New Consumer Protection Act Ineffective for Homebuyers Complaints

The new Consumer Protection Act that took effect from July 20 has changed the jurisdiction of the National Consumer Disputes Redressal Commission (NCDRC) to Rs 10 crore from the earlier Rs 1 crore. This means that only homebuyers who have paid an amount in excess of Rs 10 crore can file a case in the commission. Other cases up to Rs 1 crore can be filed with the district commission and those between Rs 1 crore to Rs 10 crore with the state commissions. Homebuyers pointed out that instead of directly approaching the NCDRC earlier, they would now have to go through several layers of the judicial process which would not only delay justice but also lead to incremental litigation costs. This also means that homebuyers who may have paid a total amount of Rs 10 crore in a project to a builder can come together through an association or as a class to file a case with the NCDRC directly. Given the huge number of cases currently pending before district courts across the country and the slow rate at which these are disposed of and inadequate infrastructure of these forums will only add to the burden of these courts. This would also go against the main objective of the consumer act which is to provide quick relief to consumers, say legal experts. Real estate developers represented by Naredco and Credai had suggested examining the difficulties faced in giving effect to provisions of RERA 2016, to bar the jurisdiction of consumer forum as currently done for civil courts under section 79 under RERA Act to avoid conflicts with judgments of RERA authorities and consumer forums which are currently both forums for RERA disputes.