Uncertainty looms over Group complaints in NCDRC

We have for long advocated that it is best to approach NCDRC as a registered association of homebuyers. Such cases are filed under Section 12 (1) (b) of the Consumer Protection Act. Not only the cases filed by association are economical for buyers, it’s been easy on courts too because they minimize the duplicity of complaints and reduce paperwork.

The NCDRC had for long maintained a stand that the Associations of homebuyers (Societies registered under Society Registration Act, 1860) can file cases on behalf of one or more its members. A landmark judgment was passed by Justice V.K Jain in the case of GGPPL vs LPWA and this was later upheld by the Supreme Court as well – Supreme Court gives green signal to Home Buyers Associations. The above-mentioned judgments paved way for homebuyers associations to effectively pursue cases against erring developers and since then the NCDRC have witnessed a flood of cases filed by registered association.

While most of the benches of NCDRC have expressed a similar opinion on maintainability of complaints filed by homebuyers association, Hon’ble Justice K. S. Chaudhary has taken a stand against such complaints. While dismissing the complaints filed by Shubhechha Welfare Society against earth infrastructure, he expressed that:

I am of the view that complaints by society/association on behalf of more than one consumer is not maintainable under Section 12 (1) (b) of the C.P. Act. The society is advised file a complaint under Section 12 (1) (c ) of C.P. Act in the representative capacity for benefit of aforesaid allottees as well other allottees.

Case study

Shubhechha Welfare Society against Earth Infrastructure in NCDRC owing to the delays by the developer. The two cases are filed under Section 12 (1) (b) by the registered society. The society relied on the following cases while arguing the maintainability of cases:

Order of this Commission in Complaint No. 816 of 2016 – Amrapali Sapphire Flat Buyers Welfare Association & Ors. Vs. Amrapali Sapphire Developers Pvt. Ltd. & Ors. in which it was held that Section 12 (1) (b) of C.P. Act does not preclude the recognized consumer association from filing a composite complaint on behalf of more than one consumers having a similar grievance.

Justice K. S. Chaudhary’s observations

If recognized consumer association is permitted to file a complaint on behalf of more than one consumers then no one would be required to file a complaint under Section 12 (1) (c) of C.P. Act. I am of the view that recognized consumer Association can file a complaint on behalf of single consumer whether that consumer is Member of that association or not, but recognized consumer association cannot file one complaint on behalf of many allottees by clubbing sale consideration for making the peculiar jurisdiction of this Commission.  A perusal of sale consideration of units to the allottees in both the complaints reveals that sale consideration for each unit is less than one crore and in such circumstances, this Commission does not have pecuniary jurisdiction to entertain complaint and complaints are to be filed by the complainant before State Commission having pecuniary jurisdiction to entertain the complaint.


Contradictory views

While deciding the matter of  Section 12 (1) (c), the larger bench had clearly mentioned that:

A cooperative society or a group of cooperative societies, firms, an association shall not be entitled to file a complaint under Section 12 (1) (c) unless the cooperative society itself is the consumer.

Unanswered questions

(a) if this bench disagrees with the observations of another bench in Amrapali Sapphire’s judgment, shouldn’t this bench refer the matter to a large bench for determination of this issue?

Ans: As per section 20(1A)(iii) of the consumer protection act, if members of A BENCH differ in opinion on any point and the members are equally divided, they shall state the point and make a reference to the President, who shall constitute a larger bench. The language of the subsection, therefore, provides for setting up a larger bench in cases where members of the same bench are equally divided and no specific provision finds a place in the consumer protection act that mandates a bench which differs from the opinion of another bench to make a reference for the larger bench.

(b) so what is the position of the National commission as regards admission of group complaint filed by registered societies?

Sahil Sethi, Consumer matter expert expressed that this is an anomalous situation created, where group complaints by registered societies when filed before the bench of Justice VK Jain may be admitted (provided the concerned bench is convinced that the complainant is a voluntary consumer Association) , however, group complaints before Justice KS Chaudhari will not be entertained. This anomaly is best resolved by the Supreme Court in an appeal against the recently passed order of the Commission. whichever side the Supreme Court rules, it is best for the consumers that an assertive and binding legal position is laid down by the Hon’ble Supreme Court.

The Logical Buyer’s opinion

We at The Logical Buyer are of the opinion that homebuyers should continue to file cases under Section 12 (1) (b) as most of the benches of NCDRC and the Hon’ble Supreme Court are of the opinion that such registered associations can file joint cases in NCDRC. At the same time, we urge the Hon’ble NCDRC to clear their position on the subject so that precious time can be saved.

3 thoughts on “Uncertainty looms over Group complaints in NCDRC

  • December 13, 2016 at 2:42 pm

    I think in Section 12/1/B cost of deficiency for each unit shud be more than 1 Cr to be there in NCDRC, where as in 12/1/C cumulative number and open ended like a class suit. Do others share the same view ?

  • December 13, 2016 at 3:20 pm

    No, under 12 (1) (B) also the combined cost of parties should exceed 1 Cr and there are various references for the same.

    The 12 (1) (c) judgement clearly mentioned associations can’t file case under 12 (1) (c) unless the association/society is a consumer itself.

  • December 16, 2016 at 4:16 pm

    I feel, it is more of a bureaucratic way of looking at the Issue than of a jurist way.

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