Complain to RERA against builders, and not to Civil Court, Police, Magistrate or High Court -- Citizens Guide Part 3

Mumbai, 31st May, 2017: One month has passed since Maharashtra's Real Estate Regulatory Authority (MahaRERA) came into force, but its significance hasn't yet been understood by the legal community. Wrongly advised by lawyers, aggrieved flat-buyers continue to go to the police, magistrate, civil court, etc, instead of approaching MahaRERA and/or its Adjudicating Officer. For example, today's newspaper carried this story about builder Yusuf Lakdawala getting an FIR filed about a penthouse that he purchased from Dhiraj builders. The FIR was reportedly registered after Yusuf Lakdawala approached Bombay High Court. However, this FIR will eventually be quashed, or police will not file chargesheet, as the matter belongs to the jurisdiction of Real Estate Regulatory Authority. Yes, Lakdawala's clever lawyers may have managed to procure a high-court order for the FIR to be filed, but this FIR will not stand the test of law as the case progresses.

But this is a serious matter, as flat buyers and investors are continuing to bark up the wrong tree. A close friend called me to share his joy that Economic Offences Wing (EOW) of Mumbai Police had registered a complaint against a very prominent builder today for cheating, breach of trust, and other IPC sections (besides MOFA) because the builder did not give timely possession, wasn't refunding money and hadn't even entered into a registered agreement with flat buyers. Some flat-owners in the rehab component of a redevelopment project got FIR registered against a builder a couple of years back, but the magistrate recently dismissed the case saying that it is a "civil matter", and so, now the aggrieved flat-owners want to appeal before Bombay High Court. And I am saying to all of them, sorry, no, all this will not work now! Your only fruitful option now is to seek reliefs from MahaRERA. Otherwise, the cops will waste your time with diversionary tactics, and get bribes from the builders for trying to "settle" the matter. Watch and see if this isn't true!

Some other flat-buyers and investors have been telling me that they are thinking that remedies from Civil Court under Specific Relief Act 1963 are still available to them for enforcement of the builder's agreement, e.g. to give possession by a certain date, etc. And I am saying, sorry, no, that's a bad idea! Under the RERA Act, they should file a complaint ("Form A") against the builder before Real Estate Regulatory Authority OR a claim for compensation ("Form B") before the Adjudicating Officer. Because civil court does not have specific jurisdiction in this matter.

Thousands of buyers, investors and flat-owners whose cases are pending at various stages in the judiciary, are thinking that their cases will continue and they will get ultimately get justice from these judicial forums. And I am saying, no, please get the matter remanded to RERA and/or adjudicating officer, or withdraw your case and file a fresh case before MahaRERA. Because, even if the judicial forum where their case is currently pending passes a judgment and disposes off their case, the matter will definitely be remanded to RERA authority if either party goes in appeal.

Why am I repeatedly saying this? The reason is: RERA is a special statute made for adjudicating and deciding disputes specifically between builders and their allottees, whereas Indian Penal Code, Specific Reliefs Act, Indian Contract Act, and other applicable laws, are general statutes.  which are only broadly and generally applicable to builders, allottees and and the properties under dispute.

It is well established principle that when a general law and a special law dealing with some aspect dealt with by the general law are in question, the rule adopted and applied is one of harmonious construction whereby the general law, to the extent dealt with by the special law, is impliedly repealed. This principle is summarized in the Latin maxim of generalia specialibus non derogant, i.e., general law yields to special law should they operate in the same field on same subject.

While the rule that the specific governs the general is not an absolute rule but is a strong indication of statutory meaning that must be overcome by textual indications that point in the other direction, if the general legislation is to be applied.

Some people argue that MOFA (Maharashtra Ownership Flats Act) is a "special statute" concerning the duties of builders. True, but MOFA confers jurisdiction on District Deputy Registrar of Cooperative Societies, and MOFA is a State Act, while RERA is a central Act and it confers jurisdiction on Real Estate Regulatory Authority. Since MOFA comes into conflict with RERA in the matter of jurisdiction for the same matter (i.e. builder-buyer disputes), RERA will prevail. Where the provisions of a Central Act and a State Act in the Concurrent List are inconsistent and irreconcilable, the Central Act will prevail and the State Act will become void in view of the repugnancy.  

RELEVANT RERA SECTIONS AND THEIR SIGNIFICANCE:

Bar of Jurisdiction: 

79. No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Authority or the adjudicating officer or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act.

This section rules out jurisdiction of Civil Court under any other Act such as Specific Reliefs Act. 

Cognizance of offences:  

80. (1) No court shall take cognizance of any offence punishable under this Act or the rules or regulations made thereunder save on a complaint in writing made by the Authority or by any officer of the Authority duly authorised by it for this purpose.
(2) No court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under this Act.

This section effectively says that police cannot entertain such cases, nor can Magistrate entertain a "private complaint". In cases revealing cheating and breach of trust by builders, Real Estate Regulatory Authority will file a complaint before a Magistrate of the first class, and only then the Magistrate will entertain this matter.  

Application of other laws not barred.

88. The provisions of this Act shall be in addition to, and not in derogation of, the provisions of any other law for the time being in force.

This means that provisions of other Acts such as Indian Penal Code and possibly MOFA also may be cited in complaints, arguments and hearings of MahaRERA, for seeking appropriate reliefs under the RERA Act. 

Act to have overriding effect.

89. The provisions of this Act shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force.

This means that provisions of other Acts such as Indian Penal Code or MOFA cannot be used for diluting the interpretation of MOFA. 

IN A NUTSHELL: 

Maharashtra Real Estate Regulatory Authority (called MahaRERA) and also the Adjudicating Officer appointed under MahaRERA, are quasi-judicial authorities i.e. they are not a court, but an administrative body or competent authority for implementing the Real Estate Regulation and Development Act, 2016. It is relatively easy for a common man to approach a quasi-judicial authority and to represent his point of view before it in writing, and also in the form of oral arguments. The primary intent of this Act is to protect the interests of the flat-purchaser or investor (termed as "allottee" in the Act) from the developer and others responsible for building and selling a flat (termed as "promoter"), and also estate agents acting on behalf of the builders.

RERA makes it makes it explicit in multiple sections that allottees of flats have the power to get the builder penalized by the Authority to the extent of 10 or 15% or even more of the total value of the project, and get interest and compensation passed by the adjudicating authority.  No other existing law is so specific about penalties and compensations due to allottees! This is a specific law made for providing quick and direct justice against builders in particular!

So, summing up, please stop wasting your precious time and money seeking remedies against your builder from other general laws and general forums. Go to RERA, your one-stop shop for justice vis-a-vis real estate projects! Take my advice, and you will be thanking your lucky stars before 2017 is over!

ISSUED IN PUBLIC INTEREST BY

Krishnaraj Rao
9821588114
krish.kkphoto@gmail.com

OTHER ARTICLES ON THIS TOPIC:

1) How to Use Maharashtra RERA for Remedy Against Builders: Citizens' Guide - Part 1

2) Where to complain? Real Estate Regulatory Authority OR Adjudicating Authority? Part 2 of Citizens' Guide to MahaRERA