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.
Supreme
Court sends back the complaint to NCDRC for re-considering to dismiss
in entirety.
It
is clear that court take very flexible approach in favour of consumers
depending upon the facts and circumstances of each case
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