Calcutta High Court
Smt. Rita Banerjee & Anr vs S.E. Builders & Realtors Limited on 5 December, 2024
IN THE HIGH COURT AT CALCUTTA
(Ordinary Original Civil Jurisdiction)
ORIGINAL SIDE
Present:
The Hon'ble Justice Krishna Rao
IA No. GA 3 of 2022
In
CS No. 57 of 2022
Smt. Rita Banerjee & Anr.
Versus
S.E. Builders & Realtors Limited
Mr. Suman Kumar Dutt, Sr. Adv.
Mr. Rajarshi Dutta
Mr. A.P. Agarwalla
... For the plaintiffs.
Mr. Siddhartha Banerjee
Mr. Subir Banerjee
Mr. Abhishek Baran Das
Mrs. Srijoni Chongdar
... For the defendant.
Hearing Concluded On : 27.11.2024
Judgment on : 05.12.2024
2
Krishna Rao, J.:
1. The defendant has filed the present application being G.A. No. 3 of
2022 in C.S. No. 57 of 2022 under Section 8 of the Arbitration and
Conciliation Act, 1996 for referring the parties to the instant suit to
arbitration in terms of Clause 26 of the General Terms and Conditions
entered between the parties
2. The plaintiffs have filed the suit against the defendant for recovery of a
sum of Rs. 62,99,393/- along with interest. The defendant is the
subsidiary of the Bengal Ambuja Housing Development Limited, who is
a joint venture company of the West Bengal Housing Board and
Ambuja Neotia Group. After going through the advertisements made by
the defendant, the plaintiffs became interested in the said project and
contacted the defendant’s representative. On 24th April, 2016, the
plaintiffs have jointly applied for allotment of Apartment No. 07 in the
project of the defendant having built up area of 4046 Sq. Ft. Type – G
on the 22nd floor of Tower No.1.
3. The defendant has provided an application to the plaintiffs, hence the
plaintiffs have duly signed the said application and also made payment
of Rs.10,00,000/- by way of cheque on 20th April, 2016. General Terms
and Conditions of the Agreement for allotment of an apartment in the
said project was also provided to the plaintiffs. On 28th April, 2016, the
defendant has also made over provisional allotment of the apartment to
the plaintiffs and the total sale consideration of the said apartment was
3
fixed at Rs. 2,73,07,620/-. Time to time as per the demand of the
defendant, the plaintiffs have paid an aggregate amount of Rs.
94,15,028/- till 22nd November, 2017 being the part sale consideration
of the apartment.
4. Due to the demand for installment amount at a regular-intervals by the
defendant which is contrary to the representations made by the
defendant prior to application for allotment causing financial difficulties
to the plaintiffs and the plaintiffs were facing serious difficulties and
inconvenience in arranging for payments of the instalment amounts at
short notice, the plaintiff no. 1 approached the defendant with a
request for cancellation of the provisional allotment of the apartment.
The plaintiffs, by e-mails dated 15th June, 2018; 8th July, 2019; 19th
July, 2019; 22nd August, 2019; 30th January, 2020 and 13th February,
2020 requested the defendant to arrange for the refund of the part
consideration paid by the plaintiffs to the defendant.
5. The defendant by an email dated 15th February, 2020, informed the
plaintiffs that the plaintiffs shall be entitled to refund of a sum of Rs.
31,15,635/- only out of the total amount of Rs. 94,15,028/- after the
resale or re-allotment of the said apartment. The defendant informed
the plaintiffs that a sum of Rs. 31,95,159/- would be deducted towards
cancellation charges of GST and Service tax.
6. As the deduction of Rs. 62,99,393/- was illegal and contrary to law, the
plaintiffs have lodged a complaint to the West Bengal Housing
4
Industrial Regulation Authority under Section 31 of the West Bengal
Housing Industry Regulation Act, 2017 but no date was fixed for
hearing of the complaint of the plaintiffs. In the meantime by a letter
dated 20th February, 2021, the defendant send a cheque of Rs.
31,15,635/- after deducting the alleged applicable charges stating that
the plaintiffs have no right, tittle or interest against the apartment.
