ANJUM HUSSAIN & ORS. versus INTELLICITY BUSINESS PARK PVT. LTD. & ORS. on 10 May 2019

1. This appeal under Section 23 of the Consumer Protection Act,1986 (hereinafter referred to as the Act) is directed against the Judgmentand Order dated 10.10.2018 passed by the National Consumer DisputesFRedressal Commission, New Delhi (‘the National Commission’, for short)in Consumer Case No.2241 of 2018 preferred by the appellants.

2. The appellant no.1 had booked an office space admeasuringabout 440 sq.ft in a project consisting of residential units, shops andoffices launched by the respondent. The Builder – Buyer AgreementGwas executed between the appellant no.1 and the respondent on02.12.2013, whereunder the respondent was to deliver possession of theoffice unit within four years. Similar such Agreements were enteredinto between the appellant nos.2 to 44 and the respondent in respect ofvarious units from the same project.

3. Since the respondent had failed to honour its commitments ofdelivering possession in four years and as the project was still at thestage of excavation, Case No.2241 of 2018 was filed by the appellants 1to 44 seeking refund of the amounts paid by them to the respondentalong with interest and compensation. An application under Section12(1)(c) of the Act was also filed by the appellants.

4. The first listing of the case before the National Commissionwas on 10.10.2018 when the application moved by the appellants underSection 12(1)(c) of the Act was dealt with by the National Commissionas under:-

1. This complaint has been instituted for the benefit of entireclass of buyers, who have booked shops/offices in a project namely“Intellicity” consisting of residential units, shops and offices atGreater Noida. The scope of this complaint is not restricted onlyto the complainants. An application seeking permission in termsof Section 12(1)(c) of the Consumer Protection Act, to institutethis complaint on behalf of all such buyers of commercial units,being IA/18734/2018, has also been filed, along with the complaint.It is alleged that the complainants are consumers as they hadbooked small shops/offices for the purpose of earing their livelihoodby means of self-employment.

2. As provided in Section 2(1)(d) of the Consumer ProtectionAct, the term ‘consumer’ excludes from its ambit, a person hiringor availing services for a commercial purpose, unless he can bringhis case within the four-corners of the explanation below Section2(1)(d) of the Consumer Protection Act. A person hiring or availingservices for the purpose of earning his livelihood by way of self-employment has thereby been included in the definition of‘consumer’. Otherwise, a shop/commercial unit is deemed to bebooked for a commercial purpose.

3. Since the scope of the complaint is not restrict only to thecomplainants and encompasses all the allottees of the shops/commercial units, as is specifically stated in the complaint and isalso evident from the prayers made in the compliant, seekingdirection to the opposite party to refund the amount deposited byeach complainant as well as other allottees along with interestand compensation, it would be maintainable as a class action onlyif it is alleged and shown that all the allottees of the shops/

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Acommercial units in the above referred project had booked thesame solely for the purpose of the earning their livelihood by wayof self-employment, meaning thereby that all the allottees intendto work themselves in these shops/commercial units and theoccupation of the said units by them has to be for the purpose ofearning their livelihood. A careful perusal of the complaint wouldBshow that it is not even alleged that all the allottees of thecommercial units/shops in the above referred project had bookedthe said shops/units solely for the purpose of the earning theirlivelihood by way of self-employment. In the absence of such anaverment in the complaint, no evidence can even be led to proveCthat not only the complainants but all the allottees of the shops/commercial units had booked the same solely for the purpose ofthe earning their livelihood by way of self-employment. Evenotherwise, the complainants cannot know the purpose for whichthe allottees, other than the complainants had booked the shops,commercial units in the aforesaid project. The said purpose canDbe in the knowledge only of the concerned allottees. Therefore,this class action under Section 12(1)(c) of the Consumer ProtectionAct on behalf of not only the complainants but all the allottees ofthe shops/commercial units in the aforesaid project is notmaintainable.”

