Supreme Court gives green signal to Home Buyers Associations

May the force be with Home Buyers;

We had earlier reported at Supreme Court to decide fate of complaints by homebuyers associations, that the Supreme Court shall decide the maintainability of complaints filed by Home Buyers Associations on behalf of its members seeking compensation for delay in possession. On 28th August, 2015, the NCDRC passed a landmark order wherein it decided that complaint no. 120 of 2015 filed by Lotus Panache Welfare Association (LPWA) against The 3C Company is maintainable. The NCDRC observed that the Consumer Protection Act, 1986 while enabling Consumer Associations to file complaints under the Act, has not placed any restriction as regards the nature of the complaint which a consumer association can file. The NCDRC therefore did not see any rationale in restricting such right of consumer associations.

The 3C company preferred an appeal before the Supreme Court challenging the order passed by the NCDRC, which was listed before the Supreme Court earlier today.  At the outset, 3C’s counsel submitted that as the Supreme Court is already seized of a connected appeal, i.e.  Civil Appeal 10602 of 2014 Atharva Towers Owners Association   .Vs.   Raheja Developers Ltd., notice should be issued in 3C’s appeal as well. LPWA’s counsel, Mr. Saikrishna Rajagopal, Managing Partner, Saikrishna & Associates, however pointed it out to the Court that the appeal in Atharva’s Case pertains to interpretation of Section 12 (1) (c) of the  Consumer Act, whilst LPWA’s complaint has been filed by placing reliance on Section 12 (1) (b) which specifically enables consumer associations such as LPWA to file complaints under the Act. Therefore, 3C’s appeal cannot be equated with the one filed by Atharva Buyers.

3C’s counsel then re-iterated the grounds taken by 3C in its appeal, primarily that LPWA consists of members who may be speculative investors and hence not “consumers” as per the definition given in the Act. The Hon’ble SC however, observed that the NCDRC has already given liberty to 3C to raise all such objections before the NCDRC at the relevant stage of proceedings. The SC disagreed that presence of speculative investors, even if any, in LPWA can be a ground for dismissing the complaint itself for being non-maintanable. The SC opined that once the principle that Consumer Associations have the right file complaints (such as the one filed by LPWA) is established, objections such as the one raised by 3C can be decided by the NCDRC considering the facts of each case. The SC finding no merit in the appeal filed by 3C directed dismissal of the appeal.

On being contacted, Mr. Sahil Sethi of Saikrishna & Associates confirmed that 3C’s appeal has been dismissed.  “This dismissal has come as an icing on the order of the NCDRC and I hope the same encourages home buyers who accept the practices of builders as part of life”, said Sahil.

We, at Logical Buyer, see this as a green signal by the Supreme Court to home buyers associations across the country to move ahead and take the next step of legally prosecuting unscrupulous builders. It is important that Home Buyers Associations ensure that the reliefs claimed are not unconnected to each other and common to all members participating in the complaint, as rightly pointed out by the NCDRC in its order in LPWA’s case, reported here: Maintainability of complaints by Home Buyers Associations

Although well begun is half done, the logical buyer wishes home buyers associations such as LPWA the best in their battle against unfair practices of builders. We quote our Late Learned President Dr. A.P.J. Abdul Kalam in this regard:

Don’t take rest after your first victory because if you fail in second, more lips are waiting to say that your first victory was just luck.”

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