Supreme Court Allows Consumer Complaint: Alpha G184 Owners Association vs. Magnum International Trading Company Pvt. Ltd. (2023)

Date of the Judgment: May 15, 2023

Citation: 2023 INSC 448

Judges: J.K. Maheshwari, J. and M.M. Sundresh, J.

Can a consumer association file a complaint on behalf of its members even if the association’s registration is under dispute? The Supreme Court of India addressed this question in a recent judgment, clarifying the rights of consumer associations and their members. The court emphasized the importance of a flexible approach to consumer protection, allowing multiple consumers with similar grievances to jointly file complaints. This decision clarifies the scope of who can be a ‘complainant’ under the Consumer Protection Act. The judgment was delivered by a two-judge bench comprising Justices J.K. Maheshwari and M.M. Sundresh, with the opinion authored by Justice M.M. Sundresh.

Case Background

The Alpha G184 Owners Association, representing flat allottees, filed a consumer complaint against Magnum International Trading Company Pvt. Ltd., the builder, for failing to complete the housing project on time and for demanding additional payments. The association initially filed the complaint on behalf of 54 allottees, with more joining later. The builder, in response, challenged the association’s registration, leading to a series of legal challenges and delays in the consumer complaint proceedings.

The dispute arose when the builder allegedly failed to meet the agreed timelines for construction and demanded extra payments from the flat allottees. The Owners Association, formed to protect the interests of the allottees, filed a complaint with the National Consumer Disputes Redressal Commission (NCDRC). However, the builder contested the association’s legal standing, leading to a parallel legal battle regarding the association’s registration.

Timeline

Course of Proceedings

The National Consumer Disputes Redressal Commission (NCDRC) initially took up the consumer complaints filed by the association. However, due to the ongoing dispute regarding the association’s registration and byelaws, the NCDRC adjourned the proceedings sine die. The builder had challenged the association’s registration, alleging that it did not comply with the Haryana Registration and Regulation of Societies Act, 2012. The State Registrar directed the association to amend its byelaws, which the association did, but the amendments were later put on hold by the District Registrar. The NCDRC adjourned the matter awaiting the outcome of the proceedings before the Registrar General, Haryana, and subsequently, the High Court of Punjab & Haryana. The Supreme Court was approached to set aside the orders of the NCDRC.

Legal Framework

The Supreme Court discussed the relevant provisions of the Consumer Protection Act, 1986, and the Consumer Protection Act, 2019. The court emphasized the objective of these acts, which is to protect consumer interests and encourage consumerism. The court noted that the definition of “complainant” under Section 2(b) of the 1986 Act is illustrative and should be interpreted broadly. The court also referred to Section 12 of the 1986 Act, which specifies how a complaint can be made.

The relevant provisions cited were:

• Section 2(b) of the Consumer Protection Act, 1986: Defines “complainant,” including a consumer, a voluntary consumer association, the Central or State Government, or one or more consumers with the same interest.
• Section 12 of the Consumer Protection Act, 1986: Specifies the manner in which a complaint can be filed, including by the consumer, a recognized consumer association, or one or more consumers with the same interest.

The court highlighted that these provisions should be interpreted in a way that favors the consumer, aligning with the social benefit-oriented nature of the legislation.

Arguments

Appellant’s Submissions:

• The respondent is deliberately trying to prevent the appellant from seeking legal remedy.
• The consumer complaints, filed in 2017, are yet to be adjudicated on merits.
• The writ petition regarding the association’s registration has no connection with the consumer complaint proceedings.
• The individual allottees have filed affidavits, so the NCDRC should not have adjourned the matters sine die.

Respondent’s Submissions:

• There is an inconsistency in the appellant’s contentions. If the association’s registration is invalid, the complaint is not maintainable.
• Even if individual complaints are allowed, the forum would be the District Consumer Disputes Redressal Commission, not the NCDRC.
• Since the High Court has not stayed the orders of the State Registrar and the Registrar General, the NCDRC’s orders are valid.

The appellant argued that the core issue was the delay in the project and the additional demands, and not the validity of the association’s registration. The respondent argued that the association’s legal standing was questionable, which affected the maintainability of the complaint.

