Delhi High Court
Lucina Land Development Ltd vs Union Of India & Ors on 27 April, 2022
Author: C. Hari Shankar
Bench: C. Hari Shankar
$~119 (Appellate side)
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CM(M) 664/2018 CM Appl. 23358/2018 and CM Appl.
5843/2019
LUCINA LAND DEVELOPMENT LTD ..... Petitioner
Through Ms. Kanika Agnihotri,
Mr.Vaibhav Agnihotri, Ms. Yashodhara
Gupta, Mr. Madhav Bhatia and Mr. Rohan
Anand, Advs.
versus
UNION OF INDIA & ORS ..... Respondents
Through Mr. Sushil Kumar Pandey,
Senior Panel Counsel with Mr. Rahul
Mourya, Adv. for Respondent 1
Mr. Piyush Singh, Mr. Akshay Srivastava
and Ms. Aditi Sinha, Advs. for remaining
respondents
CORAM:
HON'BLE MR. JUSTICE C. HARI SHANKAR
% J U D G M E N T (ORAL)
27.04.2022
1. These proceedings emanate from Consumer Case No.
1204/2017, which was a complaint filed before the learned National
Consumer Disputes Redressal Commission (NCDRC) against the
petitioner Lucina Land Development Ltd. and others by 51 allotees of
flats in a project of the petitioners, titled ―Indiabulls Greens Panvel‖
(―the project‖, hereinafter). The complaint, preferred under Section
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21(a)(i)1 read with Section 12(1)(c)2 and 22(1)3 of the Consumer
Protection Act, 1986 (―the 1986 Act‖) alleged that the petitioners were
guilty of deficiency in service and were involved in unfair trade
practices within the meaning of Section 2(1)(g)4 and 2(1)(r) of the
1986 Act.
2. The respondents, who were allottees of units in the project,
alleged, in the complaint filed by them before the learned NCDRC,
that they were ―consumers‖ of the petitioners within the meaning of
Section 2(1)(d)(ii)5 of the 1986 Act, as the units had been booked by
the respondents for residence. Paras 4 and 11 to 19 of the complaint,
which set out the grievances of the respondents, may be reproduced
thus:
1
21. Jurisdiction of the National Commission. - Subject to the other provisions of this Act, the
National Commission shall have jurisdiction -
(a) to entertain -
(i) complaints where the value of the goods or services and compensation, if any,
claimed exceeds rupees one crore;
2
12. Manner in which complaint shall be made. -
(1) A complaint in relation to any goods sold or delivered or agreed to be sold or delivered or
any service provided or agreed to be provided may be filed with a District Forum by -
*****
(c) one or more consumers, where there are numerous consumers having the same
interest, with the permission of the District Forum on behalf of, or for the benefit of, all
consumers so interested;
3
22. Power and procedure applicable to National Commission. -
(1) The provisions of sections 12, 13 and 14 and the rules made thereunder for the disposal of
complaints by the District Forum shall, with such modifications as may be considered necessary by
the Commission, be applicable to the disposal of disputes by the National Commission.
4
(g) ―deficiency‖ means any fault, imperfection, shortcoming or inadequacy in the quality; nature and
manner of performance which is required to be maintained by or under any law for the time being in force or
has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any
service‖
5
(d) "consumer" means any person who -
(ii) hires or avails of any services for a consideration which has been paid or promised or
partly paid and partly promised, or under any system of deferred payment and includes any
beneficiary of such services other than the person who 'hires or avails of the services for
consideration paid or promised, or partly paid and partly promised, or under any system of deferred
payment, when such services are availed of with the approval of the first mentioned person but does
not include a person who avails of such services for any commercial purposes;
Explanation. - For the purposes of this clause, ―commercial purpose‖ does not include use by a person of
goods bought and used by him and services availed by him exclusively for the purposes of earning his
livelihood by means of self-employment;
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―4. That, this complaint is preferred on behalf of the
Complainants and for the benefit of all the allottees, who are
consumers and are having the same interest as a Class Actions
Petition. The Complainants submit that the facts of the case of
each of the Complainants and all the allottees are same and
the issues involved, disputes & controversies are common in
nature having a common interest and have suffered identical
deficiency of service and unfair trade practice, the terms and
conditions of allotment are almost same and rely on identical
evidences and therefore, come under the definition of
Complainant as per section 2(1)(b)(iv) of the Consumer
Protection Act, 1986. The Complainants, therefore, seek leave
of this Hon'ble Commission to file a common complaint
under section 12(i)(c) of the Consumer Protection Act, 1986
(as amended till date). A separate application in this regard is
also being filed on behalf of the Complainants for grant of
permission by this Hon'ble Commission to file one complaint
for the benefit of all consumers so interested.
*****
11. That it has come to the knowledge of the complainants
that at the time when the initial booking amount was received
by the Opposite Parties in the month of August / September
2009 from some of the complainants, the Opposite Parties
were not in possession of all the approvals for going ahead
with the construction of the Project proposed to be
constructed by them, then how could they have accepted
money for selling the flats from the complainants i.e., unfair
trade practices on the part of the Opposite Parties under
Section 2(1)(r) of the Consumer Protection Act. 1986.
12. It is thus an admitted position that the Opposite Parties
were involved in unfair trade practice and deceiving tactics
against the general consumers and particularly the present
group of complainants as well as other allottees as the said
project was launched and payments towards booking of the
particular flats were being received by the opposite Parties
much before they obtained necessary approvals from the
competent authorities, for construction of the said project
including the various amenities promised and assured to the
flat purchasers, on the basis of which the Complainants and
all other were attracted to purchase the flats In the said
project. Accordingly, the intention and motive of the Opposite
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Parties was always to deceive the allottees of the said project,
particularly the complainants herein writ large on the face of
record since inception. At the time all the government
clearances from various departments for the project were not
in place. Accordingly the Opposite Parties had engaged in
unfair trade practice with the complainants and all other
allottees and are guilty of violations of the provisions of
Section 3(2) of MOFA, 19636.
13. The Complainants are attaching herewith a Statement
showing the details of each Complainant Tower/Building
Number, Flat No., Area of the flat, total cost of the flat and
the total consideration amount paid upto-date by each and
every complainant to the Opposite Parties. Hereto annexed
and marked as ANNEXURE "C-4" is the said Statement.
14. The Complainants are also attaching herewith the copy
of the Ledgers account issued by the Opposite Parties
showing the details of the payments made by the
Complainants. In general the Complainants have paid upto
95% of the cost of the flats booked by them and allotted by
the Opposite Parties. Hereto annexed and marked as
ANNEXURE "C-5" (colly.) is a copy each of the Ledgers
accounts issued by the Opposite Parties showing the details of
the payments made by the Complainants to the Opposite
"Parties.
15. The Complainants came to know about the Project
since the year 2009 or later, through various means, including
banners displayed by the Opposite Parties through giant
hoardings, advertisements in News Papers and the Brochures
distributed by the Opposite Party no.1 inviting the public at
large for booking of the fiats. The Sales Staff made aggressive
sales pitches & representations on behalf of M/s. Lucina Land
Development Limited for the project called INDIABULLS
GREENS PANVEL showing beautiful Master Plans &
layouts of fiats and amenities like a school, hospital, dub
house, shopping mall, on the basis of which they eventually
took the important decision to make a choice to buy their
preferred flat. The Opposite Parties coaxed & lured the
Complainants to pay advance booking amount, offered
construction linked payment schedules, delivery in 2 to 3
6
Maharashtra Ownership of Flats Act, 1963
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years and to book fiats in the project, based on those
promises. The reputation of the builder and property
appreciation from the proposed interational airport were
touted as additional incentives for the Complainants to book
the flats. There are also cases where the Complainants had
paid more than 90% as per allotment letters/Agreements for
sale, including 18% interest/penalty in the case of delay in
payment of instalments. The Complainants submit that at the
time of booking of the flats Opposite Party no.1 had promised
to give possession within 2/3 years of booking. As on date of
filing the complaint in 2017, the Complainants have no clarity
about the possession date and on enquiring Opposite Party
no.1 has consistently been giving a further date. On following
up for possession on the new date, yet again again a new
delivery date is given. Presently the Opposite Parties are
talking about giving possession in June, 2017, subject to
various clearances, in other words there is total uncertainty
even now.
16. The following is a summary of the grievances of the
complainants:
a) Booking the Flat & Agreement related problems
• False representation on status of approval of the
project from Government & Statutory bodies
• Presenting a Master plan with 15 storied
building, gardens, school, hospital, club house &
shopping mall, which was unilaterally changed next
year, to 37 floors with a revised layout
• The super built/ salable area of the flats was
increased by upto 25% depending on building and size
of flat. There was no corresponding increase in the
carpet area. Protesting buyers were told by sales
executives that this is due to change of layout,
additional facilities amenities being provided.
