By – Kirtika Chakraborty
In Supreme Court of India
|NAME OF THE CASE||Vikrant Singh Malik vs Supertech Ltd|
|CITATION||Civil Appeal No. 3526 of 2016|
|DATE OF THE CASE||24 August 2020|
|APPELLANT||Vikrant Singh Malik|
|BENCH/JUDGE||Hon’ble Dr Chandrachud, K.M. Joseph|
|STATUTES/CONSTITUTION INVOLVED||The Consumer Protection Act, 1986;|
|IMPORTANT ARTICLES/SECTIONS||Section 12(1)(c) in the Consumer Protection Act, 1986 Section 13 in the Consumer Protection Act, 1986 Section 2(1)(b)(iv) in the Consumer Protection Act, 1986 Section 12(1) in the Consumer Protection Act, 1986 Section 2(1)(b) in the Consumer Protection Act, 1986|
The Supreme Court upheld the NCDRC’s decision to deny flat buyers permission to file a composite complaint under Section 12(1)(c) of the Consumer Protection Act 1986, citing Rameshwar Prasad (2019) 2 SCC 417, which held that a complaint under Section 12(1)(c) of the Consumer Protection Act 1986 can only be filed with the District Forum’s consent. Furthermore, the Court determined that there must be uniformity of interest for a complaint under Section 12(1)(c) and that in this case, an application under 12(1)(c) could not be allowed because the complainants were just voicing grievances and lacked a representative character.
26 flat buyers filed a complaint with the NCDRC after booking flats in the first respondent’s residential project, Oxford Square, in Sector GH-06, 16B, Greater Noida, Uttar Pradesh. On behalf of the complainants, an application was filed under Section 12(1)(c) read with Section 2(1)(b)(iv) of the Act to allow them to pursue the complaint jointly on the basis that the relief sought by the 26 complainants claimed a commonality of interest based on their grievances against the respondent. The NCDRC determined that the application was not maintainable under Section 12(1)(c) of the Act since the complaints were unrelated.
The National Commission was approached by a group of 26 flat buyers who wanted to file a class-action lawsuit. The buyers took their case to the Supreme Court after it was denied. The Supreme Court ruled that the complaint and application simply seek to highlight the grievances of 26 complainants and do not claim to have a representative character, which is a necessary component of a class-action lawsuit. The court went on to say that the filings don’t show any intent to file the case for or on behalf of the many consumers who have the same interest, so the appeal was dismissed.
The National Commission was approached by a group of 26 flat buyers who wanted to file a class-action lawsuit. The buyers took their case to the Supreme Court after it was denied. The Supreme Court ruled that the complaint and application simply seek to highlight the grievances of 26 complainants and do not claim to have a representative character, which is a necessary component of a class-action lawsuit. The court went on to say that the pleadings don’t show that the plaintiff intended to file the action on behalf of a group of customers with a common interest, and thus dismissed the appeal.
- Is it possible to file a complaint under Section 12(1)(c) of the COPRA in the case of the allocation of many flats in a project when the payments are made on various schedules and/or the negotiated cost of the property is not the same in all of the purchases?
- Is it true that if multiple customers file a complaint with the same interest, it will be considered a ‘class action’ complaint?
- The question was whether a complaint in the subject of housing by 26 customers with the same objective against the same builder could be allowed before the supreme commission when the position of each complainant’s flat was varied.?
ARGUMENTS FROM THE APPELLANT SIDE
“Mr Shailesh Madiyal and Mr Kamal Mehta, experienced counsel standing on behalf of the appellants, criticised the NCDRC’s ruling, claiming that it contradicts a later decision made by the NCDRC’s Full Bench in Ambrish Kumar Shukla Vs Ferrous Infrastructure Pvt. Ltd. The following were some of the questions posed to the Full Bench for decision:
Whether a complaint under Section 12(1)(c) of the Consumer Protection Act can be filed in the case of the allocations of several flats in a project/building, where the subsidies are made on different dates and/or the agreed cost of the flat and/or the area of the flat is not identical in all the accommodation.”
That the deficiencies of services, unfair trade practices and irregularities adopted by the Opposite Parties against the Complainants are identical in nature in and the complainants shall rely on common evidence and the issues raised and the relief sought is also common to all the complainants. It is submitted that under these facts and circumstances the Complainants have made the present application seeking permission for instituting the present complaint jointly, having a commonality of interest.
That no prejudice shall be caused to the Opposite Party if the Complainants are allowed to institute the present complaint jointly however, grave loss and injury shall be caused to the Complainants if the present application is not allowed.”