Issues Framed by the Supreme Court

• Whether the National Consumer Disputes Redressal Commission (NCDRC) was correct in adjourning the consumer complaints sine die due to the dispute regarding the registration of the appellant association.
• Whether the consumer complaints filed by the appellant association on behalf of its members are maintainable, considering the provisions of the Consumer Protection Act, 1986.

Treatment of the Issue by the Court

Authorities

The Supreme Court relied on the following authorities:

Judgment

How each authority was viewed by the Court?

• The Supreme Court relied on National Insurance Co. Ltd. v. Harsolia Motors [2023 SCC OnLine SC 409]* to emphasize the social benefit-oriented nature of the Consumer Protection Act, requiring a constructive and liberal approach.
• The Supreme Court followed Brigade Enterprises Ltd. v. Anil Kumar Virmani [(2022) 4 SCC 138]* to determine that a joint complaint by multiple consumers with similar grievances is maintainable and does not require compliance with Order I Rule 8 of the Code of Civil Procedure.
• The Supreme Court referred to Akshay Kumar & Ors. v. Adani Brahma Synergy Pvt. Ltd in Consumer Complaint No. 48 of 2021* to highlight how the NCDRC itself had taken note of the decision in Brigade Enterprises Ltd. (supra) and allowed joint complaints.
• The Supreme Court referred to Ambrish Kumar Shukla v. Ferrous Infrastructure Pvt. Ltd. in Consumer Complaint No. 97 of 2016* to highlight how the NCDRC had dealt with the issue of pecuniary jurisdiction and maintainability of complaints.
• The Supreme Court referred to Public Health Engineering Department Vs. Upbhokta Sanrakshan Samiti I [(1992) CPJ 182 (NC)]* to highlight how the NCDRC had dealt with the issue of pecuniary jurisdiction in a representative complaint.

The court emphasized that the Consumer Protection Act is meant to protect the interests of consumers and that a technical approach should not be taken against them. The court highlighted the importance of allowing consumers to participate directly in the market economy and noted that the provisions of the Act should be construed in favor of the consumer.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to ensure that consumers have access to justice and that their grievances are addressed promptly. The court was concerned that the ongoing dispute regarding the association’s registration was causing unnecessary delays in the adjudication of the consumer complaints. The court also emphasized the need to adopt a liberal and constructive approach to interpreting the provisions of the Consumer Protection Act, ensuring that the objective of the legislation is not defeated by technicalities.

The court’s reasoning was based on a combination of legal interpretation and a concern for the practical implications of its decision on the rights of consumers. The court was keen to ensure that the consumer protection mechanism is not undermined by procedural hurdles.

Key Takeaways

• Multiple consumers with similar grievances can jointly file a complaint under the Consumer Protection Act.
• The definition of “complainant” under the Act is broad and inclusive, allowing various entities to file complaints.
• Consumer protection laws should be interpreted liberally to ensure that consumers have access to justice.
• Technical issues, such as the validity of an association’s registration, should not delay the adjudication of consumer complaints.
• The National Consumer Disputes Redressal Commission (NCDRC) is expected to hear consumer complaints expeditiously.

Directions

The Supreme Court set aside the orders of the National Commission and directed it to hear the matters on merits, expeditiously.

Development of Law

The ratio decidendi of this case is that multiple consumers with similar grievances can jointly file a complaint, and the validity of an association’s registration does not affect the maintainability of individual consumer complaints. This decision reinforces the consumer-friendly approach of the Consumer Protection Act and clarifies the scope of who can be a ‘complainant’. This decision reinforces the position of law laid down in Brigade Enterprises Ltd. v. Anil Kumar Virmani [(2022) 4 SCC 138]*.

Conclusion

The Supreme Court’s judgment in Alpha G184 Owners Association vs. Magnum International Trading Company Pvt. Ltd. is a significant step in ensuring that consumer rights are protected. The court’s emphasis on a liberal interpretation of consumer protection laws and its rejection of technicalities that hinder access to justice will have a positive impact on consumerism in India. This decision clarifies the rights of consumer associations and their members, ensuring that they can seek redressal for their grievances without unnecessary delays.