Sameness Of Interest Is Essential To Initiate A Suit In Representative Capacity U/S 35(1) Of Consumer Protection Act, 2019: Brigade Enterprises Limited Vs Anil Kumar Virmani And Ors

DATE OF JUDGEMENT:
17th December 2021

JUDGES:
Justice Hemant Gupta
Justice V. Ramasubramanian

PARTIES:
Appellant (s): Brigade Enterprises Limited
Respondent (s): Anil Kumar Virmani and Ors.

SUBJECT

The Supreme Court of India in the present case dealt with the provisions of the Consumer Protection Act, 2019 concluding that sameness of interest is essential to initiate a suit in a representative capacity under Section 35(1) of Consumer Protection Act, 2019 and the consumers can instead approach under joint complaint if the prerequisites of same are satisfied.

OVERVIEW

1. An appeal was filed by the appellants (primarily a real estate property development company), under Section 35(1)(c) of the Consumer Protection Act, 2019 against the order of the National Consumer Disputes Redressal Commission which allowed 91 purchasers of 51 apartments in the residential complex developed by the appellants, to file a complaint in a representative capacity, for the benefit of more than 1000 buyers.

2. Brief facts of the case:

a) The residential complex in the question contained about 1134 apartments, from which about 91 persons who bought 51 apartments had jointly filed the complaint in National Consumer Disputes Redressal Commission, Delhi.

b) The complaint sought permission of the Commission under Section 35(1)(c) of the Consumer Protection Act, 2019 to pursue the matter jointly, for the benefit of other consumers as well who have purchased the apartments along with 91 applicants

c) The Commission relied on the judgment of the Supreme Court in the case of Chairman, Tamil Nadu Housing Board, Madras vs. T.N. Ganapathy and the decision of the National Commission in Ambrish Kumar Shukla vs. Ferrous Infrastructure Pvt. Ltd. and granted the permission.

d) Aggrieved by the said order, the appellants approached the Supreme Court.

3. The principal grievance of the appellants was that only owners of 51 apartments of the total 1134 apartments built by them had joined in to file the complaint, which represents only a minuscule percentage of consumers. Moreover, the counsel for appellants argued that ‘there is also no commonality of interest’ in the complaint as some other buyers had preferred to file the complaint in Karnataka State Consumer Disputes Redressal Commission.

4. However, the counsel for the respondents/buyers/original complainants argued that this issue was no longer res Integra, as a similar question of law had been already decided in the case of Chairman, Tamil Nadu Housing Board, Madras vs. T.N. Ganapathy and Vikrant Singh Malik & Ors. vs. Supertech Limited & Ors. Moreover, it was contended that the buyers had ‘sameness of interest’ which was the sine qua non for an application under Section 35(1)(c).

LEGAL PROVISIONS

Civil procedure Code, 1908

• Order 1 Rule 8- One person may sue or defend on behalf of all in same interest.

Consumer Protection Act, 2019

• Section 35- Manner in which complaint shall be made.
• Section 35(1)(c)- 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; or
• Section 2(5)- Definition of Complainant.
• Section 38(1)- Procedure on admission of complaint.

ISSUES

1. Whether a representative suit under section 35(1)(c) of consumer protection act was maintainable?

JUDGMENT

1. Firstly, the Court noticed that the essential element of section 35(1)(c) is that all the complainants on whose behalf or for whose benefit the law is invoked, ‘should have the same interest’. Commenting on the phraseology of section 35(1)(c) the Court noted that a complaint under this section can be both ‘on behalf of’ or ‘for the benefit of the consumer having similar interest.
2. The Court further noted that Order 1 Rule 8 is different from section 35(1)(c) as it operates both ways. ‘It not only permits plaintiffs to sue in a representative capacity but also permits people to be sued and to be defended in an action, in a representative capacity.’ The Court also noted that the explanation of Order 1 Rule 8 bears significance in the current case as it differentiates between ‘persons having same interest’ and ‘persons having a same cause of action’ in a suit. Hence, to conclusively prove sameness of interest, the party must necessarily establish sameness of the cause of action.
3. Commenting on the nature of the suit filed by the respondents, the Court observed that ‘it was important for the respondents to include sufficient declarations to prove sameness of interest’. Analysing the material facts of the case, the court noted that ‘there are no pleadings from the 386 buyers of apartments from the amber block’. Moreover, for the remaining 748 apartments, the complaint did not mention any specific declarations that would prove sameness of interest.
4. Simplifying the issue, the court noted that compensation of delay was offered by the appellant to the buyers according to the terms of agreements and some of the buyers even accepted the compensation. The complaint failed to make it clear how, a) those who have accepted the compensation under protest; b) those who accepted without protest; and c) those who refused to accept the compensation, had the similarity of interest. Questioning the sameness of interest further the Court asserted that the delay in completion of a project varies with each buyer as it’s very huge in the case of some while it’s just negligible in the case of others.
5. The Court further noticed that delay in handing over the possession of apartments might not be the only complaint for every buyer. As some buyers have chosen Karnataka State Consumer Disputes Redressal Commissions, it goes on to show that all 1134 buyers might not have a similarity of interest.
6. The Court further noticed that the juncture of provisions of Consumer Protection Act, 1986 namely, Section 2(5), Section 38(1), and Section 35(1) leaves no room for ambiguity 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.'
7. The Court, interpreting the provisions of Section 2(5) and Section 35(1) gave guidelines as to when the complaint can be filed under Section 35(1). The Complaint may be filed a) by a single consumer; b) by a recognized consumer Association; c) by one or more consumers jointly, seeking the redressal of their grievances without representing other consumers who may or may not have the same interest; d) by one or more consumers on behalf of or for the benefit of numerous consumers; and e) the Central Government, Central Authority or State Authority.
8. The Court concluded that the Commission had erred in its judgment to allow the suit in a representative capacity. However, the Court observed that this doesn’t mean the suit is not maintainable. The complaint filed by the respondents should be treated as a joint complaint and not a complaint in a representative capacity on behalf of 1134 buyers meaning the buyers ‘may join the complaint as parties if they wish to’.
9. The Court allowed the appeal and modified the order of the National Dispute Redressal Commission to the effect that the complaint filed by the respondents should not be treated as a complaint in a representative suit but a joint complaint. Other buyers are free to implead themselves as parties to the complaint.

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