The Court was dealing with a petition filed by two persons (petitioners) who had entered into an agreement to buy an apartment with a real estate company and the Guwahati Metropolitan Development Authority (respondents).
The apartment was supposed to be delivered to the petitioners by December 20, 2020. However, although the petitioners paid the advance amount, the respondents did not hand over the possession of the apartment.
In the ensuing dispute, the petitioners sought the payment of interest for the delay in handing over the apartment – an entitlement under Section 18 of the RERA Act where there is a delay in handing over the apartment.
To resolve this dispute, the petitioners invoked an arbitration clause which provided for the settlement of disputes by a three-member arbitration tribunal.
The petitioners also appointed an arbitrator. However, the respondents did not take any steps to appoint an arbitrator from their end, thus delaying the resolution of the dispute by arbitration.
This led the petitioners to approach the High Court for relief. In response, the respondents asserted that the dispute should be decided on by the authority under the RERA Act and not by arbitration.
To support this stance, the respondents referred to the Vidya Drolia ruling, in which it had been observed that disputes handled by the Debt Recovery Tribunal (DRT) are not subject to arbitration since the DRT Act is a complete code in itself for debt recovery.
The respondents contended that the same analogy would be applicable to the RERA Act.
The Court, however, rejected this argument and held that the DRT Act and the RERA Act are not comparable.
“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 Court pointed out.
Source: Barandbench
