Sobha Hibiscus Condominium vs Managing Director, M/S. Sobha … on 14 February, 2020


Supreme Court of India

Sobha Hibiscus Condominium vs Managing Director, M/S. Sobha … on 14 February, 2020

Author: Mohan M. Shantanagoudar

Bench: Mohan M. Shantanagoudar, R. Subhash Reddy

C.A.No.1118 of 2016

                                                                                      REPORTABLE

                                             IN THE SUPREME COURT OF INDIA

                                               CIVIL APPELLATE JURISDICTION

                                               CIVIL APPEAL NO.1118 OF 2016

                            Sobha Hibiscus Condominium                                  …..Appellant
                                                             Versus

                            Managing Director, M/s. Sobha Developers Ltd. & Anr. …..Respondents


                                                        JUDGMENT

R. Subhash Reddy, J.

1. This civil appeal under Section 23 of the Consumer Protection

Act, 1986 (for short, ‘the Act’), is filed by the complainant, aggrieved by

the order dated 13.05.2015, passed by the National Consumer Disputes

Redressal Commission (NCDRC), New Delhi in Consumer Complaint

No.153 of 2010, rejecting the complaint filed by the appellant on the

ground that, the appellant-Condominium has no locus standi to file the

complaint since neither it is a ‘consumer’ nor it is a ‘recognised

consumer association’ within the meaning of Section 12 of the Act.

2. The appellant/complainant is a statutory body under provisions of

the Karnataka Apartment Ownership Act, 1972 (for short, ‘1972 Act’). It

consists of members, who are the owners of the apartments in a multi-

Signature Not Verified storey building, namely, “Sobha Hibiscus” situated in Amballipur Village,
Digitally signed by
GULSHAN KUMAR
ARORA
Date: 2020.02.14
16:47:10 IST
Reason: Varthur Hobli, of South Bangalore Taluk in Karnataka. The appellant-

Condominium has come into existence pursuant to a declaration made

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C.A.No.1118 of 2016

by the opposite party under the provisions of 1972 Act. When the

appellant has filed complaint claiming certain reliefs before the NCDRC,

the same is resisted by the opposite party, by taking a preliminary

objection that the complainant is not a ‘consumer’ within the meaning of

the Act, therefore, has no locus standi to file the complaint. The

NCDRC, by referring to relevant provisions of the Act, has recorded a

finding that the complainant is not a ‘recognised consumer association’

within the meaning of Section 12(1)(b) of the Act.

3. We have heard Sri Rajesh Mahale, learned counsel appearing for

the appellant and Sri Basava Prabhu S. Patil, learned senior counsel

appearing for the respondent-opposite parties.

4. Learned counsel appearing for the appellant has contended that

as per the provisions of the Act, any association registered under

Companies Act, 1956 or any other law for the time being in force can

maintain a complaint. It is submitted that all members of the appellant-

Condominium are members who have purchased flats in the building

named as “Sobha Hibiscus” and it is formed with a view to represent the

grievances of its members before the authorities and the tribunal, as

such, there is no reason or justification in rejecting the complaint by the

NCDRC on the ground that it has no locus standi to maintain the

complaint. In support of his argument, learned counsel has relied on a

Full Bench judgment of the NCDRC, New Delhi in Consumer Case

No.560 of 2014 and batch titled Moulivakkam Trust Heights Flats

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C.A.No.1118 of 2016

Affected Buyers Association etc. v. M/s. Prime Sristi Housing Pvt. Ltd. &

29 Ors. etc.1

5. On the other hand, Sri Basava Prabhu S. Patil, learned senior

counsel appearing for the respondents, by taking us to relevant

provisions of the 1972 Act and Consumer Protection Act, 1986, has

submitted that the appellant cannot be said to be a voluntary consumer

association, as per the provisions of the Act and it is also not a

‘consumer’ within the meaning of the Act. Learned counsel further

submitted that the appellant is a body which has come into existence as

per the declaration made by the opposite party, as required under the

1972 Act. It is submitted that as much as it is a body which has come

into existence as per the mandatory provisions of the 1972 Act, as such,

it cannot be said to be a voluntary consumer association. Further it is

submitted that as the appellant will not fit into the definition of ‘consumer’

as defined under Section 2(1)(d) of the Act, complaint as filed, is not

maintainable and there are no grounds to interfere with the impugned

order passed by the NCDRC as the same is in accordance with law.

