Sine qua non for invoking Section 35(1)(c) of Consumer Protection Act, 2019, is that all consumers should have same interest: SC

Read Judgment: Brigade Enterprises Limited vs. Anil Kumar Virmani & Others

Pankaj Bajpai

New Delhi, December 20, 2021:  The Supreme Court recently pointed out that the sine qua non for invoking Section 35(1)(c) of the Consumer Protection Act, 2019, is that all consumers on whose behalf or for whose benefit the provision is invoked, should have the same interest. 

A Division Bench of Justice Hemant Gupta and Justice V. Ramasubramanian therefore observed that delay in handing over possession of the residential apartments might have given rise to a cause of action for the individual purchasers of flats to sue the builder. 

But sameness of the cause of action is not equal to sameness of interest, added the Bench. 

Since “sameness of interest” is the prerequisite for an application under Order I Rule 8, CPC r/w/s 35(1)(c) of the 2019 Act, it was necessary for Anil Kumar Virmani & Others (Respondents) to include in the consumer complaint, sufficient averments that would show sameness of interest.

The observation came pursuant to an appeal by Brigade Enterprises Limited (Appellant – Builder) challenging an order of the National Consumer Disputes Redressal Commission (NCDRC), passed u/s 35(1)(c) of the 2019 Act, allowing 91 purchasers of 51 apartments in the residential complex developed by them, to file a consumer complaint in a representative capacity, on behalf of and for the benefit of more than about 1000 purchasers. 

The main grievance of the appellant is that out of total of 1134 apartments constructed and sold by them, the owners of merely 51 apartments have joined together and invoked the jurisdiction of the NCDRC and that such a miniscule percentage of consumers cannot seek to file the complaint in a representative capacity. 

It was also contended by Appellant’s counsel that there was no commonality of interest or grievance, as some individual apartment owners have also invoked the jurisdiction of the Karnataka State Consumer Disputes Redressal Commission, seeking redressal of their separate and distinct grievances.

Opposing the same, the counsel for the Respondents urged that the respondents have the sameness of interest with the buyers of all the 1134 apartments, which is a sine qua non for maintaining an application u/s 35(1)(c) and that, therefore, the National Commission was right in allowing the application. 

After considering the arguments & provisions, the Apex Court found that the delay on the part of the builder in handing over possession, was the primary ground on which compensation was sought by the respondents. 

Noticing that none of the owners of the apartments in Amber block have joined in the filing of the complaint, coupled with the fact that there is no pleading with respect to the timeline of the project in respect of Amber block, the Top Court said that the consumer complaint filed by the respondents cannot be treated as one representing the owners of 386 apartments in Amber block.

The respondents ought to have either included as one of the complainants, the owner of one of the apartments in Amber block or at least made necessary averments in the pleading about the timeline for completion of the Amber block, to make the complaint, as one filed in a representative capacity on behalf of the owners of flats in all the three blocks, observed the Top Court. 

Speaking for the Bench, Justice Ramasubramanian noted that Section 35(1)(c) enables one or more consumers, where there are numerous consumers having the same interest, with the permission of the District Commission, to file a complaint, on behalf of or for the benefit of all consumers so interested. 

The existence of sameness of interest, has been questioned by the appellant on the ground that delay compensation as stipulated in the Agreements was offered to the purchasers and that some of them accepted the same without any demur or protest, while a few others have refused to accept, added the Division Bench. 

Justice Ramasubramanian went on to note that it is unclear from the consumer complaint as to how (i)those who have accepted the compensation under protest; (ii) those who accepted without protest; and (iii)those who refused to accept the compensation, have the sameness of interest.

Since the period of delay in the completion of the project and the handing over of possession, does not appear to be uniform in all 1134 cases, the Division Bench opined that the respondents-complainants cannot project sameness of interest for the purchasers in whose case the period of delay was negligible and those in whose cases there was a huge delay. 

The Apex Court at the same time, highlighted that there is no scope for the contention that wherever there are more consumers than one, they must only take recourse to Order I Rule 8 CPC, even if the complaint is not on behalf of or for the benefit of, all the consumers interested in the matter. 

There may be cases where only “a few consumers” and not “numerous consumers” have the same interest, and there is nothing in the Act to prohibit these few consumers from joining together and filing a joint complaint, added the Court. 

The Apex Court therefore concluded that that while the National Commission was wrong in this case, in the peculiar facts and circumstances in permitting an application u/s 35(1)(c) r/w Order I Rule 8 CPC, it does not mean that the complaint filed by the respondents itself is liable to be thrown out.

The Top Court therefore modified the order of the NCDRC to the effect that the complaint filed by the respondents shall be treated as a joint complaint filed on behalf of only the respondents herein and not as a complaint filed in a representative capacity on behalf of or for the benefit of all the owners of all the 1134 flats.