Rameshwar Prasad Shrivastava vs Dwarikadhis Projects Pvt. Ltd.

Civil Appeal No.4802 of 2018 etc. Rameshwar Prasad Shrivastava & Ors. Vs. Dwarkadhis Projects Pvt. Ltd. & Ors.

1 Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 5802 OF 2018

RAMESHWAR PRASAD SHRIVASTAVA AND ORS. ……Appellants

VERSUS

DWARKADHIS PROJECTS PVT. LTD. AND ORS. ..…. Respondents

WITH

CIVIL APPEAL NO. 9162 OF 2018

AVINASH GAUR AND ORS. ……Appellants

VERSUS

DWARKADHIS PROJECTS PVT. LTD. AND ORS. ……Respondents

JUDGMENT

Uday Umesh Lalit, J.

Signature Not Verified Digitally signed by NARENDRA PRASAD Date: 2018.12.07 17:37:48 IST

1. These appeals under Section 23 of the Consumer Protection Act, 1986 Reason:

(hereinafter called ‘the Act’) are directed against the judgments and orders Civil Appeal No.4802 of 2018 etc. Rameshwar Prasad Shrivastava & Ors. Vs. Dwarkadhis Projects Pvt. Ltd. & Ors. 2 dated 13.02.2018 and 08.08.2018 passed by the National Consumer Disputes

Redressal Commission, New Delhi (‘the National Commission’ for short)

dismissing Consumer Case Nos.250 of 2013 and 43 of 2014 as not

maintainable.

2. An advertisement campaign was started by the first respondent

sometime in 2006-2007 for sale of apartments in a group housing project

called “Aravali Heights” located at Sector-24, Dharuhera, Haryana. Various

interested persons booked their apartments and entered into builder-buyer

agreements. Clause 11 of such typical agreement provided that the possession

would be delivered by the first respondent within three years. The time

specified for delivery thus expired in the year 2010 but no possession was

offered within the stipulated time. It appears that letters were received by

various such buyers from April, 2012 onwards asking for payment of final

instalment connected with delivery of possession. Various buyers found that

the apartments were not habitable at all and the infrastructure such as roads,

water supply, sewerage, storm water drain, fire fighting system, electricity

were not constructed or made functional. Some of the buyers therefore filed

Civil Writ Petition No.25054 of 2014 in the High Court of Punjab and

Haryana which was disposed of by the High Court directing said petitioners to Civil Appeal No.4802 of 2018 etc. Rameshwar Prasad Shrivastava & Ors. Vs. Dwarkadhis Projects Pvt. Ltd. & Ors. 3 make appropriate representation to the competent authority. It further appears

that thereafter detailed representations were made and an order came to be

passed by the concerned directorate which was then challenged by certain

allottees by filing Civil Writ Petition No.26358 of 2016.

3. At this stage 19 such allottees came together and filed a joint

complaint being Consumer Case No.250 of 2013 on 06.08.2013 in the

National Commission praying following reliefs:

“1. For delayed possession, this Hon’ble commission may direct the Respondent No.1 to provide a tower- wise schedule for completion and handing over the possession of all the flats in the “Aravali Heights” Multi-storeyed Group Housing Complex) located at Sector 21, Dharuhera on the basis of current progress & development activities.

Direct the Respondent No.1 to provide tower-wise construction status achieved so far for each tower in the complex with corresponding dates of achieving completion and an honest and logical tower-wise details/list of unfinished construction tasks and corresponding schedule of completion thereof.

Payment of penalty @ 36 per cent per annum, compounded annually (at the prevailing market rate) be imposed on the total amount paid to the builder so far by the apartment buyers and be directed to be paid immediately or at the time of possession to be calculated on the basis explained in the complaint. Civil Appeal No.4802 of 2018 etc. Rameshwar Prasad Shrivastava & Ors. Vs. Dwarkadhis Projects Pvt. Ltd. & Ors.

4 2. Declare that the demand raised by the Respondent No.1 for the enhanced/extra EDC by including interest thereon as null and void.

