RERA vs NCLT vs NCDRC: Where a Home Buyer Shall Go to Redress His Grievance

Introduction

Real estate in India constitutes a significant area of property law and encompasses transactions and legal rights relating to land and buildings, including their ownership, possession, transfer, development, lease, and use. Now the very first question which pop’s up in the mind of a real estate customer is that where to file their grievances. In India, there are mainly 3 forums which can redress the matters related to the real estate namely (i) Real Estate Regulatory Authority (RERA) (ii) National Consumer Dispute Redressal Commission (NCDRC) (iii) National Company Law Tribunal (NCLT).

Real Estate Regulatory Authority (RERA)

In 2016, the Parliament passed this act in order to bring accountability, transparency and efficiency in the Indian real estate sector. The enactment of RERA provided a representation to the real estate buyers and also a protection against any kind of fraud, cheating or any kind of malice committed by the developers on the buyers. RERA plays a very pivotal part to meet the country’s housing infrastructure needs and requirements. Earlier, the real estate sector was striving as there was no proper codified law for the real estates. Before RERA, the real estate transaction was mostly governed with a blend of general property laws, contract law, TPA act, Registration Act, Special Relief Act etc. RERA provided a centralized comprehensive framework for regulating the real estate sector. Also, it provided for numerous things which were earlier missing from the preceding laws from which it was earlier governed, like:

• Mandatory registration of projects under RERA
• Registration and regulation of the agents involved in real estate transactions
• Responsibilities and duties of the promoters of a real estate company or projects.
• Provisions for standardized disclosures and transparency
• Protection of allottees and homebuyers
• Rules and regulations for advertisement of projects
• Establishment of Authority to adjudicate upon real estate matters and
• A specialized mechanism for appeals

Provisions Related to Redressal of Grievance of a Home Buyer Under RERA

One of the primary principles of RERA is to redress the complaints and grievances of a homebuyer or an allotee. Any homebuyer or allotee may approach the RERA Authority in case of any violation of any right or any arbitrariness as shown by a developer or builder.

Section 31(1) of the RERA Act 2016 states “Any aggrieved person may file a complaint with the Authority or the adjudicating officer, as the case may be, for any violation or contravention of the provisions of this Act or the rules and regulations made thereunder against any promoter allottee or real estate agent, as the case may be”. It clearly provides that an aggrieved person may approach the RERA Authority for any violation of any right of a homebuyer under RERA Act.

A person may make a grievance relating to:

• Delay in possession of the property
• Refund of money in transaction related to real estate
• Failure of delivery of the apartment or building
• If there is any structural or quality defect in the property
• Any violation of the agreement between the developer and the homebuyer/allottee

Adjudicating Officer vs the Authority

Under RERA, the grievance can be heard and adjudicated by the two different authorities namely the Adjudicating Authority and The RERA Authority.

A Real Estate Regulatory Authority has been established under the RERA 2016. Section 20 of the Act deals with the establishment of Authority. The Authority has to be established by the Government of the concerned State or Union Territory. It consists of One Chairman along with 2 other full-time members, appointed by the appropriate Government on recommendation of a Selection committee. Section 34 of the act talks about the functions of the authority. Some functions of the Authority are:

• to register and regulate real estate projects and real estate agents registered under this Act;
• to publish and maintain a website of records, for public viewing, of all real estate projects for which registration has been given, with such details as may be prescribed, including information provided in the application for which registration has been granted;
• to maintain a database, on its website, for public viewing, and enter the names and photographs of promoters as defaulters including the project details, registration for which has been revoked or have been penalized under this Act, with reasons therefore, for access to the general public;
• to maintain a database, on its website, for public viewing, and enter the names and photographs of real estate agents who have applied and registered under this Act, with such details as may be prescribed, including those whose registration has been rejected or revoked;
• to fix through regulations for each area under its jurisdiction the standard fees to be levied on the allottees or the promoter or the real estate agent, as the case may be;
• to ensure compliance of the obligations cast upon the promoters, the allottees and the real estate agents under this Act and the rules and regulations made thereunder;
• to ensure compliance of its regulations or orders or directions made in exercise of its powers under this Act;
• to perform such other functions as may be entrusted to the Authority by the appropriate Government as may be necessary to carry out the provisions of this Act.

