Consumers With Same Interest Can File Joint Complaint to initiate a suit in representative capacity : SC

In the current case, the Supreme Court of India addressed the provisions of the Consumer Protection Act, 2019, concluding that sameness of interest is required to initiate a suit in a representative capacity under Section 35(1) of the Consumer Protection Act, 2019, and that consumers can instead approach under joint complaint if the prerequisites are met.

OVERVIEW

1. The appellants (primarily a real estate property development company) filed an appeal under Section 35(1)(c) of the Consumer Protection Act, 2019 against the order of the National Consumer Disputes Redressal Commission allowing 91 purchasers of 51 apartments in the appellants’ residential complex to file a complaint in a representative capacity on behalf of over 1000 buyers.

2. Brief facts of the case:

a) The residential complex in question had approximately 1134 apartments, and approximately 91 people who purchased 51 homes filed a combined complaint with the National Consumer Disputes Redressal Commission in Delhi. b) The complaint requested permission from the Commission, pursuant to Section 35(1)(c) of the Consumer Protection Act, 2019, to pursue the matter jointly for the benefit of other customers who purchased the units alongside the 91 applicants.

b) The complaint requested permission from the Commission, pursuant to Section 35(1)(c) of the Consumer Protection Act, 2019, to pursue the matter jointly for the benefit of other customers who purchased the units alongside the 91 applicants.

c) The Commission granted the permit based on the Supreme Court’s ruling in Chairman, Tamil Nadu Housing Board, Madras vs. T.N. Ganapathy and the National Commission’s decision in Ambrish Kumar Shukla vs. Ferrous Infrastructure Pvt. Ltd.

d) Dissatisfied with the order, the appellants petitioned the Supreme Court.

3. The main point of the appellants was that just 51 of the total 1134 flats developed by them had joined in filing the lawsuit, representing a small number of consumers. Furthermore, the appellants’ lawyer contended that “there is no commonality of interest” in the complaint because some other buyers decided to register the complaint with the Karnataka State Consumer Disputes Redressal Commission.

4. However, the respondents’/buyers’/original complainants’ counsel argued that this issue was no longer res Integra because a similar question of law had already been decided in the cases of Chairman, Tamil Nadu Housing Board, Madras vs. T.N. Ganapathy and Vikrant Singh Malik & Ors. vs. Supertech Limited & Ors. Furthermore, it was argued that the buyers shared the ‘sameness of interest,’ which was a requirement for an application under Section 35(1). (c).

ISSUES

Whether a representative suit under section 35(1)(c) of consumer protection act was maintainable?

JUDGMENT

1. To begin, the Court noted that the basic aspect of section 35(1)(c) is that all complainants whose behalf or benefit the law is invoked’ should have the same interest.’ The Court stated, while commenting on the phraseology of section 35(1)(c), that a complaint under this provision can be made “on behalf of” or “for the benefit of the consumer having similar interest.”

2. The Court further pointed out that Order 1 Rule 8 differs from Section 35(1)(c) in that it operates in both directions. ‘It not only allows plaintiffs to sue in a representative capacity, but it also allows people to be sued and defended in a representative capacity in an action.’ The Court further emphasised that the explanation of Order 1 Rule 8 is important in the current instance because it distinguishes between ‘persons having the same interest’ and ‘persons having the same cause of action’ in a suit. As a result, in order to establish definitively the sameness of interest, the party must also establish the sameness of the cause of action.

3. Regarding the basis of the respondents’ suit, the Court stated that ‘it was crucial for the respondents to submit adequate affidavits to indicate sameness of interest.’ When reviewing the case’s material facts, the court found that “there are no pleadings from the 386 buyers of units from the amber block.” Furthermore, the complaint made no reference of any specific disclosures that would demonstrate similarity of interest for the remaining 748 apartments.

4. To simplify the problem, the court noted that the appellant offered delay compensation to the buyers in accordance with the provisions of the agreements, and some of the buyers accepted the compensation. The objection failed to explain how a) those who took the compensation under protest; b) those who accepted without protest; and c) those who refused to take the payout shared a common interest. In questioning the sameness of interest further, the Court argued that the delay in project completion varied with each customer, being very large in the case of some and trivial in the case of others.

5. The Court also noted that a buyer’s complaint about a delay in receiving possession of an apartment may not be the only one. Because some customers choose Karnataka State Consumer Disputes Redressal Commissions, it implies that all 1134 buyers may not share a common interest.

6. The Court also noted that the intersection of provisions of the Consumer Protection Act of 1986, namely Sections 2(5), 38(1), and 35(1), leaves no room for ambiguity that ‘wherever there are more consumers than one, they must only take recourse to Order I Rule 8 CPC, even if the complaint is not on behalf of or for the benefit of all the consumers interested in the matter.’

7. The Court, in interpreting Sections 2(5) and 35(1), provided rules for when a complaint may be made under Section 35. (1). The Complaint may be filed by: a) a single consumer; b) a recognised consumer Association; c) one or more consumers jointly, seeking redress of their grievances without representing other consumers who may or may not have the same interest; d) one or more consumers on behalf of or for the benefit of numerous consumers; or e) the Central Government, Central Authority, or State Authority.

8. The Court ruled that the Commission’s decision to admit the litigation in a representative capacity was erroneous. However, the Court noted that this did not preclude the claim from being maintained. The respondents’ complaint should be viewed as a joint complaint rather than a complaint filed on behalf of 1134 buyers, implying that the buyers “may join the complaint as parties if they desire.”

9. The Court granted the appeal and changed the ruling of the National Dispute Resolution Commission so that the complaint submitted by the respondents shall be treated as a joint complaint rather than a complaint in a representative suit. Other purchasers are entitled to join the complaint as parties.

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