• Buyers were re-alloted flats in the new master
plan and In many cases forced to re-book on higher
floors, with floor rise/ PLC charges payable. When the
complainants objected, they either didn't respond or
offered refund with 15% cancellation charges on total
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cost of the flat. Many were also told that they could
sell their flats later, on super build area, so why
protest.
• Later the Opposite Parties asked buyers to sign
one-sided Agreements, did not allow any changes to
highly objectionable clauses and threatened that we
take it as it is or cancel with 15% cancellation charges
of total cost of the flat. This Agreement also had a
revised delivery possession date of 5 years 9 months.
• The Opposite Parties have subsumed car
parking charges within the per unit rate of the flats,
which is illegal. There are also specific promises made
by the Sales persons & Customer Service Executives
while selling the flat, but disowned later, when
complainants went to sign the Agreement
b) Payment & Financing related problems
1. The Opposite Parties were quick to levy interest
charges & penalties on the slightest delay in payment,
despite not communicating payment demands on time.
2. In the specific case of Mr. Sangram Choudhury
(Complainant # 36), he was allotted Flat N-2204 in
December 2010. He received a letter dated 13.12.201
that the construction has started and demanded
payment of 1st instalment. Having booked under ADF,
a tripartite agreement was signed with Indiabulls
finance with the flat number N2204. Subsequently, they
unilaterally changed the entire master plan & layout
with no communication to the buyers. They gave him
limited options to choose a new flat and threatened to
forfeit his advance, if he cancelled the booking. He was
penalised with interest despite the delay being on
account of the Opposite Parties.
3. Prior to every demand for payment, they were
providing Architect certificates to prove status of
construction, originally from Mr. Hafeez Contractor
(an architect reputed for professionalism and
accuracy). With constant delays at their own end, they
shifted to issuing certificates from an internal architect
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and started raising demands. When the Complainants
protested, they ignored and coerced to accept the new
arrangement.
4. All liabilities of the interest on loans, loss of IT
rebate on loans and financing charges (particularly
related to their sister company) are to the Complainants
account despite delays in communicating, construction
schedules not being met and pending approvals for
possession being from Opposite Parties end.
c) Delay in Delivery of Completed flats
i) For flats booked over the last 7 years, for many
complainants there is no clarity from the Opposite
Parties as to when the possession of the flats will be
given. The Opposite Parties' customer service
executives keep on giving new dates for every query
on delivery date. This has become an endless &
meaningless exercise. Their regular plea, when they do
respond, is of clearances not being availably and
construction delays. The complainants have no control
over this matter and have to face the consequences of
shabby, unreliable and arrogant service from the OP's
executives.
ii) The OP had promised various facilities &
amenities through advertisements, hoardings,
brochures and direct selling. They promised world
class construction and quality of life. The current
project is a highly diluted version of these
advertisements, with little or no resemblance to earlier
promises made. Site visits made by many complainants
reveal severe compromises on all facilities &
amenities, congested layout, poor quality of
construction and fittings. The complainants are of the
unanimous view that, if they knew of these deficiencies
and unlivable layout, they would not have booked flats
in Indiabulls Greens. Panvel and would have exercised
alternative options. However, the Opposite Parties are
preventing the Complainants from cancelling the
booking by means of unfair trade practices of
demanding heavy cancellation charges equal to 15% of
the total cost of the flat.
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iii) The experience with OP's executives and their
failure to deliver on their various promises is causing
severe mental trauma, anxiety and harassment as some
complainants were depending on completion and
peaceful possession of flats in this project, for
occupation post retirement or other-wise. The
opportunity cost of the delay, unkept promises and
fight for the rights of the complainants is Incalculable.
17. Some of the Complainants took permission to visit their
flat and were shocked to see the quality of the work which are
much inferior to what had been promised. Most of the
amenities are missing. No club house, no school. No Hospital,
No Mall. Nothing of what they had told at the time of
booking. So the innocent people are cheated by the Opposite
Party No.1. The hard earned money spent for booking of the
flat is blocked with Opposite Party No.1 and the
Complainants are trapped as they are not allowed to exit from
the project by way of demanding 15% of the total cost of the
flat as cancellation charges.
18. The Complainants state that in view of enormous delay
in completion of the project and uncertainty in the date for
handing over possession of the fiats some' of the complainants
approached the Opposite Party no.1 for cancellation of their
booking. However, the Opposite Parties demanded
cancellation charges equal to 15% of the total cost of the flats,
which is a significant disincentive to exercise this option &
thereby preventing the Complainants from exiting from the
said project. It is therefore, evident that the Opposite Parties
have deceived the Complainants by not honouring their
commitments and not carrying out the construction as
promised by them. The Opposite Parties have collected crores
of rupees from innocent consumers, by selling only dreams of
owning a flat. It is a clear case of deficiency in service and
unfair trade practices adopted by the Opposite Parties.
19. The Complainants have also got the Building and the
flats inspected by Mr.Hitendra Mehta, Architect and Govt.
Approved valuer who after obtaining permission from the
Opposite Parties visited the building and inspected the
construction along with the approved plans and had submitted
his detailed report with his Affidavit. It has been observed in
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his report apart from inferior quality of construction there are
deficiency in carpet area of the flats as compared to the area
sold by the OPs to the Complainants. He has also given the
present prevailing market value for calculation of
compensation for shortfall in carpet area of the flat and for not
providing various amenities promised but not provided at all
at the site. Hereto annexed and marked as‖
3. These alleged indiscretions of the petitioners, according to para
20 of the complaint, amounted to deficiency in service and unfair trade
practices within the meaning of Sections 2, 3 and 4 of the MOFA and
were actionable under the 1986 Act. Para 20 of the complaint,
therefore, exhorted the learned NCDRC to exercise the powers vested
in it by the 1986 Act and to direct the petitioners to complete the
construction and hand over the possession of their respective flats with
the requisite occupancy and building completion certificates along
with all amenities, or, in the alternative, to pay compensation to the
respondents equal to the market value of the flats in the area in
question along with interest and costs.
4. Para 22 of the complaint sought to justify the filing of the
complaint as a class action, thus:
―22. That the Opposite Parties Builders have also not
carried out the construction of the Buildings as promised in
the Brochure and or the Allotment Letters. The cause of
action triggered due to enormous delay in handing over the
physical possession of the allotted flats to the complainants
with complete development as per the agreed terms and
conditions of the allotment in a habitable condition with all
promised/assured amenities already mentioned which is
seriously lacking till date. The immediate cause of action for
institution of the instant complaint by the complainants as a
class action petition as they are having common interest and
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grievances against the Opposite Parties. The Complainants are
also involved together as a class having common interest,
aggrieved against the Opposite Parties under various heads as
stated above. Therefore, the cause of action is continuing and
the complaint as filed is not barred by limitation‖
5. Para 27 of the complaint, therefore, prayed thus:
―27. The Complainants, therefore, pray that in view of the
foregoing paragraphs It would be just and proper and further
in the interest of justice that this Hon'ble Commission be
pleased to grant the following reliefs:
a. To hold and declare the Opposite Parties jointly
and severally to be guilty of deficiency in service and
unfair trade practice as per the provisions of the
Consumer Protection Act, 1986 (as amended).
b. To grant permission under section 12(1)(c) of
the Consumer Protection Act, 1986 to file a common
complaint on behalf of and for the benefit of all the flat
allottees / purchasers /buyers having, similar grievance
against the Opposite Parties and in the Interest of
justice;
c. To order issue of Public Notice by
advertisement in the News Papers viz. "THE FREE
PRESS JOURNAL" English Daily and
"NAVASHAKTI" Marathi daily at the cost of the
Complainants under Order I, Rule 8 (2) of the Code
Civil Procedure, 1908 for which a separate application
has been filed.
d. To direct the Opposite parties to complete the
construction with all promised amenities and to hand
over vacant and peaceful possession of their respective
flats with occupancy and building completion
certificates issued by the competent authority to the
complainants as well as all other allottees / purchasers /
buyers within the stipulated time as may be decided by
this Hon'ble Commission failing which to pay penalty
of Rs.5,000/- per day to each flat purchaser after the
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expiry of the said period till handing over possession of
the flats.
