Supreme Court rules complaints under Consumer Protection Act not to be rejected on certain grounds

Supreme Court rules complaints under Consumer Protection Act not to be rejected on certain grounds

Remits the matter back to the National Consumer Disputes Redressal Commission to consider the aspect of undelivered promises by the developers

The Supreme Court has held that complaints by consumers should not be rejected by consumer forums on the ground that the consumers knew what they were purchasing.

In the Debashis Sinha and Others vs RNR Enterprise (represented by its proprietor/chairman), Kolkata and Others case, the court observed that under the Consumer Protection Act, the jurisdiction of consumer forums was often invoked after the consumer made a purchase. But if the complaints were rejected on the ground that the consumers were aware of what they were buying, the purpose of the enactment was defeated.

The division bench of Justice S Ravindra Bhat and Justice Dipankar Dutta stated, "More often, the jurisdiction of the consumer fora under the Consumer Protection Act is invoked post-purchase. Any deficiency detected post-purchase opens up an avenue for the aggrieved consumer to seek relief before the consumer fora."

The court criticized the approach of the National Consumer Disputes Redressal Commission (NCDRC) for rejecting a consumer complaint.

Justice Bhat and Justice Dutta stated, "We fail to comprehend what NCDRC meant when it observed that the appellants 'ought to have known what they were purchasing' The reasoning of the NCDRC is indefensible."

The bench was hearing an appeal against the NCDRC order rejecting the complaint of certain flat owners (appellants). The appellants alleged that the developers had defaulted on several promises made on the provision of flat amenities. For these alleged unfair trade practices, they sought compensation from the developers.

The appellants also claimed that the developers failed to secure a completion certificate from the municipal authorities. The NCDRC was urged to direct the developers to obtain the certificate and rectify the 'constructional defects.'

The NCDRC found the developers had shown a casual approach to various aspects and were guilty of unfair trade practices. Still, it dismissed the appellants' complaint. The Commission pointed out that the appellants had occupied the flat, despite not obtaining the completion certificate.

The consumer forum held that both parties violated the law and denied relief to the flat owners.

However, the apex court criticized NCDRC's approach. It noted that the forum's order defied logic. It was perfunctory in certain aspects and had let off the flat developers in a manner contrary to the law.

The Supreme Court said, "Once NCDRC arrived at a finding that the respondents were casual in their approach and resorted to unfair trade practice, it was obligated to consider the appellants' grievance objectively. If the appellants had not forfeited any right by registration of the sale deeds and the respondents were remiss in providing the facilities/amenities as promised in the brochure/advertisement, it was NCDRC's duty to set things right."

Referring to the aspect of the flats being occupied by the appellants even before the completion certificate was obtained, the court opined that NCDRC appeared to have failed to appreciate the present-day realities.

It observed that. owners might experience undue stress, anxiety, and harassment on account of delays in flat development. It is common knowledge that they may have no other option but to take possession of their flats even without them being wholly complete.

The bench highlighted that even under the Kolkata Municipal Corporation Act, which applied to the appellants' flats, it was the obligation of the person intending to erect a building to apply for a completion certificate. It was not the owner's duty to apply for it.

The court remitted the matter back to the NCDRC to consider the aspect of undelivered promises made by the developers to the flat owners.

It explained that it was not directing the consumer forum to decide afresh on the aspect of the compensation since the appellants had failed to give detailed particulars or provide a basis for claiming such compensation.

The court added, "The appellants were also on the wrong side of the law by taking possession of their respective flats without the completion certificate."

Since the matter was almost 15 years old, the top court directed NCDRC to dispose of the matter within a year.