Joint complaint & Class action are not the same but accepted both: Re-confirms SC

 “The need for the application of Order I Rule 8 of the Code of Civil Procedure, 1908 which speaks of a plaintiff representing the other public as a whole would be required only in a case involving a complaint under Section 12(1)(c) of the 1986 Act. In other words, it does not have any application when similarly placed complainants jointly make a complaint seeking the very same relief. In such a case, there is no question of Order I Rule 8 CPC being complied with as they do not represent the others, particularly when there is no larger public interest involved. Such complainants seek reliefs for themselves and nothing beyond.” held SC in its order

Case title: Alpha G184 Owners Association V/S M/S Magnum International Trading Company Pvt. Ltd. C.A. No.-004718 / 2022 Hon'ble Mr. Justice J.K. Maheshwari, Hon'ble Mr. Justice M.M. Sundresh Decided 15 May, 2023

Dr Prem Lata ,Legal Head VOICE

Factual background:

Controversy has been again raised by a construction company against whom home buyers filed a consumer complain before National commission for non-completion of project within promised time. Builder took the plea that present complaint is not maintainable on two counts

1.      Complaint is not filed in the capacity of representation by someone under Order I Rule 8 of the Code of Civil Procedure, 1908 where public interest is involved

2.      Complaint of the association was not maintainable because the registration of the association of allottees did not conform with the Haryana Registration and Regulation of Societies Act, bye-laws 2012 (HRRS Act)

Since builder filed affidavit before the national commission bringing to the notice of National commission that the issue above in writ petition is pending before High court of Haryana for adjudication. Hence National commission adjourned the mattes sine die.

Here is an appeal against the order of National commission  

SC after going through the details observed -

“The need for the application of Order I Rule 8 of the Code of Civil Procedure, 1908 (hereinafter referred to as “CPC”), which speaks of a plaintiff representing the other public as a whole would be required only in a case involving a complaint under Section 12(1)(c) of the 1986 Act. In other words, it does not have any application when similarly placed complainants jointly make a complaint seeking the very same relief. In such a case, there is no question of Order I Rule 8 CPC being complied with as they do not represent the others, particularly when there is no larger public interest involved. Such complainants seek reliefs for themselves and nothing beyond.”

Court further held “a pedantic and hyper-technical approach would cause damage to the very concept of consumerism”.

On the second point of eligibility of association to file complaint Court noted

‘that the issue of registration and byelaws of the association had no relevance in the proceedings before the Commission in light of the fact that individual affidavits were filed, the complaint would fall under Section 12(1)(a) (Manner in which complaint shall be made by a consumer) of the 1986 Act and that there was no need to go into the issue of whether the case would come under Section 12(1)(b) of the 1986 Act (Manner in which complaint shall be made by a consumer association

“The 2019 Act facilitates the consumers to approach the forums by providing a very flexible procedure. It is meant to encourage consumerism in the country. Any technical approach in construing the provisions against the consumer would go against the very objective behind the enactment.” the Court observed.

The Apex Court directed the National Commission to expeditiously hear the matters on merits.

Earlier cases

Class Action debate started with Amrapali Sapphire Developers v/s Amrapali Sapphire Flat Buyers Welfare Association Amrapali builders case in 2019 when 43 consumers filed consumer complaints together before the National Commission Flat Buyers Welfare Association, filed the complaint against the builder in May 2016, for delay in handing over possession of their flats. And it was contested by Builders raising following points 

1.      Number of consumer cannot file cases together

2.      The pecuniary jurisdiction of Commission should be considered on the basis of amount involved in each case separately

3.      RWA cannot be a complainant on behalf of residents

The Supreme Court (SC) announced on that flat owners can now join hands and directly approach the National Consumer Disputes Redressal Commission (NCDRC) against real estate developers for delay in handing over possession of their flats,
 

Thereafter ‘Class Action’ theory was specifically brought in Consumer Protection Act 2019

 

In this connection, the judgment referred to Brigade Enterprises Ltd. v. Anil Kumar Virmani (2021) which held that consumers having similar interests can file a joint complaint and that they need not file in a representative capacity.