Or Alternatively
In the event the Opposite Parties are not in a position to
hand over possession of their allotted flats to the
Complainants as well as all other allottees / purchasers
/ buyers, they may be directed to give alternate flats of
the similar standards & carpet area stated in the
agreement of each complainants in the same Panvel
locality within the stipulated time of 2 months from the
date of the order
Or alternatively
To direct the Opposite Parties to pay to the
Complainants the proportionate current prevailing
market value by way of compensation for the
inordinate delay and to refund the amount of
Rs.22.84,15,731/- (Rupees Twenty Two Crores, Eighty
Four Lakhs, Fifteen Thousand Seven Hundred and
Thirty one) paid by the Complainants/flat purchasers as
shown in the Statement annexed and marked as
Annexure "C-4" along with interest at 18% per annum
from the promised date of possession i.e., 01/10/2011
till realization with compensation and costs.
e. To direct the Opposite Parties jointly and
severally to pay damages and compensation to the
complainants amounting to Rs.8,31,88,466/- (Rupees
Eight Crores, Thirty One Lakhs, Eighty Eight
Thousand Four Hundred and Sixty Six) at the rate of
Rs.15,99,778.20 (Rupees Fifteen Lakhs, Ninety Nine
Thousand Seven Hundred Seventy Eight and paise
twenty) to each of the complainants towards non
provision of Club House, Sports, Gardens &
Landscaping, Commercial facilities, education
facilities, healthcare. Management & security facilities
as per valuation given by the Architect in his report
(Annexure "C-6").
f. To direct the Opposite Parties to pay Rs.
15,60,000/- (Rupees Fifteen Lakhs Sixty Thousand) at
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the rate of Rs.30,000/- (Rupees Thirty Thousand) to
each of the complainant towards compensation for
mental agony and incient harassment suffered by the
Complainants due to inordinate delay in handing over
possession of the flat.
g. To direct the opposite parties to pay a sum of
Rs.13,00,000/- (Rupees Thirteen Lakhs ) at the rate of
Rs.25,000/- (Rupees Twenty Five Thousand) to each
complainant towards cost of litigations & Incidental
expenses such as professional fees of Advocate and
Architect travelling, Xeroxing, filing, etc.
h. To grant such other and further relief as this
Hon'ble Commission may deem fit and proper in the
nature and Circumstances of the above numbered
complaint.‖
6. The complaint was accompanied by an application under
Section 2(1)(b)(iv)7 read with Section 12(1)(c) of the 1986 Act, for
permission to file a consolidated consumer complaint.
7. Para 1 of the application stated that the complaint was being
filed by the respondents on behalf of all allottees of the project, who
were consumers having the same interest as a class action, as the
dispute/controversy involved was common and the deficiency in
service and unfair trade practices allegedly imputed to the petitioners
were also common vis-à-vis all the allottees of flats in the project.
Para 7 of the complaint reads thus:
―7. That the Complainants have filed the aforesaid
consumer complaint as a class action petition against the
7
(b) "complainant" means -
*****
(iv) one or more consumers, where there are numerous consumers having the same
interest"
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Opposite Parties being aggrieved with the illegal activities of
the Opposite Parties by promising to give possession of the
flats within 2 years and collecting huge amounts before
obtaining , requisite approvals for construction of the
promised flats. The Complainants as a class is also aggrieved
with the enormous delay in construction of the project and to
deliver possession of the allotted flats in a habitable condition
by the Opposite Parties. Besides the Complainants as a class
have also suffered huge monetary loss in the form of income
tax benefit, due to staying in rented houses, paying EMI to the
Bank on loan, etc.‖
It was also pointed out, in the application, that the claim of the
respondents themselves aggregated to over ₹ 1 crore, as a result of
which the jurisdiction, to entertain the complaint, vested in the learned
NCDRC. In view thereof, the application prayed for grant of
permission to the respondents under Section 12(1)(c) of the 1986 Act
to file a common complaint on behalf of all flat
purchasers/buyers/complainants having similar grievances and, for the
said purpose, to issue public notice by way of advertisement in the
newspapers.
8. The petitioners filed a reply to the aforesaid application of the
respondents under Section 12(1)(c) of the 1986 Act. Apart from
traversing the allegations levelled by the respondents in the complaint
on merits, it was alleged that several of the complainants, who were
residing elsewhere in the country as well as abroad, had failed to
disclose as to how the premises booked by them were not intended to
be put to commercial use, in which case they were not ―consumers‖
within the meaning of Section 2(1)(d) of the 1986 Act. It was
submitted that the construction of the flats was complete and that the
petitioners were willing to hand over possession subject to issuance of
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occupation certificate. It was further submitted, in paras 25 and 26 of
the reply, thus:
―25. It is most respectfully submitted that a complaint under
Section 12(l)(c) of the Consumer Protection Act read with
Order I Rule 8 of the Code of Civil Procedure can be filed
where there are numerous consumers having the "same
interest" i.e. a common grievance against the same person and
the complaint is filed on behalf of or for the benefit of all such
numerous consumers, and seeking same relief for all of them.
It is submitted that the all the buyers of the flat cannot be
treated at par with each other as such most of the
Complainants are investors whereas some of them may be
genuine consumers. Thus in absence of the element of "same
interest" the present Complaint in the representative capacity
deserves to be dismissed. The Complainants thus ought to
approach a civil court to address its grievance. On this ground
alone the present application under 12(l)(c) deserves to be
dismissed.
26. Admittedly, the Complainants herein have sought to
file the present Complaint for and on behalf of all customers
of the Answering Opposite Party/Respondent who have made
a booking for a flat in Indiabulls Greens, Village Kon, Panvel.
As admitted by the Complainants in the Complaint the facts
and circumstances pertaining to each booking differs from
case to case as different customers have purchased different
flats from the Answering Opposite Party/Respondent at
different points of time ranging over the past decade, at
different rates and have made pro rata payments to different
extents with or without defaults therein. It is, therefore,
submitted that by no stretch of imagination it can be said that
the numerous customers of the Answering Opposite
Party/Respondent stand on a similar footing with respect to
each other. It is therefore submitted that the present
Complaint is not maintainable as the cause of action has not
arisen till date. It is further submitted that the Complainants
have approached this Hon'ble Commission with malafide
intentions of making unlawful gains and therefore no
permission shall be given to file the present Complaint on this
short ground alone and the present application ought to be
dismissed.‖
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9. By order dated 16th May, 2018, the learned NCDRC proceeded
to allow the respondents' application under Section 12(1)(c) of the
1986 Act and, consequently, to direct publication of public notice
regarding the complaint in the media, under Order I Rule 8 of the
Code of Civil Procedure, 1908 (CPC). The reasoning of the learned
NCDRC is contained in the following passages from the impugned
order:
―5. I have heard the submissions made on behalf of the
opposite parties. Section 12(1)(c) of the Act is reproduced as
under:
―12. Manner in which complaint shall be made. -
(1) A complaint in relation to any goods
sold or delivered or agreed to be sold or
delivered or any service provided or agreed to
be provided may be filed with a District Forum
by -
(c) one or more consumers, where there are
numerous consumers having the same interest,
with the permission of the District Forum, on
behalf of, or for the benefit of, all consumers so
interested"
6. On bare perusal of the above, it is clear that one or
more consumers with the permission of Consumer Fora can
pursue the complaint on their behalf as also on behalf of other
numerous consumers having the same interest but not arrayed
as complainants provided the complaint is filed for the benefit
of the complainants as also for the benefit of consumers
having same interest in the outcome of the complaint but not
arrayed as complainants.
7. In order to find out whether or not the instant
complaint fits into the requirements of Section 12(1)(c) of the
Act, I have carefully perused the complaint, in particular, the
prayer clause. On reading of the complaint as also the prayer
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clause, it is clear that instant complaint has been filed in
respect of a booking of development project involving
numerous consumers and the complainants have filed the
instant complaint against the opposite parties as a class
action on their behalf and also on behalf of and for the benefit
of all other consumers similarly placed and having same
interest in the outcome of the complaint. Merely because,
some of the complainants are NRls, will not make them
persons of a different class. If the claims of some of the
existing complainants have already been satisfied, they will
not get any relief subject to the evidence. Thus, in my view,
requirements of Section 12(1)(c) of the Act are fulfilled in this
case and accordingly, I allow the application under section
12(1)(c) of the Act and permit the complainants to proceed
with the complaint as a class action.‖
(Emphasis supplied)
10. Aggrieved by the aforesaid order dated 16 th May, 2018, the
petitioners have approached this Court under Article 227 of the
Constitution of India by means of the present petition.
11. The respondent, during the course of these proceedings,
challenged the maintainability of the present petition under Article
227 of the Constitution of India, citing, for the purpose, the judgment
of the Supreme Court in Cicily Kallarackal v. Vehicle Factory8
especially emphasising para 9 of the said decision, which reads thus:
―9. While declining to interfere in the present Special Leave
Petition preferred against the order passed by the High Court
in exercise of its extraordinary jurisdiction Under Article 226
of the Constitution of India, we hereby make it clear that the
order of the Commission are incapable of being questioned
under the writ jurisdiction of the High Court, as a statutory
appeal in terms of Section 27A(1)(c) lies to this Court.