After several correspondences between the parties, the plaintiffs have
accepted the amount of Rs. 31,15,635/- without prejudice to the rights
of the plaintiffs to recover the entire consideration along with interest.
7. The plaintiffs have not received any notice of any proceeding from the
West Bengal Housing Industrial Regulation Authority, the plaintiffs
have filed the present suit.
8. Mr. Siddhartha Banerjee, Learned Advocate representing the defendant
submits that the dispute in the instant case revolves around the
contract entered between the parties pertaining to the residential unit
in the form of provisional letter of allotment and the General Terms and
Conditions signed by both the parties. He submits that in the
provisional letter of allotment specifically mentioned that the residential
unit had been allotted subject to the stipulations contained in the
General Terms and Conditions of the Contract.
9. Mr. Banerjee submits that pursuant to the provisional letter of
allotment, the residential unit was provisionally allotted to the plaintiffs
and simultaneously General Terms and Conditions of the Contract had
5
also been handed over to the plaintiffs and after going through the said
document and upon understanding the scope, purports, contents and
meaning thereof, the plaintiffs have voluntarily put their signatures in
the General Terms and Conditions. He submits that the existence and
enforceability of the Contract had never been disputed by the plaintiffs.
10. Mr. Banerjee submits that Clause 26 of the General Terms and
Contract specifically provided for resolution of all the disputes and
differences between the parties through arbitration. He submits that in
the plaint, the plaintiffs had admitted that the existence and the
binding effect of the General Terms and Conditions. He submits that
the disputes raised in the instant suit are covered under the arbitration
clause of the General Terms and Conditions of the Contract and the
disputes sought to be raised in the suit is arbitrable in nature.
11. Mr. Suman Kumar Dutt, Learned Senior Advocate representing the
plaintiffs submits that in terms of Section 2(c) of the Real Estate
(Regulation and Development) Act, 2016, Agreement for Sale means an
agreement entered between the promotor and the allottee. Section 13 of
the Act casts an obligation on the promoter not to take deposit or
advance without first entering into Agreement for Sale. He submits that
Rule 9 of the West Bengal Real Estate (Regulation and Development)
Rules, 2021 provides that the Agreement for sale shall be in the form as
per Annexure ‘A’ for the purpose of Sub-Section (2) of Section 13 of the
Act of 2016. He submits that Section 13(2) of the Act of 2016 provides
that the Agreement for sale referred in Section 13(1) shall be in such
6
form as may be prescribed. He submits that the agreement of the
present suit is not in consonance with the statutory form of agreement
provided under Rule 9 of the 2021 Rules.
12. Mr. Dutt submits that the defendant has entered into an agreement
and incorporated Clauses of Arbitration, which is contrary to and in
derogation of the provisions of the Act of 2016. He submits that the
provisions of the Act of 2016 contained in Chapter VIII thereof provides
for various punishment/ penalties, if a party contravenes any of the
provisions of the Act of 2016.
He submits that apart from the remedies in civil law, the Act of
2016 also provides for remedies under the criminal law, as would be
evident from the provisions contained in Sections 59 to 70 of the Act of
2016.
13. There is no dispute with respect to the provisional letter of allotment
and execution of General Terms and Conditions of the Contract
between the parties. The defendant relied upon Clause 26 of the
General Terms and Conditions of the Contract which reads as follows:
“26. JURISDICTION AND ARBITRATION:
A. The acceptance of Provisional Allotment Letter by
the Allottee shall be subject to these terms and
conditions and shall be binding on the Allottee. The
legal relationship between the Allottee and the
COMPANY shall be governed by the laws of India.
B. All disputes or differences relating or arising out of
or in connection with the Provisional Allotment read
with the Terms and Conditions contained herein,
7shall be mutually discussed and settled between
the parties.
C. Disputes which cannot be settled amicably shall be
finally decided and resolved by arbitration in
accordance with the provisions of the Arbitration
and Conciliation Act, 1996 and any subsequent
amendments thereto. The matters requiring
arbitration will be referred to a sole arbitrator to be
appointed by the COMPANY at Kolkata only. The
proceedings of the arbitration shall be conducted in
English and shall be construed as a domestic
arbitration under the applicable laws.
