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Conciliation Forum in RERA - Need of the Hour!

Edition: October - December 2018

The Real Estate (Regulation and Development) Act, 2016 seeks to protect home-buyers from the perils of real estate developers. The Act establishes Real Estate Regulatory Authority (RERA) in each state for regulation of the real estate sector and also act as an adjudicating body for dispute redressal. Thus, RERA has become the most preferred option of home buyers for grievance redressal, as we see many complaints being filed before the authority.

The Act states that the regulatory authority should endeavour to dispose of complaints within 60 days from the date of filing. If the authority fails to work within this timeframe,  reasons for the delay need to be recorded in writing. The main purpose of this section is to ensure that justice is delivered to the aggrieved party at the earliest. After all, the very essence of justice lies in speedy dispute resolution.

However, with TNRERA, it is observed that there is an inordinate delay in disposal of complaints. Out of a total of 364 complaints filed till now, 99 only have been disposed of. 265 complaints are still pending, of which 146 are pending since 2017! Various reasons could be attributed to this. To begin with, there is a lack of permanent authority. TNRERA has an interim authority with the Principal Secretary, Department of Housing and Urban Development holding additional charge as Chairman, TNRERA Authority acting as a conciliatory body and trying to mediate between home buyers and the developers.

In this regard, it is important to look at the best practices followed by Maharashtra RERA (MahaRERA). MahaRERA has a permanent authority which disposes off cases expeditiously. Section 32 (g) of the Real Estate (Regulation and Development) Act 2016, provides for measures to be taken by the authority to facilitate amicable conciliation of disputes between the promoters and the alottees through dispute settlement forums set up by the consumer or promoter associations.  Accordingly, MahaRERA has established a conciliation forum, with representatives from consumer groups, promoters’ associations and MahaRERA forming the core committee, for amicable resolution of complaints, which has turned out to be highly successful. 

In one of the cases resolved by the MahaRERA Conciliation Forum, Mrs. Khinvsara had paid Rs,23,32,800/- to a developer in Pune and the agreement for sale was executed. The date of possession was not mentioned in the sale agreement. There was no progress in work and no assurance about possession of flat. Mrs. Khinvsara approached the conciliation forum demanding either interest on the amount paid by her till date or return of the entire amount paid with interest and compensation. The conciliators heard both the parties in person and persuaded the developer to pay double the investment cost i.e. Rs. 46,65,600/- which will include interest plus compensation to solve the issue as the project was incomplete following some technical issues. Both parties agreed. The settlement was reached in two sittings within a span of just two weeks.

In yet another case, the developer agreed to refund the amount with interest and also the registration fees. Mr. Samikant Chinderkar was an aggrieved consumer, who had paid almost 95% of the consideration to the promoter but was not given possession on the promised date. He approached the conciliation forum for a refund. He was also awarded interest @ 9 % p.a. of the total amount, on the amount paid by him. The promoter was asked to make the first payment immediately in order to take care of Mr. Chinderkar’s loan installment. Rest of the amount was to be paid within 3 months, by Pay Order. The promoter also agreed to carry out the process for refund of registration charges. The settlement was reached in less than one and a half months.

Justice delayed is justice denied! Consumer satisfaction is the main objective of the complaint redressal mechanism under RERA. This can be attained only through quick administration of justice and this is where conciliation forums play a major role. Hence, it is highly recommended that TNRERA also introduces such conciliation forums, which will be beneficial to consumers .

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