Direct the Respondent No.1 to provide details of the initial EDC and EDC Charge and Calculations thereof in terms of the latest directive/memo issued by the official Respondents including the status of its payment by the Builder to the DGTCP – Haryana including their payments by the Respondent No.1 to the DGTCP – Haryana.

Direct the builder to raise fresh/rectified demand bills/letter towards EDC Charges after addressing the stated issues-supra. Direct the adjustment of the extra amounts paid by some of the Buyers against the EDC with interest @ 24% thereon against the fresh computations/bills raised as above.

Direct the Respondent No.1 to maintain transparency in the matter of payment of EDC Charges to the Authorities by displaying the status on their Website so as to restore Buyer Confidence.

3. Direct the Respondent No.1 to refund the open stilt car parking charges in the sum of Rs.75,000/- to Rs.1,50,000/- to the buyers and the community building membership charges – these being not saleable and part of common areas and not belonging to the Respondent No.1

4. Direct the Respondent No.1 to refrain from raising illegal demands of new PLC and immediately withdraw their demand letters to customers of some of the units demanding new PLC under filmsy grounds.

Civil Appeal No.4802 of 2018 etc. Rameshwar Prasad Shrivastava & Ors. Vs. Dwarkadhis Projects Pvt. Ltd. & Ors. 5

Direct the Respondent No.1 to refund with 36% interest the PLC money claimed from all those consumer/Complainants whose flats have ceased to remain Green Facing/falling under PLC of Green facing.

5. Direct the Respondent No.1 to refrain from raising illegal demands of the additional electricity charges, and to immediately withdraw their demand letters to customers of some of the units demanding the additional electricity charges under flimsy grounds.

6. Direct the Respondent No.1 to refrain from raising illegal demands of the electricity charges, as the said demand and the affixation of the electricity charges is unilateral, and any such charges towards the electricity are payable when the possession is given, and for an amount, which is determined in consultation with the buyers.

7. Direct the Respondent No.1 to refrain from raising illegal demands of the Maintenance Charges, as the said charges are payable when the possession is given to the buyers after completing the flat in all respect.

8. Direct the Respondent No.1 to pay penalty for the mental harassment caused to the Complainants @ 10,00,000/- (Rupees Ten lakhs) per Complainant).

9. Direct the Respondent No.1 to pay costs towards Legal expenditure @ Rs.50,000/- (Rupees Fifty Thousand) per Complainant.

10. Direct the Respondent No.1 to complete the project and the flats with all the amenities and facilities including water connection, electricity connection, Civil Appeal No.4802 of 2018 etc. Rameshwar Prasad Shrivastava & Ors. Vs. Dwarkadhis Projects Pvt. Ltd. & Ors. 6

power back up, roads, park, parking space, club house, street lighting, sewage drains, rainwater drains, firefighting system etc.

11. Declare the aforesaid legal omissions and commissions as amounting deception, deficiency in service and amounts to unfair trade practice together with monetary compensation/penalty/etc. as prayed in the complaint for the gross mental tension and harassment.”

4. The National Commission issued notice on 23.08.2013, whereafter the

first respondent put in appearance and filed its written statement. After

exchange of pleadings, the evidence was also completed. After about 20

hearings in the matter, by order dated 25.02.2016 the case was fixed for final

arguments.

5. On 07.10.2016 a Bench of three Members of the National

Commission delivered judgment in Ambrish Kumar Shukla and others v.

Ferrous Infrastructure Pvt. Ltd.1 while answering reference made to the

larger Bench of the National Commission. One of the points which was

referred to the larger Bench of the National Commission was as under: 1

I (2017)CPJ1 (NC) Civil Appeal No.4802 of 2018 etc. Rameshwar Prasad Shrivastava & Ors. Vs. Dwarkadhis Projects Pvt. Ltd. & Ors.

