Supreme Court clarifies the scope of representative consumer complaints under Section 35(1)(c) of the Consumer Protection Act, 2019: Brigade Enterprises Ltd. vs. Anil Kumar Virmani & Ors. (17 December 2021)

Introduction

Date of the Judgment: 17 December 2021
Citation: Civil Appeal No. 1779 of 2021
Judges: Hemant Gupta, J. and V. Ramasubramanian, J.

Can a few apartment buyers file a consumer complaint on behalf of all buyers in a large residential complex? The Supreme Court of India addressed this question in a recent case, clarifying the rules for representative consumer complaints. This judgment clarifies the requirements for filing a consumer complaint on behalf of a large group, focusing on the need for a “sameness of interest” among all the consumers involved. The bench comprised of Justices Hemant Gupta and V. Ramasubramanian, with the judgment authored by Justice V. Ramasubramanian.

Case Background

The case involves a residential project called “Brigade Lakefront” launched by Brigade Enterprises Limited in 2013. The project was to comprise of around 1100 units in three blocks: Amber, Blue, and Crimson. The promised delivery date for the flats in the Blue block was June 30, 2016, with a six-month grace period, and for the Crimson block, it was January 31, 2018, with a similar grace period.

About 91 apartment buyers, who had purchased 51 apartments in the complex, filed a consumer complaint before the National Consumer Disputes Redressal Commission (NCDRC). They sought permission to file the complaint in a representative capacity, not only for themselves but also for all the other buyers in the complex, numbering over 1000. The main grievance of the complainants was the delay in handing over possession of the apartments and the unfair trade practices adopted by the builder.

The complainants sought directions from the NCDRC to order the builder to pay delay compensation as stipulated in the sale agreements, compensatory interest at 12% per annum on the amount paid by the buyers for the delay in construction, and the cost of the complaint.

Timeline

Course of Proceedings

The National Consumer Disputes Redressal Commission (NCDRC) allowed the application of the 91 purchasers to file a consumer complaint in a representative capacity. The NCDRC relied on the Supreme Court’s decision in Chairman, Tamil Nadu Housing Board, Madras vs. T.N. Ganapathy [(1990) 1 SCC 608] and its own decision in Ambrish Kumar Shukla vs. Ferrous Infrastructure Pvt. Ltd.

Aggrieved by the NCDRC’s order, the builder, Brigade Enterprises Limited, filed an appeal before the Supreme Court of India.

Legal Framework

The case revolves around the interpretation of Section 35(1)(c) of the Consumer Protection Act, 2019, which allows one or more consumers to file a complaint on behalf of numerous consumers with the same interest, with the permission of the District Commission. The provision states:

“one or more consumers, where there are numerous consumers having the same interest, with the permission of the District Commission, on behalf of, or for the benefit of, all consumers so interested.”

The Supreme Court also considered Section 38(11) of the Consumer Protection Act, 2019, which makes the provisions of Order I Rule 8 of the Code of Civil Procedure, 1908 (CPC) applicable to cases where the complainant is a consumer referred to in Section 2(5)(v). Order I Rule 8 of CPC allows one or more persons to sue or defend on behalf of all in the same interest.

Order I Rule 8 of the CPC states:

“Where there are numerous persons having the same interest in one suit,—(a) one or more of such persons may, with the permission of the Court, sue or be sued, or may defend such suit, on behalf of, or for the benefit of, all persons so interested.”

The Explanation under Order I Rule 8 distinguishes between persons having the same interest in one suit and persons having the same cause of action.

Arguments

Appellant’s Arguments (Brigade Enterprises Limited):

• The appellant argued that only a small percentage of apartment owners (51 out of 1134) had joined the complaint, and therefore, they could not seek to file a complaint in a representative capacity.
• The appellant contended that there was no commonality of interest or grievance, as some individual apartment owners had also approached the Karnataka State Consumer Disputes Redressal Commission with their separate grievances.
• The builder also argued that the delay compensation was already offered to the purchasers, and some had accepted it without protest, while others had refused. Therefore, there was no sameness of interest among all the buyers.
• The appellant pointed out that the complaint did not include any of the owners of the 386 apartments in the Amber block, and therefore, the complaint could not be treated as representing all the buyers in the project.