Therefore, we have no hesitation in issuing a direction of
caution that it will not be proper exercise of jurisdiction by the
High Courts to entertain writ petitions against such orders of
8
(2012) 8 SCC 524
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the Commission.‖
12. As against this, learned Counsel for the petitioners, relying on
the following passages from the report in State of Karnataka v.
Vishwabharathi House Building Coop. Society9, sought to contend
that the petition was maintainable:
―51. It may be true that there does not exist any provision
for transfer of case from one forum to the other or there does
not exist any provision to grant injunction. Absence of such
provisions in our opinion would not render the statute ultra
vires the Constitution or unworkable.
52. The very fact that in a given case a party under the said
Act may approach upto this Court and/or may otherwise take
recourse to the remedy of judicial review, the interests of the
parties must be held to have been sufficiently safeguarded.
53. The provisions relating to power to approach appellate
court by a party aggrieved by a decision of the forums/State
Commissions as also the power of High Court and this Court
under Article 226/227 of the Constitution of India and Article
32 of this Court apart from Section 23 of the Act provide for
adequate safeguards. Furthermore, primarily the jurisdiction
of the forum/ commissions is to grant damages. In the event, a
complainant feels that he will have a better and effective
remedy in a civil court as he may have to seek for an order of
injunction, he indisputably may file a suit in an appropriate
civil court or may take recourse to some other remedies as
provided for in other statutes.‖
(Emphasis supplied)
13. Substantive arguments were advanced by the learned Counsel
for both parties on the maintainability of the present petition under
Article 227 of the Constitution of India as well as on the merits of the
impugned order dated 16th May, 2018 passed by the learned NCDRC.
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Submissions and analysis
Re. Maintainability
14. Mr. Piyush Singh, learned Counsel for the allottees, submitted
that the present petition was not maintainable under Article 227 of
Constitution of India, in view of the availability of an alternate remedy
by way of an appeal to the Supreme Court under Section 2310 of the
1986 Act, which provides for a right of appeal against every order
passed by the learned NCDRC under Section 21(a)(i) of the 1986 Act.
15. This position, contends Mr. Piyush Singh, also stands
underscored in para 9 of the judgment in Cicily Kallarackal8
reproduced supra.
16. Ms. Agnihotri, learned Counsel for the petitioners, contends,
per contra, that Cicily Kallaracka8 was rendered in the context of the
right conferred by Article 226 of the Constitution of India, whereas the
present petition has been filed under Article 227. Para 53 of the report
in Vishwabharathi House Building Coop. Society9, she submits,
clearly indicates that the right to file a petition under Article 227 of the
Constitution of India is independently available, apart from the right
conferred by Section 23 of the 1986 Act. This position, she submits,
stands expressly recognised in the opening sentence of para 53 of the
9
(2003) 2 SCC 412
10
23. Appeal. - Any person, aggrieved by an order made by the National Commission in exercise of its
powers conferred by sub-clause (i) of clause (a) of section 21, may prefer an appeal against such order of the
Supreme Court within a period of thirty days from the date of the order:
Provided that the Supreme Court may entertain an appeal after the expiry of the said period of thirty
days if it is satisfied that there was sufficient cause for not filing it within that period.
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report in Vishwabharathi House Building Coop. Society9, which
reads thus:
―53. The provisions relating to power to approach appellate
court by a party aggrieved by a decision of the forums/State
Commissions as also the power of High Court and this Court
under Article 226/227 of the Constitution of India and Article
32 of this Court apart from Section 23 of the Act provide for
adequate safeguards.‖
As such, submits Ms. Agnihotri, the right available under Section 23
of the 1986 Act cannot derogate from the right to invoke the
jurisdiction of this Court under Article 227 of the Constitution of
India.
17. Having heard learned Counsel and perused the aforesaid
decision, it is clear that Cicily Kallarackal8 addressed the issue of
availability of the right to file a writ petition under Article 226 of the
Constitution of India and was not rendered under the context of
Article 227 of the Constitution of India. No doubt, the right to
approach the writ court under Articles 226 and 227 of the Constitution
of India are, in a way of speaking, interlinked and cognate. That said,
however, there is a subtle difference between the two provisions
inasmuch as the jurisdiction exercised by a court under Article 226 of
the Constitution of India is in the nature of judicial review by issuance
of, inter alia, the high prerogative writs of habeas corpus, certiorari,
mandamus, prohibition and quo warranto, envisaged by the said
Article, whereas the jurisdiction exercised under Article 227 of the
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Constitution of India is supervisory in nature.
18. There is a fundamental jurisprudential difference between
judicial review jurisdiction and supervisory jurisdiction. The nature of
the power exercised by a court in each case is also essentially
different. The exercise of powers under Article 227, in a sense, more
constricted than the exercise of powers under Article 226, inasmuch as
the scope of examination of the merits of the decision under challenge
is, under Article 226, more expansive than under Article 227. While
exercising jurisdiction under Article 227, what the court is essentially
concerned with is ensuring that the courts and tribunals subject to its
supervisory jurisdiction exercise their powers appropriately.
19. The Article 227 court does not sit in appeal over the decisions
of the court or tribunal below. It is not expected to scrutinize the
merits of the said decision with a view to correct the said decision on
merits. If, however, the decision is one which involves erroneous
exercise of jurisdiction or assumption of power where no power exists,
then the court, under Article 227, would be justified in interfering.
Equally, if the decision demonstrates discharge, of the Court or
Tribunal below, of its functions otherwise than the manner in which
the law requires the Court of Tribunal to so discharge, the decision can
be corrected in exercise of the supervisory jurisdiction vested in the
High Court. Else, the position in law is trite, as enunciated in Estralla
Rubber v Dass Estate11, Garment Craft v. Prakash Chand Goel12 and
Puri Investment v. Young India13 that a writ court, under Article 227,
11
(2001) 8 SCC 97
12
2022 SCC OnLine SC 29
13
2022 SCC OnLine SC 283
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is not even empowered to correct errors in the orders passed by the
courts below. The distinction is as explicit as it is nuanced.
20. Vishwabharathi House Building Coop. Society9 refers to
―Articles 226/227 of the Constitution of India‖. The opening sentence
in para 53 of the report in the said case holds that adequate safeguards,
against orders passed by the learned NCDRC, are available to an
aggrieved party by way of writ to a High Court under Article 226/227
or to the Supreme Court of India under Article 32 of the India or by
way of an appeal under Section 23 of the 1986 Act. It does not,
however, provide any further guidance as to the circumstances in
which these remedies would, individually, be available against the
decision of the learned NCDRC. Even so, the view canvassed by Mr
Piyush Singh, if accepted, would amount to holding that, where the
appellate remedy under Section 23 of the 1986 Act is available, the
remedy under Article 227 of the Constitution of India stands
irrevocably foreclosed, which would militate against the tenor of the
view expressed in Vishwabharathi House Building Coop. Society9.
21. The issue, however, stands largely answered, in principle, by
the judgment of the Supreme Court in Virudhunagar Hindu
Nadargal Dharma Paribalana Sabai v. Tuticorin Educational
Society14 (―Virudhunagar‖, hereinafter), though the said decision did
not examine the issue in the backdrop of the 1986 Act. In that case,
the Supreme Court was concerned with the aspect of availability of a
remedy to the High Court, seeking exercise of its supervisory
14
(2019) 9 SCC 538
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jurisdiction over the courts below, where a remedy of appeal against
the decision of courts below was available under the CPC. Paras 11 to
13 of the report read thus:
―11. Secondly, the High Court ought to have seen that when
a remedy of appeal under section 104 (1)(i) read with Order
XLIII, Rule 1 (r) of the Code of Civil Procedure, 1908, was
directly available, the respondents 1 and 2 ought to have
taken recourse to the same. It is true that the availability of a
remedy of appeal may not always be a bar for the exercise of
supervisory jurisdiction of the High Court. In A.
Venkatasubbiah Naidu v. S. Chellappan & Ors15, this Court
held that "though no hurdle can be put against the exercise of
the Constitutional powers of the High Court, it is a well
recognized principle which gained judicial recognition that
the High Court should direct the party to avail himself of such
remedies before he resorts to a Constitutional remedy".
