Associations That Are Formed Due To Mandate Of Law Cannot File A Consumer Complaint: SC [Read Judgment]

Explaining the term 'voluntary consumer association' appearing in Section 12(1)(b) of the Consumer Protection Act, the Supreme Court observed that it is 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 bench of Justice Mohan M. Shantanagoudar and Justice R. Subhash Reddy observed thus while holding that Sobha Hibiscus Condominium, an 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 Karnataka Apartment Ownership Act, 1972, cannot be said to be a voluntary association to maintain a complaint under the provisions of the Act.

The bench was considering an appeal against NCDRC order rejecting the complaint filed by the Association on the ground that it 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.

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. The issue in the appeal before the Apex Court was whether Sobha Hibiscus Condominium is a voluntary consumer association?

The Court noted that 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 and the Complainant-body came into existence pursuant to a declaration made by the opposite party in terms of the 1972 Act. It observed:

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 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.

While dismissing the appeal, the bench further observed:

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.  

Case name : Sobha Hibiscus Condominium vs. Managing Director, M/s. Sobha Developers Ltd
Case no.: CIVIL APPEAL NO.1118 OF 2016
Coram: Justice Mohan M. Shantanagoudar and Justice R. Subhash Reddy 
Counsel: Advocate Rajesh Mahale and Sr. Advocate Basava Prabhu S. Patil

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