SUPREME COURT REITERATES CRITERIA FOR FILING CONSUMER COMPLAINTS IN A REPRESENTATIVE CAPACITY

A Division Bench of the #SupremeCourt comprising of Justice Hemant Gupta and Justice V. Ramasubramanian passed a Judgment dated 17-12-2021 in the matter of Brigade Enterprises Limited vs Anil Kumar Virmani and Ors. and decided upon the issue whether a #complaint filed in a #representativecapacity can be allowed under #ConsumerProtection Act 2019.

In this case, a Complaint was filed by 91 Home Buyers (Respondents) who purchased 51 Residential Apartments in a Residential Complex comprising of 1134 Apartments promoted by Brigade Enterprises Limited (Appellant) before the National Consumer Disputes Redressal Commission, New Delhi (National Commission) for causing abnormal and inordinate delay in construction and handing over of possession of Apartments to the Respondents. The said Complaint was filed along with an Application under Section 35(1)(c) of the Consumer Protection Act 2019 (Act), seeking permission of the National Commission to prosecute the matter jointly, for the benefit of or on behalf of, all the consumers who have purchased Apartments in the same Complex. In other words, the Consumer Complaint filed by the Respondents before the National Commission, is said to be in the nature of class action and the permission sought by them is in the nature of permission that could be granted by a Civil Court under Order I Rule 8 of the Code of Civil Procedure 1908 (CPC). Section 35(1)(c) of the Act and Order I Rule 8 of CPC are reproduced below for easy reference:

Section 35 of Consumer Protection Act 2019: 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 Commission by—

(c) one or more consumers, where there are numerous consumers having the same interest, with the permission of the District Commission, on behalf of, or for the benefit of, all consumers so interested;

Order I CPC: Parties to Suits

8.One person may sue or defend on behalf of all in same interest

(1) Where there are numerous persons having the same interest in one suit,—

(a) one or more of such persons may, with the permission of the Court, sue or be sued, or may defend such suit, on behalf of, or for the benefit of, all persons so interested;

(b) the Court may direct that one or more of such persons may sue or be sued, or may defend such suit, on behalf of, or for the benefit of, all persons so interested.

The National Commission allowed the 91 Home Buyers to file the Complaint in a representative capacity on behalf of and for the benefit of more than 1000 consumers who have purchased Apartments in the same Complex. (Date of National Commission Order is not known as it is not mentioned in the Supreme Court Judgment)

Aggrieved, the Appellant-Promoter filed an Appeal before the Supreme Court. The Apex Court passed a Judgment dated 17-12-2021 and made the following observations in this case:

1) That the sine qua non or the pre-essential condition for maintaining an Application under Section 35(1)(c) of the Act is that the Complainants/Applicants must have the same interest as that of the other Buyers of the Apartments, for the benefit of or on behalf of whom, the joint prosecution has been sought in the Section 35(1)(c) Application.

2) That in this case, the Respondents-Complainants had submitted that on account of Appellant’s delay in construction and handing over of possession of Apartments, the Respondents suffered losses in terms of payment of monthly rent, interests on loan, payment of higher registration charges as circle rates had gone up, etc.

3) That the grounds for filing the Complaint was common for all the Respondents, i.e. delay in construction and handing over of possession of Apartments by Appellant and thus, the 91 Complainants sought for delay compensation payable to the Complainants and all the other Home Buyers of the Apartments having same interest.

4) Further, a Section 35(1)(c) Application can be filed either “on behalf of” or “for the benefit of” all consumers having the same interest. If such an Application is allowed, it would be in the nature of permission granted by a Civil Court under Order I Rule 8 of CPC. Also, Section 38 (11) of the Act makes the provisions of Order I Rule 8 of CPC applicable to complaints filed by one or more consumers under the Consumer Protection Act 2019, where there are numerous consumers having the same interest.

Section 38 of the Act: Procedure on admission of complaint:

(11) Where the complainant is a consumer referred to in sub-clause (v) of clause (5) of section 2, the provisions of Order I Rule 8 of the First Schedule to the Code of Civil Procedure, 1908 shall apply subject to the modification that every reference therein to a suit or decree shall be construed as a reference to a complaint or the order of the District Commission thereon.

5) However, the Respondents-Complainants have not satisfied the requirement of Section 35(1)(c) of the Act i.e. there is lack of “same interest” of the 91 Complainants and other Home Buyers, on behalf of whom or for the benefit of whom the joint prosecution has been sought.

6) That in this case there may have been a common cause of action / ground for filing Complaint for deficiency of services, i.e. delay in construction and handing over of possession of Apartments. But “same cause of action” is not equal to “same interest”.

7) “Same interest” can be established from the nature of relief claimed. In this case, the Respondents sought for delay compensation but have not specified the amount of compensation sought. This may be for the reason that the period of delay in completion of project and handing over of possession is not the same for all 1134 Apartments. Hence, there is lack of same relief and ‘same interest’ of all consumers in this case.

8) Furthermore, some consumers may have other grounds for filing the Complaint apart from delay in construction and handing over of possession of Apartments. Thus, if the Application to invoke Section 35(1)(c) of the Act is allowed, then the individual consumers, who may have other complaints as well against the Appellant, will not get the opportunity to ventilate their individual grievances before the District/State Commission, etc.

Hence, the Supreme Court held that for the aforesaid reasons, the Respondents cannot be allowed to invoke Section 35(1)(c) of the Act and accordingly the Section 35(1)(c) Application has been rejected. Further, the Complaint filed by Respondents has been allowed but the National Commission Order has been modified to the extent that the said Complaint has to be treated as a joint complaint and not as a complaint in a representative capacity on behalf of all 1134 Purchasers. The Apex Court further held that parties who wish to be impleaded in the Consumer Complaint, may be allowed by the National Commission. Accordingly, the Appeal was allowed and the National Commission Order was partly modified.

 

Harini Daliparthy

Senior Legal Associate

The Indian Lawyer