12. But courts should always bear in mind a distinction
between (i) cases where such alternative remedy is available
before Civil Courts in terms of the provisions of Code of Civil
procedure and (ii) cases where such alternative remedy is
available under special enactments and/or statutory rules and
the fora provided therein happen to be quasi judicial
authorities and tribunals. In respect of cases falling under the
first category, which may involve suits and other proceedings
before civil courts, the availability of an appellate remedy in
terms of the provisions of CPC, may have to be construed as a
near total bar. Otherwise, there is a danger that someone may
challenge in a revision under Article 227, even a decree
passed in a suit, on the same grounds on which the
respondents 1 and 2 invoked the jurisdiction of the High
court. This is why, a 3 member Bench of this court, while
overruling the decision in Surya Dev Rai vs. Ram Chander
Rai16, pointed out in Radhey Shyam Vs. Chhabi Nath17 that
―orders of civil court stand on different footing from the
orders of authorities or Tribunals or courts other than
judicial/civil courts‖.
15
(2000) 7 SCC 695
16
(2003) 6 SCC 675
17
(2015) 5 SCC 423
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13. Therefore wherever the proceedings are under the
code of Civil Procedure and the forum is the Civil Court, the
availability of a remedy under the CPC, will deter the High
Court, not merely as a measure of self imposed restriction,
but as a matter of discipline and prudence, from exercising its
power of superintendence under the Constitution. Hence, the
High Court ought not to have entertained the revision under
Article 227 especially in a case where a specific remedy of
appeal is provided under the Code of Civil Procedure itself."
(Emphasis supplied)
22. The afore-extracted passages from Virudhunagar14 distinguish
between the situation where the order under challenge is passed by a
civil court and a remedy of appeal lies to another civil court, vis-à-vis
a situation in which the order under challenge is not passed by a civil
court, but by a quasi-judicial authority or tribunal, or where the
remedy of appeal does not lie to a civil court. In the former case, i.e.
where it is a CPC-to-CPC appeal, the Supreme Court held that the
remedy of appeal would operate as a ―near total bar‖ to the availability
of supervisory jurisdiction under Article 227 of the Constitution of
India. Where, however, the order under challenge is not passed by a
civil court, no appeal against the said order is available under the CPC,
or the appeal that is available is not to another civil court, the remedy
under Article 227 does not appear to be foreclosed.
23. In this context, the extracted words from the earlier decision of
the Supreme Court in A. Venkatasubbiah Naidu15 are of some
significance. In the said decision, the Supreme Court has held that,
while there cannot be any hurdle to the exercise of constitutional
powers of the High Courts, where other alternate remedies are
available, the High Court should direct the party to avail such
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remedies ―before he resorts to a constitutional remedy‖. A.
Venkatasubbiah Naidu15, therefore, expressed the view that, before
seeking recourse to the constitutional remedy of writ before the High
Court, other alternative remedies available to the litigant ought to be
directed to be exhausted.
24. This option is, obviously, not available where the other alternate
remedy is to the Supreme Court, as in the case of Section 23 of the
1986 Act. The principle in A. Venkatasubbiah Naidu15, which has
been followed in Virudhunagar14 has no application, therefore, in a
case where the remedy of appeal is to the Supreme Court, as under
Section 23 of the 1986 Act, as there can be no question of the party
availing such remedy before resorting to a writ remedy available under
the Constitution to the High Court. A party cannot be directed to
exhaust the alternate remedy available before the Supreme Court
before approaching the High Courts under Article 226. There can be
no appeal from Caesar to Mark Antony.
25. Relegating the party to the remedy of appeal under Section 23
of the 1986 Act would, therefore, operate to foreclose, once and for
all, the right to seek recourse to writ jurisdiction of the High Court
under Articles 226/227 of the Constitution of India. This, in my
considered opinion, can never be the intent of the Supreme Court in
Virudhunaga14 and would also militate against the opening sentence
in para 53 of the Vishwabharathi House Building Coop. Society9.
26. For all these reasons, I am of the opinion that the right of the
petitioners, to approach this Court under Article 227 of the
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Constitution of India cannot be affected by the remedy of appeal to the
Supreme Court available under Section 23 of the Consumer Protection
Act.
27. Having said that, it is also clear that any party which seeks to
invoke the jurisdiction of the High Court under Article 227 subjects
itself to the rigours of the provision and to the restrictions inbuilt in it.
The High Court, under Article 227, cannot examine the matter with
the same latitude as would be available to a Court which exercises
appellate jurisdiction.
28. The contention of Mr Piyush Singh that Article 227 of the
Constitution of India ought not to be invoked by the petitioner as a
remedy of appeal, against the impugned order of the learned NCDRC,
lay to the Supreme Court under Section 23 of the 1986 Act, is
fallacious on another count as well, which somewhat pre-empts the
discussion that is to follow hereinafter. Section 23 provides for an
appeal against a decision of the NCDRC in exercise of the powers
conferred on it by Section 21(a)(i). Section 21 deals with the
jurisdiction of the learned NCDRC. Sub-section (a)(i) of Section 21
vests jurisdiction in the learned NCDRC to entertain complaints where
the value of the goods or services and compensation, if any, exceeds ₹
1 crore. The respondents have valued their complaint in excess of ₹ 1
crore on the premise that the complaint is maintainable as a class
action proceeding on behalf of all the allottees of units in the project.
As I proceed to hold hereinafter, however, the pleadings in the
Complaint do not make out a case for justified institution of the
Complaint as a class action proceeding for all the allottees in the
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project, or even for the 51 complainants before the learned NCDRC.
Unless the number of consumers having "sameness of interest" is
manifest from the pleadings in the Complaint, in the manner
envisaged by law and as stipulated by the Supreme Court in Brigade
Enterprises Ltd. v. Anil Kumar Virmani18, it is not possible to hold
that the cumulative value of the goods or services, or the
compensation claimed, by all such consumers having sameness of
interest, would exceed ₹ 1 crore. The very maintainability of the
Complaint before the learned NCDRC, under Section 21(a)(i) is,
therefore, questionable. If Section 21(a)(i) is not applicable, neither is
Section 23.
29. Where the justifiability of the invocation, by the respondents, of
the jurisdiction of the learned NCDRC under Section 21(a)(i) is itself
in doubt, it is obviously not open to the respondents to cite the
availability of an alternate remedy to the petitioners under Section 23
as a ground to non-suit them under Article 227 of the Constitution of
India. A plea of alternate appellate remedy, predicated on erroneous
invocation of original jurisdiction of the Court or Tribunal below,
obviously has to fail.
30. Even on facts, therefore, the assertions in the Complaint filed by
the respondents do not make out a case of availability, to the
petitioners, of an alternate remedy
31. The objection to maintainability, as advanced by Mr. Piyush
Singh, is, therefore, rejected.
18
2021 SCC OnLine SC 1283
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Re. Merits
32. An authoritative pronouncement, on the maintainability of class
action complaints, under Section 35(1)(c)19 of the Consumer
Protection Act, 2019, which is in pari materia and in haec verba with
Section 12(1)(c)2 of the 1986 Act, is available in the judgment of the
Supreme Court in Brigade Enterprises18.
33. 91 purchasers of 51 apartments in a residential complex, were,
in that case, permitted, by the learned NCDRC to file a class action
consumer complaint in a representative capacity under Section
35(1)(c) of the 2019 Act, on behalf of and for the benefit of more than
1000 purchasers. Aggrieved by the said decision, Brigade Enterprises,
the builder, appealed to the Supreme Court.
34. The residential complex in question comprised of over 1134
apartments. The 91 complainants before the learned NCDRC had
purchased 51 apartments. They contended that they desired to
prosecute the complaint not only for themselves but also on behalf of
numerous other consumers who had purchased apartments in the same
complex, as a class action, and that the learned NCDRC was
empowered to grant permission to them to do so, as could be granted
19
35. Manner in which complaint shall be made. -
(1) A complaint in relation to any goods sold or delivered or agreed to be sold or delivered or
any service provided or agreed to be provided may be filed with a District Forum by -
*****
(c) one or more consumers, where there are numerous consumers having the same
interest, with the permission of the District Forum on behalf of, or for the benefit of, all
consumers so interested;
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by a civil court under Order I Rule 8 of the CPC. The learned
NCDRC allowed the application relying on the earlier decision of the
Supreme Court in Chairman, Tamilnadu Housing Board v.
T.N.Ganapathy20 and of the Full Bench of the learned NCDRC itself
in Ambrish Kumar Shukla v. Ferrous Infrastructure Pvt. Ltd.21. I
may note here, that Mr. Piyush Singh also placed extensive reliance on
Ambrish Kumar Shukla21.