6. Having heard learned counsels on both sides, we have perused

the impugned order and other material placed on record. After

considering the submissions made by the learned counsels on both

sides with reference to the provisions of the Consumer Protection Act,

1986 and the relevant provisions of the 1972 Act, we are of the view that

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2017 SCC OnLine NCDRC 163
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C.A.No.1118 of 2016

there is no merit in this appeal so as to interfere with the impugned

order, for the following reasons.

7. To maintain a complaint under the provisions of the Act

complainant must be either a ‘consumer’ within the meaning of Section

2(1)(d) of the Act or it must fit into Section 12(1) of the Act. The word

‘consumer’ is defined under Section 2(1)(d) of the Act which reads as

under :

“2. Definitions.-(1) In this Act, unless the context otherwise
requires,-

…. …. …. ….

(d) “consumer” means any person who,-

(i) buys any goods 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 user of such goods other than the
person who buys such goods for consideration paid or
promised or partly paid or partly promised, or under
any system of deferred payment, when such use is
made with the approval of such person, but does not
include a person who obtains such goods for resale or
for any commercial purpose; or

(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 purpose;

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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C.A.No.1118 of 2016

8. Section 12 of the Act deals with the manner in which complaint

shall be made. As per the Section 12(1)(a), a consumer to whom such

goods are sold or delivered or agreed to be sold or delivered or such

service provided or agreed to be provided can file a complaint. Under

clause (b) of sub-section (1) of Section 12 of the Act any ‘recognised

consumer association’ whether the consumer to whom the goods sold or

delivered or agreed to be sold or delivered or service provided or agreed

to be provided is a member of such association or not can file a

complaint. As per the Explanation to Section 12 of the Act, ‘recognised

consumer association’ means any voluntary consumer association

registered under the Companies Act, 1956 or any other law for the time

being in force. It is clear from the Explanation that only a voluntary

consumer association registered under the Companies Act, 1956 or any

other law can maintain a complaint under Section 12(1)(b) of the Act.

So as to consider whether the appellant is a voluntary consumer

association or not, it is necessary to refer to relevant provisions of the

1972 Act. The Karnataka Apartment Ownership Act, 1972 is an Act of

the State which is enacted with a view to provide for the ownership of an

individual apartment in a building and to make such apartment heritable

and transferable property and for matters connected therewith. The

appellant body has come into existence pursuant to a declaration made

by the opposite party in terms of the 1972 Act. Section 3(j) of the 1972

Act defines ‘declaration’ as under:

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C.A.No.1118 of 2016

“3. Definitions.-In this Act, unless the context otherwise
requires.-

…. …. ….

(j) ‘Declaration’ means the instrument by which the property
is submitted to the provisions of this Act, as hereinafter
provided, and such Declaration as from time to time may be
lawfully amended:”

As per Section 13 of the 1972 Act, Declarations, Deeds of Apartments

and copies of floor plans are required to be registered under provisions

of the Registration Act, 1908. A copy of the Deed of Declaration dated

22.05.2006 is placed on record and the same is a declaration under

provisions of the said Act by the opposite party. The name of appellant

body as “Sobha Hibiscus Condominium” has come into existence

pursuant to clause (8) of the Declaration. The bye-laws framed by the

appellant-Condominium are also placed on record. Bye-law No.5 of the

Bye-laws deals with the Members of Association which reads as under :

“5) MEMBERS OF ASSOCIATION:

5.1) All persons who have purchased constructed
Apartments in the “Sobha Hibiscus” shall execute respective
declarations under Section 5(ii) of the Karnataka Apartment
Ownership Act, 1972 submitting their Apartments to the
provisions of the Act. All persons who become the owner of
the Apartment, shall acquire 10 shares of the “Sobha
Hibiscus Condominium” by paying Rs.1000/- and on
acquisition, shall become the members of the “Sobha
Hibiscus Condominium” and be bound by the Deed of
Declaration and Exhibits thereto.”