ARGUMENTS FROM THE RESPONDENT
“Mr Keshav Mohan, learned counsel for the first respondent, argued that the NCDRC was correct in concluding that the case as filed was not maintainable under Section 12(1). (c). Through twenty-six complainants originally filed the case, only twenty-one appellants remain in the Civil Appeal that has been filed before this Court after the NCDRC’s judgement. Furthermore, it was claimed that just six of the remaining twenty-one appellants had not taken possession, implying that the rest have resolved their grievances by taking ownership from the first respondent.
Furthermore, just six of the remaining twenty-one appellants have not gained possession, implying that the others have settled their grievances by obtaining possession from the first respondent. Apart from the aforementioned objection, Mr Keshav Mohan also claimed that, concurrently with the consumer complaint before the NCDRC, the complainants filed writ proceedings before the Allahabad High Court, labelled Subodh Pandey and others v State of UP and others, under Article 226 of the Constitution. . That both NCDRC consumer complaint and the Allahabad High Court writ proceedings, it was argued, are related to the very same project of the first respondent in Sector GH-06, 16B, Greater Noida, Uttar Pradesh. The reliefs claimed in the Allahabad High Court writ proceedings were, among other things.”
“It was urged that two of the prayers in the consumer complaint before the NCDRC namely, prayers (a) and (h), specifically deal with the aspects which were sought to be canvassed before the Allahabad High Court. In the writ proceedings, the Allahabad High Court by an order dated 7 July 2017 directed the Chief Executive Officer of Greater Noida Industrial Development Authority to take a decision on the representation submitted by the complainants.
On these grounds, learned counsel for the first respondent submitted that there is no surviving basis for the appellants to urge that the complaint before the NCDRC is of a representative character under Section 12(1)(c) since even among the appellants several have resolved their grievance by taking possession of their respective flats.”
- Section 12(1)(c) in the Consumer Protection Act, 1986
(c) one or more consumers, where numerous consumers are having the same interest, with the permission of the District Forum, on behalf of, or for the benefit of, all consumers so interested; or
- Section 13 in the Consumer Protection Act, 1986
13. 1[Procedure on admission of complaint]. —
(1) The District Forum shall, 2[on the admission of a complaint] if it relates to any goods,— 3[(a) refer a copy of the admitted complaint, within twenty-one days from the date of its admission to the opposite party mentioned in the complaint directing him to give his version of the case within a period of thirty days or such extended period not exceeding fifteen days as may be granted by the District Forum.]
(b) where the opposite party on receipt of a complaint referred to him under clause (a) denies or disputes the allegations contained in the complaint, or omits or fails to take any action to represent his case within the time given by the District Forum, the District Forum shall proceed to settle the consumer dispute in the manner specified in clauses (c) to (g);
(c) where the complaint alleges a defect in the goods which cannot be determined without proper analysis or test of the goods, the District Forum shall obtain a sample of the goods from the complainant, seal it and authenticate it in the manner prescribed and refer to the sample so sealed to the appropriate laboratory along with a direction that such laboratory make an analysis or test, whichever may be necessary, with a view to finding out whether such goods suffer from any defect alleged in the complaint or from any other defect and to report its findings thereon to the District Forum within forty-five days of the receipt of the reference or within such extended period as may be granted by the District Forum;
(d) before any sample of the goods is referred to any appropriate laboratory under clause (c), the District Forum may require the complainant to deposit to the credit of the Forum such fees as may be specified, for payment to the appropriate laboratory for carrying out the necessary analysis or test concerning the goods in question;
(e) the District Forum shall remit the amount deposited to its credit under clause (d) to the appropriate laboratory to enable it to carry out the analysis or test mentioned in clause (c) and on receipt of the report from the appropriate laboratory, the District Forum shall forward a copy of the report along with such remarks as the District Forum may feel appropriate to the opposite party;
(f) if any of the parties disputes the correctness of the findings of the appropriate laboratory or disputes the correctness of the methods of analysis or test adopted by the appropriate laboratory, the District Forum shall require the opposite party or the complainant to submit in writing his objections regarding the report made by the appropriate laboratory;
(g) the District Forum shall thereafter give a reasonable opportunity to the complainant as well as the opposite party of being heard as to the correctness or otherwise of the report made by the appropriate laboratory and also as to the objection made in relation thereto under clause (f) and issue an appropriate order under section 14.
(2) The District Forum shall, if the 4[complaints admitted] by it under section 12 relates to goods in respect of which the procedure specified in sub-section (1) cannot be followed, or if the complaint relates to any services, —
(a) refer a copy of such complaint to the opposite party directing him to give his version of the case within a period of thirty days or such extended period not exceeding fifteen days as may be granted by the District Forum;
(b) where the opposite party, on receipt of a copy of the complaint, referred to him under clause (a) denies or disputes the allegations contained in the complaint, or omits or fails to take any action to represent his case within the time given by the District Forum, the District Forum shall proceed to settle the consumer dispute,—
(i) based on evidence brought to its notice by the complainant and the opposite party, where the opposite party denies or disputes the allegations contained in the complaint, or
(ii) 5[ex parte on the basis of evidence] brought to its notice by the complainant where the opposite party omits or fails to take any action to represent his case within the time given by the Forum; 6[(c) where the complainant fails to appear on the date of hearing before the District Forum, the District Forum may either dismiss the complaint about default or decide it on merits.]