D. All disputes/issues arising out of this GTC will be
subject to the exclusive jurisdiction of Courts at
Kolkata.”
The objection raised by the plaintiffs that the General Terms and
Conditions entered between the parties is in violation of Rule 9 of the
West Bengal Real Estate (Regulation and Development) Rules, 2021
which provides that for the purpose of sub-section (2) of Section 13, the
Agreement for Sale shall be in the form as per Annexure ‘A’ and as per
Annexure ‘A’, there is no Clause for Arbitration. The defendant has
relied upon italic part of Clause 33 of Annexure ‘A’ of Rule 9 which
reads as follows:
“33. DISPUTE RESOLUTION
All or any disputes arising out or touching
upon or in relation to the terms and conditions of
this Agreement, including the interpretation and
validity of the terms thereof and the respective
rights and obligations of the Parties, shall be
settled amicably by mutual discussion, failing
which the same shall be settled through the
Adjudicating Officer appointed under the Act.
[Please insert any other terms and conditions
as per the contractual understanding between the
parties, however, please ensure that such
8additional terms and conditions are not in
derogation of or inconsistent with the terms and
conditions set out above or the Act and the Rules
and Regulations made thereunder.]”
Section 71 of the Act of 2016 provides for Power to adjudicate
which reads as follows:
“71. Power to adjudicate. — (1) For the
purpose of adjudging compensation under sections
12, 14, 18 and section 19, the Authority shall
appoint, in consultation with the appropriate
Government one or more judicial officer as deemed
necessary, who is or has been a District Judge to
be an adjudicating officer for holding an inquiry in
the prescribed manner, after giving any person
concerned a reasonable opportunity of being heard:
Provided that any person whose complaint in
respect of matters covered under sections 12, 14,
18 and section 19 is pending before the Consumer
Disputes Redressal Forum or the Consumer
Disputes Redressal Commission or the National
Consumer Redressal Commission, established
under section 9 of the Consumer Protection Act,
1986 (68 of 1986), on or before the commencement
of this Act, he may, with the permission of such
Forum or Commission, as the case may be,
withdraw the complaint pending before it and file
an application before the adjudicating officer under
this Act.
(2) The application for adjudging compensation
under sub-section (1), shall be dealt with by the
adjudicating officer as expeditiously as possible
and dispose of the same within a period of sixty
days from the date of receipt of the application:
Provided that where any such application
could not be disposed of within the said period of
sixty days, the adjudicating officer shall record his
reasons in writing for not disposing of the
application within that period.
(3) While holding an inquiry the adjudicating
officer shall have power to summon and enforce the
attendance of any person acquainted with the facts
9and circumstances of the case to give evidence or to
produce any document which in the opinion of the
adjudicating officer, may be useful for or relevant to
the subject matter of the inquiry and if, on such
inquiry, he is satisfied that the person has failed to
comply with the provisions of any of the sections
specified in sub-section (1), he may direct to pay
such compensation or interest, as the case any be,
as he thinks fit in accordance with the provisions of
any of those sections.”
The contention of the defendant that as per the Italic provision in
Clause 33 of Annexure ‘A’ (Agreement), the defendant has incorporated
Clause of Arbitration being Clause 26 of the General Terms and
Conditions of the Contract which was duly signed by the plaintiffs
voluntarily and with the knowledge of the Arbitration Clause and thus
at this stage, the plaintiffs cannot say that the General Terms and
Conditions of the Contract is illegal.
Section 88 of the Act of 2016 reads as follows:
“88. Application of other laws not barred
— The provisions of this Act shall be in addition to,
and not in derogation of, the provisions of any other
law for the time being in force.”
14. Section 13(2) of the 2016 Act provides that an Agreement for Sale to be
entered into between the promoter and the intending purchaser in such
form as may be prescribed. The expression “Prescribed” has been
defined under Section 2(zi) of the 2016 Act which means prescribed by
rules made under this Act. The West Bengal Real Estate (Regulation
and Development) Rules, 2021 were framed under the Act of 2016 and
as per Rule 9 of the said Rules, requires an Agreement for Sale to be
10
executed in the form as per ‘Annexure-A’ of the said Rules. Annexure
‘A’ is the prescribed format of the Agreement for Sale to be entered
between the promoter and the prospective parties. In Clause 33 of the
prescribed form of the agreement, there is an insertion in italic in
brackets wherein the parties are at liberty to incorporate any other
terms and conditions as per the contractual understanding between the
parties provided such additional terms and conditions are not in
derogation of or inconsistent with the terms and conditions set out in
the agreement or in the Act or the Rules and Regulations made
thereunder.
