Judgement for case no 219/2006 consumer court

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PFA the judgment.

I have gone through the above judgment. The burden of the judgment is that a “Co-operative Housing Society” comes under the provisions of the Consumer Protection Act, 1986. There have been also other similar judgments, which are also by the Maharashtra State Consumer Commission. I do not know of any similar judgment in any other State.

In my opinion the State Commission has erred in the above judgment as well as in similar other judgments.

The Consumer Protection Act, 1986 is for the redressal grievances of consumers against a seller of goods or services. Any dispute requires two parties. In the Consumer Protection Act, they are the consumer on one side and seller of goods or services on the other.

Any Co-operative Society is a Co-operative Consumer Society, though the word “consumer” is missing from the name. Again a Co-operative Housing Society is different from other Co-operative Societies such as a bank or a store. A Housing Society exclusively serves its own members only and not any outsider. In other words, a group of consumers, who need housing and services pertaining to that, come together and serve themselves. They elect a few from among themselves to perform on behalf of them and call them a Managing Committee. The Managing Committee changes by rotation and any of the consumer members are eligible to get elected to the Committee. Within the Society all are consumers only. Calling the Managing Committee as service provider is like one trading with oneself. A Co-operative Housing Society works on the principle of mutuality. Hence the contributions by its members are not income for the purpose of the Income-tax Act.

In the above judgment the Commission holds that the Society provides a service because

“It is admitted that society collects maintenance charges from the members. Therefore, complainant is a consumer”

But the Society collects the maintenance charges only for dispersal to the various service providers and not to themselves. Section 2(o) of the Consumer Protection Act says

 “service” means service of any descripttion which is made available to the potential users and includes, but not limited to, the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service.

Any service provided free of charge is excluded from the purview of the Consumer Protection Act.  The Managing Committee members are volunteers, who give their services to the Society “free of any remuneration” for themselves. Most of them will have other full time vocations to earn their own livelihood and they spare a part of their valuable time in the service of the Society.

In continuation the judgment says:

-----, because of deeming provision, which is highlighted in sub-section 2 of section 22 of Maharashtra Co-operative Societies Act, 1960.

What is this provision? It has also been reproduced in the judgment:

“Where a person is refused admission as a member of a society, the decision (with the reasons therefor) shall be communicated to that person within fifteen days of the date of the decision, or within three months (from the date of receipt of the application for admission), whichever is earlier.  If the society does not communicate any decision to the applicant within three months from the date of receipt of such application, the applicant shall be deemed to have been (admitted) as a member of the society. (If any question arises whether a person has become a deemed member or otherwise, the same shall be decided by the Registrar after giving a reasonable opportunity of being heard to all the concerned parties.)”

How this provision does make a Society member a consumer or the Society a service provider?

Most of the Co-operative Housing Societies in Maharashtra work on a low budget. The budget of the whole Society will be less than the budget of individual members. They can hardly afford to spend on essential expenses. Much less they can afford to spend on litigation. In most cases the MC members are a harassed lot, harassed by recalcitrant members and not the other way about. As a result in most Societies members do not come forward to serve in the Committee and the Society is either mis-managed or goes under the administrator appointed by the Registrar. If the aggrieved member had gone to the Registrar instead of the Consumer Forum, she would have got relief much faster under the provisions of Section 22 of the Maharashtra Co-operative Societies Act. Has any Consumer Commission judgment gone on appeal to Delhi? Most probably not, because the amount involved are small and the Societies are not rich enough.