Reference was also made to the recent decision National Insurance Co. Ltd. v. Harsolia Motors And Ors. 2023 (SC) 313 which advocated against adopting a technical approach in interpreting Consumer Protection Act

Important Class Action Case after new act 2019 ;

Vikrant Singh Malik & 25 Ors.Versus Supertech Limited & 2 Ors (Through its M.D.)

After enactment of new act Supreme court Decided on 24 august 2020(SC) in one case explained the theory of Class Action in detail which is considered landmark judgment to be followed in matter related to  Class Action cases

A case before the Hon’ble National Commission was in the matter of Vikrant Singh Malik & 25 Ors.Versus Supertech Limited & 2 Ors (Through its M.D.) Consumer Case No. 1290 of 2015

The issue involved was as to whether the complaint by 26 consumers with the same interest against the same builder in the matter of housing could be admitted before the apex commission when status of flat of each complainant was different. All the 26 consumers filed a joint complaint along with an application for permission to file joint complaint. Section 2(1) (c) read with 2(1) (b) (IV) of the Act 86 invoked for filing joint complaint 

National Commission made two major observations

1. That there was variation of facts of each homebuyer about the allotment of their flat such as –

         Apartment Distinct

         Date of Buyer agreement different

         Date of execution of agreement different

         Price of flat Different

         Area of flat different

 

2.      Frame of complaint, nature of pleadings and relief sought is not fit to be called ‘class action’  

·         Only seeks to high light  the grievance of 26   complaints  whereas some other consumers having same grievance  had settled the matter with builder

·         Complaint does not  possess the character of representative for all having the common interest which is the essential  element of section 2(i)(c) and then could refer to  section 13(6

  NCDRC dismissed the complaint in entirety giving liberty to the complainants to file individual complaints before the appropriate forum.

Matter now comes before the Supreme Court

Supreme Court observes

·         A complaint filed by all the consumers with the relief for the benefit of all consumers is maintainable

·         Regarding factually different cost, size ,booking date and price variation ,Supreme court refers to full bench order in the matter of Ambrish Kumar Shukla v/s Ferrous Infrastructure Pvt. Ltd (2017)NC wherein the issue was explained in details by giving example-

If a developer has sold 100 flats in a project out of which 25 are three bedroom flats, 25 are two bedroom flats and 50 are one bedroom flats and failed to deliver timely possession, all the allotees irrespective of size shall have common grievance against the builder .Hence a complaint filed by all the consumers with the relief for the benefit of all consumers is maintainable under section 2(1) (c) of the act. Hence Complainants could file a joint complaint if there is an element of sameness of the interest

·         Complaint need to be modified to make it Class Acton

Character of reprehensive of all the consumers is missing in the complaint .Facts also revealed that some of the homebuyers had settled their grievance with builder and taken the possession ,hence  complaint in the present form was not maintainable, It has to be modified. Since the object and purpose of the act is welfare of the consumers NCDRC can reconsider the decision to dismiss complaint in entirety when element of sameness of interest of complainants is very much apparent on face of it. This issue can also be considered in the light of the fact advocate appearing on behalf of complainants had sought liberty to file application to amend the complaint

 

 Hence law laid down by Supreme Court for “Class Action” character as a consumer Complaint thus stands as hereunder-

1.      There should be an element of sameness of the interest and with common interest of all the consumers joining together.

2.      The complaint should be represented by one leading case for protection of interest& benefit of all the consumers.

3.      Factually different cost, size ,booking date and price variation will not affect the character of “class action” against the same party with the same objective held Supreme Court.

4.     The content of the complaint must also not be a single party centric it should speak for all the consumers.

 

 

 

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