Arbitration clause not a bar in seeking relief, holds TNRERA

“RERA Act is a special enactment to protect the interest of consumers in the real estate sector and to establish an adjudicating mechanism for speedy dispute redressal. Section 88 of the Act makes it clear that the provisions the Act is in addition to, and not is derogation of, the provisions of any other law for time being in force. Therefore, arbitration clause in agreement is not a bar seeking reliefs under the Act by complainant. Section 79 of the Act bars the jurisdiction of civil court to entertain any matter which the Authority or the adjudicating officer is empowered to determine,” adjudicating officer G Saravanan said in his order.

The order pertains to a complaint filed by homebuyer, C Lakshmi Narayanan, against Pacifica (Chennai Project) Infrastructure Company Private Limited. Lakshmi Narayanan said in his complaint that he had booked an apartment at the builder’s project in Padur village at a total cost of Rs 48.27 lakh including taxes.

The builder had given an undertaking that the flat would be handed over by June 2015, with a grace period of six months, and the sale deed for UDS land was also executed. However, the construction has not been completed till date, said the complainant, seeking refund of the amount with interest, compensation and cost.

But the builder claimed that the project was already announced before Act came into force. The podium was not connected with main building. “The respondent is willing to deliver new apartment in another block against the booked apartment with the stipulated period in the registration certificate and the complainant already agreed for swapping. The complaint is hit by Arbitration and Conciliation Act in view of the arbitration clause in the construction agreement,” the builder argued.

But the adjudicating officer rejected the contentions and ordered the builder to refund the amount with interest, along with Rs 2 lakh towards compensation and Rs 25,000 towards legal expenses.