7 “(i) Whether a complaint under Section 12(1)(c) of the Consumer Protection Act filed on behalf of or for the benefit of only some of the numerous consumers hav- ing a common interest or a common grievance is main- tainable or it must necessarily be filed on behalf of or for the benefit of all the consumers having a common interest or a common grievance against same person(s)”

6. After considering the relevant provisions of the Act namely Section

2(1)(b) defining the expression “complainant”, Section 12(1) and Section

13(6) of the Consumer Protection Act, 1986 (‘The Act’, for short) as well as

the provisions of Order I Rule 8 of Code of Civil Procedure (‘CPC’, for short)

and a decision of this Court in The Chairman, Tamil Nadu Housing Board,

Madras v. T.N. Ganapathy2 the larger Bench of the National Commission

held as under:

“……………The primary object behind permitting a class action such a complaint under Section 12(1)(c) of the Consumer Protection Act being to facilitate the decision of a consumer dispute in which a large number of consumers are interested, without recourse to each of them filing an individual complaint, it is necessary that such a complaint is filed on behalf of or for the benefit of all the persons having such a community of interest. A complaint on behalf of only some of them therefore will not be maintainable. If for instance, 100 flat buyers/plot buyers in a project have a common grievance against the builder/Developer and a 2 (1990) 1 SCC 608 Civil Appeal No.4802 of 2018 etc. Rameshwar Prasad Shrivastava & Ors. Vs. Dwarkadhis Projects Pvt. Ltd. & Ors.

8 complaint under Section 12(1)(c) of the Consumer Protection Act is filed on behalf of or for the benefit of say 10 of them, the primary purpose behind permitting a class action will not be achieved, since the remaining 90 aggrieved persons will be compelled either to file individual complaints or to file complaints on behalf of or for the benefit of the different group of purchasers in the same project. This, in our view, could not have been the Legislative intent. The term ‘persons so interested’ and ‘persons having the same interest’ used in Section 12(1)(c) mean, the persons having a common grievance against the same service provider. The use of the words “all consumers so interested” and “on behalf of or for the benefit of all consumers so interested”, in Section 12(1)(c)(d) leaves no doubt that such a complaint must necessarily be filed on behalf of or for the benefit of all the persons having a common grievance, seeking a common relief and consequently having a community of interest against the same service provider.

7. The aforesaid Consumer Case No.250 of 2013 was thereafter taken up

for consideration. The National Commission observed certain factual

developments in the matter as under:

“4. A perusal of the record clearly establishes that at the time of filing of this Complaint, no application under Section 12(1)(c) seeking permission to file joint Complaint had been filed by the Complainants, though there were 19 Complainants in this Complaint. Thereafter, an I.A.No.12680 of 2017 has been filed by the Complainants seeking amendment of the Complaint. The Civil Appeal No.4802 of 2018 etc. Rameshwar Prasad Shrivastava & Ors. Vs. Dwarkadhis Projects Pvt. Ltd. & Ors.

9 said application also contained an Application under Section 12(1)(c) of the Act.

5. Ms. Priyanjali Singh, Advocate for the Complainants at the time of arguments in this case, on instructions, stated that the Complainants did not wish to press I.A.No.12680 of 2017 seeking amendment of the Complaint and requested the Complaint should be dealt with as filed earlier. Hence, I.A.No.12680 of 2017 was dismissed as not pressed.”

8. It was observed that since there was no application under Section

12(1)(c) of the Act, in view of the decision rendered by larger Bench of the

National Commission in Ambrish Kumar (supra), the complaint in the instant

case was not maintainable. The National Commission thus by its order dated

13.02.2018 dismissed the aforesaid Consumer Case No.250 of 2013 as not

being maintainable. Similarly, by order dated 08.08.2018 the National

Commission dismissed Complaint Case No.43 of 2014 preferred by 4 buyers

in respect of same project of the first respondent as not being maintainable.