9. On a conjoint reading of the various relevant provisions of the

1972 Act and the Bye-laws of the Condominium referred above, we are

of the view that the appellant-body has come into existence as per the

mandatory provisions under the 1972 Act. It is clear from the objects of
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C.A.No.1118 of 2016

the said Act, that it is an Act to provide ownership of an individual

apartment in a building and to make such apartment heritable and

transferable property. In view of the mandatory provisions of the 1972

Act the appellant cannot be said to be a voluntary registered association

for the purpose of filing a complaint before the competent authority

under the provisions of the Act. The Explanation to Section 12 of the

Act makes it clear that, the recognised consumer association as referred

under Section 12(1)(b) of the Act means any voluntary consumer

association registered under the Companies Act, 1956 or any other law

for the time being in force. By applying the said Explanation, the

appellant cannot be said to be a voluntary consumer association so as

to maintain a petition. Further, it will not fall within the definition of

‘consumer’ as defined under Section 2(1)(d) of the Act. The term

‘voluntary’ has been defined in Black’s Law Dictionary IX Edn. as under :

“voluntary, (14c) 1. Done by design or intention voluntary act.

2. Unconstrained by interference; not impelled by outside
influence voluntary statement. 3. Without valuable
consideration or legal obligation; gratuitous voluntary gift. 4.
Having merely nominal consideration voluntary deed.
Voluntariness”.

The term ‘voluntary’ as defined in Oxford Dictionary reads as under :

“2. Of an action: performed or done of one’s own will,
impulse, or choice; not constrained, promoted, or suggested
by another. Also more widely, left to choice, not required or
imposed, optional. Of an oath, a confession, etc: voluntarily
made or given; not imposed or prompted by a promise or
threat. Of a conveyance, a disposition etc.: made without
money or other consideration being given or promised in
return. Growing wild or naturally; or spontaneous growth.

Volunteer
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C.A.No.1118 of 2016

3. …. ….

4.a. Assumed or adopted by free choice; freely chosen or
undertaken; (of work) unpaid b. Brought about by one’s own
choice or deliberate action; self-inflicted, self-induced. C. Of a
society, association, etc.: entered into a free choice. Also
consisting of volunteers.

5. Done by deliberate intent; designed, intentional

6. Of the will: free, unforced, unconstrained.

7. Of a person: acting from personal choice or impulse,
willingly, or spontaneously, in a specified capacity. Also,
endowed with the faculty of willing. B. Serving as a volunteer
soldier. Also, composed of such volunteers.

8. Freely or spontaneously bestowed or made; contributed
from personal choice or impulse or from generous or
charitable motives.

9. …. ….

10. Of an institution, organisation, etc.: maintained or
supported solely or largely by voluntary contributions. Also
more widely, existing through voluntary support, not
established by statute; in the UK, (of a school) built by a
voluntary institution but maintained by a local education
authority. B. of, pertaining to, or advocating voluntarism in
respect of Church, schools, etc.”..

In essence, a voluntary consumer association will be a body formed by a

group of persons coming together, of their own will and without any

pressure or influence from anyone and without being mandated by any

other provisions of law. The appellant association which consists of

members of flat owners in a building, which has come into existence

pursuant to a declaration which is required to be made compulsorily

under the provisions of 1972 Act, cannot be said to be a voluntary

association to maintain a complaint under the provisions of the Act.

10. The learned counsel appearing for the respondents also relied on

the very same judgment in the case of Moulivakkam Trust Heights Flats

Affected Buyers Association etc.1 In the aforesaid decision, a Full

Bench of the National Commission has taken a view that even a
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C.A.No.1118 of 2016

Residents’ Welfare Association, if registered under a statute will qualify

as a consumer association under the provisions of Section 12 of the Act

provided, it qualifies as a voluntary association.

11. For the aforesaid reasons and in view of the reasons recorded in

the impugned order by the NCDRC, we do not find any merit in this

appeal so as to interfere with the same. The civil appeal is accordingly

dismissed with no order as to costs.

………….…………………………………J.

[MOHAN M. SHANTANAGOUDAR]

….…………………………………………J.

[R. SUBHASH REDDY]

New Delhi.

February 14, 2020.

9
C.A.Nos.9961-9962 of 2017

REPORTABLE
IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS.9961-9962 OF 2017

Subhechha Welfare Society …..Appellant
Versus
M/s. Earth Infrastructure Pvt. Ltd. …..Respondent

WITH
CIVIL APPEAL NOS. 9959-9960 of 2017

Subhechha Welfare Society …..Appellant
Versus

M/s. Earth Infrastructure Pvt. Ltd. …..Respondent

JUDGMENT
R. Subhash Reddy, J.

