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Smart Summary

Factual and Procedural Background

South City Group Housing Apartment Owners Association (the complainant), an association registered under the Karnataka Apartment Ownership Act, 1972 and representing 1323 apartment owners of the South City residential project constructed by Larsen and Toubro and another opposite party, filed a complaint seeking multiple reliefs. These included compensation for relinquished land, refund of excess statutory dues collected for security, water, electricity, parking user charges, maintenance charges for unsold flats, and compensation for delays and mental agony caused by the opposite parties.

The opposite parties raised a preliminary objection challenging the maintainability of the complaint. They contended that under Section 12(1)(b) of the Consumer Protection Act, 1986, only a "voluntary consumer association" can file a complaint, whereas the complainant association was formed under mandatory provisions of the Karnataka Apartment Ownership Act, 1972, and thus did not qualify as a voluntary consumer association. The Commission examined the maintainability of the complaint in light of this objection.

Legal Issues Presented

  1. Whether an association registered under the Karnataka Apartment Ownership Act, 1972, which is not a "voluntary consumer association," qualifies as a "recognised consumer association" capable of filing a complaint under Section 12(1)(b) of the Consumer Protection Act, 1986.
  2. Whether the complaint filed by the South City Group Housing Apartment Owners Association is maintainable under the Consumer Protection Act, 1986.

Arguments of the Parties

Opposite Parties' Arguments

  • Only a "voluntary consumer association" registered under the Companies Act or any other law can file a complaint under Section 12(1)(b) of the Consumer Protection Act, 1986.
  • The complainant association, being formed under mandatory provisions of the Karnataka Apartment Ownership Act, 1972, is not a voluntary consumer association.
  • Therefore, the complaint filed by the South City Group Housing Apartment Owners Association is not maintainable.

Complainant's Arguments

The opinion does not contain a detailed account of the complainant's legal arguments.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
S. Sundaram Pillai Vs. Pattabiraman, (1985) 1 SCC 591 Principles for interpreting an Explanation to a statutory provision, clarifying meaning without altering statutory rights. Guided the court to interpret the Explanation under Section 12(1)(b) of the Consumer Protection Act without restricting the meaning of "recognised consumer association" solely to voluntary associations.
MK Salpekar (Dr.) Vs. Sunil Kumar Shamsunder Chaudhari and others, (1988) 4 SCC 21 Explanation limited to one category cannot affect the scope of the section with respect to another category. Supported the court's interpretation that the Explanation to Section 12(1)(b) does not restrict the scope of "recognised consumer association" to only voluntary associations.
Sobha Hibiscus Condominium Vs. Managing Director, M/s. Sobha Developers Ltd. and another, Civil Appeal No.1118 of 2016 Held that an association registered under Karnataka Apartment Ownership Act, 1972 is not a voluntary consumer association for the purposes of Consumer Protection Act. Applied to hold the present complainant association not maintainable as it is not a voluntary consumer association under Section 12(1)(b).

Court's Reasoning and Analysis

The court examined the definition and scope of "recognised consumer association" under Section 12(1)(b) of the Consumer Protection Act, 1986, which includes any voluntary consumer association registered under the Companies Act or any other law. The court referred to the principles laid down in S. Sundaram Pillai Vs. Pattabiraman regarding the interpretation of explanations to statutory provisions, emphasizing that such explanations clarify but do not restrict or alter statutory rights.

It reasoned that the term "recognised consumer association" means an association whose identity is fixed by registration under law, and that a voluntary consumer association is only one type of recognised consumer association, not the sole type. Restricting the term only to voluntary associations would render the main provision redundant, which is impermissible under statutory interpretation principles.

However, the court noted that the Supreme Court in Sobha Hibiscus Condominium held that an association registered under the Karnataka Apartment Ownership Act, 1972 is not a voluntary consumer association under the Consumer Protection Act. Applying this precedent, the court found the complainant association does not qualify as a voluntary consumer association and thus the complaint is not maintainable under Section 12(1)(b).

Holding and Implications

The complaint filed by South City Group Housing Apartment Owners Association is dismissed as not maintainable.

The direct effect of this decision is the dismissal of the complaint on maintainability grounds due to the complainant's status as a non-voluntary consumer association under the Consumer Protection Act, 1986. No new precedent was established beyond the application of existing Supreme Court rulings.

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    SOUTH CITY GROUP HOUSING APARTMENT OWNERS' ASSOCIATION v. LARSEN AND TOUBRO (L&T) & ANR.

    NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION

    NEW DELHI

    CONSUMER CASE NO. 386 OF 2014

    1. SOUTH CITY GROUP HOUSING APARTMENT

    OWNERS' ASSOCIATION

    First Floor,Club House,South City, Arekere MICO Layout,Off Bannerghatta Road,

    Bangalore-560076 ...........Complainant(s) Versus

    1. LARSEN AND TOUBRO (L&T) & ANR. L&T House Ballard Estate, Narottam Moharjee Marg Mumbai-400038

    2. Shri Dinesh P. Ranka 634,Ranka Park,Nos.4,5 &6 Lalbag Road, Bangalore - 560 025 ...........Opp.Party(s)

    BEFORE:

    HON'BLE MR. C. VISWANATH,PRESIDING MEMBER

    HON'BLE MR. JUSTICE RAM SURAT RAM MAURYA,MEMBER

    For the Complainant : Ms. Sumdedha Dang, Advocate

    For the Opp.Party : For Opposite Party No.1: Mr. Anand Shankar Jha, Advocate Ms. Swati Sinha, Advocate

    Ms. Kamakshi Sehgal, Advocate

    For Opposite Party No.2: Mr. Shashank Khurana, Advocate

    Dated : 26 Jul 2022

    ORDER

    South City Group Housing Apartment Owners Association (the complainant) has filed1.

    above complaint for following prayers:-

    (a) Direct the OPs to pay an amount of Rs.887535000/-, as compensation, which sum is equivalent to the market price of the total relinquished land area of 8 acres and 6 guntas, along with interest @ 18% per annum w.e.f. the date of payment by the allottees till the date of realization of the said amount;

    (b) Direct the OPs to refund the amount of Rs.244553992/-, illegally collected in excess by OPs on account of statutory dues for security, water and electricity connections in the said project till 07.02.2013, along with interest @ 18% per annum w.e.f. the date of payment by the allottees till the date of realization of the said amount;

    -1-

    (c) Direct OPs to provide detailed account for the amounts collected in excess from 07.02.2013 till Aug 2014 on account of securing water and electricity connections and direct the OPs to refund the same along with interest @18% p.a. w.e.f. the date of payment by the allottees till the date of realization of the said amount;

    (d) Direct the OPs to refund to the complainant association the 'user charges' of parking i.e. Rs.280192610/-, as on 31.01.2012 which has been illegally charged from the apartment buyers in absolute violation of the Karnataka Apartment Ownership Act, along with interest @ 18% per annum w.e.f. the date of payment by the allottees till the date of realization of the said amount;

    (e) Direct OP to provide detailed account for such 'user charges' collected subsequently from 01.02.2012 till August 2014 on account of 'reserved car parking' and direct the OPs to transfer the same to the complainant association, along with interest @18% p.a. w.e.f. the date of payment by the allottees till the date of realization of the said amount;

    (f) Direct the OPs to regularly pay the amounts due towards maintenance charges for the unsold flats and refund the excess amount of Rs.1.24 Cr/-, illegally collected by OP in excess of the actual charges to be paid by the allottees, along with interest @ 18% per annum w.e.f. the due date of payment till the date of realization of the said amount;

    (g) Direct the OPs to provide an account of the amounts illegally collected towards maintenance charges of unsold flats from April 2010 till May 2013 from the allottees and direct the OPs to refund the said amount along with interest @ 18 p.a. w.e.f. from the date of payment by the allottees till the realization of the amount;

    (h) Direct the OPs to pay a sum of Rs.1000000/- per allottee as compensation for the delay (for almost 10 years) in the completion of the amenities and facilities as provided in the brochures and the agreements; (i) Direct the OPs to pay a sum of Rs.500000/- (per allottee) towards mental agony and harassment caused to the members of the complainant Association; (j) any other relief, which is deemed fit and proper in the fact and circumstances of case. In paragraph-1 of the complaint, it has been stated that South City Group Housing2.

    Apartment Owners' Association is an Association duly registered under the provisions of Karnataka Apartment Ownership Act, 1972. The said Association was comprised of 1323 apartment owners in the Group Housing Residential Apartment Project 'South City', situated at Kothanur Village, Uttarahalli Hobli, Bangalore, South Taluk, which was constructed by the Larsen and Toubro (L &T), the opposite party and another.