9. These appeals thus question the correctness of the decisions of the

National Commission and raise issues concerning maintainability of the

complaints. At this stage we may extract the relevant provisions of the Act. Civil Appeal No.4802 of 2018 etc. Rameshwar Prasad Shrivastava & Ors. Vs. Dwarkadhis Projects Pvt. Ltd. & Ors. 10

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

(a) … … …

(b) “complainant” means-

(i) a consumer; or

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

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

(iv) One or more consumers, where there are numerous consumers having the same interest;

(v) In case of death of a consumer, his legal heir or repre-

sentative; who or which makes a complaint;

Section 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-

(a) The consumer to whom such goods are sold or deliv- ered or agreed to be sold or delivered or such service provided or agreed to be provided;

Civil Appeal No.4802 of 2018 etc. Rameshwar Prasad Shrivastava & Ors. Vs. Dwarkadhis Projects Pvt. Ltd. & Ors. 11

(b) Any recognised consumer association whether the con- sumer to whom the goods sold or delivered or agreed to be sold or delivered or service provided or agreed to be proved is a member of such association or not;

(c) One or more consumers, where there are numerous consumers having the same interest, with the permis- sion of the District Forum, on behalf of, or for the bene- fit of, all consumers so interested; or

(d) The Central Government or the State Government, as the case may be, either in its individual capacity or as a representative of interests of the consumers in general.

Section 13. Procedure on admission of complaint

… … …

(6) Where the complainant is a consumer referred to in sub-clause (iv) of clause (b) of sub-section (1) of section 2, the provisions of rule 8 of Order I of the First Schedule to the Code of Civil procedure, 1908 (5 of 1908) shall apply subject to the modification that every reference therein to a suit or decree shall be construed as a reference to a complaint or the order of the District Forum thereon.”

10. We heard Ms. Priyanjali Singh, learned Advocate in support of the

appeals and Mr. V.V. Manoharan, learned Advocate for the first respondent.

According to Ms. Singh, the definition of the Complainant as found in Section

2(1)(b) permits even a voluntary consumer association to espouse the cause of Civil Appeal No.4802 of 2018 etc. Rameshwar Prasad Shrivastava & Ors. Vs. Dwarkadhis Projects Pvt. Ltd. & Ors. 12 aggrieved party/parties. In her submission the expression “one or more

consumers, where there are numerous consumers having the same interest”

ought to be given widest possible interpretation so as to sub-serve the

underlying objectives of the Act and to make the redressal mechanism easy,

cost effective and efficacious. She further submitted that in cases having

large number of apartment holders, if only some of them approach the

consumer forum, their grievance redressal ought not to be forced to go

through the mechanics of Section 13(6) of the Act read with the provisions of

Order 1 Rule 8 CPC. According to her any such insistence would render the

remedy exorbitant as cost required for newspaper publication itself would be

quite prohibitive. On the other hand, Mr. Manoharan, learned Advocate for

the first respondent, submitted that the view taken by the Commission in

Ambrish Kumar (supra) was correctly and rightly applied by the Commission

in the present case. He further submitted that such view was the only possible

view, going by the text of the relevant provisions.

11. A closer look at Section 2(1)(b) would show that under sub-clause (i)

it is the consumer himself, as aggrieved person who could be the Complainant

and maintain an action. Under sub-clause (ii), a voluntary organization or

association may espouse the cause of such aggrieved person. Under sub- Civil Appeal No.4802 of 2018 etc. Rameshwar Prasad Shrivastava & Ors. Vs. Dwarkadhis Projects Pvt. Ltd. & Ors. 13 clause (iii) either the central government or the state government may take-up

the matter as complainant. We are, however, concerned with the expression

appearing in sub-clause (iv) which reads “one or more consumers whether

there are numerous consumers having the same interest”. This very

expression finds incorporated in sub-clause (c) of Section 12(1) with an

addition following said expression, namely “….. with the permission of the

District Forum, on behalf of, or for the benefit of, all consumers so

interested”.

12. Section 12(1) thus in its substantive part says that a complaint may be

filed with the District Forum by any of the four categories as mentioned in

sub-clauses ‘a’ to ‘d’. Since sub-clause (c) contemplates filing of such

complaint, “….. with the permission of the District Forum”, we will have to

see the context and in what manner such permission is required to be taken in

terms of the provisions of the Act. The answer is available in Section 13(6) of

the Act which inter alia lays down that where the complaint is referable to

Section 2(1)(b)(iv), the provisions of Rule 8 of Order 1 of the First Schedule

to the CPC, 1908 (Act 5 of 1908) shall apply subject to the modification that

every reference therein to a suit or decree shall be construed as a reference to Civil Appeal No.4802 of 2018 etc. Rameshwar Prasad Shrivastava & Ors. Vs. Dwarkadhis Projects Pvt. Ltd. & Ors. 14 a complaint or the order of the District forum thereon. The mandate, “shall

apply” is quite significant.

