Class Action Suit: by Consumers has
become a reality to happen in India, with order of Apex Consumer Commission and
Apex Court of India.
>>> The Supreme Court of India
upheld a decision by the National Consumer Disputes Redressal Commission
(NCDRC) to allow flat buyers to jointly approach it in case of a dispute with a
builder, allowing home buyers to leapfrog lower Forums: District Consumer
Disputes Redressal Forum, State Consumer Disputes Redressal Commission, and
approach the National (Apex) consumer commission (NCDRC), directly.
It also made it clear
that the pecuniary jurisdiction is to be determined on the basis of the
aggregate of the value of the products or service rendered to the consumers.
As on date, if the
value of the suit is Rs 1 crore or more, the jurisdiction lies with the NCDRC.
Less than Rs 1 crore but more than Rs 20 lakh, the jurisdiction is with the
respective state forum and less than Rs 20 lakh with the respective district
forum.
>>>
Dated: 21st FEBRUARY, 2017; Supreme
Court of India:
“These people have trusted in your business. And you want them
to go to the state or district forum,”
The Apex Court bench headed by Justice
Dipak Mishra told the company’s (real estate developer Amrapali ) counsel,
Rakesh Kumar.
Thus: The Supreme Court empowers Home Buyers
Association to file case against unfair developers. Home Buyers Associations
can now collectively file cases in NCDRC.
Hence:
As held by: The Apex consumer forum:
(NCDRC):“Class Action” suits can be entertained under the Consumer Protection
(CP) Act.
>>>
The ruling opens the doors for others stuck with delayed flats to approach the
apex panel in a similar manner.
In a
case of individuals who bought flats from real estate developer Amrapali, the panel
allowed multiple individuals to club their cases to cross the `Rupees: 1crore,
ceiling.
The developer had challenged the decision at
the apex court.
Disputes
between buyers and sellers need to be first raised at state- or district-level
consumer rights panels, where they are usually stuck for a while.
The
national panel can be approached only for appeals or if the total value of the
disputed deal crosses Rupees: 1 crore.
>>>
The NCDRC ( National Consumer Disputes Redressal Forum) had held that under
Section 12 (1) (c) of the CP Act ( Consumer Protection Act) a group of
consumers having a common interest or a common grievance seeking same relief
against the same person can file the ‘class
action suit’.
Different regulations may
have a different requirement for filing it, but generally more than one person
can file it.
The government-Nestle legal
battle is the first instance of a class action suit filed in the country by the
Department of Consumer Affairs, Ministry of Consumer Affairs, Food & Public
Distribution, citing the Consumer Protection Act, 1986.
Class action: is simply filing a law suit in a
larger group instead of individual suits where there are numerous persons
having the same interest in that suit.
A class action suit can also
be filed under Section 91, Order 1 Rule 8 of Civil Procedure Code, 1908.
However different statutes
may have different provisions for filing suit.
http://ncdrc.nic.in/bare_acts/Consumer%20Protection%20Act-1986.html
http://www.vakilno1.com/bareacts/laws/civil-procedure-code-1908.html
>>>
Principles of consumer protection are provided
under the Consumer Protection Act, 1986 which is primarily based on principles
of "unfair trade practice"
THE CONSUMER PROTECTION ACT,
1986:
2. Definitions. - (1) In this Act, unless the context otherwise
requires:
(r) "unfair
trade practice" means a trade practice which, for the purpose of promoting
the sale, use or supply of any goods or for the provision of any service,
adopts any unfair method or unfair or deceptive practice including any of the
following practices, namely;
12. Manner in which complaint shall be
made.—(1) A complaint in relation to any goods sold
or delivered or agreed to be sold or delivered or any service provided or
agreed to be provided may be filed with a District Forum by –
(c) one or more consumers, where
there are numerous consumers having the same interest, with the permission of
the District Forum, on behalf of, or for the benefit of, all consumers so
interested; or
http://ncdrc.nic.in/bare_acts/Consumer%20Protection%20Act-1986.html
>>>
Those buying, or those
who have paid money as booking amount for their flats in various housing societies,
can collectively sue a builder if he errs in keeping his declared promises.
The
NCDRC has gone a step ahead to hold that date of booking, allotment, purchase
of the flat would be wholly irrelevant in such a complaint.