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5. The National Commission thus concluded that the case couldnot be accepted as class action and dismissed the same. It was howeverobserved that the dismissal would not come in the way of the complainantsavailing such other remedies as would be open to them.

6. The dismissal of the case as class action is questioned in thisFappeal.

7. We heard Mr. Yash Srivastava, learned Advocate for theappellants and Mr. Ashutosh Dubey, learned Advocate for the respondent.

8. Relevant provisions of the Act may be adverted to at the outset.GSections 2(1)b and 2(1)(d) of the Act define “complainant” and“consumer” as under:- (b) “complainant” means –

(i) a consumer; or

(ii) any voluntary consumer association registered under theCompanies Act, 1956 (1 of 1956) or under any other law for thetime being in force; or

(iii) the Central Government or any State Government; or

(iv) one or more consumers, where there are numerous consumershaving the same interest;

(v) in case of death of a consumer, his legal heir or representative;who or which makes a complaint; (d) “consumer” means any person who

(i) buys any goods for a consideration which has been paid orpromised or partly paid and partly promised, or under any systemof deferred payment and includes any user of such goods otherthan the person who buys such goods for consideration paid orpromised or partly paid or partly promised, or under any systemof deferred payment when such use is made with the approval ofsuch person, but does not include a person who obtains such goodsfor resale or for any commercial purpose; or

(ii) hires or avails of any services for a consideration which hasbeen paid or promised or partly paid and partly promised, or underany system of deferred payment and includes any beneficiary ofsuch services other than the person who [hires or avails of theservices for consideration paid or promised, or partly paid andpartly promised, or under any system of deferred payments, whensuch services are availed of with the approval of the first-mentionedperson; but does not include a person who avails of such servicesfor any commercial purpose; Explanation : For the purposes of this clause “commercial purpose”does not include use by a person of goods bought and used by himand services availed by him exclusively for the purposes of earninghis livelihood, and services availed by him by means of self-employment;

9. Section 12 of the Act states:

12. Manner in which complaint shall be made – (1) A complaint inrelation to any goods sold or delivered or agreed to be sold or A

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Adelivered or any service provided or agreed to be provided, maybe filed with a District Forum, by –

(a) the consumer to whom such goods are sold or deliveredor agreed to be sold or delivered or such service providedor agreed to be provided; B

(b) any recognised consumers association whether theconsumer to whom the goods sold or delivered or serviceprovided or agreed to be provided is a member of suchassociation or not;

(c) one or more consumers, where there are numerousconsumers having the same interest, with the permissionof the District Forum, on behalf of, or for the benefit of,all consumers so interested; or C

(d) the Central Government or the State Government, as thecase may be, either in its individual capacity or as aDrepresentative of interests of the consumers in general.”

10. Section 13(6) of the Act reads as under:

13. Procedure on admission of complaint – (1) to (5)……….

(6) Where the complainant is a consumer referred to in sub-clause(iv) of clause (b) of subsection (1) of section 2, the provisions ofRule 8 of Order I of the First Schedule to the Code of CivilProcedure, 1908 (5 of 1908) shall apply subject to the modificationthat every reference therein to a the plaintiff and the defendantshall be construed as a reference to a complaint or the oppositeparty, as the case may be.

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11. According to the National Commission, though all the appellantshad a common grievance that the respondent had not delivered possessionof the respective units booked by them and thus the respondent wasdeficient in rendering service, it was not shown how many of the allotteeshad booked the shops/commercial units solely for the purchase of earningGtheir livelihood by way of self-employment.

