CIVIL APPEAL NO. 1676 OF 2019 ANJUM HUSSAIN & ORS. VS. INTELLICITY BUSINESS PARK PVT. LTD. & ORS.  

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Reportable IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.1676 OF 2019

ANJUM HUSSAIN & ORS. …Appellant(s)

VERSUS

INTELLICITY BUSINESS PARK PVT. LTD. & ORS.  …Respondent(s)

J U D G M E N T

Uday Umesh Lalit, J.

1. This appeal under Section 23 of the Consumer Protection Act, 1986 (hereinafter referred to as the Act) is directed against the Judgment and Order dated 10.10.2018 passed by the National Consumer Disputes  Redressal  Commission,  New  Delhi  (‘the  National Commission’, for short) in Consumer Case No.2241 of 2018 preferred by the appellants. 2. The  appellant  no.1  had  booked  an  office  space  admeasuring about 440 sq.ft in a project consisting of residential units, shops and  offices  launched  by  the  respondent.   The  Builder  –  Buyer Agreement  was  executed  between  the  appellant  no.1  and  the respondent on 02.12.2013, whereunder the respondent was to deliver possession of the office unit within four years.  Similar such Agreements were entered into between the appellant nos.2 to 44 and

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the respondent in respect of various units from the same project. 3. Since the respondent had failed to honour its commitments of delivering possession in four years and as the project was still at the stage of excavation, Case No.2241 of 2018 was filed by the appellants 1 to 44 seeking refund of the amounts paid by them to the  respondent  along  with  interest  and  compensation.   An application under Section 12(1)(c) of the Act was also filed by the appellants. 4. The first listing of the case before the National Commission was on 10.10.2018 when the application moved by the appellants under Section 12(1)(c) of the Act was dealt with by the National Commission as under:-

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

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

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‘consumer’.   Otherwise,  a  shop/commercial  unit  is deemed to be booked for a commercial purpose.

2. Since the scope of the complaint is not restrict only to the complainants and encompasses all the allottees of  the  shops/commercial  units,  as  is  specifically stated in the complaint and is also evident from the prayers made in the compliant, seeking direction to the opposite party to refund the amount deposited by each  complainant  as  well  as  other  allottees  along with  interest  and  compensation,  it  would  be maintainable as a class action only if it is alleged and  shown  that  all  the  allottees  of  the shops/commercial units in the above referred project had booked the same solely for the purpose of the earning their livelihood by way of self-employment, meaning thereby that all the allottees intend to work themselves in these shops/commercial units and the occupation of the said units by them has to be for the purpose of earning their livelihood.  A careful perusal of the complaint would show that it is not even alleged that all the allottees of the commercial units/shops in the above referred project had booked the said shops/units solely for the purpose of the earning their livelihood by way of self-employment. In the absence of such an averment in the complaint, no evidence can even be led to prove that not only the  complainants  but  all  the  allottees  of  the shops/commercial units had booked the same solely for the purpose of the earning their livelihood by way of self-employment.   Even  otherwise,  the  complainants cannot  know  the  purpose  for  which  the  allottees, other  than  the  complainants  had  booked  the  shops, commercial units in the aforesaid project.  The said purpose can be in the knowledge only of the concerned allottees.   Therefore,  this  class  action  under Section 12(1)(c) of the Consumer Protection Act on behalf  of  not  only  the  complainants  but  all  the allottees  of  the  shops/commercial  units  in  the aforesaid project is not maintainable.”

5. The National Commission thus concluded that the case could not be accepted as class action and dismissed the same.  It was however observed  that  the  dismissal  would  not  come  in  the  way  of  the complainants availing such other remedies as would be open to them. 6. The dismissal of the case as class action is questioned in

CIVIL APPEAL NO. 1676 OF 2019 ANJUM HUSSAIN & ORS. VS. INTELLICITY BUSINESS PARK PVT. LTD. & ORS.  