35. Paras 7 to 25 of the report in Brigade Enterprises18 read thus:
―7. Before we get into an analysis of the rival contentions
with specific reference to the statutory provisions, it is
necessary to look into the reliefs prayed for, by the
respondents in their consumer complaint and the pleadings on
the basis of which the reliefs were so sought. The reliefs
sought by the respondents in their consumer complaint, for
the benefit of and on behalf of the purchasers of all the flats in
the entire residential complex reads as follows:--
"That in view of the abovementioned facts and
circumstances this Hon'ble Commission may
graciously be pleased to pass orders and to direct the
OP to:--
i. Direct the OP to pay to each of the
Complainants and to each buyer having same interest
delay compensation, as stipulated in the Sale and
Construction Agreements, for unpaid period out of the
"Total Period of Delay" as indicated in Para 46 of the
Consumer Complaint;
ii. Direct the OP to pay to each of the
Complainants and to each buyer having same interest,
compensatory interest @ 12% p.a. on individual
consideration amount paid, for abnormal and
inordinate delay in construction, till handing over
possession of flats to the complainants, computing total
20
1990 (1) SCC 608
21
2016 SCC OnLine NCDRC 1117
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period of delay as indicated in Para 46 of the
Consumer Complaint;
iii. Award cost of the Complaint to the
Complainants; and/or
iv. Pass any other and/or further relief, which this
Hon'ble Commission thinks fit and proper, in the facts
and circumstances of the case, in favour of the
complainants and against the OP."
8. The pleadings on the basis of which the respondents
sought the aforesaid prayers, in brief, are as follows : (i) that
the appellant launched the subject project in the year
2013; (ii) that the project styled as ―Brigade Lakefront‖ was
to comprise of about 1100 units in three blocks, namely,
Amber block, Blue block and Crimson block; (iii) that Amber
block, also called Building No. 1, was to have seven wings,
namely, Wings A, B, C, D, E, F and G; Blue block, also
called Building No. 2 was to have Wings H, I, J, K, L, M and
N and Crimson block, also called Building Nos. 3 and 4 were
to have Wings O, P, Q, R, S and T; (iv) that in respect of the
flats in Blue block, the promised delivery date was
30.06.2016 with a six months grace period; (v) that though the
completion certificate and structural stability certificate were
also issued by the Consultant/Architect for the buildings in
Blue block on 3.05.2017, the occupancy certificate was issued
partially on 28.12.2018 and the occupancy certificate for the
balance was issued on 25.06.2019; (vi) that in respect of the
buildings in Crimson block, the promised delivery date was
31.01.2018 with a grace period of six months; (vii) that
though the completion certificate for the Crimson block was
issued by the architect on 10.08.2018, the occupancy
certificate was issued partially on 28.12.2018; (viii) that the
builder was guilty of unfair trade practice, inasmuch as the
terms and conditions of the agreement prescribed a paltry
compensation of Rs. 5 per square feet to the purchasers, if
there was delay in completion of the project, while penal
interest was levied on the buyers at 18% p.a. whenever they
committed default or delay in making payment; (ix) that on
account of the delay on the part of the appellant in handing
over possession, the buyers suffered losses in the form of
payment of monthly rent, interest on the loans taken and
payment of higher registration charges, as the circle rates had
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gone up in the meantime; and (x) that therefore they were
constrained to file a complaint.
9. From the aforesaid averments contained in the
consumer complaint, it could be seen 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. We have already extracted the prayers made in
the original complaint. Interestingly the prayer portion of the
complaint does not contain the quantification of the total
amount of compensation sought by the respondents either
individually or collectively for and on behalf of all the
purchasers of all the 1134 residential apartments. The prayer
portion of the complaint refers to paragraph 46 of the
complaint, for the purpose of computation of delay
compensation. But paragraph 46 of the complaint does not
convey any meaning except if taken into account along with
paragraph 45. Therefore, paragraphs 45 and 46 of the
complaint are extracted as follows:
"45. Computation of "Total Period of Delay"--The
Complainants assert that the Total Period of Delay be
calculated as follows : Delay Period Start - Promised
Date of Possession, not considering the grace period;
and Delay Period End - Either of the following two
dates based on facts of individual complainants:
a. Where possession was taken prior to issuance of
Occupancy Certificate, the Date of Occupancy
Certificate; OR
b. Where possession was taken after the issuance
of Occupancy Certificate, then Date of possession
Offered;
It would be relevant to state that the meaning and
nature of „possession‟ as stated by the complainants in
this para would mean legal possession only where said
possession had been given or offered to be given upon
confirmation of readiness of the flat for possession, in
adherence to Schedule of Construction Agreement.
46. It is clearly and unambiguously inferred that the
Buyers shall receive possession by executing the Sale
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Deed and getting the same registered. Both actual
possession and sale deed registration have to be done
in unison in accordance with clauses of the agreement
for construction. Hence, possession without registering
and executing sale deed or vice versa does not together
construe to be "possession" for the purpose of
calculating the delay suffered by the buyers. If both
events are done on separate times, the later date of the
two would prevail. It is respectfully submitted that for
the given residential project, the date of grant of
Occupancy Certificate shall be reckoned as the pivotal
event to ascertain delayed possession and calculating
compensation based thereon."
10. Paragraphs 45 and 46 contain a tacit admission that the
period of delay in handing over possession of the flats, may
vary from buyer to buyer in respect of the purchasers of all
the 1134 apartments. This is why the respondents have sought
the indulgence of the Commission to compute the delay in
respect of each case, on the basis of formulae indicated in
paragraph 45.
11. However, paragraph 41 of the consumer complaint
contains the valuation of the complaint, at least insofar as the
91 complainants who jointly filed the consumer complaint are
concerned. The relevant portion of paragraph 41 of the
complaint reads as follows:
"It is submitted that as per the Agreement terms
reproduced above, OPs are committed to pay meager
delay compensation of Rs. 5/- per sq. ft. of saleable
area, per month, which comes to around 0.1% per
annum of the sale consideration, or even lesser. On the
contrary, the penalty charged by the OPs in case the
buyers' default or delay in paying the instalment is
18% per annum. It is clear that the balance of
performance is over 180 times against the buyers who
have been bearing the brunt of the absolute
mismanagement of project by the OPs. The buyer is not
only patiently waiting for the possession but also gets a
double whammy to keep paying all the instalments
without enjoying the property. Of the total number of
complainants those who have preferred to approach
this Hon'ble Forum in this instant Complaint, the
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aggregate value of sale for 51 complainant-buyers
alone, is about Rs. 66 Crore whereas the aggregate
amount disbursed by the OP so the same buyers, in the
name of Delay Compensation is a meager, less than
Rs. 10 lakh which is just about 0.1% for the entire of
delay of more than 2 years."
12. Before we proceed further we must record one
important fact, namely, that even according to the
respondents-complainants, the project comprised of three
blocks namely Amber block, Blue block and Crimson block.
Amber block was to have seven Wings with 386 apartments.
It appears that none of the owners of these 386 apartments in
Amber block have joined with the respondents-complainants.
This is why the entire discussion about the delay in
completion of the project, with reference to the timeline of
events found in paragraph 14 of the consumer complaint,
refers only to Blue block and Crimson block. The appellant
has given a tabulation in their counter to the original
complaint, pointing out that Blue block comprises of 412
apartments, out of which the owners of only 47 apartments
have joined in the filing of the complaint and that Crimson
block has 336 apartments, out of which the owners of only 4
apartments have joined in the complaint.
13. In view of the fact 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 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. Let us now see at least whether the
complaint was maintainable in a representative capacity on
behalf of the owners of the flats in Blue block and Crimson
block, in the light of the requirements of Section 35(1)(c) of
the Act.
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14. 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. It is needless to point out that the
sine qua non for invoking Section 35(1)(c) is that all
consumers on whose behalf or for whose benefit the provision
is invoked, should have the same interest. Interestingly,
Section 35(1) (c) uses the disjunction ―or‖ in between two sets
of words, namely, (i) ―on behalf of‖; and (ii) ―for the benefit
of‖. Clause (c) of Sub-Section (1) of Section 35 reads as
under:
"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."
15. Therefore, a complaint filed under Section 35(1)(c)
could either be ―on behalf of‖ or ―for the benefit of‖ all
consumers having the same interest.
16. Section 38(11) of the Consumer Protection Act, 2019
makes the provisions of Order I Rule 8 of the First Schedule
to the Civil Procedure Code, 1908 applicable to cases where
the complainant is a consumer referred to in Section 2(5)(v),
which defines a ‗complainant' to mean one or more
consumers, where there are numerous consumers having the
same interest.