Respondents’ Arguments (Apartment Buyers):

• The respondents argued that the issue was no longer res integra (a matter not yet decided) due to previous decisions of the Supreme Court in Chairman, Tamil Nadu Housing Board, Madras vs. T.N. Ganapathy and Vikrant Singh Malik & Ors. vs. Supertech Limited & Ors.
• The respondents contended that they had a sameness of interest with all the buyers of the 1134 apartments, which is a prerequisite for maintaining an application under Section 35(1)(c) of the Consumer Protection Act, 2019.
• The respondents claimed that all the buyers had suffered due to the delay in handing over possession, and hence, they were entitled to compensation.

The innovativeness of the argument by the appellant lies in pointing out the lack of “sameness of interest” among the buyers, which is a crucial requirement for a representative complaint. The appellant highlighted that the delay periods varied, some buyers had accepted compensation, and some had filed individual complaints, thus challenging the commonality of the grievance.

The respondents, on the other hand, relied on previous judgments to argue that the issue was settled. However, the Supreme Court found that those judgments were not directly applicable to the facts of this case.

Submissions

Issues Framed by the Supreme Court

The Supreme Court considered the following issues:

1. Whether the consumer complaint filed by the respondents was maintainable in a representative capacity under Section 35(1)(c) of the Consumer Protection Act, 2019.
2. Whether the respondents had established the “sameness of interest” required to maintain a representative complaint.
3. Whether the complaint could be treated as a joint complaint if the representative aspect was not maintainable.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

The Supreme Court analyzed the authorities as follows:

• Chairman, Tamil Nadu Housing Board, Madras vs. T.N. Ganapathy [(1990) 1 SCC 608]*: The Court distinguished this case, stating that it involved a uniform demand on all allottees, unlike the present case where the delay periods varied. The Court also noted that the decision was restricted to low-income group allottees.
• Rameshwar Prasad Shrivastava & Ors. vs. Dwarkadhis Projects Private Limited & Ors. [(2019) 2 SCC 417]*: The Court noted this case, which upheld the dismissal of a complaint for lack of a proper application under Section 12(1)(c) of the 1986 Act.
• Anjum Hussain and Ors. vs. Intellicity Business Park Private Limited and Ors. [(2019) 6 SCC 519]*: The Court referred to this case, where the court had reversed the dismissal of an application under Section 12(1)(c).
• Vikrant Singh Malik and Ors. vs. Supertech Limited and Ors. [(2020) 9 SCC 145]*: The Court noted this case, which upheld the dismissal of an application under Section 12(1)(c) where the reliefs were confined to only 26 complainants.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• The lack of “sameness of interest” among the apartment buyers, as the delay periods varied, and some buyers had accepted compensation.
• The fact that the complaint did not include any of the owners of the 386 apartments in the Amber block, indicating that the complaint was not truly representative of all the buyers in the project.
• The need to protect the rights of individual buyers who may have separate grievances and may not wish to be bound by a representative complaint.
• The need to ensure that the provisions of the Consumer Protection Act are interpreted in a manner that is consistent with the principles of natural justice and fairness.

Fact:Law

The court’s reasoning was primarily based on the factual aspects of the case, such as the varying delay periods and the different actions taken by the buyers. However, legal principles such as the interpretation of Section 35(1)(c) of the Consumer Protection Act and Order I Rule 8 of the CPC also played a significant role.

Logical Reasoning

The court considered alternative interpretations, such as the argument that the issue was already settled by previous judgments. However, the court rejected this argument, finding that the previous judgments were not directly applicable to the facts of this case. The court also considered the argument that the complaint should be dismissed altogether, but held that it could be treated as a joint complaint by the respondents.