>>>
It shall be pertinent to go thru the whole decision by full
bench of NCDRC president DK Jain, members VK Jain and BC Gupta, while settling
the issue of class action suit, that laid:: a complaint under Section 12 (1)
(c) of the Act can be filed on behalf of or for the benefit of all the
consumers, having a common interest or a common grievance seeking the same and
similar relief against the same person.
Case No. CC/819/2016
Dated : 30 Aug 2016
ORDER
IA/7247,7249,7251
& 7253 /2016 (Maintainability of Complaint)
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These are the applications filed by the
opposite party, namely, Amrapali Sapphire Developers Pvt. Ltd.
The applicant is seeking dismissal of the
complaint primarily on the grounds that (i) the complainant has no locus
standi to file the present complaint on behalf of several allottees each of
whom has a separate and distinct cause of action (ii) the complainant is
not a voluntary consumer association (iii) since the sale consideration for
each flat was less than Rs.1 crore, this Commission lacks the pecuniary
jurisdiction to entertain the complaint.
2. Section
12 (1) (b) of the Consumer Protection Act reads as under:-
“Manner in which complaint shall be made.—(1) A complaint in relation to any goods sold or
delivered or agreed to be sold or delivered or any service provided or
agreed to be provided may be filed with a District Forum by –
(b)
any recognised consumer association whether the consumer to whom the goods
sold or delivered or agreed to be sold or delivered or service provided or
agreed to be provided is a member of such association or not;”
It would thus be seen that a complaint
can be instituted by a recognized consumer association even if the consumer
to whom the goods are sold or delivered or agreed to be sold or services
are provided or agreed to be provided is a member of such an Association or
not.
3. The first question which arises
for consideration is as to whether the complainant is a recognized consumer
association or not. The explanation below section 12 provides that for the
purpose of the said section recognized consumer association means any
voluntary consumer association registered under the Companies Act or any
other law for the time being in force.
This would mean that if a voluntary
consumer association is registered under any law for the time-being in
force, it will be deemed to be a recognized consumer association for the
purpose of filing a complaint in terms of section 12(1)(b) of the Consumer
Protection Act. No separate recognition is required in such a case, nor
does the Act contain any provision for recognizing a Voluntary Consumer
Association.
Admittedly,
the complainant is registered under Societies Registration Act. Therefore,
the first requirement of the explanation stands fulfilled.
It is contended by the learned counsel for the applicant that mere
registration under the Societies Registration Act or any other for the time
being does not amount to recognition of a consumer association. His
contention is that since Bureau of Indian Standards (Recognition of
Consumers Associations) Rules 1991 lay down the procedure for recognition
of consumer associations, the said procedure is required to be followed and
a certificate of recognition is to be obtained from the Govt. of India,
Ministry of Consumer Affairs in terms of the aforesaid rules.
I, however, find no merit in this
contention.
As noted earlier, as per the explanation
below section 12, recognized consumer association means any voluntary
consumer association registered under Companies Act or any other law for
the time being in force. Once a voluntary consumer association is
registered in the aforesaid manner, it will be deemed to be a recognized
consumer association provided that it is otherwise a voluntary association
of the consumers.
The
recognition from the Govt. of India in terms of the BIS Rules or any other
rules framed under any other act, in my view, is not envisaged in the
Consumer Protection Act.
Therefore,
I find no merit in the contention.
4. The
second question which then arises is as to whether the complainant can be
said to be a voluntary consumer association or not. The term
‘voluntary consumer association’ has not been defined in the Consumer
Protection Act.
Giving
an ordinary meaning to it, the expression voluntary consumer association
would mean that the association in question should be an organization of
consumers and the membership of the organization should not be compulsory.
