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Remedies available Via RERA /CPA /IBC

Remedies available Via RERA /CPA /IBC

BASIS RERA CPA IBC
WHO CAN FILE A PURCHASER, HOME BUYER OR PROSPECTIVE PURCHASER/HOME BUYER OFFERED FLAT CAN FILE COMPLAINT IRRESPECTIVE OF THE FACT THAT SUCH PERSON IS CORPORATE ENTITY OR INDIVIDUAL. CONSUMER SATISFYING THE REQUIREMENT AS PROVIDED UNDER SECTION 2(D) OF CPA, CAN FILE A CPA COMPLAINT. TYPICALLY, AN INDIVIDUAL WHO ENTERS INTO AGREEMENT FOR PURCHASE OF FLAT CAN FILE COMPLAINT WHEN HE PURCHASES THE SAME FOR HIS INDIVIDUAL USE AND RESIDENCE. SINCE BY RECENT AMENDMENT IN AUGUST 2018, THE ALLOTTEE OF PROJECT IS CONSIDERED A FINANCIAL CREDITOR, ANY PERSON WHETHER AN INDIVIDUAL OR CORPORATE ENTITY CAN FILE AN INSOLVENCY APPLICATION UNDER SECTION 7 OF IBC.
CASE TIMELINE RERA TAKES A FEW MONTHS TO YEARS FOR REDRESSAL OF GRIEVANCES DEPENDING ON THE STATE. REDRESSAL OF GRIEVANCES OR ADJUDICATION OF A DISPUTE TAKES AN AVERAGE OF 5 TO 6 YEARS BY CONSUMER FORUMS. IBC TAKES ABOUT 6 MONTHS TO A YEAR FOR ADJUDICATION OF INSOLVENCY APPLICATION BY ADJUDICATING AUTHORITY.
ACCESSIBILITY THERE ARE 1 – 2 RERA OFFICES IN EACH STATE WHICH HAS CONSTITUTED THE AUTHORITY UNDER THE ACT.

MAHARASHTRA HAS OFFICES IN MUMBAI, PUNE AND NAGPUR.

 DISTRICT FORUMS ESTABLISHED IN EVERY DISTRICT OF THE STATE. STATE COMMISSION PRESIDES IN EACH OF THESE STATES, WHILE THE NATIONAL COMMISSION PRESIDES AT DELHI AND HAVING BENCHES IN VARIOUS PARTS OF THE COUNTRY AS WELL. NCLT HAS 16 BENCHES ALL OVER INDIA. NCLT IS TYPICALLY CONSTITUTED FOR EACH STATE AND PRESIDES AT ONE PLACE IN THE STATE OR ONE NCLT IS COMMONLY EMPOWERED AND IS HAVING JURISDICTION OVER TWO STATES.
EXECUTION/ RELIEFS PROVIDED RERA TYPICALLY EXERCISE ITS POWER BY WAY OF AN ORDER TO IMPOSE FINE, DEREGISTER THE PROJECT, INCLUDE THE PROMOTER IN LIST OF DEFAULTERS, DIRECT COMPLETION OF PROJECT IN MANNER PROVIDED IN CONSULTATION WITH STATE GOVERNMENT AND PASS APPROPRIATE ORDERS INCIDENTAL THERETO. CONSUMER FORUM HAS THE POWER TO EXECUTE THE ORDERS. THIS MAKES EXECUTION OF ORDERS ALSO AN EXPEDITIOUS AFFAIR IN COMPARISON TO REGULAR SUITS OR EXECUTION OF ORDERS PASSED BY VARIOUS COURTS/QUASI-JUDICIAL FORUMS. SINCE THE SCOPE OF CONSUMER ACT IS LIMITED, THE RELIEF AND REMEDIES ARE COMPARATIVELY AN EXPEDITIOUS AFFAIR. ONCE, NCLT ADMITS THE INSOLVENCY APPLICATION, IRP COMES INTO THE PICTURE TO MANAGE THE AFFAIRS OF THE COMPANY AND IN CASE OF FAILURE OF CORPORATE INSOLVENCY RESOLUTION PROCESS (“CIRP”), LIQUIDATION WOULD BE COMMENCED. NCLT MONITORS THE ENTIRE PROCESS AND TIME TO TIME, VARIOUS REPORTS ARE REQUIRED TO BE FILED WITH NCLT.

KEY OBSERVATIONS & ANALYSIS

  1. If person could be a consumer and seeks performance of statutory obligation or compensation in respect thereof, then Consumer Forum could be a better and effective remedy especially just in case where Developer is financially string enough to pay back the consumers. Also, an application be also filed with RERA, for blacklisting such Developer and other reliefs which RERA can provide but consumer forum cannot.
  2. If an individual isn’t a consumer, then RERA would be more appropriate remedy.
  3. If someone isn’t a consumer and seeks carrying out of statutory obligations from Developer, his only remedy would be to file a daily suit. However, in order to avail the compensation and other reliefs, the person is required to approach RERA.
  4. If Person, whether consumer or not, is seeking only return of his money, especially when Developers financial position is deteriorating, then Insolvency Application before NCLT would be appropriate remedy more so when its redevelopment of property that doesn’t involve many flat in sale component.
  5. Also, the more the project is closer to the verge of completion, RERA would be a more practical remedy especially if Flat Purchaser/Home Buyer desires to get a Flat and vice-versa in addition to the consideration that RERA also can provide compensatory reliefs.
  6. Insolvency can always be availed as an alternate remedy when a Flat Purchaser feels that financial position of Developer is deteriorating and Developer won’t be able to complete any pending project and thereby fails to return the money with interest, shall be able to be prevent against any further deterioration.
  7. It’ll help to get recovery of maximum amount of cash invested together with Interest. Completion of project may take several years because of various practical difficulties which will arise within the completion of project. Also, execution of order for payment of cash won’t have any fruitful result if Developer doesn’t have financial ability to pay it.
  8. In terms of execution, Insolvency since being process to liquidate the assets of entity or person are going to be a more lucrative remedy just in case there’s high probability that Developer might not be in position to return the cash invested.
  9. Consumer Forum since having power to enforce their own orders also provide great remedy just in case where builder has completed construction but delayed possession or not complied with statutory obligation to get reliefs in respect of both.
  10. The Flat Purchaser/Home Buyer can always initiate criminal proceedings against Developer against fraud or other criminal offences or acts committed by it.
Tags: IBBI
2 years ago
Rajput Jain & Associates

Rajput Jain & Associates is a Chartered Accountants firm, with it's headquarter situated at New Delhi (the capital of India). The firm has been set up by a group of young, enthusiastic, highly skilled and motivated professionals who have taken experience from top consulting firms and are extensively experienced in their chosen fields has providing a wide array of Accounting, Auditing, Taxation, Assurance and Business advisory services to various clients and their stakeholders. Rajput jain & Associates, a professional firm, offers its clients a full range of services, To serve better and to bring bucket of services under one roof, the firm has merged with it various Chartered Accountancy firms pioneer in diversified fields. We have associates all over India in big cities. All our offices are well equipped with latest technological support with updated reference materials. We have a large team of professionals other than our Core Team members to meet the requirements of our prospective clients including the existing ones. However, considering our commitment towards high quality services to our clients, our team keeps on growing with more and more associates having strong professional background with good exposure in the related areas of responsibility.

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