17. Order I Rule 8, CPC, unlike Section 35(1)(c) operates
both ways and contains provisions for a two-way traffic. 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. Order I Rule 8 reads as
follows:--
"8. One person may sue or defend on behalf of all
in same interest.--(1) Where there are numerous
persons having the same interest in one suit,--
(a) one or more of such persons may, with the
permission of the Court, sue or be sued, or may defend
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such suit, on behalf of, or for the benefit of, all persons
so interested;
(b) the Court may direct that one or more of such
persons may sue or be sued, or may defend such suit,
on behalf of, or for the benefit of, all persons so
interested.
(2) The Court shall, in every case where a
permission or direction is given under sub-rule (1), at
the plaintiff's expense, give notice of the institution of
the suit to all persons so interested, either by personal
service, or, where, by reason of the number of persons
or any other cause, such service is not reasonably
practicable, by public advertisement, as the Court in
each case may direct.
(3) Any person on whose behalf, or for whose
benefit, a suit is instituted, or defended, under sub-rule
(1), may apply to the Court to be made a party to such
suit.
(4) No part of the claim in any such suit shall be
abandoned under sub-rule (1), and no such suit shall
be withdrawn under sub-rule (3), of rule 1 of Order
XXIII, and no agreement, compromise or satisfaction
shall be recorded in any such suit under rule 3 of that
Order, unless the Court has given, at the plaintiff's
expense, notice to all persons so interested in the
manner specified in sub-rule (2).
(5) Where any person suing or defending in any
such suit does not proceed with due diligence in the
suit or defence, the Court may substitute in his place
any other person having the same interest in the suit.
(6) A decree passed in a suit under this rule shall
be binding on all persons on whose behalf, or for
whose benefit, the suit is instituted, or defended, as the
case may be."
18. In simple terms, the salient features of the stipulations
contained in Order I Rule 8 CPC can be summed up as
follows:
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(i) where there are numerous persons having the
same interest in one suit, one or more of such persons
may, with the permission of the Court, sue on behalf of
or for the benefit of all persons so interested;
(ii) where there are numerous persons having the
same interest in one suit, one or more of such persons
may be sued or one or more such persons may defend
such suit, on behalf of or for the benefit of all persons
so interested;
(iii) the Court itself may, without the plaintiffs or
defendants seeking any permission under Order I Rule
8(1)(a), direct that one or more such persons may sue
or be sued or may defend the suit on behalf of and for
the benefit of all persons interested;
(iv) notice of the institution of the suit to all persons
so interested either by personal service or by public
advertisement should be ordered by the Court in both
categories of cases, namely, where permission is given
by the Court on the application of the individuals or
direction is issued by the Court itself;
(v) any person on whose behalf or for whose benefit
the suit is instituted or defended may seek to be made a
party to the suit;
(vi) abandonment of the whole or part of the claim,
withdrawal of the suit or the recording of any
agreement, compromise or satisfaction shall not be
allowed by the Court unless notice to all persons
interested in the matter is issued either by personal
service or by public advertisement.
(vii) the Court may at any time substitute the person
suing or defending in a representative capacity, with
any other person, if the former was not prosecuting the
suit or defence with due diligence.
(viii) the decree passed in the suit covered by this
Rule will be binding on all persons.
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19. The Explanation under Order I Rule 8 is of
significance. It distinguishes persons having the same interest
in one suit from persons having the same cause of action. To
establish sameness of interest, it is not necessary to establish
sameness of the cause of action.
20. The Explanation under Order I Rule 8, is a
necessary concomitant of the provisions of the Rules 1 and
3 of Order I. Order I Rule 1, CPC, allows many persons to
join in one suit as plaintiffs. Order I, Rule 3 allows many
persons to be joined in one suit as defendants. But to fall
under Order I Rule 1 or Order I Rule 3, the right to relief
should arise out of or be in respect of the same act or
transaction allegedly existing in such persons, jointly,
severally or in the alternative. To some extent, Rules 1 and
3 of Order I are founded upon the sameness of the cause
of action. This is why the Explanation under Order I Rule
8 distinguishes sameness of interest from the sameness of
the cause of action.
21. Since ―sameness of interest‖ is the pre-requisite for an
application under Order I Rule 8, CPC read with Section
35(1)(c) of the Consumer Protection Act, 2019, it was
necessary for the respondents to include in the consumer
complaint, sufficient averments that would show sameness of
interest. As we have pointed out earlier the total number of
residential apartments constructed in three blocks comprising
of about 20 wings (7 wings each in Amber and Blue blocks
and 6 wings in Crimson block) were 1134. There are no
pleadings insofar as the purchasers of 386 residential
apartments in the 7 wings of Amber block are concerned.
Even in respect of the owners of the remaining 748 residential
apartments in blue block and Crimson block, the complaint
does not contain any specific averments regarding sameness
of interest. The 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. The existence of sameness of interest, has been
questioned by the appellant-builder 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. It is not clear from the consumer complaint as to
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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.
22. 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 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.
23. We may have to look at the issue also from the point of
view of the buyers. The delay in handing over possession
need not necessarily be the only deficiency in service on the
part of the appellant-builder. Some of the purchasers of flats
may also have other complaints and their right to proceed
against appellant cannot be stultified by a few individuals
invoking Section 35(1)(c). That a few purchasers have chosen
to approach the Karnataka State Consumer Disputes Redressal
Commission to ventilate their individual grievances shows
that all the 1134 buyers do not have the same interest as that
of the respondents. At least if the respondents have given the
names of purchasers of all flats on whose behalf the present
complaint could be entertained, they would have been better
off. But they have not done so.
24. Reliance is placed by the learned senior counsel for the
respondents, upon the Judgment of this Court in Chairman,
Tamil Nadu Housing Board, Madras v. T.N.
Ganapathy (supra), to drive home the point that the object of
Order I Rule 8 is to facilitate the decision of questions in
which large number of persons are interested, without
recourse to the ordinary procedure and that, therefore, the
provision must receive an interpretation which will subserve
the object of its enactment. This Court pointed out in the said
case that though each of the allottees of plots by the Housing
Board may be interested individually in fighting out the
demand separately made or likely to be made by the Board, it
would not make Order I Rule 8 inapplicable.
25. But the above decision in Tamil Nadu Housing
Board (supra) cannot be pressed into service by the
respondents for two reasons, namely, (i) that what was
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questioned in a representative suit in that case, was the
additional demand sought to be made by the Housing Board
on all the allottees uniformly, for an amount over and above
the tentative price originally fixed; and (ii) that in any case
this Court restricted the applicability of the decision only to
those allottees of the low income group. Therefore, the
sameness of interest has to be tested on the basis of the nature
of the reliefs claimed and the pleadings that pinpoint the
sameness of interest.‖
36. Thereafter, relying on its earlier decision in Rameshwar Prasad
Shrivastava v. Dwarkadhis Projects Pvt. Ltd.22, Anjum Hussain v.
Intellicity Business Park Pvt. Ltd.23 and Vikrant Singh Malik v.
Supertech Ltd.24, the Supreme Court emphasised the fact that a
common complaint could be filed by complainants who had
―sameness of interest‖, vis-a-vis the alleged deficiency in service of
the service provider.
37. The Supreme Court has, in this context, distinguished between
―sameness of interest‖ and ―sameness of cause of action‖. In the case
before it, the Supreme Court noted that, though there were a number
of purchasers of residential units in the project under consideration
before it, who had grievances against the builder, their grievances
were distinct and different. The judgment is also an authority for the
proposition that ―sameness of interest‖ should be manifest from the
pleadings in the complaint filed before the Consumer Forum. In other
words, from the pleadings in the Complaint, the Consumer Forum
should be in a position to hold that the persons whose cause the
complainants before it were seeking to espouse had identical
22
(2019) 2 SCC 417
23
(2019) 6 SCC 519
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grievances against the opposite party and that the deficiency in service
of the opposite party vis-a-vis the said persons were, from the
pleadings, manifestly the same. Else, a consolidated consumer
complaint as a class action would not be maintainable under Section
35(1)(c) of the 2019 Act - and, therefore, under Section 12(1)(c) of
the 1986 Act.
38. Mr. Piyush Singh has sought to submit that, in examining
whether the complaint was maintainable as a class action petition, the
Court was required to be guided by the prayers in the complaint. If
the prayers were identical, he submits that a class action complaint
could be maintainable. He points out that, in the present case, the
prayers in the complaint filed by his clients sought omnibus reliefs ―to
complete the construction with all promised amenities and to hand
over vacant and peaceful possession of their respective flats with
occupancy and building completion certificate issued by the
competent authority to the complainants as well as other
allottees/purchasers/buyers within the stipulated time as may be
decided by‖ the learned NCDRC, failing which the petitioners ought
to be directed to give alternate flats of similar standards and carpet
area to each of the complainants, failing which they be directed to
compensate the purchasers and to refund the amounts paid by them.