5. As per
clause 4 of the Memorandum of Association of the complainant, its aims and
objectives inter-alia include the following:-
“(i)
To
protect the collective interest of the registered members of the
Association;
(ii)
To protect interest of the members by representing
the Association at various relevant forums, appropriate government, quasi
government, judicial, statutory and other relevant bodies, including local
municipal bodies, authorities, builders, developers, association of
builders and developers and other organizations which may impact the
members monetarily or otherwise and take all such steps as may be necessary
in this regard;
(iii)
To perform such other legal and lawful acts that may be
necessary for the members of the Association;
(iv)
To work for the wellbeing and safety of the members of the Association,
who are owners of residential / commercial plot(s) on anywhere in India;
(v)
To project, protect and pursue all matters in the
collective interests of members with the society or needy persons including
timely delivery and possession of plots;
(vi)
To do all acts, matters and things as are incidental or
conductive to the attainment of the above aims and objects, or any one or
more of them”
Considering the above-referred aims and objectives of the complainants’
society, it would be difficult to dispute that it has been set up for the
purpose of protecting the interests of consumers including flat/plot
buyers.
Such
an organization, in my opinion, qualifies as a consumer association. Since
its membership is voluntary and it is registered under the Societies
Registration Act, the complainant is a recognized consumer
association in terms of the explanation below section 12 of the Consumer
Protection Act.
Therefore,
I find no merit in the first ground taken in the application.
6.
The next ground taken in the application is that since the value and the
services, i.e., the sale consideration of the flats in each case is less
than Rs.1 crore, this Commission lacks the pecuniary jurisdiction to
entertain the complaint.
This
is also the contention of the learned counsel for the applicant/opposite
party that the complainant cannot club the individual causes of action
available to each flat buyer.
In my view, section 12 (1)(b) of the
Consumer Protection Act does not preclude the recognized consumer
association from filing a composite complaint on behalf of more than one
consumers, having a similar grievance against the seller of the goods or
the provider of the services, as the case may be.
There
is nothing in the aforesaid provision which would restrict its application
to the complaint pertaining to an individual complainant.
If a recognized consumer association is
made to file multiple complaints in respect of several consumers having a
similar cause of action, that would result only in multiplicity of
proceedings without serving any useful purpose.
In CC No. 250 of 2014 – Atharva
Towers Owners Association Vs. M/s Raheja Developers Ltd., an association of consumers filed
a complaint espousing the cause of as many as 43 members. An application
seeking permission of this Commission to add members/allottees of the
association to the complaint was filed. The application having been
opposed, this Commission vide order dated 5.11.2014 allowed the impleadment
after excluding the prayers (e), (f) and (g) of the complaint,
but granting liberty to those persons to file individual complaints.
Being aggrieved from the order passed by this Commission, the complainant
association approached the Hon’ble Supreme Court by way of Civil Appeal
No.10602 of 2014. Vide its order dated 14.3.2016, the Hon’ble Supreme Court
directed that since the dispute was pending before this Commission, it
would be appropriate if prayers (e), (f) and (g) are also considered and
this Commission looks into the grievances of each of the flat owners
individually in respect of those particular prayers. Each flat owners was
directed to file an affidavit setting out his or her grievance concerning
prayers (e), (f) and (g). In view of the above-referred decision of the
Hon’ble Supreme Court, it would not be correct to say that a complaint by a
voluntary consumer association on behalf of more than one consumers, having
a similar cause of action against the same seller of goods or provider of
services, will be not maintainable. The only requirement would be to direct
each and every allottee on whose behalf the complaint is filed to file an
affidavit concerning the prayers to the extent they pertain to his
individual grievances.
Once
it is accepted that a consumer complaint on behalf of more than then
consumers can be filed by a recognized consumer association, it can hardly
be disputed that it is the aggregate value of the services which has to be
taken for the purpose of determining the pecuniary jurisdiction of the
consumer forum before which the complaint is filed.
A reference in this regard can be made to
the decision rendered by a 4-Members Bench of this Commission in Public Health Engineering Department Vs. Upbhokta
Sanrakshan Samiti, I (1992) CPJ 182 (NC). In that case a complaint,
seeking to recover compensation for the negligence resulting in thousands
of persons getting infected in a city was filed. The State Commission took
the view that the complaint ought to have been filed before the District
Forum. Setting aside the said order, this Commission inter-alia held,
as under:
“5.
