2019 (5) TMI 754 - SC - Indian Laws

Common petition against builder - class action or not - Failure to honour commitments of delivering possession of an office space booked by appellant - Section 23 of the Consumer Protection Act, 1986 - According to the National Commission, though all the appellants had a common grievance that the respondent had not delivered possession of the respective units booked by them and thus the respondent was deficient in rendering service, it was not shown how many of the allottees had booked the shops/commercial units solely for the purchase of earning their livelihood by way of self-employment. HELD THAT - In Chairman, Tamil Nadu Housing Board, Madras vs. T. N. Ganapathy 1990 (2) TMI 309 - SUPREME COURT it was held by this Court that the persons who may be represented in a Suit under Order 1 Rule 8 of Civil Procedure Code need not have the same cause of action and all that is required for application of said provision is that the persons concerned must have common interest or common grievance. What is required is sameness of interest. It was observed by this Court in T.N. Housing Board1 that the provision must receive an interpretation which would subserve the object for its enactment. It is in this light that the Full Bench of the National Commission held that oneness of the interest is akin to a common grievance against the same person - However, the National Commission in the instant case, completely lost sight of the principles so clearly laid down in the decisions referred to above. In our view, the approach in the instant case was totally erroneous. The application preferred by the appellants under Section 12(v)(o) of the Act is held to be maintainable - Appeal allowed.

Summary

Issues Involved:
1. Maintainability of the complaint as a class action under Section 12(1)(c) of the Consumer Protection Act, 1986.
2. Definition and scope of 'consumer' under Section 2(1)(d) of the Consumer Protection Act, 1986.
3. Interpretation of Order I Rule 8 of the Code of Civil Procedure, 1908 in the context of consumer disputes.

Detailed Analysis:

1. Maintainability of the Complaint as a Class Action:

The appellants filed a complaint under Section 12(1)(c) of the Consumer Protection Act, 1986, seeking a refund along with interest and compensation for the amounts paid to the respondent for office spaces in a project. The National Commission initially dismissed the case, concluding that the complaint could not be accepted as a class action. The Commission reasoned that the complaint did not allege that all allottees had booked the units solely for earning their livelihood by way of self-employment, which is a requirement under the definition of 'consumer' in Section 2(1)(d) of the Act. The Supreme Court, however, found this approach erroneous. It emphasized that the principles laid down in previous judgments, such as the sameness of interest and common grievance, were not adequately considered by the National Commission. The Supreme Court allowed the appeal, setting aside the National Commission's order and restoring the case for further proceedings.

2. Definition and Scope of 'Consumer':

The definition of 'consumer' under Section 2(1)(d) of the Consumer Protection Act, 1986, was central to the dispute. The term excludes individuals who hire or avail services for commercial purposes unless it is for earning their livelihood by means of self-employment. The National Commission had dismissed the class action on the grounds that the complaint did not specify that all allottees intended to use the commercial units for self-employment. The Supreme Court highlighted that the complaint's maintainability should be assessed based on whether the consumers had a common grievance and interest, rather than strictly on individual purposes of livelihood.

3. Interpretation of Order I Rule 8 of the Code of Civil Procedure, 1908:

The Supreme Court referred to its earlier judgment in Chairman, Tamil Nadu Housing Board vs. T. N. Ganapathy, which clarified that for a representative suit under Order I Rule 8, the concerned persons need not have the same cause of action but must have a common interest or grievance. The Full Bench of the National Commission in Ambrish Kumar Shukla and Ors. vs. Ferrous Infrastructure Pvt. Ltd. reiterated that the objective of such provisions is to avoid multiplicity of litigation and facilitate decision-making for a large number of interested consumers. The Supreme Court noted that the National Commission failed to apply these principles in the present case, leading to an erroneous dismissal of the class action.

In conclusion, the Supreme Court allowed the appeal, reinstating the appellants' complaint as a class action and directing the National Commission to proceed with the case in accordance with the law. The judgment underscores the importance of interpreting consumer protection laws in a manner that serves the legislative intent of facilitating collective redressal for common grievances.