Buyer Associations Can Approach Apex Consumers' Panel Against Builders, Rules SC

In a move that will speed up the dispute resolution process for home buyers, the Supreme Court has ruled that individual buyers can join hands and approach the National Consumer Disputes Redressal Commission (NCDRC) collectively in case of a disagreement with a real estate developer. The NCDRC is the apex consumer rights panel, and so far, buyers had to approach district or state-level bodies before reaching out to the national body. The Consumer Protection Act stipulates that NCDRC can be approached directly only if the cost involved is more than Rs 1 crore.

The latest ruling by the apex court however, gives home owners a way out by moving a group complaint against the developer.

What was the case

The Supreme Court (SC) was hearing a matter between a developer and an association of home owners alleging delay in delivery of flats. The complainants had approached the NCDRC, which ruled in their favour, prompting the developer to appeal in the SC. The developer claimed the 43 flat owners were ineligible to move the NCDRC as they did not meet the Rs 1 crore criteria.

 Boost to home owners

The SC ruling paves the way for similar cases to approach the national panel to seek relief. At a time when project delays have led to home buyers getting caught in long-drawn quasi-legal battles with developers, the SC ruling comes as a move that will restore home buyers' confidence into the sector.

What is the NCDRC

Here are four things you should know about the body:

The NCDRC is a quasi-judicial body set up in 1988 under the Consumer Protection Act. 1986. The panel has its head office in Delhi. The remedy under the Act is an alternative in addition to that available to consumers by way of civil suits.

The NCDRC entertains a complaint valued more than Rs 1 crore. Also, an aggrieved consumer can file a complaint with the panel within two years from the date on which the cause of action has arisen.

The NCDRC has appellate and revisional jurisdiction on the orders of state and district commissions.

Section 23 of the Consumer Protection Act, 1986, lays that one can move the SC within 30 days since the order is passed to contest a ruling by the NCDRC.