Exploring Lok Adalat as a Remedy for RERA Cases: Opportunities, Challenges, and Insights

The Uttar Pradesh Real Estate Regulatory Authority (UPRERA) has announced the organization of a National Lok Adalat on 14th December 2024. This initiative offers a platform for resolving disputes related to real estate projects registered under the Real Estate (Regulation and Development) Act, 2016. While the Lok Adalat provides an alternative dispute resolution mechanism, it is crucial for allottees to understand its implications, benefits, and limitations before opting for this route.

Key Details About the Lok Adalat for RERA Cases

1. Purpose of the Lok Adalat:

   • The Lok Adalat aims to facilitate compromise settlements between aggrieved parties and real estate developers, providing a quicker and cost-effective resolution mechanism.

2. Eligibility and Participation:

   • Parties involved in disputes under Sections 31, 38, 40, and 63 of the RERA Act can participate.

   • Applications must be submitted to UPRERA by 10th December 2024, clearly expressing the intent to settle.

3. Location and Timing:

   • The proceedings will take place at UPRERA's headquarters in Lucknow and its Greater Noida office, starting at 10:30 AM.

4. Nature of Relief:

   • The focus is on mutual agreements. However, the enforceability and execution of settlements might require further steps through UPRERA or civil courts.

     
     

Critical Insights for Allottees Considering Lok Adalat

While the Lok Adalat serves as a statutory mechanism for alternative dispute resolution, it has both advantages and limitations that allottees should carefully consider.

1. Who Should Opt for Lok Adalat?

   • Lok Adalat is an excellent opportunity for allottees who haven’t pursued legal remedies through UPRERA or Consumer Forums. However, for those who already have orders from UPRERA and are seeking their execution, this option may not be relevant.

2. Uncertainty Surrounding Relief:

   • The extent of relief granted through a compromise settlement is uncertain. It is unclear whether the Lok Adalat's decisions will align with historical rulings of RERA courts, the NCDRC, or the Supreme Court, or comply with the UP Real Estate Rules, 2018.

3. Delays in Executing Settlements:

   • Even if a compromise settlement is granted, its execution through UPRERA or civil courts could take years, creating additional delays for allottees.

4. Overlap with UPRERA’s Conciliation Process:

   • The role of Lok Adalat overlaps with UPRERA’s existing conciliation mechanism, which has not significantly reduced complaints against developers. UPRERA could benefit from reviewing the success rates of its conciliation efforts before promoting Lok Adalat as a solution.

5. Jurisdictional Limitations:

   • Section 22C of the Legal Services Authorities Act, 1987, limits the jurisdiction of Permanent Lok Adalats to disputes where the property value is under ₹10 lakh. Most cases involving real estate allottees exceed this value, potentially excluding them from Lok Adalat’s jurisdiction.

6. Finality of Lok Adalat Awards:

   • Awards made by Lok Adalats are deemed as decrees of a civil court and are final and binding, with no provision for appeal. This raises concerns for allottees who might feel that the award fails to deliver justice.

7. Right to Litigate Post-Lok Adalat Awards:

   • While parties dissatisfied with Lok Adalat awards can pursue litigation, the time and effort spent in Lok Adalat might feel wasted if the outcome is unsatisfactory. Conversely, builders with favorable awards may enforce them, leaving allottees burdened by procedural delays.

Conclusion

The Lok Adalat offers a promising avenue for resolving real estate disputes, particularly for those who are yet to approach legal forums. However, for allottees already engaged with UPRERA or holding favorable orders awaiting execution, this mechanism might not provide additional value. Key concerns include the uncertainty of relief, jurisdictional limitations, and potential delays in execution.

Before opting for Lok Adalat, allottees should weigh the pros and cons carefully. Seeking legal advice and exploring other remedies, such as UPRERA’s conciliation process or direct litigation, could prove beneficial for certain cases. Ultimately, while Lok Adalat serves as a statutory mechanism for compromise and settlement, its effectiveness for resolving complex real estate disputes remains to be seen.