12. In Chairman, Tamil Nadu Housing Board, Madras vs. T.N. Ganapathy[1] it was held by this Court that the persons who may berepresented in a Suit under Order 1 Rule 8 of Civil Procedure Code H1 (1990) 1 SCC 608

need not have the same cause of action and all that is required forapplication of said provision is that the persons concerned must havecommon interest or common grievance. What is required is sameness of interest. Paragraphs 7 and 9 of the decision were as under:-

7. On the question of maintainability of the suit in a representativecapacity under Order I, Rule 8 of the Code of Civil Procedure, ithas been contended that since the injury complained of is in regardto demand of money and that too by a separate demand againsteach of the allottees, giving rise to different causes of action,Rule 1 has no application. The learned counsel proceeded to saythat it is not known whether each of the allottees in Ashok Nagarhad been even served with an additional demand before the suitwas filed; and further emphasised that those who had been soserved are interested in defeating only the demand individuallyreferable to each of them. Each one of them is not interested inwhat happens to the others. It is, therefore, suggested that onlysuch of the allottees who have already been served with additionaldemands are entitled to maintain an action in court, and they alsoshould do it by filing separate suits. We do not find any merit inthe argument. The provisions of Order I of Rule 8 have beenincluded in the Code in the public interest so as to avoid multiplicityof litigation. The condition necessary for application of theprovisions is that the persons on whose behalf the suit is beingbrought must have the same interest. In other words either theinterest must be common or they must have a common grievancewhich they seek to get redressed. In Kodia Goundar v. VelandiGoundar (ILR 1955 Mad 339: AIR 1955 Mad 281) a Full Benchof the Madras High Court observed that on the plain language ofOrder I Rule 8, the principal requirement to bring a suit within thatrule is the sameness of interest of the numerous persons on whosebehalf or for whose benefit the suit is instituted. The court, whileconsidering whether leave under the rule should be granted ornot, should examine whether there is sufficient community ofinterest to justify the adoption of the procedure provided underthe rule. The object for which this provision is enacted is really tofacilitate the decision of questions, in which a large number ofpersons are interested, without recourse to the ordinary procedure.The provision must, therefore, receive an interpretation which willsubserve the object for its enactment. There are no words in the A

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rule to limit its scope to any particular category of suits or toexclude a suit in regard to a claim for money or for injunction asthe present one.

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9. It is true that each of the allottees is interested individually infighting out the demand separately made or going to be made onhim and, thus, separate causes of action arise in the case, but, thatdoes not make Order I Rule 8 inapplicable. Earlier there wassome doubt about the rule covering such a case which now standsclarified by the Explanation introduced by the Code of CivilProcedure (Amendment) Act, 1976, which reads as follows:

“Explanation.— For the purpose of determining whether thepersons who sue or are sued, or defend, have the same interestin one suit, it is not necessary to establish that such personshave the same cause of action as the persons on whose behalf,or for whose benefit, they sue or are sued, or defend the suit,as the case may be.”

The objects and reasons for the amendment were stated below:

“Objects and Reasons: Clause 55; sub-clause (iv), — Rule 8of Order I deals with representative suits. Under this rule, wherethere are numerous persons having the same interest in onesuit, one or more of them may, with the permission of the court,sue or be sued, on behalf of all of them. The rule has createda doubt as to whether the party representing others shouldhave the same cause of action as the persons represented byhim. The rule is being substituted by a new rule and anexplanation is being added to clarify that such persons neednot have the same cause of action.”

There is, therefore, no doubt that the persons who may berepresented in a suit under Order I, Rule 8 need not have thesame cause of action. The trial court in the present case wasright in permitting the respondent to sue on behalf of all the allotteesof Ashok Nagar. We, therefore, do not find any merit in this appealwhich is dismissed with costs. Before closing, however, we wouldlike to point out that the plaintiff has represented only those in thelow income group in Ashok Nagar who will be governed by this judgment, and nothing that has been said or decided in this case isapplicable to any other group or colony.”