Inasmuch as these prayers applied to all the allottees of residential
units in the project, Mr. Piyush Singh submits that the learned
NCDRC could not be said to have erred in permitting the complaint to
be filed as a class action proceeding under Section 12(1)(c) of the
24
(2020) 9 SCC 145
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1986 Act.
39. Ms. Agnihotri, learned Counsel for the petitioners submits, per
contra, that the pleadings in the complaint itself indicate that there is
no ―sameness of interest‖ for all the allottees in the project. In fact,
she submits that no such sameness of interest is apparent even qua the
51 complainants before the learned NCDRC. She submits that, in fact,
in respect of flat allottees, the scheduled date for taking of possession
of the flats had itself not been reached, so that there could be no
question of the allottees being aggrieved by any delay in handing over
the flats or by any deficiencies in the flats themselves. With respect to
the other allottees, as such, submits Ms. Agnihotri, even on facts, the
grievances of the allottees of the individual units in the complex of her
client were distinct and different, and no class action proceeding under
Section 12(1)(c) could be permitted to have been instituted. The
learned NCDRC has, in passing the impugned order dated 16 th May,
2018, she submits, proceeded merely on the basis of the prayer in the
complaint without examining the aspect of maintainability of the class
action proceeding as filed by the respondents with the seriousness it
deserves.
40. Inasmuch as the number of allottees who have ―sameness of
interest‖ is not forthcoming or apparent from the pleadings in the
complaint, Ms. Agnihotri submits that it cannot be said that the claims
of the allottees having sameness of interest, when consolidated, would
exceed ₹ 1 crore, so that the question of the jurisdiction of the learned
NCDRC to entertain the complaint would also be highly disputable.
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41. Having heard learned Counsel and perused the record and in
view of the law enunciated in Brigade Enterprises18, I am of the
opinion that the submission of Ms. Agnihotri deserves to be accepted
and that of Mr. Piyush Singh, correspondingly, rejected.
42. Brigade Enterprises18 is clear and categorical in requiring that,
in order to maintain a class action proceeding under Section 35(1)(c)
of the 2019 Act - or, correspondingly, under Section 12(1)(c) of the
1986 Act - the pleadings in the complaint had necessarily to
unequivocally indicate ―sameness of interest‖ of all the persons whose
cause the complainants before the Consumer Forum were seeking to
espouse, vis-à-vis the opposite party.
43. In the present case, while there is an omnibus recital, in para 4
of the complaint, that the facts relating to the allottees of the project
are the same and that common issues disputes and controversies are
involved, with the allottees having common interest and having
suffered identical deficiency of service, the pleadings that follow
thereafter belie this assertion. Para 16 of the complaint sets out, in a
bulleted fashion, various alleged complaints relating to the allocation
of units to the allottees in the project. The complaint does not,
however, identify these various perceived deficiencies in service vis-a-
vis the allottees aggrieved thereby, by identifying the deficiencies in
service by which the individual allottees were aggrieved. Nor is there
any assertion, in the complaint, that each and all of the grievances
enumerated in para 16 of the complaint applied to every allottee of
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units in the complex, whose cause the complainant chose to espouse.
Even in respect of the 51 complainants before the learned NCDRC,
the complaint does not set out, with clarity, their individual
grievances, out of the several grievances enumerated in para 16 of the
complaint. Rather, the use of the words ―many complainants‖, ―some
complainants‖, and the like, which figure in para 16 of the Complaint,
indicate, prima facie, that the grievances of all allottees were not
identical, though, in the ultimate eventuate, their common aim might
have been to secure allotment to them, by the petitioners, of
serviceable flats.
44. Such a common ultimate aim cannot, however, connote
―sameness of interest‖ within the meaning of Section 12(1)(c), or
Section 2(1)(b)(iv), of the 1986 Act. The law enunciated in Brigade
Enterprises18 does not permit filing of a class action complaint under
Section 12(1)(c) of the 1986 Act, in such a fashion. The matter is not
merely one of the reliefs sought in the complaint. The 1986 Act offers
protection to consumers against deficiencies in service or perpetration
of unfair trade practices. The relief that follows is merely a sequitur.
The sameness of interest has to be with respect to the grievances of the
complainants, and not with respect to the reliefs sought. Pared down
to brass tacks, hypothetically, if one allottee is aggrieved by water
leakage in the flat allotted to him, another by not allotment of
adequate parking space, a third by delayed allotment and a fourth by
the flat not being of the category assured to him, they cannot maintain
a class action against the builder, by invoking Section 12(1)(c), merely
on the ground that the ultimate relief sought by all of them is allotment
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of flats as originally contracted. Once, as in the present case (vide
para 16 of the Complaint), the complainants enumerated several
individual items of grievance, the Complaint would either have to
assert that each grievance applied to each allottee whose cause they
were seeking to espouse, or to identify the allottees, grievance-wise.
Else, the very requirement of ―sameness of interest‖, in the case of a
class action proceeding under the Consumer Protection Act, would be
reduced to a redundancy, as, in every case, the consumers could make
an omnibus prayer that the units should be allotted to them in good
condition and, on that basis, plead sameness of interest. This, in my
view, militates against the law laid down in Brigade Enterprises18.
To reiterate what is required is that it must be apparent and
forthcoming, from the complaint, that the consumers whose cause the
complaint seeks to espouse have sameness of interest, to the extent
that the deficiencies in the service provided by the service provider,
qua each and all of the said complainants, is the same. That
requirement, in my considered opinion, is wanting in the complaint
filed by the respondents in the present case.
45. With greatest respect to the learned NCDRC, I am of the
opinion that paras 5 to 7 of the impugned order dated 16 th May, 2018
do not indicate that the learned NCDRC has approached the matter of
maintainability of the complaint as a class action in the manner
envisaged by Brigade Enterprises18. In fact, a reading of para 7
indicates that the learned NCDRC appears to have proceeded on the
basis of the omnibus prayer clause contained in the complaint.
46. The learned NCDRC has also noted that the complainants had,
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―same interest in the outcome of the complaint‖. Such an approach in
my considered and respectful opinion, cannot be accepted, in view of
the law laid down in Brigade Enterprises18. What is required is not
sameness of interest in the outcome of the complaint, but sameness of
interest with respect to the grievances of the complainants and the
deficiencies in service that the complaints claimed to have suffered at
the instance of the opposite party. It is only then, that the Consumer
Protection Forum could assess the correctness of the allegation of
deficiency of service on the part of the opposite party vis-a-vis the
complainants. Unless the consumers who have sameness of interest in
respect of their grievances vis-a-vis the opposite party were
immediately identifiable from the complaint, the complaint cannot be
maintained as a class action covering the interest of all such
consumers.
47. I am, therefore, unable to subscribe to the view expressed by the
learned NCDRC in paras 5 to 7 of the impugned order dated 16 th May,
2018.
48. In my view, the complaint, as filed, does not indicate that, even
in respect of 51 complainants who were before the learned NCDRC,
there is ―sameness of interest‖ as could permit the complaint to be
maintained as a class action covering their grievances vis-a-vis the
petitioners. The pleadings in the compliant, are not sufficient to
enable the Court to assess the number of complainants who would
have sameness of interest, in their grievances vis-a-vis the petitioners.
It cannot, therefore, be said that the consolidated claim of such
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complainants who would have sameness of interest would be in excess
of ₹ 1 crore.
49. The impugned order cannot, therefore, sustain.
50. Per consequence, the complaint filed by the petitioners cannot,
applying the law laid down in Brigade Enterprises18, and on the basis
of the pleadings contained in the complaint, be maintained as a class
action in respect of all the allottees of the Indiabulls Greens, Panvel
Project or even in respect of the 51 complainants who approached the
learned NCDRC.
51. The complaint would, therefore, necessarily have to be
dismissed, as, in the manner in which it is filed, it is not even apparent
that the complaint is maintainable before the learned NCDRC.
52. Having said that, however, this order would not preclude the
complainants from filing a proper complaint, keeping in mind the
observations contained hereinabove, as a class action proceeding
under Section 12(1)(c) or otherwise, before the appropriate forum,
which might even be the learned NCDRC. Any such complaint, if and
when filed, would be decided by the concerned forum in accordance
with law and keeping in view the observations contained in the present
judgment.
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Conclusion
53. In view of the aforesaid, the petition is allowed. The impugned
order of the learned NCDRC is quashed and set aside. The complaint
filed by the complainants before the learned NCDRC is also
dismissed, reserving liberty as recorded in para 52 supra.
54. There shall be no orders as to costs.
C. HARI SHANKAR, J.
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