Are Class Action in respect of Consumer Dispute emanating from a commercial transaction done for the purpose of livelihood maintainable?
It is no more a res integra that a person buying goods or availing services for a commercial purpose shall be a Consumer within the meaning of Consumer Protection Act provided the goods so purchased or the services so availed are for the purpose of earning a livelihood. With the aforesaid being settled law, the question of whether class actions in cases goods purchased or services availed for doing commerce for the purpose of livelihood be brought to the Consumer Courts emerged. While class actions in respect of non-commercial transactions were maintainable and got further fortified by the judgment in Ambrish Kumar Shukla and Ors. Vs. Ferrous Infrastructure Pvt. Ltd (Consumer Complaint No. 1498 of 2015), the maintainability of class actions in respect of commercial transactions but for the purpose of livelihood remained a debatable and less touched subject.
However, when the question of maintainability of class action due to a dispute arising out of a commercial transaction done for earning livelihood came up before the Hon’ble National Consumer Disputes Redressal Commission, New Delhi (hereinafter referred to as “NCDRC”), it had answered the aforesaid question against the complainant. Anjum Hussain & Ors Versus Intellicity Business Park Pvt. Ltd. & Anr. (Consumer Complaint No. 2241 of 2018) and Usha Rani Atree & Ors. Vs Earth Infrastructures Ltd (Consumer Complaint No. 902 of 2017) were dismissed by the NCDRC primarily on the ground that each of the complainants will have to lead evidence to show that specific commercial spaces booked by them were booked with an intention to use said spaces for earning a livelihood by means of self-employment. Hence, the NCDRC held that it would be a case of misjoinder of parties and causes of action in such cases. Resultantly the grant of permission under Section 12 (1) (c) of the Act to pursue common complaint jointly was not granted by the NCDRC.
Anjum Hussain & Others, being dissatisfied with the verdict of NCDRC took their case to the Hon’ble Apex Court by filing a Civil Appeal. The Hon’ble Apex Court came to the rescue of the Appellants and held that the provision touching upon the institution of class actions i.e. Section 12(1) (c) of COPRA, 1986 must receive an interpretation which would subserve the object for its enactment. Oneness of the interest is akin to a common grievance against the same person and hence there is no legal impediment even if in maintainability of consumer disputes in consumer courts arising from a commercial transaction done to earn a livelihood.
Recently, in Neema Agarwal & Ors. Vs. Bhasin Infotech and Infrastructure Pvt. Ltd. (Consumer Complaint No. 684 of 2018), the Complainants before NCDRC being allottees of small commercial spaces in a project, namely, Grand Venice Mall’ filed a joint consumer complaint on behalf of all such allottees of the aforesaid project who may seek refund of the amount paid by them to the builder along with compensation, etc. The Complainants had invested in the mall in order to either start a small-scale business or to shift already running a small-scale business in around 500 sq. ft each. The aforesaid contention was specifically pleaded by the Complainants in their complaint. The complainants sought a refund of the amount which they and other affected consumers had paid to the OP in respect of the shops purchased solely for the purpose of livelihood, along with interest etc. The Complainants as required under law, also moved an application under Section 12(1) (c) along with their complainants.
The Complainants’ application was opposed by the builder on grounds namely, complainant not being consumers as per the COPRA, 1986, dismissal of a similar complaint by NCDRC in the past, pendency of Arbitration between one of the Complainants and the builder, builder putting effort to settle the matter with the complainants and lastly, the law of limitation.
The Hon’ble NCDRC relied on the verdict of Anjum Hussain and rejected all the grounds raised by the OP and allowed the Complainants to institute a complaint for the benefit of all consumers similarly situated to them and seeking refund of entire sums paid by them. Accordingly, a publication has been ordered in the Navbharat Times and Times of India and the matter has been posted for 26th February 2020.
It is no more a res integra that a person buying goods or availing services for a commercial purpose shall be a Consumer within the meaning of Consumer Protection Act provided the goods so purchased or the services so availed are for the purpose of earning a livelihood. With the aforesaid being a settled law, the question whether class actions in cases goods purchased or services availed for doing commerce for the purpose of livelihood be brought to the Consumer Courts emerged. While class actions in respect of non-commercial transactions were maintainable and got further fortified by the judgment in Ambrish Kumar Shukla and Ors. Vs. Ferrous Infrastructure Pvt. Ltd (Consumer Complaint No. 1498 of 2015), the maintainability of class actions in respect of commercial transactions but for the purpose of livelihood remained a debatable and less touched subject.
However, when the question of maintainability of class action due to a dispute arising out of a commercial transaction done for earning livelihood came up before the Hon’ble National Consumer Disputes Redressal Commission, New Delhi (hereinafter referred to as “NCDRC”), it had answered the aforesaid question against the complainant. Anjum Hussain & Ors Versus Intellicity Business Park Pvt. Ltd. & Anr. (Consumer Complaint No. 2241 of 2018) and Usha Rani Atree & Ors. Vs Earth Infrastructures Ltd (Consumer Complaint No. 902 of 2017) were dismissed by the NCDRC primarily on the ground that each of the complainant will have to lead evidence to show that specific commercial spaces booked by them were booked with an intention to use said spaces for earning livelihood by means of self employment. Hence, the NCDRC held that it would be a case of misjoinder of parties and causes of action in such cases. Resultantly the grant of permission under Section 12 (1) (c) of the Act to pursue common complaint jointly was not granted by the NCDRC.
Anjum Hussain & Others, being dissatisfied with the verdict of NCDRC took their case to the Hon’ble Apex Court by filing a Civil Appeal. The Hon’ble Apex Court came to the rescue of the Appellants and held that the provision touching upon institution of class actions i.e. Section 12(1) (c) of COPRA, 1986 must receive an interpretation which would subserve the object for its enactment. Oneness of the interest is akin to a common grievance against the same person and hence there is no legal impediment even if in maintainability of consumer disputes in consumer courts arising from a commercial transaction done to earn livelihood.
Recently, in Neema Agarwal & Ors. Vs. Bhasin Infotech and Infrastructure Pvt. Ltd. (Consumer Complaint No. 684 of 2018), the Complainants before NCDRC being allottees of small commercial spaces in a project, namely, Grand Venice Mall’ filed a joint consumer complaint on behalf of all such allottees of the aforesaid project who may seek refund of the amount paid by them to the builder alongwith compensation etc. The Complainants had invested in the mall in order to either start small-scale business or to shift already running small-scale business in around 500 sq. ft each. The aforesaid contention was specifically pleaded by the Complainants in their complaint. The complainants sought refund of the amount which they and other affected consumers had paid to the OP in respect of the shops purchased solely for the purpose of livelihood, alongwith interest etc. The Complainants as required under law, also moved an application under Section 12(1) (c) along with their complainants.
The Hon’ble NCDRC relied on the verdict of Anjum Hussain and rejected all the grounds raised by the OP and allowed the Complainants to institute a complaint for the benefit of all consumers similarly situated to them and seeking refund of entire sums paid by them. Accordingly, a publication has been ordered in the Navbharat Times and Times of India and the matter has been posted for 26th February 2020.
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