1. These civil appeals are filed by the complainant in Consumer

Complaint Nos.1196 and 1197 of 2016, aggrieved by the order dated

06.12.2016 and the order dated 05.01.2017 in R.A.Nos.312 and 313 of

2016 passed by the National Consumer Disputes Redressal

Commission (for short, ‘NCDRC’), New Delhi.

2. The appellant-complainant is a registered Welfare Society.

Consumer Complaint No.1196 of 2016 has been filed by the

complainant on behalf of 8 allottees and Consumer Complaint No.1197

of 2016 has been filed by the complainant on behalf of 12 allottees with

the allegations that buyers booked units with the opposite party on

different dates and inspite of making major payment, possession has not

been delivered to them. In the aforesaid complaint directions are sought

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C.A.Nos.9961-9962 of 2017

against the opposite party to hand over possession of units in all

respects or in the alternative to provide other flat of identical size or to

refund the amount deposited along with interest and compensation.

3. It is the case of the appellant that the complainant being a society

registered under Haryana Registration and Regulation Act has filed

complaint on behalf of allottees, under Section 12(1)(b) of the Consumer

Protection Act, 1986 (for short, ‘the Act’).

4. Both the complaints filed by the appellant-complainant are

dismissed vide impugned order dated 06.12.2016 on the ground that

recognised consumer association can file complaint on behalf of single

consumer only, but cannot file complaint on behalf of several consumers

in one complaint. Review applications preferred against the dismissal of

the complaints have also been dismissed vide order dated 05.01.2017

which order is also under challenge.

5. We have heard Sri Ashwani Kumar, learned counsel appearing for

the appellant. Inspite of service of notice, there is no appearance on

behalf of the respondent.

6. Learned counsel appearing for the appellant has submitted that

the reasoning assigned by the NCDRC for dismissing the complaints as

not maintainable, is erroneous as much as there is no restriction on the

voluntary registered association to file complaint on behalf of single

consumer only. It is submitted that the restriction as recorded in the

impugned order will defeat the very purpose of registering an

association. Learned counsel has also brought to our notice an order of

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C.A.Nos.9961-9962 of 2017

the NCDRC in Consumer Complaint No.816 of 2016 wherein the

Tribunal has recorded a finding that, Section 12(1)(b) of the Act does not

preclude the recognised consumer association from filing a composite

complaint on behalf of more than one consumers, having a similar

grievance against the seller of the goods or the provider of services, as

the case may be. Further, it is submitted that the said order is affirmed

by this Court as the Civil Appeal Nos.10882 of 2016 etc. titled M/s.

Amrapali Sapphire Developer Pvt. Ltd. v. M/s. Amrapali Sapphire Flat

Buyers Welfare Association preferred against the orders passed by the

NCDRC are dismissed by order dated 21.02.2017.

7. Having considered the submissions made by the learned counsel

for the appellant and on perusal of the impugned order and other

material placed on record, we are of the view that the finding of the

NCDRC that recognised consumer association can file complaint on

behalf of a single consumer, but cannot file complaint on behalf of

several consumers in one complaint, is erroneous and there is no legal

basis for that. From a reading of Section 12(1)(b) of the Act read with

Explanation to Section 12 it is clear that voluntary registered association

can file a complaint on behalf of its members to espouse their

grievances. There is nothing in the aforesaid provision of the Act which

would restrict its application to the complaint pertaining to an individual

complainant. If a recognised consumer association is made to file

multiple complaints in respect of several consumers having a similar

cause of action, that would defeat the very purpose of registration of a

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C.A.Nos.9961-9962 of 2017

society or association and it would result only in multiplicity of

proceedings without serving any useful purpose.

8. We are in agreement with the view taken by the NCDRC in

interpreting the provisions of Section 12(1)(b) of the Act in order dated

30th August 2016 in Consumer Complaint No.816 of 2016 passed in the

case of Amrapali Sapphire Flat Buyers Welfare Association etc. v.

Amrapali Sapphire Developers Pvt. Ltd. etc. which is also affirmed by

this Court by virtue of dismissal of Civil Appeal Nos.10882 of 2016 etc.

vide order dated 21.02.2017.