13. Very same issue was dealt with by Full Bench of the NationalCommission in Ambrish Kumar Shukla and Ors. vs. FerrousInfrastructure Pvt. Ltd.[2]. The National Commission relied upon thedecision of this Court in T.N. Housing Board[1]. Relevant portion of thedecision of the National Commission was :- “10. Since by virtue of Section 13(6) of the Consumer ProtectionAct, the provisions of the Order 1 Rule 8 of CPC apply to theconsumer complaints filed by one or more consumers where thereare numerous consumers having the same interest, the decisionof the Hon’ble Supreme Court in Tamil Nadu Housing Board(supra) would squarely apply, while answering the reference. Thepurpose of giving a statutory recognition to such a complaint beingto avoid the multiplicity of litigation, the effort should be to give aninterpretation which would sub serve the said objective, by reducingthe increasing inflow of the consumer complaints to the ConsumerForums. The reduction in the number of consumer complaintswill be cost effective not only for the consumers but also for theservice provider.

11..……As held by the Hon’ble Supreme Court in Tamil NaduHousing Board (supra), the interest of the persons on whose behalfthe claim is brought must be common or they must have a commongrievance which they seek to get addressed. The defect ordeficiency in the goods purchased, or the services hired or availedof by them should be the same for all the consumers on whosebehalf or for whose benefit the complaint is filed. Therefore, theoneness of the interest is akin to a common grievance against thesame person. If, for instance, a number of flats or plots in a projectare sold by a builder/developer to a number of persons, he fails todeliver possession of the said flats/plots within the time framepromised by him, and a complaint is filed by one or more suchpersons, either seeking delivery of possession of flats/plotspurchased by them and other purchasers in the said project, orrefund of the money paid by them and the other purchasers to thedeveloper/builder is sought, the grievance of such persons being A

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common i.e. the failure of the builder/developer to deliver timelypossession of the flats/plots sold to them, they would have sameinterest in the subject matter of the complaint and sufficientcommunity of interest to justify the adoption of the procedureprescribed in Order 1 Rule 8 of the Code of Civil Procedure,provided that the complaint is filed on behalf of or for the benefitof all the persons having a common grievance against the samedeveloper/builder, and identical relief is sought for all suchconsumers.

The primary object behind permitting a class action such as acomplaint under Section 12(1)(c) of the Consumer Protection Actbeing to facilitate the decision of a consumer dispute in which alarge number of consumers are interested, without recourse toeach of them filing an individual complaint, it is necessary thatsuch a complaint is filed on behalf of or for the benefit of all thepersons having such a community of interest. A complaint on behalfof only some of them therefore will not be maintainable. If for instance, 100 flat buyers/plot buyers in a project have a commongrievance against the Builder/Developer and a complaint underSection 12(1)(c) of the Consumer Protection Act is filed on behalfof or for the benefit of say 10 of them, the primary purpose behindpermitting a class action will not be achieved, since the remaining90 aggrieved persons will be compelled either to file individualcomplaints or to file complaints on behalf of or for the benefit ofthe different group of purchasers in the same project. This, in ourview, could not have been the Legislative intent. The term ‘personsso interested’ and ‘persons having the same interest’ used in Section 12(1)(c) mean, the persons having a common grievance againstthe same service provider. The use of the words ‘all consumersso interested’ and “on behalf of or for the benefit of all consumersso interested”, in Section 12(1)(c) leaves no doubt that such acomplaint must necessarily be filed on behalf of or for the benefitof all the persons having a common grievance, seeking a commonrelief and consequently having a community of interest againstthe same service provider.”

14. It was observed by this Court in T.N. Housing Board[1]thatthe provision must receive an interpretation which would subserve theobject for its enactment. It is in this light that the Full Bench of the

National Commission held that oneness of the interest is akin to a commongrievance against the same person.

15. However, the National Commission in the instant case,completely lost sight of the principles so clearly laid down in the decisionsreferred to above. In our view, the approach in the instant case wastotally erroneous.

16. We, therefore, allow this appeal, set aside the Order underappeal. The application preferred by the appellants under Section 12(1)(c)of the Act is held to be maintainable. Case No.2241 of 2018 is restoredto the file of the National Commission and shall be proceeded with inaccordance with law.

17. The appeal is allowed in aforesaid terms. No costs.

Divya Pandey

Appeal allowed.

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