Mr. Dutt submits that Clause contained in Clause 33 of the
prescribed form of agreement is fallacious and misconceived and
Clause 26 of the General Terms and Conditions is void and contrary to
Clause 33 of the prescribed form of agreement and the same cannot be
implemented.
The provisions of Section 88 of the Act of 2016 are in addition to
and not in derogation of the provisions of any other law for the time
being in force. At the same time as per Section 89 of the Act of 2016,
the provisions of this Act shall have effect, notwithstanding anything
inconsistent therewith contained in any other law for the time being in
force.
Considering the above, this Court did not find illegality in
incorporating Clause of Arbitration in the General Terms and
Conditions by the defendant.
11
15. Mr. Dutt relied upon the judgment in the case of Army Welfare
Housing Organization and Another Vs. Col. R. Ganesan reported in
2021 SCC OnLine Mad 16554 and submitted that when the issues
governed by the special Statute including criminal matters, the same is
non arbitrable. In paragraphs 29 and 30 the said report, the Madras
High Court held as follows:
“29. The statement of objects and reasons
shows that this Act is enacted for establishing the
Real Estate Regulatory Authority for regulation and
promotion of real estate sector and to ensure sale of
plot, apartment or building, as the case may be, in
an efficient and transparent manner and to protect
the interest of consumers in the real estate sector
and to establish a Real Estate Appellate Tribunal to
hear the appeals from the decisions, directions or
orders of the Real Estate Regulatory Authority. It is
to ensure greater accountability towards
consumers and would significantly reduce frauds
and delays as also current high transaction cost. It
attempts to balance the interest of consumers and
promoters by imposing certain responsibilities on
both.
30. Thus, this Act has provisions for
registration of real estate project and real estate
agents, definitions of the functions and duties of
promoters, rights and duties of allottees,
establishment of Real Estate Regulatory Authority
and Real Estate Appellate Tribunal, defining their
functions and powers and importantly providing
penalties for the offences committed under the Act.
Sections 59 to 69 of the Real Estate (Regulation
and Development) Act, 2016 deals with the
offences, penalties and adjudication. Section 70
deals with compounding of offences. Certainly
arbitrators cannot impose penalty and
imprisonment.”
Mr. Banerjee relied upon the judgment in the case of Priyanka
Taksh Sood and Others Vs. Sunworld Residency Pvt. Ltd. and
12
Another reported in 2022 SCC OnLine Del 4717 wherein the Delhi
High Court held that:
“40. From the foregoing, it is thus clear that
the remedy available under the A&C Act is in
addition to the remedies available under other
special statutes and the availability of alternative
remedies is not a bar to the entertaining of a
petition filed under the A&C Act. But once elected,
then the other remedy will not lie in respect of the
same dispute. Hence, once a RERA proceeding is
initiated, an application under Section 8 of the Act
would not lie. However, in the instant case,
Respondent has not initiated any proceeding under
RERA, hence election of remedy of arbitration is not
barred.”
Mr. Banerjee relied upon the judgment in the case of Pallab
Ghosh and Another Vs. Simplex Infrastructures Limited reported in
2024 SCC OnLine Gau 751 wherein the Guwahati High Court held
that :
“32. As held by the Supreme Court in the case
of Vidya Drolia (supra), the DRT Act is a complete
Code in itself and recovery of money is provided
under Chapter-V of the DRT Act, after the procedure
under Chapter-IV of the DRT Act has concluded.
The recovery of money is automatic as soon as the
order of the Tribunal or the Appellate Tribunal is
made under the DRT Act. However, the same is not
the case with respect the RERA Act. The recovery of
money under the RERA Act has to be made under
Section 40 as an arrear of land revenue and
Section 40 does not come into play automatically,
until and unless the appropriate procedure is
adopted, based upon the order of the adjudicating
officer or the authority concerned.