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this appeal. 7. We  heard  Mr.  Yash  Srivastava,  learned  Advocate  for  the appellants  and  Mr.  Ashutosh  Dubey,  learned  Advocate  for  the respondent. 8. Relevant  provisions  of  the  Act  may  be  adverted  to  at  the outset.  Sections 2(1)b and 2(1)(d) of the Act define “complainant” and “consumer” as under:-

 (b) “complainant” means –  (i) a consumer; or (ii)  any  voluntary  consumer  association registered under 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 representative; who or which makes a complaint; (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

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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 payments, 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, and services availed by him by means of self-employment;

9. Section 12 of the Act states: 12. Manner in which complaint shall be made – (1) A complaint 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  delivered  or  agreed  to  be  sold  or delivered  or  such  service  provided  or agreed to be provided;  

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

(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; 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.”

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10. Section 13(6) of the Act reads as under: 13. Procedure on admission of complaint – (1) to (5)………. (6)  Where  the  complainant  is  a  consumer referred to in sub-clause (iv) of clause (b) of  subsection  (1)  of  section  2,  the provisions 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 the plaintiff and the defendant shall be construed as a reference to a complaint or the opposite party, as the case may be.

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

12. In  Chairman,  Tamil  Nadu  Housing  Board,  Madras  vs.  T.  N. Ganapathy1 it was held by this Court that the persons who may be represented in a Suit under Order 1 Rule 8 of Civil Procedure Code need not have the same cause of action and all that is required for application of said provision  is that  the  persons concerned must have common interest or common grievance.  What is required is sameness of interest.  Paragraphs 7 and 9 of the decision were as under:-

7. On the question of maintainability of the 1  (1990) 1 SCC 608

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suit  in  a  representative  capacity  under Order  I,  Rule  8  of  the  Code  of  Civil Procedure, it has been contended that since the  injury  complained  of  is  in  regard  to demand of money and that too by a separate demand against each of the allottees, giving rise to different causes of action, Rule 1 has  no  application.  The  learned  counsel proceeded  to  say  that  it  is  not  known whether each of the allottees in Ashok Nagar had  been  even  served  with  an  additional demand  before  the  suit  was  filed;  and further emphasised that those who had been so served are interested in defeating only the demand individually referable to each of them. Each one of them is not interested in what  happens  to  the  others.  It  is, therefore, suggested that only such of the allottees who have already been served with additional demands are entitled to maintain an action in court, and they also should do it by filing separate suits. We do not find any merit in the argument. The provisions of Order I of Rule 8 have been included in the Code in the public interest so as to avoid multiplicity  of  litigation.  The  condition necessary for application of the provisions is that the persons on whose behalf the suit is  being  brought  must  have  the  same interest. In other words either the interest must be common or they must have a common grievance which they seek to get redressed. In  Kodia  Goundar v.  Velandi  Goundar (ILR 1955 Mad 339: AIR 1955 Mad 281) a Full Bench of the Madras High Court observed that on the plain language of Order I Rule 8, the principal requirement to bring a suit within that rule is the sameness of interest of the numerous  persons  on  whose  behalf  or  for whose benefit the suit is instituted. The court, while considering whether leave under the rule should be granted or not, should examine  whether  there  is  sufficient community  of  interest  to  justify  the adoption of the procedure provided under the rule. The object for which this provision is enacted is really to facilitate the decision of  questions,  in  which  a  large  number  of persons are interested, without recourse to the ordinary procedure. The provision must, therefore, receive an interpretation which will subserve the object for its enactment.

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There are no words in the rule to limit its scope to any particular category of suits or to exclude a suit in regard to a claim for money or for injunction as the present one.

… … …

9. It is true that each of the allottees is interested individually in fighting out the demand separately made or going to be made on him and, thus, separate causes of action arise in the case, but, that does not make Order I Rule 8 inapplicable. Earlier there was some doubt about the rule covering such a  case  which  now  stands  clarified  by  the Explanation introduced by the Code of Civil Procedure (Amendment) Act, 1976, which reads as follows:

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

The objects and reasons for the amendment were stated below:

“Objects  and  Reasons:  Clause  55; sub-clause (iv), — Rule 8 of Order I deals with representative suits. Under this  rule,  where  there  are  numerous persons having the same interest in one suit, one or more of them may, with the permission  of  the  court,  sue  or  be sued,  on  behalf  of  all  of  them.  The rule has created a doubt as to whether the  party  representing  others  should have the same cause of action as the persons represented by him. The rule is being substituted by a new rule and an explanation is being added to clarify that  such  persons  need  not  have  the same cause of action.”