13. The language used and the text in Section 13(6) is clear that wherever

a complaint is filed by a complainant in the category referred to in Section

2(1)(b)(iv), the provisions of Order 1 Rule 8 CPC shall apply with the

modification that reference to suit or decree shall be construed as reference to

a complaint or order of the District Forum. The expression “with the

permission of the District Forum” as appearing in Section 12(1)(c) must be

read along with Section 13(6) which provides the context and effect to said

expression. In our view Sections 12(1)(c) and 13(6) are not independent but

are to be read together and they form part of the same machinery.

14. It is however summitted that the expression “one or more consumers,

where there are numerous consumers having the same interest” may be given

widest possible interpretation so as to make the redressal mechanism easy,

cost effective and efficacious. We are afraid we cannot accept such

contention as the language employed in the relevant provisions is absolutely Civil Appeal No.4802 of 2018 etc. Rameshwar Prasad Shrivastava & Ors. Vs. Dwarkadhis Projects Pvt. Ltd. & Ors. 15 clear and does not admit of any other interpretation. It was laid down by this

Court in Babu Manmohan Das Shah & ors. v. Bishun Das3 as:-

“The ordinary rule of construction is that a provision of a statute must be construed in accordance with the language used therein unless there are compelling reasons, such as, where a literal construction would reduce the provision to absurdity or prevent the manifest intention of the legislature from being carried out.”

If we accept the submission of the appellants, the category of persons

referred to in Section 13(6) of the Act, with the aid of requisite permission in

terms of Order I Rule 8 of the CPC could maintain a class action which may

bind similarly placed consumers but those referred to in Section 12(1)(c)

would be a different category who would not be bound by the provisions of

Order I Rule 8 of CPC. In essence a separate category of persons as

consumer/consumers would be entitled to maintain an action under Section

12(1)(c) of the Act. In our considered view that certainly is not the intent. If

we accept the submission, we would be going against the express mandate of

the statute. All that such interpretation would help achieve for some

consumers is to maintain an action in a forum with higher pecuniary

jurisdiction where, but for such collective cause of action, the action would

not lie in such forum with higher pecuniary jurisdiction.

3 (1967) 1 SCR 836 at page-839 Civil Appeal No.4802 of 2018 etc. Rameshwar Prasad Shrivastava & Ors. Vs. Dwarkadhis Projects Pvt. Ltd. & Ors.

16 15. We, therefore, find that the view taken by the National Commission in

the case of Ambrish Kumar (supra) is consistent with the text of the

provisions and is the correct view. The National Commission, in the present

case, was therefore justified in holding Consumer Case Nos. 250 of 2013 and

43 of 2014 to be not maintainable.

16. During the course of hearing we had asked Ms. Singh, learned counsel

if the appellants were willing to proceed with the requirements under Section

13(6) of the Act and take appropriate steps as mandated under Order 1 Rule 8

CPC. She, however, responded that the entire process being prohibitive in

terms of cost, her clients were unwilling to proceed in that behalf. It must

however be noted that the matters were pending with the National

Commission for more than three years during which time the pleadings were

exchanged and the evidence was filed. In the circumstances, though we

uphold the view taken by the National Commission, the proper course would

be to enable the appellants to approach the concerned State Commission. If

the State Commission is so approached, the matter shall not be proceeded de

novo but from the stage at which it was before the National Commission. Civil Appeal No.4802 of 2018 etc. Rameshwar Prasad Shrivastava & Ors. Vs. Dwarkadhis Projects Pvt. Ltd. & Ors.

17 That is to say that the matter shall be proceeded with on the strength of same

pleadings and the evidence laid before the National Commission.

17. With these observations these Civil Appeals stands disposed of. No

costs.

………..…..……..……J. (Uday Umesh Lalit)

..………….……………J. (R. Subhash Reddy) New Delhi, December 07, 2018.