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)  | 
 
 
  | 
   
    | 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.     |  |  |  |  |  |  | 
 
 
  |   | 
 
  | ......................J | 
 
  | V.K. JAIN | 
 
  | PRESIDING MEMBER | 
 
Dated : 14 Feb 2017
 
  | ORDER | 
 
  | 
   
    | 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. |  |  |  |  |  |  | 
 
 
  |   | 
 
  | ......................J | 
 
  | V.K.
  JAIN | 
 
  | PRESIDING
  MEMBER | 
 
 
 
  | NATIONAL
  CONSUMER DISPUTES REDRESSAL COMMISSION | 
 
  | NEW
  DELHI | 
 
  |   | 
 
 
  |  | 
 
  | CONSUMER
  CASE NO. 816,817,818,819 OF 2016 | 
 
  |   |  |  |  |  |  | 
 
 
  |  | 
 
  | 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
 | 
 
 
  | 
   
    | of Complainant: AMRAPALI
    SAPPHIRE FLAT BUYERS WELFARE ASSOCIATION |  
    | 104, HIGHLAND APARTMENT,
    VASUNDHARA ENCLAVE, DELHI-110096 |  | ...........Complainant(s) | 
 
  | Versus Opp
  Party(s) |   | 
 
  | 
   
    | -AMRAPALI SAPPHIRE DEVELOPERS
    PVT. LTD. |  
    |  |  
    | -M/S. ULTRA HOMES CONSTRUCTIONS
    PVT. LTD. |  
    |  |  |  | 
 
 
 
 
  | BEFORE: |   | 
 
  |   | HON'BLE MR. JUSTICE V.K.
  JAIN,PRESIDING MEMBER | 
 
 
 
>>> 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.