(3) No proceedings complying with the procedure laid down in sub-sections (1) and (2) shall be called in question in any court on the ground that the principles of natural justice have not been complied with. 7[(3A) Every complaint shall be heard as expeditiously as possible and endeavour shall be made to decide the complaint within three months from the date of receipt of notice by the opposite party where the complaint does not require analysis or testing of commodities and within five months if it requires analysis or testing of commodities: Provided that no adjournment shall be ordinarily granted by the District Forum unless sufficient cause is shown and the reasons for grant of adjournment have been recorded in writing by the Forum: Provided further that the District Forum shall make such orders as to the costs occasioned by the adjournment as may be provided in the regulations made under this Act: Provided also that in the event of a complaint being disposed of after the period so specified, the District Forum shall record in writing, the reasons for the same at the time of disposing of the said complaint.
(3B) Where during the pendency of any proceeding before the District Forum, it appears to it necessary, it may pass such interim order as is just and proper in the facts and circumstances of the case.]
(4) For the purposes of this section, the District Forum shall have the same powers as are vested in a civil court under Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the following matters, namely: —
(i) the summoning and enforcing the attendance of any defendant or witness and examining the witness on oath,
(ii) the discovery and production of any document or other material object producible as evidence,
(iii) the reception of evidence on affidavits,
(iv) the requisitioning of the report of the concerned analysis or test from the appropriate laboratory or any other relevant source,
(v) issuing of any commission for the examination of any witness, and
(vi) any other matter which may be prescribed.
(5) Every proceeding before the District Forum shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the Indian Penal Code (45 of 1860), and the District Forum shall be deemed to be a civil court for the purposes of section 195, and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974). 8[(6) Where the complainant is a consumer referred to in sub-clause (iv) of clause (b) of sub-section (1) of section 2, the provisions of rule 8 of Order I of the First Schedule to the Code of Civil Procedure, 1908 (5 of 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 Forum thereon.] 8[(7) In the event of death of a complainant who is a consumer or of the opposite party against whom the complaint has been filed, the provisions of Order XXII of the First Scheduled to the Code of Civil Procedure, 1908 (5 of 1908) shall apply subject to the modification that every reference therein to the plaintiff and the defendant shall be construed as a reference to a complainant or the opposite party, as the case may be.]
- Section 2(1)(b)(iv) in the Consumer Protection Act, 1986
[(iv) one or more consumers, where numerous consumers are having the same interest;]
- Section 2(1)(b) in the Consumer Protection Act, 1986
(b) “complainant” means—
(i) a consumer; or
(ii) any voluntary consumer association registered under the Companies Act, 1956 (1 of 1956) or under any other law for the time being in force; or
(iii) the Central Government or any State Government; or
3 [(iv) one or more consumers, where numerous consumers are having the same interest;]
4 [(v) in case of death of a consumer, his legal heir or representative;] who or which makes a complaint;
A group of 26 flat buyers petitioned the National Commission for authorization to file a class-action lawsuit. When this was denied, the purchasers filed an appeal with Supreme Court. The Supreme Court ruled that the complaint and application simply seek to highlight the grievances of 26 complainants and do not claim to be representative, which is a necessary component of a class action. The court further noted that the pleadings do not show any desire to present the complaint about or on behalf of the numerous consumers who have the same interest and dismissed the appeal as a result.
With regard to the framing of the complaint, the nature of the pleadings, and the reliefs sought, the Supreme Court supported the NCDRC’s decision, holding that the application submitted on behalf of the appellants supposedly under Section 12(1)(c) of the Act was not maintainable. The Court noted that the complainants indicated in their complaint that they purchased the flats after careful evaluation of the many amenities and facilities promised. If this is the case, the complainants should have been aware of what they were buying. The court, on the other hand, found that the developer had engaged in unfair commercial practices. Concerning the completion certificate, the court determined that both parties were at fault, and both were in breach of the law. It is a legal necessity to issue a completion certificate, but it is also a legal requirement that the purchaser does not occupy the premises until the completion certificate is provided. The court did not hold the developer liable for any service deficiencies because the claimant occupied the property without a CC.