33. In view of the above, there is a difference
in the mode of recovery of money envisaged under
the DRT Act and the RERA Act. In so far as
recovery of money is to be done under the
Arbitration and Conciliation Act, an execution case
would have to be filed in terms of the provisions of
13the Arbitration and Conciliation Act before the
District Judge, which is somewhat akin to following
the appropriate procedure prescribed under the
RERA Act for recovery of money.
39. In the present case, the petitioners have
opted for arbitration, as per the arbitration clause,
for settling the dispute between them. In view of
the above reasons, this Court is of the view that the
arbitration clause which had been agreed to by the
parties for resolution of their disputes can be
chosen by the petitioners for deciding the present
dispute, instead of taking recourse to the RERA
Act.”
The plaintiffs have lodged a complaint on 7th October, 2020 before
the West Bengal Housing Industrial Regulation Authority under Section
31 of the West Bengal Housing Industry Regulation Act, 2017 which is
the Housing Industry Regulatory Authority under Section 20 of the said
Act for appropriate relief. It is the case of the plaintiffs that even after
receipt of the complaint, the authority has not taken any action by
fixing a date for hearing of the complaint filed by the plaintiffs and
hence the plaintiffs have filed the present suit. At the time of hearing,
the defendant has produced a Notification issued by the Government of
West Bengal in exercise of power conferred under Sub-Section (1) of
Section 20 of the Real Estate (Regulation and Development) Act, 2016
by appointing an Authority to be known as the West Bengal Real Estate
Regulatory Authority with immediate effect. The plaintiffs although
have made complaint to the authority but have not pursued the same
before the concern authority and filed the present suit on the ground
that no date was fixed for hearing by the Authority.
14
16. In the case of Imperia Structures Ltd. Vs. Anil Patni and Another
reported in (2020) 10 SCC 783, the Hon’ble Supreme Court held as
follows:
“24. Before we consider whether the
provisions of the RERA Act have made any change
in the legal position stated in the preceding
paragraph, we may note that an allottee placed in
circumstances similar to that of the complainants,
could have initiated the following proceedings
before the RERA Act came into force:
(A) If he satisfied the requirements of being a
“consumer” under the CP Act, he could have
initiated proceedings under the CP Act in addition
to normal civil remedies.
(B) However, if he did not fulfil the
requirements of being a “consumer”, he could
initiate and avail only normal civil remedies.
(C) If the agreement with the developer or the
builder provided for arbitration:
(i) in cases covered under Clause (B)
hereinabove, he could initiate or could be called
upon to invoke the remedies in arbitration.
(ii) in cases covered under Clause (A)
hereinabove, in accordance with law laid down
in Emaar MGF Land Ltd. v. Aftab Singh , he
could still choose to proceed under the CP Act.
26. It is, therefore, required to be considered
whether the remedy so provided under the RERA
Act to an allottee is the only and exclusive modality
to raise a grievance and whether the provisions of
the RERA Act bar consideration of the grievance of
an allottee by other fora.
27. Section 79 of the RERA Act bars
jurisdiction of a civil court to entertain any suit or
proceeding in respect of any matter which the
Authority or the adjudicating officer or the
Appellate Tribunal is empowered under the RERA
15
Act to determine. Section 88 specifies that the
provisions of the RERA Act would be in addition to
and not in derogation of the provisions of any other
law, while in terms of Section 89, the provisions of
the RERA Act shall have effect notwithstanding
anything inconsistent contained in any other law
for the time being in force.
28. On plain reading of Section 79 of the
RERA Act, an allottee described in Clause (B)
stated in para 24 hereinabove, would stand barred
from invoking the jurisdiction of a civil court.
However, as regards the allottees who can be
called “consumers” within the meaning of the CP
Act, two questions would arise; (a) whether the bar
specified under Section 79 of the RERA Act would
apply to proceedings initiated under the provisions
of the CP Act; and (b) whether there is anything
inconsistent in the provisions of the CP Act with
that of the RERA Act.