Power of the Authority: (Section 35–40)

• The Authority may require any promoter, allottee or real estate agent to provide information or explanation relating to their affairs;
• Authority can take suo motto action and may exercise these powers on its own motion or on basis of a complaint;
• The Authority may appoint one or more persons to conduct an inquiry into the affairs of a promoter, allottee, or real estate agent;
• The authority has same power of a Civil Court while exercising these powers;
• The authority may order to produce any books of account and other documents at a specified place and time;
• It may order summons and enforce the attendance of a person and examine him on oath;
• It may issue commissions for examining the witness or documents or any other;
• Authority may make interim orders;
• Authority may impose penalty and interest upon promoters, agents or allotees;
• Authority has power to regulate their own procedure.

An adjudicating officer is appointed under section 71 of the RERA Act,2016 by the RERA Authority. A person to become an adjudicating officer must be or have been a District Judge. The Adjudicating Officer mainly looks after the compensation matters. Any dispute regarding the share division between the developer and homebuyer, is adjudicated by the Adjudicating officer. Any compensation under section 12, 14, 18, 19 is decided by the adjudicating officer only. In short, RERA authority deals with complaints concerning violation and can grant appropriate statutory reliefs such as refunds/interests in matter falling within its jurisdiction whereas an Adjudicating officer deals particularly with claims for compensation under the RERA

Landmark Judgements

Newtech Promoters and Developers Pvt. Ltd. v. State of Uttar Pradesh (2021): The Hon’ble Apex court in this case affirmed that RERA applies retroactively to all ongoing projects that had not received a valid certification on 1st May 2017. The ruling in this case also confirmed that the RERA authority possesses complete legal power to order refunds and interest under section 18, while the Adjudicating officer determines the compensation under section 12, 14,18 and 19 of the Act. It was also said that these precedents protect the buyers who are engaged in property transactions

M/S. Imperia Structures Ltd. v. Anil Patni and another: Another landmark judgment of the Hon’ble Supreme Court where the court recognized that a home buyer can seek redressal under RERA and RERA provides a statutory remedy against the promoter.

Mansi Brar Fernandes v. Shubha Sharma and another (Civil Appeal No. 10261 of 2025): In this case also the Hon’ble Apex court affirmed that the RERA remains the primary forum for redressal of homebuyer’s grievances.

The Supreme Court has recognized RERA as a statutory and sector-specific mechanism for redressal of grievances of homebuyers. In particular, Section 31 enables an aggrieved allottee to approach the Real Estate Regulatory Authority for violations of the Act, Rules or Regulations, while recent jurisprudence has reiterated that RERA remains the primary forum for redressal of homebuyers’ grievances

National Consumer Dispute Redressal Commission

The Consumer Protection Act, 2019 also provides remedy to home buyers for lodging their grievances in NCDRC. A homebuyer can seek remedy in NCDRC when, the dispute between the developer and the home buyer is pertaining to:

• Deficiency in service
• Unfair trade practice
• Delay in possession
• Failure to perform the promised amenities
• Or any failure to honor the terms of the agreement between the home buyer and the developer

The homebuyer being a consumer within the Consumer Protection Act 2019, can seek relief before the consumer forum. A consumer forum may grant relief such as:

• refund of the amount paid
• interest on the amount deposited
• compensation for deficiency in service
• compensation for mental agony and harassment
• compensation for financial loss
• directions concerning possession, where appropriate and
• litigation costs

Landmark Judgements

Imperia Structures Ltd. v. Anil Patni (2020): The Supreme court in the present case explicitly held that the remedy under RERA does not bar any consumer to approach the Consumer Forums. Section 79 of the RERA Act bars the civil court to entertain complaints pertaining to the real estate but it does not bar the Consumer courts to adjudicate upon any such complaints. Also, it was observed that the aggrieved buyer has concurrent remedy available under RERA as well as Consumer Forums also. They have both options and can choose where to file their claim.