The decision was reached by analyzing the specific facts of the case and applying the relevant legal provisions. The court emphasized the need to protect the rights of all consumers, while also ensuring that the provisions of the Consumer Protection Act are interpreted in a fair and just manner.

The Supreme Court held that the complaint filed by the respondents could not be treated as a representative complaint on behalf of all 1134 apartment buyers. However, the Court clarified that the complaint could be treated as a joint complaint filed by the 91 respondents on their own behalf.

The Court reasoned that the delay in handing over possession was not uniform for all buyers, and some buyers had accepted compensation, while others had not. Additionally, the complaint did not include any of the owners of the 386 apartments in the Amber block. Therefore, the Court held that the “sameness of interest” required for a representative complaint was not established.

The Court also clarified that a joint complaint by multiple consumers is different from a representative complaint, and that the Consumer Protection Act does not prohibit multiple consumers from filing a joint complaint for their own grievances.

The majority opinion was delivered by Justice V. Ramasubramanian, with Justice Hemant Gupta concurring. There were no dissenting opinions.

The court’s reasoning was based on the interpretation of Section 35(1)(c) of the Consumer Protection Act, 2019 and Order I Rule 8 of the Code of Civil Procedure, 1908. The court emphasized the importance of “sameness of interest” for a representative complaint and held that the respondents had failed to establish such sameness.

The potential implications for future cases are that consumer forums must carefully scrutinize the pleadings and reliefs sought in representative complaints to ensure that the “sameness of interest” requirement is met. The judgment also clarifies that multiple consumers can file a joint complaint for their own grievances, without having to represent all consumers with similar grievances.

The court did not introduce any new doctrines or legal principles, but it clarified the interpretation of existing provisions.

Key Takeaways

• For a consumer complaint to be filed in a representative capacity, there must be a “sameness of interest” among all the consumers on whose behalf the complaint is filed.
• The “sameness of interest” is not the same as “sameness of cause of action.” It requires a commonality of grievance and a similar nature of relief sought.
• Multiple consumers can file a joint complaint for their own grievances without having to represent all consumers with similar grievances.
• Consumer forums must carefully scrutinize the pleadings and reliefs sought in representative complaints to ensure that the “sameness of interest” requirement is met.
• Builders should be aware that they can be held liable for delays and unfair trade practices, even if the complaint is not filed in a representative capacity.

Directions

The Supreme Court directed that:

• The complaint filed by the respondents should be treated as a joint complaint filed on behalf of only the respondents, and not as a complaint filed in a representative capacity.
• Persons who wish to implead themselves as parties to the complaint may be allowed by the National Commission, provided their grievance is also limited to the grievance as projected by the respondents in their consumer complaint.
• The intervenors in the appeal shall also be allowed to be impleaded in the consumer complaint.

Specific Amendments Analysis

There were no specific amendments discussed in the judgment.

Development of Law

The ratio decidendi of this case is that a consumer complaint filed in a representative capacity under Section 35(1)(c) of the Consumer Protection Act, 2019, requires a “sameness of interest” among all the consumers on whose behalf the complaint is filed. This judgment clarifies that the “sameness of interest” is not the same as “sameness of cause of action,” and that a joint complaint by multiple consumers for their own grievances is different from a representative complaint.

This judgment does not change the previous position of the law, but it clarifies the interpretation of existing provisions and provides guidance on how to determine whether a representative complaint is maintainable.

Conclusion

The Supreme Court’s judgment in Brigade Enterprises Limited vs. Anil Kumar Virmani & Ors. clarifies the requirements for filing a consumer complaint in a representative capacity under Section 35(1)(c) of the Consumer Protection Act, 2019. The Court held that a “sameness of interest” is essential for a representative complaint and that the respondents in this case had failed to establish such sameness. However, the Court allowed the complaint to be treated as a joint complaint by the respondents, clarifying that multiple consumers can file a joint complaint for their own grievances. This judgment provides important guidance for consumer forums and clarifies the distinction between representative and joint complaints.