Supreme Court Expands the Scope of Section 35(1)(a) of Consumer Protection Act, 2019: More than one Consumer can File a Joint Complaint

Introduction

The Consumer Protection Act, 2019¹ (2019 Act), as well as the old Act of 1986², provides for class-action litigation. Under Section 35(1)(c) of the 2019 Act³, one or more consumers can file a complaint on behalf of other similarly placed consumers. This type of complaint (in common parlance, referred to as a “joint complaint/group complaint”) mandatorily inherits the application of Order 1 Rule 8⁴ of the Code of Civil Procedure, 1908⁵. That being so, joint complaints initiated by groups of consumers who have joined hands for the redressal of only their grievances, have been previously disallowed by the consumer fora.

Previous position in law

Joint complaints, but not in a representative capacity, have always been dismissed as being unsustainable under the consumer protection law. In a landmark ruling of the year 2016⁶, the National Consumer Disputes Redressal Commission (NCDRC) observed that the legislative intent to permit a class action was not to allow only a group of consumers to club together and prefer a consumer complaint for themselves.

Thereafter, this view was reiterated several times by the NCDRC whilst dismissing complaints instituted by groups of consumers looking for the redressal of their individual grievances. In one such case⁷, the NCDRC ruled that complaints wherein the prayer for relief is restricted only to the complainants therein are not maintainable under Section 12(1)(c)⁸ of the 1986 Act.

In another case⁹, it was categorically held that there is no provision under the Consumer Protection Act, 1986, that envisages a joint complaint filed by more than one complainant for the redressal of grievances restricted to themselves.

Reversal of position by Supreme Court in Brigade Enterprises Ltd. v. Anil Kumar Virmani

Dismissal of joint/group complaints wherein there was no undertaking of representation of other similarly placed consumers became the standard ruling of the NCDRC. The position that joint/group complaints have to be compulsorily preferred in a representative capacity stood solid, until on 17-12-2021, the Supreme Court, in Brigade Enterprises Ltd. v. Anil Kumar Virmani¹⁰, held that a “joint complaint” preferred by a few consumers, but not in a representative capacity, was maintainable under Section 35(1)(a) of the 2019 Act. The premise was that Section 2(5)(i)¹¹ of the Act, which defines a “consumer”, includes “consumers” by the conjoint virtue of Section 13(2) of the General Clauses Act, 1897¹², and there being nothing repugnant in the 2019 Act to hold otherwise.

Although the dismissal of the application under Section 35(1)(c) by NCDRC was upheld in that case, the supposedly doomed fate of the complaint therein was turned around and the same was directed to be entertained as a “joint complaint” under Section 35(1)(a) of the 2019 Act.

Difference between a “joint complaint” and a complaint under Section 35(1)(c)

Priorly, the terms “joint complaint” and “group complaint” were used interchangeably to refer to a complaint preferred under Section 35(1)(c). However, the ruling in Brigade Enterprises¹³ has now set out a “joint complaint” to be different from a complaint filed in a representative capacity. The features of both are distinct and offer consumers two very different choices of litigation. A reading of the said judgment would highlight the key points of distinction between the two, as have been tabulated hereinbelow:

Determination of pecuniary jurisdiction in joint complaints entertained under Section 35(1)(a) of Consumer Protection Act, 2019

Although Brigade Enterprises¹⁴ provides for the entertainment of joint complaints under Section 35(1)(a), it fails to lay down the method of computation for the purposes of determining pecuniary jurisdiction. It was left unclear if each complainant has to pay a consideration of Rs 2 crores or if the total value of consideration paid by all complainants has to meet the threshold of Rs 2 crores.

To further obscure the issue, the NCDRC stated on one instance¹⁵, that the complaint therein was maintainable as “the value of the consideration paid by each of the complainants is more than Rs 2 crores”. The usage of such language would demand the inference that the consideration paid by every complainant has to exceed Rs 2 crores. However, such an inference would defeat the purpose of a joint complaint as if a complainant has paid more than Rs 2 crores, he would be singly eligible to approach the NCDRC and would then not be required to join hands with other similarly placed consumers to invoke the provisions of Section 35(1)(a).

Finally, a three-Member Bench of the NCDRC settled the position of law in Akshay Kumar v. Adani Brahma Synergy (P) Ltd.¹⁶, by holding that for the purposes of meeting pecuniary jurisdiction, the total consideration paid by all the complainants has to exceed Rs 2 crores. In observing so, reliance was placed upon its earlier decision in Ambrish Kumar Shukla¹⁷, which stated that the value of the goods purchased or the services hired and the compensation claimed by each complainant would be immaterial; the total value of the goods purchased or the services hired by all complainants and the compensation claimed by all of them shall be considered to determine pecuniary jurisdiction. However, it is to be borne in mind that prior to the enactment of the 2019 Act, pecuniary jurisdiction in joint complaints was computed by the value of the goods purchased or the services hired, and the compensation claimed by all the complainants. Nonetheless, the NCDRC upheld the principle to apply to the total value of paid consideration for joint complaints under the 2019 Act.

The judgment in Akshay Kumar¹⁸ recently served as a basis for the admission of a joint complaint¹⁹ preferred by 30 complainants against M/s Raheja Developers Pvt. Ltd., which was held to be maintainable “as the total consideration paid by these 30 persons exceeds Rs 2 crores”.

Thus, it now stands clarified that the total value of consideration paid by all the complainants shall be considered while determining the pecuniary jurisdiction for a joint complaint under Section 35(1)(a) of the 2019 Act.

Further, the ruling in Akshay Kumar²⁰ recently received affirmation from the Supreme Court in Alpha G184 Owners Assn. v. Magnum International Trading Co. (P) Ltd.²¹, which now concretes the position on the issue of pecuniary jurisdiction in joint complaints.

Conclusion

The judgments discussed in this article set the ground for groups of consumers to sue together, without undergoing the arduous procedure followed for complaints under Section 35(1)(c), which includes pre-admission/admission, service of notice/paper publication, impleadment of parties, completion of pleadings, filing of individual affidavits and final arguments. If not for joint complaints, consumers who wished to seek redressal of their grievances in union, would be constrained to engage in a protracted class-action litigation. This would completely defeat the purpose of adopting a summary procedure to adjudicate consumer disputes.

A liberal and harmonious interpretation of the provisions of the 2019 Act, like in the instance under discussion, would go a long way in easing access to justice for consumers who are likewise aggrieved. It incidentally also takes into account a very apparent social reality i.e. it is tedious for consumers to singularly pursue litigation against service providers (who are more than often corporate giants) but much easier with the collective power of a community.