M/s Kabra and Associates & Ors. v. Rekha Rajkumar Hemdev & Ors. (Civil Appeal No. 6936/2023, Supreme Court):

This ruling of the Hon’ble Supreme Court enforced the legal principle of “election of remedies”. The apex court was of the view and held that once a consumer has initiated a complaint under on Authority cannot pursue multiple forums for redressal of the same matter. Basically, it prevented the litigants from pursuing multiple forums for the same dispute after making their deliberate choice.

Pioneer Urban Land and Infrastructure vs Union of India on 2 April, 2019: 

Here the homebuyer was aggrieved of delay in possession of the apartment where the NCDRC has directed the developer to refund the amount to the home buyer with interest and the Supreme court reaffirmed the judgment of NCDRC and held that NCDRC was right in providing relief to the homebuyer. A homebuyer can approach the consumer forum for relief against a developer where there is an unreasonable delay in handing over possession.

National Company Law Tribunal

The redressal under NCLT is a bit different than RERA and Consumer forums. Here, the home buyer cannot directly approach the NCLT merely with a grievance related to possession or other compensation related cases. In NCLT, a home buyer can move an application to seek initiation of insolvency process under IBC. A homebuyer is treated as a financial creditor under the IBC. The remedy arises here only if a real estate developer is at default.

Section 5(8)(f) clearly includes in explanation (i) “any amount raised from an allottee under a real estate project shall be deemed to be an amount having the commercial effect of a borrowing; and (ii) the expressions, “allottee” and “real estate project” shall have the meanings respectively assigned to them in clauses (d) and (zn) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016);], so the amount raised by the allotee shall be treated as financial debt. After the 2018 amendment, home buyers count as financial creditors and can collectively initiate insolvency proceedings against a defaulting builder. Consequently, the allotee can invoke section 7 of the IBC Act, which talks about initiation of corporate insolvency resolution process by financial creditor against the defaulter real estate developer subject to statutory requirements.

The objective of proceedings under the IBC is resolution of insolvency and revival of the corporate debtor, and not merely recovery of the individual homebuyer’s money. Further, pursuant to the second proviso to Section 7(1), an application by homebuyers of a real-estate project must be filed jointly by at least 100 allottees or 10% of the total number of allottees under the same project, whichever is less.

Important Cases:

Pioneer Urban Land & Infrastructure Ltd. v. Union of India, (2019): The Apex Court upheld amendments to the Insolvency and Bankruptcy Code (IBC) classifying homebuyers as financial creditors. This status allows groups of homebuyers to initiate corporate insolvency proceedings against defaulting developers before the NCLT. Also, it was held that the amount raised from the home buyers or allottees have the commercial effect of borrowing and therefore fall within the definition of section 5(8)(f) of IBC.

Manish Kumar v. Union of India, (2021): The Supreme Court upheld the requirement that, for a real-estate project, an application under Section 7 must be filed by 100 allottees or 10% of the total allottees, whichever is less. The Court considered this threshold necessary to prevent an isolated allottee from unnecessarily triggering insolvency proceedings against the developer.

Conclusion

Although both RERA and Consumer Forums provide mechanisms for resolving disputes involving homebuyers and real-estate developers, they differ significantly in their jurisdiction and scope. RERA is specifically designed to address real-estate-related grievances, including delays in possession, construction defects, non-compliance with contractual obligations, and issues concerning the rights of allottees. It provides a specialized regulatory framework to ensure transparency and accountability within the real-estate sector. Consumer Forums, on the other hand, deal with broader consumer disputes involving deficiency in services, unfair trade practices, and claims for compensation.

Therefore, the appropriate forum depends upon the nature of the grievance and the relief sought. Where the dispute primarily concerns the obligations of a promoter or the rights of an allottee under a real-estate transaction, RERA may provide a more specialized mechanism for redressal. Conversely, where the grievance involves deficiency in service or broader consumer rights, a consumer forum may be an appropriate avenue for seeking relief and compensation.

Author: Namanveer Singh Sodhi, Senior Associate

Co-Author: Shaurya Darsh, Intern