“As noted earlier, what is required for the applicability of Section 12(1)(c) of the Consumer Protection Act read with (2017) 1 CPJ 1 (NC): 2016 SCC online NCDRC 1117 Order I Rule 8 of the Code of Civil Procedure is the sameness of the interest i.e. a common grievance of numerous persons which is sought to get redressed through a representative action. Therefore, so long as the grievance of the consumers is common and identical relief is claimed for all of them, the cost, size, area of the flat/plot and the date of booking/allotment/purchase, would be wholly immaterial. For instance, if a builder/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 he has failed to deliver timely possession of those flats, all the allottees irrespective of the size of their respective flats/plots, the date of their respective purchase and the cost agreed to be paid by them have a common grievance i.e. the failure of the builder/developer to deliver possession of the flat/plot sold to them and a complaint filed for the benefit of or on behalf of all such consumers and claiming same relief for all of them, would be maintainable under Section 12(1)(c) of the Consumer Protection Act. The relief claimed will be the same/identical if for instance, in a case of failure of the builder to deliver timely possession, refund, or possession or in the alternative refund with or without compensation is claimed for all of them. Different reliefs for one or more of the consumers on whose behalf or for whose benefit the complaint is filed cannot be claimed in such a complaint.” 10 By the Full Bench decision in Ambrish Kumar Shukla (supra), the position of law was set at rest for the NCDRC on 7 October 2016. The judgment impugned in the present appeal was rendered earlier on 19 February 2016. The submission is that the impugned judgment is contrary to the principles enunciated in Ambrish Kumar Shukla and does not lay down the correct position of law. Mr Madiyal has also adverted to a decision rendered by a two-judge Bench of this Court in Anjum Hussain v Intellicity Business Park Pvt. Ltd.6, which has taken note of the (2019) 6 SCC 519 judgment delivered by the Full Bench of the NCDRC in Ambrish Kumar Shukla.”
The court held “ we are of the view that bearing in mind the object and purpose of the Act, it would be appropriate if the NCDRC reconsiders its decision to dismiss the complaint in its entirety by considering as to whether some or all the prayers which were urged before it in the complaint would fall within the description of sameness of interest. Whether this is so should, in our view, be examined by the NCDRC. Since this is not the point that was canvassed before the NCDRC nor was it considered in the judgment of the NCDRC, we are inclined to restore the complaint about the reconsideration of the above aspect before the NCDRC. The NCDRC would be at liberty to consider whether the complaint which was filed on behalf of the twenty-six consumers claiming a commonality of interest would be maintainable, having regard to the provisions of the Act. Since an objection has been raised on behalf of the first respondent that even out of the twenty-six consumers who had initially filed proceedings, several have settled and resolved their grievances, we leave that aspect open to be addressed before and considered by the NCDRC. The first respondent would be at liberty to place on the record relevant material in support of the above plea. Moreover, the NCDRC is at liberty to consider the objection raised by the first respondent on the ground that some of the reliefs in the complaint before it were also the subject of the writ proceedings before the Allahabad High Court. We may also note at this stage that Mr Madiyal appearing for the appellants had sought liberty of this Court to move an application before the NCDRC for amendment of the complaint and to plead the essential requirements of Section 12(1)(c). We need not consider a request of an anticipatory nature of this kind at the present stage since no such application has been made. This will not preclude the appellants from adopting such remedies as are available within the parameters of the law.
For the above reasons, we hold and conclude that:
(ii) The above application was liable to be rejected and would stand rejected;
(iii) The order of the NCDRC rejecting the consumer complaint shall be set aside and the consumer complaint shall stand restored before the NCDRC; and
(iv) All objections in regard to the maintainability of the complaint are kept open to be addressed before and decided by the NCDRC.
The appeal is accordingly disposed of in the above terms. There shall be no order as to costs.
Pending application(s), if any, shall stand disposed of.”
Since the act’s object and purpose are to protect consumers, the NCDRC can review its decision to dismiss a complaint in its entirety if the complainants’ interests are extremely similar on the surface. This issue can also be recognised in light of the fact that an advocate making an appearance on behalf of the complainants had requested the liberty to file an application to amend the complaint, which the Supreme Court denied, and the complaint was sent back to the NCDRC to be reconsidered for dismissal in its entirety. This means that the Supreme Court wants the NCDRC to enable amendments to the complaint by designating it as representative of all aggrieved property investors for the same purpose.
The Consumer Protection Act of 2019 (CPA) replaced the Consumer Protection Act of 1986 in July 2020. The CPA has the ability to file a class-action lawsuit. It specifies that persons seeking representation have a common interest.’ In addition, the new Act mandates the establishment of the Central Consumer Protection Authority (CCPA), which will safeguard, promote, and defend consumer rights as a class, as well as prohibit consumer rights infractions. The CCPA can investigate if there is a prima facie case of consumer rights violations, unfair trade practices, or misleading advertising.