00:00Greetings of the day. This is Advocate Shubhdeep Kaur, Legal Associate at NRI Legal Services.
00:06Today, I will discuss Consumer Protection Act 2019, its application on residential projects,
00:14and what implications does this new act has on NRIs. It is a known fact that Indian real estate
00:21market is flourishing and everyone throughout the world is keeping an eye out for ways to invest in
00:29it. Luckily for NRIs, they can buy residential and commercial properties in India on an equal footing
00:37with Indian residents. One of the modes the NRIs avail this opportunity is by purchasing an apartment
00:44or a flat from a builder. This investment has dual benefits for NRIs. They can earn side income through
00:52the way of rents, and they always have a home to stay in if they ever want to relocate to
00:58India
00:59in their golden years. The appreciation of property value is one of the benefits too. The NRIs purchases
01:07a flat or an apartment by getting into a builder-buyer agreement with the builders. This builder-buyer
01:16agreement has all the vital clauses such as name of the parties, description of the property, default
01:24clause, payment plan, and maintenance charges, and the most important, prescribed time period
01:32for handing over of possession with an additional grace period. Generally, these builder-buyer agreements
01:39have default clauses which heavily penalize the buyers for the delays. Still, if the delay is
01:46at the end of the builder, they get away with nominal charges. These agreements are one-sided,
01:53favoring the builders, and heavily against the interests of the buyers. But there is no need
01:59to worry as the Honorable Supreme Court in its landmark judgment of Pioneer Urban Land and Infrastructure
02:07Limited vs. Govindan Raghavan has said that where a buyer has no choice, or rather no meaningful
02:14choice, but to give his consent to a contract and to sign on the dotted lines in a prescribed
02:21contract. Incorporating of such one-sided clauses in an agreement constitutes an unfair trade practice
02:29as per the Consumer Protection Act, and the builder in future cannot later seek to bind the buyer
02:37with such one-sided contractual agreements in the court of law.
02:42Now, coming to one of the most crucial clauses in the builder-buyer agreement, i.e., the position clause.
02:49So, in a scenario where a builder-buyer agreement specifies that the position will be handed over
02:55to a buyer within 24 months with an additional grace period of 6 months. Ideally, the builder
03:03should deliver the project within a 2.5 years of time period. But as we all know, builders
03:10in India are infamous for the delays and even the stalled projects. So, what remedies do the
03:17buyers have if the builder takes years and years to complete one of the projects and your hard-earned
03:24money is logged in one of such projects. So, herein, Consumer Protection Act 2019 comes to play to
03:33the rescue of these vulnerable buyers. The purpose of enacting Consumer Protection Act 2019 was to
03:41manage consumer grievances quickly and efficiently. Instead of simply initiating further amendments to
03:48the Consumer Protection Act 1986, the legislature's intent to create this new act was to grant a higher
03:56degree of security to the consumer's interests. The Consumer Protection Act applies to all sorts of buyers
04:05and whenever they are buying any goods or buying any services. As per Consumer Protection Act section 2,
04:14Clause 7, the consumer means any person who buys goods or hires any service for considerations.
04:22NRIs also come within the purview of this definition. And the service described in this act also includes
04:29providing facilities related to housing construction. Section 2, Clause 11 of this act defines deficiency as
04:38fault, imperfection, shortcoming, or inadequacy in the quality, nature, and manner of performance which
04:47is required to be maintained by under any law or as per the agreement. The Honorable Supreme Court of
04:55India in its plethora of judgments has said that when a person hires the service of a builder or a
05:02contractor
05:03for the construction of a house or a flat and the same is for a consideration. It is a service
05:10as per the
05:10Consumer Protection Act and the inordinate delay in handing over the possession of the flat amounts to
05:17deficiency in service. A person cannot be made to wait indefinitely for the possession of the flat allotted
05:25to him and is entitled to seek refund of the amount he paid along with a reasonable compensation. Therefore,
05:34if you are at the receiving end of these delayed services by the builder, you can always seek remedy
05:40from the consumer forums. Now let's talk about various consumer forums under the act. There are namely
05:47three consumer forums that is the District Consumer Dispute Redressal Commission, the State Consumer Dispute
05:55Redressal Commission, and the National Consumer Dispute Redressal Commission. These consumer commissions are
06:03divided depending upon the pecuniary jurisdiction of these forums. So, earlier as per the jurisdiction of
06:12Consumer Protection Act of 1986 stated that the value of the goods and services claimed by the buyer or the
06:22complainant along with compensation sought determined the pecuniary jurisdiction of the complaint. But many
06:29complainants used to exaggerate the compensation to change the pecuniary jurisdiction of the forum. But this
06:36lacuna has been dealt with by the introduction of Consumer Protection Act 2019. Now, the value of goods and
06:44services paid as consideration determines the pecuniary jurisdiction of the complaint. The Centre has
06:52recently notified rules by the Consumer Protection Jurisdiction Rules 2021, which states the revised jurisdiction
07:01jurisdiction of these consumer forums. According to these rules, the District Commission has the jurisdiction
07:08to entertain all sorts of complaints regarding goods and services where the value of goods and services
07:15paid as compensation does not exceed 50 lakh rupees. The State Commission shall have the jurisdiction to
07:23entertain all complaints regarding the goods and services where the value of goods and services paid as
07:30consideration exceeds 2 crores of rupees. The National Commission shall have the jurisdiction to entertain
07:41the complaint regarding any sorts of goods and services where the value of goods and services paid as
07:47consideration exceeds 2 crores of rupees. So, what type of redressal is available from these forums? The
07:56aggrieved complainant can pray for the relief of a refund of the principal with an interest as compensation.
08:03In addition, the complainant can also claim the cost of mental agony and harassment caused by the delay
08:10and you can also pray for expense of litigation. In the alternative, the aggrieved can also go to RERA
08:19for the authority. Real Estate Regulation and Development Act is a special law enacted in 2016 to regulate the real
08:27estate sector so that the delivery of projects can be transparent between the promoters and the homebuyers.
08:35Therefore, some specific remedies for the homebuyers and speedy disposal of cases are a few merits of the RERA,
08:44but it does not mean that the RERA is reducing the scope of the Consumer Protection Act. On the contrary,
08:51the RERA is an extension or we can say a support to the growing need for the transparency in the
08:59favor of
09:00homebuyers and the builders. The buyers are free to approach any of these authorities as both acts neither
09:07excludes nor contradicts each other. Rather, these acts are to be read harmoniously to subserve their
09:15common purpose. I hope this video will help the NRI viewers to better understand their rights as
09:22homebuyers in India and has shed some light on remedies available to them if the builder lacks any sort of
09:29service. If you like this video please like, comment, share and also subscribe to our channel and if you
09:37have any sort of query you can write to us at query at nrilegalservices.com. Thank you.
Comments