Complaints under Consumer Protection Act, 2019 in Real Estate Sector : Supreme Court Examines Finer Legal Nuances

Complaints under Consumer Protection Act, 2019 in Real Estate Sector : Supreme Court Examines Finer Legal Nuances

In an interesting Judgment where consumer issues arose in real estate sector, Supreme Court has discussed the law on Consumer Protection Act, 2019.

Consumer alleged that there was delay in handing over possession by the builder. Complaint was filed jointly by 91 consumers of the real estate project. 

It was found that since project was in multiple blocks so when buyers of other blocks have not joined in complaint so complaint in representative capacity for those persons was found non-maintainable. While joint complaint in this case was permitted but complaint filed in representative capacity was not permitted due to certain reasons ; however, the complaint filed in representative capacity was allowed to be continued in a complaint of joint nature.

S.35 of CPA, 2019 and Order 1 Rule 8 of Code of Civil Procedure

Section 35(1)(c) of Consumer Protection Act, 2019 enables one or more consumers, where there are   numerous   consumers   having  the  same   interest,   with   the permission of the District Commission, to file a complaint, on behalf of or for the benefit of all consumers so interested. It is needless to point out that the sine qua non for invoking Section 35(1)(c) is that all consumers on whose behalf or for whose benefit the provision is invoked, should have the same interest. Interestingly, Section 35(1) (c) uses the disjunction “or” in between two sets of words, namely, (i)  “on behalf of”; and  (ii)  “for the benefit of”. Therefore, a complaint filed under Section 35(1)(c) could either be “on behalf of” or “for the benefit of” all consumers having the same interest.

Section 38(11) of the Consumer Protection Act, 2019 makes the provisions of Order I Rule 8 of the First Schedule to the Code of Civil Procedure, 1908 applicable to cases where the complainant is a   consumer   referred   to   in   Section   2(5)(v),   which   defines   a ‘complainant’ to  mean one or more consumers, where there are numerous consumers having the same interest.

"Sameness of Interest" and Its Impact

Since   “sameness   of   interest”   is   the   pre­requisite   for   an application under Order I Rule 8 read with Section 35(1)(c) of the  Consumer   Protection   Act,   2019,   it   was   necessary   for  the respondents   to   include   in   the   consumer   complaint,   sufficient averments   that   would   show   sameness   of   interest.

Applying the law to this case it was held that in this case, it is not clear from the consumer complaint as to how  (i)  those who have accepted the compensation under protest; (ii) those who accepted without protest; and (iii) those who refused to accept the compensation, have the sameness of interest. It was also held that for allowing an application under Section 12(1)(c) of the 1986 Act or Section 35(1)(c) of the 2019 Act,   the   pleadings   and   the   reliefs   are   to   be  considered.

There is no scope for the contention that wherever there are more consumers than one, they must only take recourse to Order I Rule 8 of Code of Civil Procedure, 1908 even if the complaint is not on behalf of or for the benefit of, all the consumers interested in the matter. There may be cases where only “a few consumers” and not “numerous consumers” have the same interest.  There is nothing in the Act to prohibit these few consumers from joining together and filing a joint complaint. A joint complaint stands in contrast to a complaint filed in a representative capacity.  For   attracting   the   provisions   of   Section 35(1)(c) of Consumer Protection Act, 2019 the complaint filed by one or more consumers should be on behalf of or for the benefit of numerous consumers having same interest. It does not mean that where there are only very few consumers having the same   interest,  they   cannot   even   join   together   and   file   a  single complaint,  but   should   take   recourse   only   to   independent   and separate complaints.

The proper way of interpreting Section 35(1) read with section 2(5), would be to say that a complaint may be filed: (i) by a single consumer;  (ii)  by a recognised consumer Association; (iii) by one or more consumers jointly, seeking the redressal of their own grievances without representing other consumers who may or may not have the same interest; (iv) by one or more consumers on behalf of or for the benefit of numerous consumers;  and  (v)  the Central Government, Central Authority or State Authority.

Case reference is Brigade Enterprises Ltd v. Anil Kumar Virmani [2021] GCtR 2900 (SC).