Consumer VOICE

Filing of ‘Class Action’ Consumer Complaints

Do you have a complaint against goods and services of a particular product or do you wish to complaint against your real estate agent. But if more than one or more consumers have the same complaints, it should be a class action complaint rather than individual complaint. As per section 12 (1) (c) of  Consumer Protection Act, 1986 a complaint can be filed by one or more consumers, where there are numerous consumers having the same interest, with the permission of the District Forum, on behalf of, or for the benefit of, all consumers so interested.

If for instance, 100 flat buyers/plot buyers in a project have a common grievance against the builder/Developer and a complaint under Section 12(1)(c) of the Consumer Protection Act is filed on behalf of or for the benefit of 10 of them, the primary purpose behind permitting a class action will not be achieved. This is because the remaining 90 aggrieved persons will be compelled either to file individual complaints or to file complaints on behalf of or for the benefit of the different group of purchasers in the same project.

The use of the words “all consumers so interested” and “on behalf of or for the benefit of all consumers so interested”, in Section 12(1)(c)(d) leaves no doubt that such a complaint must necessarily be filed on behalf of or for the benefit of all the persons having a common grievance, seeking a common relief and consequently having a community of interest against the same service provider.

Read further about Ambrish Kumar Shukla and others v. Ferrous Infrastructure Pvt. Ltd., where the NCDRC (National Consumer Disputes Redressal Commission) interpreted that class action complaint is maintainable against the complainant company if the cause of action is same for all the consumers and Rameshwar Prasad Shrivastava and Ors. Vs. Dwarkadhis Projects Pvt. Ltd. and Ors., where Supreme Court held that for filing ‘class action’ consumer complaints u/s 12(1)(c) notice under order 1 rule 8(2) CPC is mandatory.

Click here to read the full story

The Supreme Court recently held that that ‘Class Action’ consumer complaints filed by one or more consumers where there are numerous consumers having the same interest will be maintainable only where the complaint fulfils all the requisite conditions in terms of Section 12(1) (c) of the Consumer Protection Act read with Order I Rule 8 of the Code of Civil Procedure.

In one of the recent cases, an advertisement campaign was started by the builder somewhere in 2006-2007 for sale of apartments in a group housing project called “Aravali Heights”. Clause 11 of such typical agreement provided that the possession would be delivered by the builder within three years. The time specified for delivery thus expired in the year 2010 but no possession was offered within the stipulated time.

In Ambrish Kumar Shukla and others v. Ferrous Infrastructure Pvt. Ltd., one of the points which was referred to the larger Bench of the National Commission was whether a complaint under Section 12(1)(c) of the Consumer Protection Act filed on behalf of or for the benefit of only some of the numerous consumers having a common interest or a common grievance is maintainable or it must necessarily be filed on behalf of or for the benefit of all the consumers having a common interest or a common grievance against same person(s). After considering the relevant provisions like Section 2(1)(b) Section 12(1) and Section 13(6) of the Consumer Protection Act, 1986 as well as the provisions of Order I Rule 8 of Code of Civil Procedure and a decision of this Court in The Chairman, Tamil Nadu Housing Board, Madras v. T.N. Ganapathy the larger Bench of the National Commission held that the primary object behind permitting a class action such a complaint under Section 12(1)(c) of the Consumer Protection Act being to facilitate the decision of a consumer dispute in which a large number of consumers are interested, without recourse to each of them filing an individual complaint, it is necessary that such a complaint is filed on behalf of or for the benefit of all the persons having such a community of interest. A complaint on behalf of only some of them therefore will not be maintainable. If for instance, 100 flat buyers/plot buyers in a project have a common grievance against the builder/Developer and a complaint under Section 12(1)(c) of the Consumer Protection Act is filed on behalf of or for the benefit of say 10 of them, the primary purpose behind permitting a class action will not be achieved, since the remaining 90 aggrieved persons will be compelled either to file individual complaints or to file complaints on behalf of or for the benefit of the different group of purchasers in the same project. The use of the words “all consumers so interested” and “on behalf of or for the benefit of all consumers so interested”, in Section 12(1)(c)(d) leaves no doubt that such a complaint must necessarily be filed on behalf of or for the benefit of all the persons having a common grievance, seeking a common relief and consequently having a community of interest against the same service provider.

In the present case referred above, the Commission observed that at the time of filing of the Complaint, no application under Section 12(1)(c) seeking permission to file joint Complaint had been filed by the Complainants, though there were 19 Complainants in this Complaint. It was observed that since there was no application under Section 12(1)(c) of the Act, in view of the decision rendered by larger Bench of the National Commission in Ambrish Kumar, the complaint in the instant case was not maintainable. The National Commission dismissed the above mentioned case as not being maintainable. Similarly, the National Commission dismissed the complaint preferred by 4 buyers in respect of same project of the builder as not being maintainable.

After being rejected, the case went for appeal in Supreme Court questioning the correctness of the decisions of the National Commission and raise issues concerning maintainability of the complaints.

It was contended that in cases having large number of apartment holders, if only some of them approach the consumer forum, their grievance redressal ought not to be forced to go through the mechanics of Section 13(6) of the Act read with the provisions of Order 1 Rule 8 CPC, as any such insistence would render the remedy exorbitant as cost required for newspaper publication itself would be quite prohibitive. However Supreme Court rejected the said submission, and explained that the text in Section 13(6) clearly says that wherever a complaint is filed by a complainant in the category referred to in Section 2(1)(b)(iv), the provisions of Order 1 Rule 8 CPC shall apply with the modification that reference to suit or decree shall be construed as reference to a complaint or order of the district forum. The expression “with the permission of the District Forum” as appearing in Section 12(1)(c) must be read along with Section 13(6) which provides the context and effect to said expression. Sections 12(1)(c) and 13(6) are not independent but are to be read together and they form part of the same machinery. Taking into consideration that matters were pending with the National Commission for more than three years during which time the pleadings were exchanged and the evidence was filed, the bench allowed the homebuyers to approach state forum, and in that event, it said that the district forum shall proceed with the matter on the strength of same pleadings and the evidence laid before the National Commission.

VOICE

VOICE

Enquiry

Enquire Now

 

Verification