Wednesday, October 12th, 2016

NCDRC: Class action suits under Consumer Protection Act can be entertained now

R Venkataraman | October 12, 2016 9:50 am Print
The NCDRC has held that under Section 12 (1) (c) of the CP Act a group of consumers having a common interest or a common grievance seeking same relief against the same person can file the ‘class action suit’
Consumers of the country unite! For, you have received a shot in the arm. The weapon is that the National Consumer Disputes Redressal Commission (NCDRC), the apex consumer forum of the country, has held that “class action” suits can be entertained under the Consumer Protection (CP) Act.
Class action suit is one in which a group of people affected by a product can sue a single or multiple parties, what the late Justice VR Krishna Iyer called ‘mass action appeals’, in which a mass of common man can appeal against a common evil.
The NCDRC held that under Section 12 (1) (c) of the CP Act a group of consumers having a common interest or a common grievance seeking same relief against the same person can file the ‘class action suit’. It also made it clear that the pecuniary jurisdiction is to be determined on the basis of the aggregate of the value of the products or service rendered to the consumers.
As on date, if the value of the suit is Rs 1 crore or more, the jurisdiction lies with the NCDRC. Less than Rs 1 crore but more than Rs 20 lakh, the jurisdiction is with the respective state forum and less than Rs 20 lakh with the respective district forum.
What started as a social legislation, the CP Act, too, has now become one more legislation with lakhs of cases pending for years, although it is stipulated that consumer disputes shall be settled within six months. Former President of NCDRC MB Shah said efforts were on during his tenure to dispose of the pending cases.
However, this social welfare legislation has assumed a new significance with the order on mass action or class action suits. A full bench of NCDRC president DK Jain, members VK Jain and BC Gupta, while settling the issue of class action suit, said a complaint under Section 12 (1) (c) of the Act can be filed on behalf of or for the benefit of all the consumers, having a common interest or a common grievance seeking the same and similar relief against the same person.
Say you buy a refrigerator or a TV or a car, washing machine or any such consumer durable. It invariably goes off within a year and any manufacturer would say “the warranty or guarantee period” has already expired. This is the common story of any common Indian. From now on, such type of consumers who buy a product from a particular company now can sue that particular company collectively. And if the collective money exceeds Rs 1 crore, they could directly approach the NCDRC.
It is applicable to flats and apartments also. Those buying, or paid money as booking amount for their flats in various housing societies, can collectively sue a builder if he errs in keeping his declared promises. The NCDRC has gone a step ahead to hold that date of booking, allotment, purchase of the flat would be wholly irrelevant in such a complaint. The Indian middle-class dream of having a roof over the head has resulted in a multiplicity of litigations and the Supreme Court in a catena of decisions has given different orders and even punished several builders.
In all such cases, the filing of a single petition before the NHDRC is sufficient.  It should detail the subject matter of the complaint including the particulars of the project if the complaint relates to a housing project / scheme, the class of persons on whose behalf or for whose benefit the complaint is filed, the common grievance sought to get redressed through the class action, the alleged deficiency in the services and the reliefs claimed in the complaint.
R Venkataraman
R Venkataraman
(The writer is ex-accredited correspondent of Supreme Court of India, Parliament of India, Central Government (PIB) and ex-member Press Council of India.)