    The opposite parties relying upon the judgment of Supreme Court in 3. Civil Appeal No.1118 of 2016, Sobha Hibiscus Condominium Vs. Managing Director, M/s. Sobha

    raised a preliminary objection relating toDevelopers Ltd. and another decided on 14.02.2020

    the maintainability of the complaint. It has been argued by the counsel for the opposite parties that only "voluntary consumer association" can file a complaint under Section 12(1)(b) of Consumer Protection Act, 1986. M/s. South City Group Housing Apartment Owners' Association (the complainant), according to its own allegation was formed in view of mandatory provisions of Karnataka Apartment Ownership Act, 1972, as such, it cannot be regarded as "voluntary consumer association" within the meaning of Section 12 (1)(b) of the Consumer Protection Act, 1986 and the complaint is not maintainable.

    -2-

    In order to appreciate the controversy, relevant provisions of Consumer Protection Act,4.

    1986 are quoted below:-

    (1) A complaint in relation to anySection-12. Manner in which complaint shall be made.-

    goods sold or delivered or agreed to be sold or delivered or any service provided or agreed to be provided may be filed with a District Forum by-

    (a) ………………..

    (b) 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;

    .-For the purposes of this section, "recognised consumer association" means anyExplanation

    voluntary consumer association registered under the Companies Act, 1956 (1 of 1956) or any other law for the time being in force.

    The word 'complainant' has been defined under Section 1 (b) of the Act and under Section5.

    2(1)(b)(ii) any voluntary consumer association registered under the Companies Act, 1956 (1 of 1956) or under any other law for the time being in force is the complainant. Supreme Court in culled out6. S. Sundaram Pillai Vs. Pattabiraman, (1985) 1 SCC 591

    following principles to give effect to an explanation to a statutory provision:-

    (a) to explain the meaning and intendment of the Act itself,

    (b) where there is any obscurity or vagueness in the main enactment, to clarify the same so as to make it consistent with the dominant object which it seems to sub-serve.

    (c) to provide an additional support to the dominant object of the Act in order to make it meaningful and purposeful.

    (d) an Explanation cannot in any way interfere with or change the enactment or any part thereof but where some gap is left which is relevant for the purpose of the Explanation, in order to supress the mischief and advance the object of the Act it can help or assist the Court in interpreting the true purport and intendment of the enactment, and

    (e) it cannot, however, take away a statutory right with which any person under a statute has been clothed or set at naught the working of an Act by becoming an hindrance in the interpretation of the same.

    In 7. MK Salpekar (Dr.) Vs. Sunil Kumar Shamsunder Chaudhari and others, (1988) 4

    held that when the section deals with two categories of cases for e.g. residential andSCC 21

    non-residential accommodations and explanation of this section which is limited in scope to one category, namely residential accommodations cannot effect the scope of the section with reference to the second category, namely, non-residential accommodation.

    Under Section 12(1)(b) of the Act "any recognised consumer association whether the8.

    consumer to whom the goods sold or delivered or agreed to be sold or delivered or service

    -3-

    provided or agreed to be is a member of such association or not" can file a consumer complaint. The word 'recognised' means whose identity is fixed. An association registered under the provisions of law can be regarded as a recognized association. The object of the Act is to promote and protect the right of the consumers. In order to sub-serve the object, any recognised consumer association to which the actual aggrieved consumer is member or not can file a complainant regarding the grievances of a consumer. A voluntary consumer association may be one of the species of any recognised consumer association but not the only. If the explanation is given meaning that only voluntary consumer association registered under law is the only recognized consumer association, then the main Section 12(1)(b) will become redundant. Under the statutory interpretation of the explanation, it is not permitted as held by the Supreme Court in above cases. Supreme Court in , in which, the9. Soba Hibiscus Condominium's case (supra)

    complainant was an association registered under Karnataka Apartment Ownership Act, 1972, held that it was not a voluntary association. The case law of (supra) isSoba Hibiscus Condominium

    fully applicable in the present case. In such circumstances, we hold that the complaint is not maintainable.

    ORDER

    The complaint is dismissed as not maintainable.

    ......................

    C. VISWANATH

    PRESIDING MEMBER

    ......................J

    RAM SURAT RAM MAURYA

    MEMBER

    -4-

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    SOUTH CITY GROUP HOUSING APARTMENT OWNERS' ASSOCIATION v. LARSEN AND TOUBRO (L&T) & ANR.
    (Jul 26, 2022)