress of the owner.  Not only are they burdened with the amount of the loan taken upon the total consideration of the property but also along with it the accumulated interest on the total consideration. In such cases, with the overburden of the loan, the owner either tends to commit suicide in order to get out of this vicious cycle of payment and repayment of interest or sometimes takes the decision to enforce his rights before the appropriate forum. 

In order to enlighten such owner’s who fell prey to the fraud and cheating committed by the real-estate builders, this article will introduce such allottees of their rights, when can they enforce these rights and before which forum/forum’s?

Rights of the Allottee

The right of the allottee are given under Section 19 of the RERA i.e. Real Estate (Regulation and Development) Act, 2016. The following are:

1. Right to Obtain the Information: Information related to sanctioned plans, layouts along with the specifications and any other information can be obtained by the allottee.

2. Right to know stage-wise time schedule of the completion of Project: Stage wise time schedule along with the provisions of sanitation, electricity and other amenities.

3. Right to claim possession: Right to claim the possession of the plot, apartment, building etc and also shall be entitled to claim the possession of common area as per the declaration given by the owner.

4. Right to claim refund: Right to claim the refund along with the interest in case the promoter fails to comply or is unable to give the possession. The right also extends to claim compensation.

5. Right to have document: Right to claim documents and plans including that of the common area after the handling of the complete apartment or plot or building.

Change in Regime After RERA,2016 and IBC,2016 :

With effect from 2016, a shift in the regime of filing of cases for rights of the allottees before the different forums have been noticed. Prior to 2016, the victimized home-buyers had no other recourse but to proceed against the malpractice of the real estate builders under the Consumer Protection Act and to file his case either before the District Courts or before the Consumer Redressal Commissions(Consumer Court). The process under the Consumer forums and Commissions was much more time taking, expensive, cumbersome and did not provide much relief to the victim, thereby leaving an option with him to appeal the order and wait for the favorable outcome.

With such a background and the issues at forefront, the Government of India wanted to come up with a better law in order to settle the issue of transparency and efficiency in the domain of the real estate sector.  Hence, in 2016 the Real Estate Regulatory Authority(RERA) was established under the enactment of The Real Estate (Regulation and Development) Act. The objective of the Act was to provide immediate relief to the buyers from the malpractice of the builders. In the year 2018, the homebuyers were also allowed to approach National Company Law Tribunal (NCLT) under Insolvency and Bankruptcy Code, 2016(IBC) in the capacity of Financial Creditor, who could sue the Real Estate Company for the default in the possession and ask for the refund and the interest from the date of booking of the flat. 

A Look Out for Better Preference: RERA or NCLT?

As discussed in the earlier part of the article, the homebuyer can now approach any of the three forums i.e. Consumer Forum, RERA and NCLT. The law allows the parties to move all the three forums simultaneously. In the year 2019, Supreme Court in Pioneer Urban Land & Infrastructure Ltd Vs Union of India held that “ the remedies given to the allottee of flat/apartment are concurrent, and such allottees are in a position to avail remedies under CPA, RERA as well as trigger the provision of Insolvency and Bankruptcy Code.”

But, to distinguish one from the other is a bit tricky. For the benefit of the buyer, a smart and intelligent choice while approaching the appropriate forum is a must. Approaching NCLT (National Company Law Tribunal) is beneficial for the homebuyers when a large group of them is unable to get the possession of their flat and it appears from the circumstances that the financial condition of the developer is degenerating, then in such a case all of them can file joint Insolvency Application in order to claim the refund or compensation from the real estate company. The process of Insolvency helps one to recover the maximum amount of money invested. Another reason behind moving petition before NCLT is that many of the buyers say that they face various challenges while implementing the order of RERA and hence forcing them to approach NCLT which is offering them quick relief.

Reference:

1. https://www.indiafilings.com/learn/homebuyers-rights-under-rera/

2. https://www.aaptaxlaw.com/real-estate-act-2016/section-19-real-estate-act-2016-rights-and-duties-of-allottees-section-19-the-real-estate-regulation-and-development-act-2016.html

3. https://lawlex.org/lex-pedia/understanding-the-rights-of-a-buyer-under-rera/22381

4. https://www.sndlegalassociates.com/post/rera-v-nclt-v-consumer-redressal-commission-which-is-the-best-forum-for-homebuyers

5. https://www.thebuyt.com/consumer-court-rera-and-nclt-home-buyer-can-approach-all-three/

6. https://timesofindia.indiatimes.com/business/india-business/why-buyers-prefer-nclt-over-rera/articleshow/71614630.cms

7. https://www.livemint.com/

8. https://housing.com/news/national-company-law-tribunal-nclt/

9. https://www.lawtendo.com/blogs/which-is-better-rera-or-nclt