There  is,  therefore,  no  doubt  that  the persons  who  may  be  represented  in  a  suit

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under Order I, Rule 8 need not have the same cause  of  action.  The  trial  court  in  the present  case  was  right  in  permitting  the respondent  to  sue  on  behalf  of  all  the allottees of Ashok Nagar. We, therefore, do not find any merit in this appeal which is dismissed  with  costs.  Before  closing, however, we would like to point out that the plaintiff has represented only those in the low income group in Ashok Nagar who will be governed by this judgment, and nothing that has been said or decided in this case is applicable to any other group or colony.”

13. Very same issue was dealt with by Full Bench of the National Commission  in  Ambrish  Kumar  Shukla  and  Ors.  vs.  Ferrous Infrastructure Pvt. Ltd.2.  The National Commission relied upon the decision of this Court in T.N. Housing Board1.  Relevant portion of the decision of the National Commission was :-

“10. Since by virtue of Section 13(6) of the Consumer Protection Act, the provisions of the  Order  1  Rule  8  of  CPC  apply  to  the consumer  complaints  filed  by  one  or  more consumers where there are numerous consumers having the same interest, the decision of the  Hon'ble  Supreme  Court  in  Tamil  Nadu Housing Board (supra) would squarely apply, while answering the reference. The purpose of giving a statutory recognition to such a complaint being to avoid the multiplicity of litigation, the effort should be to give an interpretation  which  would  sub  serve  the said objective, by reducing the increasing inflow  of  the  consumer  complaints  to  the Consumer Forums. The reduction in the number of  consumer  complaints  will  be  cost effective  not  only  for  the  consumers  but also for the service provider. 11..……As held by the Hon'ble Supreme Court in  Tamil  Nadu  Housing  Board  (supra),  the interest of the persons on whose behalf the claim is brought must be common or they must have a common grievance which they seek to get addressed. The defect or deficiency in

2  Consumer Case No.97 of 2016, decided on 07.10.2016

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the goods purchased, or the services hired or availed of by them should be the same for all  the  consumers  on  whose  behalf  or  for whose  benefit  the  complaint  is  filed. Therefore, the oneness of the interest is akin to a common grievance against the same person. If, for instance, a number of flats or  plots  in  a  project  are  sold  by  a builder/developer to a number of persons, he fails  to  deliver  possession  of  the  said flats/plots within the time frame promised by him, and a complaint is filed by one or more such persons, either seeking delivery of  possession  of  flats/plots  purchased  by them  and  other  purchasers  in  the  said project, or refund of the money paid by them and  the  other  purchasers  to  the developer/builder is sought, the grievance of  such  persons  being  common  i.e.  the failure of the builder/developer to deliver timely possession of the flats/plots sold to them, they would have same interest in the subject  matter  of  the  complaint  and sufficient community of interest to justify the adoption of the procedure prescribed in Order  1  Rule  8  of  the  Code  of  Civil Procedure,  provided  that  the  complaint  is filed on behalf of or for the benefit of all the  persons  having  a  common  grievance against  the  same  developer/builder,  and identical  relief  is  sought  for  all  such consumers. The primary object behind permitting a class action  such  as  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  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

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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) 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.”

14. It was observed by this Court in T.N. Housing Board1 that the provision must receive an interpretation which would subserve the object for its enactment.  It is in this light that the Full Bench of the National Commission held that oneness of the interest is akin to a common grievance against the same person.   

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

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

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

..…..……………….J. (Arun Mishra)

..…………………….J. (Uday Umesh Lalit)

New Delhi; May 10, 2019.