30. On the strength of the law so declared,
Section 79 of the RERA Act does not in any way
bar the Commission or Forum under the provisions
of the CP Act to entertain any complaint.
31. Proviso to Section 71(1) of the RERA Act
entitles a complainant who had initiated
proceedings under the CP Act before the RERA Act
came into force, to withdraw the proceedings under
the CP Act with the permission of the Forum or
Commission and file an appropriate application
before the adjudicating officer under the RERA Act.
The proviso thus gives a right or an option to the
complainant concerned but does not statutorily
force him to withdraw such complaint nor do the
provisions of the RERA Act create any mechanism
for transfer of such pending proceedings to
authorities under the RERA Act. As against that the
mandate in Section 12(4) of the CP Act to the
contrary is quite significant.
32. Again, insofar as cases where such
proceedings under the CP Act are initiated after the
provisions of the RERA Act came into force, there is
nothing in the RERA Act which bars such initiation.
The absence of bar under Section 79 to the
initiation of proceedings before a fora which cannot
be called a civil court and express saving under
16
Section 88 of the RERA Act, make the position quite
clear. Further, Section 18 itself specifies that the
remedy under the said section is “without prejudice
to any other remedy available”. Thus, the
parliamentary intent is clear that a choice or
discretion is given to the allottee whether he wishes
to initiate appropriate proceedings under the CP Act
or file an application under the RERA Act.
33. It was, however, urged that going by the
objective or the purpose for which the RERA Act
was enacted and considering the special expertise
and the qualifications of the Chairpersons and
Members of the Authority (Section 22) and the
Appellate Tribunal (Section 46), such authorities
alone must be held entitled to decide all issues
concerning the Project registered under the RERA
Act. It was submitted that if the allottees were to be
permitted to initiate parallel proceedings before the
fora under the CP Act, the financial drain on the
promoter would render completion of construction
an impossibility and, therefore, the RERA Act in
general and Section 89 in particular be construed
in such a way that all the issues pertaining to the
project concerned be decided only by the
authorities under the RERA Act. Even with
acceptance of such interpretation, the allottees
would still be entitled to approach the authorities
under Section 18 of the RERA Act.
34. It is true that some special authorities are
created under the RERA Act for the regulation and
promotion of the real estate sector and the issues
concerning a registered project are specifically
entrusted to functionaries under the RERA Act. But
for the present purposes, we must go by the
purport of Section 18 of the RERA Act. Since it gives
a right “without prejudice to any other remedy
available”, in effect, such other remedy is
acknowledged and saved subject always to the
applicability of Section 79.
35. At this stage, we may profitably refer to
the decision in Pioneer Urban Land & Infrastructure
Ltd. v. Union of India, where a Bench of three
Judges of this Court was called upon to consider
the provisions of the Insolvency and Bankruptcy
Code, 2016, the RERA Act and other legislations
17
including the provisions of the CP Act. One of the
conclusions arrived at by this Court was:
“100. RERA is to be read harmoniously with
the Code, as amended by the Amendment Act. It
is only in the event of conflict that the Code will
prevail over RERA. Remedies that are given to
allottees of flats/apartments are therefore
concurrent remedies, such allottees of
flats/apartments being in a position to avail of
remedies under the Consumer Protection Act,
1986, RERA as well as the triggering of the
Code.”
36. We, therefore, reject the submissions
advanced by the appellant and answer the
questions raised in para 28 hereinabove against
the appellant.”
17. In the case of Gujarat State Civil Supplies Corporation Limited Vs.
Mahakali Foods Private Limited (Unit 2) and Another reported in
(2023) 6 SCC 401, the Hon’ble Supreme Court held that:
“45. There cannot be any disagreement to the
proposition of law laid down in various decisions of
this Court, relied upon by the learned counsel for
the buyers that the Court has to read the
agreement as it is and cannot rewrite or create a
new one, and that the parties to an arbitration
agreement have an autonomy to decide not only on
the procedural law to be followed but also on the
substantive law, however, it is equally settled legal
position that no agreement entered into between
the parties could be given primacy over the
statutory provisions. When the Special Act i.e.
the Msmed Act, 2006 has been created for ensuring
timely and smooth payment to the suppliers who
are the micro and small enterprises, and to provide
a legal framework for resolving the dispute with
regard to the recovery of dues between the parties
under the Act, also providing an overriding effect to
the said law over any other law for the time being
in force, any interpretation in derogation thereof
would frustrate the very object of the Act.”
