Kerala High Court
Kerala High Court
Litigation News

Does RERA bar PLAs from deciding real estate claims? Kerala HC leaves question open but states no error in PLA Order declining jurisdiction

The Kerala High Court recently refused to set-aside an Order passed by a Permanent Lok Adalat (PLA) declining jurisdiction over a real estate dispute.

Lydia Suzanne Thomas

The Kerala High Court recently refused to set-aside an Order passed by a Permanent Lok Adalat (PLA) declining jurisdiction over a real estate dispute.

The order was challenged by a disgruntled apartment-buyer who had approached the PLA seeking the refund of an amount advanced when the construction-agreement was drawn up (Santhosh v. Peramanent Lok Adalat and Ors).

The buyer pulled out of the building-agreement after the builder failed to complete the construction of his apartment within the charted timeline. The PLA refused to entertain the complaint by reason of the enactment of the Real Estate (Regulation and Development) Act, 2016 (RERA).

Aggrieved by the PLA’s refusal to adjudicate the dispute, the apartment-buyer moved the High Court.

The buyer, through his counsel Advocate G Krishnakumar, argued that the RERA only barred “civil courts” from taking jurisdiction. He stated further that adalats, were not “civil courts.

Relying on a Supreme Court ruling in Pioneer Urban Land and Infrastructure Limited and another v. Union of India and others, the Advocate argued that the jurisdiction of PLAs and the authorities established by the RERA were concurrent, and any finding to the contrary was per se illegal.

The Respondent-builders through Advocate R Venugopal refuted these arguments relying on a Bombay High Court judgment on provisions of the RERA i.e. Neel Kamal Realtors Suburban Private Ltd and another v. Union of India.

Justice Anu Sivaraman, in dismissing the writ petition, noted that Section 79 of the RERA pertained to the ‘bar on civil courts’.

Distinguishing the case at hand from the Supreme Court ruling that was relied upon, the Court stated that the case specifically applied to the provisions of the Insolvency and Bankruptcy Code vis-à-vis aggrieved home-buyers in holding that the two enactments were to be read harmoniously.

Finding that the PLA had grounded its decision in the Bombay High Court judgment on the provisions of the RERA, Justice Sivaraman found no “glaring” error in law or fact that merited interference.

The PLA had found that the RERA provided for “comprehensive and effective measures” to protect consumers in real estate deals. Further, if the PLA did take jurisdiction, the complainant would be prevented from enforcing his rights before other fora, per the provisions of the Legal Services Authorities Act, the PLA said.

Adopting the ruling of the Bombay High Court which elaborately dealt with the provisions of the Act, the PLA stated that it had no jurisdiction to resolve the real estate dispute.

“Even if it is admitted for the sake of argument that the Lok Adalat has concurrent power to decide the issue, the petitioner who is possessed of a more specific and efficacious remedy cannot be said to be aggrieved by Ext.P3 (the Adalat’s Order).”
Justice Sivaraman observed.

The Court proceeded to dismiss the petition, holding that the petitioner had an efficacious remedy in the RERA to “agitate” his grievances.

At the tail end of the judgment, Justice Sivaraman recorded, however, that the legal question of the concurrent jurisdiction of the PLA (with the RERA) was left open.

Read the Judgment:

Santhosh v. Peramanent Lok Adalat and Anr. - Judgment dated July 8, 2020.pdf
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