Choosing between RERA and consumer court for action against builders, dues

Carefully assess nature of grievance before choosing forum

The Supreme Court of India, in M/s Kabra and Associates v Rekha Rajkumar Hemdev & Ors, held that once a party chooses to seek relief under the Real Estate (Regulation and Development) Act, 2016 (RERA), it cannot later approach consumer forums under the Consumer Protection Act, 2019, for the same cause of action. The court set aside an order of the National Consumer Disputes Redressal Commission (NCDRC). 

“The court emphasised that although both laws provide remedies to home buyers, they cannot be pursued sequentially or in parallel for the same cause of action. The ruling aims to prevent forum shopping and multiplicity of proceedings,” says Amrutha Varshini Sreedhar, partner designate, King Stubb & Kasiva, Advocates and Attorneys.

 

Settled position or new precedent?

 

According to legal experts, courts have shaped this position through judicial interpretation. The Real Estate (Regulation and Development) Act, 2016, does not expressly bar home buyers from approaching consumer courts and states that its remedies are “in addition to” other legal remedies. Earlier, the Supreme Court of India had also clarified that buyers could pursue remedies under both RERA and consumer law. 

“The court has now more firmly emphasised the principle of election of remedies. The ruling does not eliminate consumer remedies but makes the initial choice of forum binding,” says Shankey Agrawal, partner, BMR Legal.

 

Pros and cons of RERA

 

RERA regularly deals with issues such as delayed possession, refund claims, project disclosures and builder obligations. This sector-specific focus often makes proceedings more practical and better aligned with real estate matters.

 

“It is designed for relatively faster resolution than traditional litigation. Authorities can direct builders to meet project timelines, refund amounts with interest and rectify statutory violations, making RERA an effective forum for home buyers seeking possession, refunds or enforcement of builder obligations,” says Agrawal.

 

“RERA offers remedies such as enforcement of sanctioned plans, rectification of structural defects within five years, transfer of title through a registered conveyance deed and imprisonment of up to three years for defaulting developers. Even if a project is unregistered, RERA authorities can still examine complaints under the Act,” says Astha Sharma, partner, Aquilaw.

 

RERA proceedings, however, focus more on contractual and regulatory compliance. Procedural efficiency can also vary across states.

 

Pros and cons of consumer courts

 

The Consumer Protection Act, 2019, treats builders and real estate agents as “product sellers” and recognises home buyers who purchase for personal use as consumers. A key advantage is that consumer courts can award compensation even beyond the specific contractual terms between the buyer and developer.

 

“They have wide powers to grant relief, including refund with interest, removal of defects and punitive damages. Consumer courts also have stronger enforcement powers, including imprisonment in execution proceedings for non-compliance with their orders,” says Sharma.

 

Consumer court complaints, however, must generally be filed within two years of the cause of action and only by those who qualify as “consumers”. If a person does not fall within this definition, they must approach RERA.

 

Choosing between RERA and consumer courts

 

The choice should depend on the facts of the case and the relief sought. “If the buyer primarily seeks compensatory relief, a consumer court may be appropriate, whereas RERA may be more suitable when the objective is regulatory enforcement or deterrent action against the developer,” says Sharma.

 

Issues such as project delays, non-registration or regulatory violations may be better addressed before RERA authorities, while consumer courts may be suitable for deficiency in service or compensation claims.

 

Do’s and don’ts

 

In light of this judgment, home buyers should carefully assess the nature of their grievance and choose the appropriate forum.

 

“Home buyers should maintain key documents such as builder-buyer agreements and payment records and seek legal advice before initiating proceedings,” says Sreedhar.

 

The writer is a Delhi-based independent journalist

 

Key takeaways from SC judgment

• The judgment reiterates the principle of election of remedies in real estate disputes
• Once a home buyer chooses to pursue a remedy under RERA, they cannot later invoke consumer jurisdiction for the same dispute
• RERA and consumer law remedies cannot be pursued sequentially or in parallel for the same cause of action
• The ruling seeks to prevent forum shopping and multiplicity of proceedings