In our opinion this proposition is clearly wrong since under the terms of
Section 11 of the Act the pecuniary jurisdiction of the District Forum
would depend upon the quantum of compensation claimed in the
petition. The view expressed by the State Commission is not based on
a correct understanding or interpretation of Section 11. On the plain
words used in Section 11 of the Act, the aggregate quantum of compensation
claimed in the petition will determine the question of jurisdiction and
when the complaint is filed in a representative capacity on behalf of
several persons, as in the present case, the total amount of compensation
claimed by the representative body on behalf of all the persons whom it
represents will govern the valuation of the complaint petition for purposes
of jurisdiction.
6.
The quantum of compensation claimed in the petition being far in excess of
Rs. 1lakh the District Forum was perfectly right in holding that it had no
jurisdiction to adjudicate upon the complaint. The reversal of the
said order by the State Commission was contrary to law. The Order of
the State Commission is accordingly set aside, and the order passed by the
District Forum directing the return of the Complaint Petition to the
petitioner for being presented to the competent forum under the Consumer
Protection Act, 1986, will stand resorted. No costs”.
If
the aggregate value of the services in respect of the flat buyers on whose
behalf this complaint is filed is taken exceeds Rs.1 crore. Therefore, this
Commission does possession the requisite jurisdiction to entertain the
complaint.
For the reasons stated hereinabove, these applications are dismissed.
CC/816 to 819 of 2016
Written version is stated to have been
filed.
Rejoinder be filed within two
weeks. Affidavit of admission/denial of the documents shall be filed
by both the parties within four weeks from today. The complainant shall
file affidavit by way of evidence within six weeks from today. Such an
affidavit by the opposite party can be filed within next four weeks.
List for directions on 03.11.2016.
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......................J
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V.K. JAIN
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PRESIDING MEMBER
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Dated : 14 Feb 2017
ORDER
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Affidavit by way of evidence has not been filed by the
OP. Be filed within one week from today. The matter is coming
up before the Hon’ble Supreme Court on 21.02.2017.
List for directions on 27.03.2017.
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......................J
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V.K.
JAIN
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PRESIDING
MEMBER
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NATIONAL
CONSUMER DISPUTES REDRESSAL COMMISSION
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NEW
DELHI
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CONSUMER
CASE NO. 816,817,818,819 OF 2016
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WITH
IA/4597/2016,IA/4598/2016,IA/5646/2016,IA/7246/2016,IA/7247/2016,IA/8126/2016,IA/10665/2016,IA/10666/2016
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of Complainant: AMRAPALI
SAPPHIRE FLAT BUYERS WELFARE ASSOCIATION
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104, HIGHLAND APARTMENT,
VASUNDHARA ENCLAVE, DELHI-110096
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...........Complainant(s)
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Versus
Opp
Party(s)
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-AMRAPALI SAPPHIRE DEVELOPERS
PVT. LTD.
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-M/S. ULTRA HOMES CONSTRUCTIONS
PVT. LTD.
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BEFORE:
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HON'BLE MR. JUSTICE V.K.
JAIN,PRESIDING MEMBER
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>>> IN THE SUPREME COURT OF
INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.10882 OF 2016
M/S. AMRAPALI SAPPHIRE DEVELOPER PVT.
LTD. Appellant(s)
VERSUS
M/S. AMRAPALI SAPPHIRE FLAT BUYERS
WELFARE ASSOCIATION Respondent(s)
WITH CIVIL APPEAL NO.10954 OF 2016
CIVIL APPEAL NO.10979 OF 2016 CIVIL
APPEAL NO.11094 OF 2016
( Appealed Against Case No CCN 819/16
NATIONAL CONSUMERS DISPUTES REDDRESSAL
COMMISSION, NEW DELHI)
O R D E R
Having heard learned counsel for the
parties, we are not inclined to interfere with the impugned order(s) passed by
the National Consumer Disputes Redressal Commission, New Delhi.
The civil appeals are accordingly
dismissed. ........................
J. (DIPAK MISRA)
........................
J. (A.M. KHANWILKAR)
.......................
.J. (MOHAN M. SHANTANAGOUDAR)
NEW DELHI;
21st FEBRUARY, 2017.
http://courtnic.nic.in/supremecourt/casestatus_new/querycheck_page2.asp
>>>
Thus: Gone are the times when aggrieved home buyer did not have an option but
to give in to builder’s illegal demands.
Builders
also find it difficult to silence individuals when confronted as groups.
Home
buyers should get their group registered to form a registered, collective and
legal body.