18
18. The allegation of the plaintiffs in the present suit that the defendant
has no right or authority in law to withhold the money paid by the
plaintiffs to the defendant towards part consideration of the flat. The
defendant already sold or taken steps for sale of the said property and
realized or about to realize the entire consideration thereof. The
defendant cannot make wrongful gain at the cost of the plaintiffs. The
Clause in the General Terms and Conditions permitting the defendant
to withhold payment on the garb of applicable charges is contrary to
law and cannot be given effect to.
Section 18 of the Act of 2016 stipulates that if the promoter itself
fails to complete or is unable to give possession of an apartment, plot or
building in accordance with the terms of the agreement for sale, the
promoter would be liable, on demand from the allottees, to return the
amount received by him in respect of that apartment, plot or building,
with interest at such rate, as may be prescribed. In the instant case,
the plaintiffs wanted to walk out of the agreement on the ground that
the defendant has violated the agreement.
Section 31 of the Act of 2016 provides for filing of complaints with
the authority or the adjudicating officer. In paragraph 12 of the plaint,
the plaintiffs have categorically averred that prior to institution of the
suit, the plaintiffs have made complaint before the adjudicating
authority.
Section 79 of the Act of 2016 specifically excludes the jurisdiction
of every civil court to entertain any suit or proceeding in respect of any
19
matter, which the authority or the adjudicating officer or the Appellate
Tribunal constituted under the Act of 2016 is empowered to determine.
The Hon’ble Supreme Court in the case of Imperia Structures Ltd.
(Supra) held that on plain reading of the Section 79 of the RERA Act,
an allottee would stand barred from invoking the jurisdiction of a civil
court.
19. In the case of Gujarat State Civil Supplies Corporation Limited
(Supra), the Hon’ble Supreme Court while setting aside the order
passed by the High Court held that the Facilitation Council shall have
the jurisdiction to proceed with reference made by the party in respect
of the dispute covered under Section 17 of the Msmed Act, 2006
despite the existence of an independent arbitration agreement between
the parties.
20. In the present case, it is admitted that the plaintiffs have made
complaint before the West Bengal Housing Regulation Authority on 7th
October, 2020 under Section 31 of the Act and without proceeding the
same, the plaintiffs have filed the present suit. It is also admitted that
under the General Terms of Conditions entered between the parties
under Clause 26, there is a Clause of Arbitration on the basis of which
the defendant has filed the present application for referring the parties
to arbitration. The contention of the plaintiffs that in Chapter VIII of the
Act of 2016 provides for punishment/penalties and the arbitrator
cannot impose punishment and penalty. The plaintiffs have filed the
suit for a decree for a sum of Rs. 62,99,393/- with interest but have
20
not prayed for any punishment and penalty, thus the contention of the
plaintiffs does not stand.
21. Considering the above, it is clear that the remedy available under the
Arbitration and Conciliation Act, 1996 is in addition to the remedies
available under other special statutes and the availability of alternative
remedies is not a bar to the entertaining of a petition under the
Arbitration and Conciliation Act, 1996. But once elected, then the other
remedy will not lie in respect of the same dispute.
The plaintiffs have initially made complaint being Complaint No.
COM000518 dated 7th October, 2020 before the West Bengal Housing
Industrial Regulation Authority under Section 31 of the Act and the
said complaint is still pending before the concern authority. Thus the
plaintiffs elected remedy under Section 31 of the Act of 2016, the
plaintiffs cannot file the suit for recovery of money and the parties
cannot be referred to arbitration.
22. In view of the above, the suit being C.S. No. 57 of 2022 filed by the
plaintiffs and the application filed by the defendant being G.A. No. 3 of
2022 are dismissed. The dismissal of the suit will not create any
hindrance to the plaintiffs to take appropriate steps before the concern
authority to proceed with the complaint filed by the plaintiffs on 7th
October, 2020.
(Krishna Rao, J)