9. For the aforesaid reasons, these civil appeals are allowed and the

impugned common order dated 06.12.2016 passed in Consumer

Complaint No.1196 and 1197 of 2016 and the orders dated 05.01.2017

passed in R.A. Nos.312 and 313 of 2016 are set aside. The matter is

remitted back to the National Consumer Disputes Redressal

Commission, New Delhi with a direction to consider the complaints on

merits and pass appropriate orders. It is made clear that the

observations made in this order are only for the purpose of disposal of

these appeals which are directed against the order of the NCDRC

dismissing the complaints in limine on the ground of maintainability. It is

open for the Commission to consider the grievance(s) raised in the

complaints on its own merits.

………….…………………………………J.

                                           [MOHAN M. SHANTANAGOUDAR]

           New Delhi.                      ….…………………………………………J.
                                               4
C.A.Nos.9961-9962 of 2017

           February 14, 2020   [R. SUBHASH REDDY]




                                  5
C.A.No.9963 of 2017

                                                                     REPORTABLE

                             IN THE SUPREME COURT OF INDIA

                              CIVIL APPELLATE JURISDICTION

                              CIVIL APPEAL NO.9963 OF 2017

           Monu Kumar & Ors.                                         …..Appellants
                                             Versus

           M/s. Metromax Infrastructure Pvt. Ltd.                    …..Respondent




                                        JUDGMENT

           R. Subhash Reddy, J.


1. This civil appeal is filed, by the complainant(s) in Consumer Case

No.1361 of 2015 filed before the National Consumer Disputes Redressal

Commission (for short, ‘NCDRC’), aggrieved by the order dated

09.01.2017.

2. The aforesaid complaint is filed by the appellant Monu Kumar and

32 others. In the joint complaint, it is alleged that there is deficiency of

service on the part of the respondent-opposite party in respect of

Buyer’s agreement executed between the respective complainants and

the opposite party. As the complaint was filed under Section 12(1)(c) of

the Consumer Protection Act, 1986 (for short, ‘the Act’), by number of

consumers having the same interest, they sought permission to file a

joint complaint by filing separate application. In the application for

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C.A.No.9963 of 2017

permission to file joint complaint in Consumer Case No.1361 of 2015,

the following order was passed on 27.11.2015 :

“Dated 27 Nov 2015

ORDER

Learned counsel for the complainants present. Arguments
heard.

The case stands admitted.

Notice be issued to opposite party returnable on 2.8.2016
with the direction to the opposite party to file the written
version within 30 days from the date of receipt of notice as
per Section 13 of the Consumer Protection Act, 1986. Time
of 15 days can be extended by filing an application by the
opposite party. In case, the written version is not filed within
the aforesaid period, the right of the opposite party to file the
written version shall stand forfeited.

…………………J
J.M. MALIK
PRESIDING MEMBER

…………………J
DR. S.M. KANTIKAR
MEMBER”

Having admitted the Consumer Case and issued notice, the impugned

order is passed rejecting the application for grant of permission to file

joint complaint under Section 12(1)(c) of the Act and consequently

rejecting the complaint filed.

3. We have heard learned counsels on both sides, perused the

impugned order and other material on record. As much as complaint

was filed on behalf of number of individual consumers, an application

was filed seeking permission to file joint complaint and after hearing the

arguments of the learned counsel, case was admitted and notice was

issued. Though expressly it is not stated that permission is granted in
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C.A.No.9963 of 2017

the application seeking permission to file joint complaint, but in view of

the fact that admission of the complaint is recorded in the order dated

27.11.2015 and notice was issued the permission is to be read as

inherent in the order of admission. When the specific application was

moved seeking permission for filing joint application and having passed

order of admission by issuing notice on such application, the

Commission ought not to have rejected the application by the impugned

order. The grant of permission is to be read inherently into the order

dated 27.11.2015.

4. For the aforesaid reasons, the impugned order is set aside, matter

is remitted back to the National Consumer Disputes Redressal

Commission, New Delhi with a direction to consider the matter afresh

and dispose of the complaint case on its own merits. The civil appeal is

accordingly allowed with a direction as indicated above.

………….…………………………………J.

[MOHAN M. SHANTANAGOUDAR]

….…………………………………………J.

[R. SUBHASH REDDY]

New Delhi.

February 14, 2020.

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