SC: O.I R.VIII of CPC shall apply in all ‘class action’ consumer complaints.

Today, i.e. on 07.12.2018, in the matters of

  • Rameshwar Prasad Shrivastava and Ors. v. Dwarkadhis Project Pvt. Ltd. and Ors.
  • Avinash Gaur and Ors. v. Dwarkadhis Project Pvt. Ltd. and Ors.

The Supreme Court while upholding the verdict of a three judge bench of National Commission in Ambrish Kumar Shukla and others v. Ferrous Infrastructure Pvt. Ltd. [(2017) CPJ 1 (NC)] pronounced that, the provisions of Sections 12(1)(c) and 13(6) of the Consumer Protection Act  are not independent and have to be read together and they form part of the same machinery.

Thereby meaning, in a case where there are numerous consumers having the same interest, and a consumer files a complaint on behalf of others (under Section 12(1)(c) of the Consumer Protection Act), then it is mandatory that such complaint shall be filed on behalf of or for the benefit of all the consumers having a common interest or a common grievance against same person(s). In case of such complaint, the provisions of Order 1 Rule 8 of CPC shall apply as mandated by and in accordance with the Section 13(6) of the Consumer Protection Act.

Ergo, in such complaints, it is a prerequisite that at the expense of complainant , a notice of the institution of the suit to all persons so interested either by personal service, or, where, by reason of the number of persons or any other cause, such service is not reasonably practicable, by public advertisement, as the Court in each case may direct shall be given.

The Hon’ble Supreme Court observed that:

The language used and the text in Section 13(6) is clear that wherever a complaint is filed by a complainant in the category referred to in Section 2(1)(b)(iv), the provisions of Order 1 Rule 8 CPC shall apply with the modification that reference to suit or decree shall be construed as reference to a complaint or order of the District Forum. (Para 13)

The expression “with the permission of the District Forum” as appearing in Section 12(1)(c) must be read along with Section 13(6) which provides the context and effect to said expression. (Para 13)

The expression “one or more consumers, where there are numerous consumers having the same interest” shall not be given a wide interpretation as the language employed in the relevant provisions is absolutely clear and does not admit of any other interpretation. (This inference has been drawn on the basis of Para 14)

The expression “one or more consumers, where there are numerous consumers having the same interest” cannot be widely interpreted because the category of persons referred to in Section 13(6) of the Act, with the aid of requisite permission in terms of Order I Rule 8 of the CPC could maintain a class action which may bind similarly placed consumers but those referred to in Section 12(1)(c) would be a different category who would not be bound by the provisions of Order I Rule 8 of CPC. In essence a separate category of persons as consumer/consumers would be entitled to maintain an action under Section 12(1)(c) of the Act which certainly is not the intent of the legislature. (This inference has been drawn on the basis of Para 14)

Giving wide interpretation of the expression “one or more consumers, where there are numerous consumers having the same interest” would be going against the express mandate of the statute. All that such interpretation would help achieve for some consumers is to maintain an action in a forum with higher pecuniary jurisdiction where, but for such collective cause of action, the action would not lie in such forum with higher pecuniary jurisdiction. (This inference has been drawn on the basis of Para 14)

Relevant Provisions:

Consumer Protection Act:

“Section 2(1) In this Act, unless the context otherwise requires, –

(a)………
(b) “complainant” means-

(i) a consumer; or

(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; or

(iii)  The Central Government or any State Government; or

(iv)  One or more consumers, where there are numerous consumers having the same interest;

(v) In case of death of a consumer, his legal heir or representative; who or which makes a complaint;

Section 12. Manner in which complaint shall be made –

(1) A complaint in relation to any 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) The 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;

(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 proved is a member of such association or not;

(c) One or more consumers, where there are numerous consumers having the same interest, with the permission of the District Forum, on behalf of, or for the benefit of, all consumers so interested; or

(d)The Central Government or the State Government, as the case may be, either in its individual capacity or as a representative of interests of the consumers in general.

Section 13. Procedure on admission of complaint ………

(6) Where the complainant is a consumer referred to in sub-clause (iv) of clause (b) of sub-section (1) of section 2, the provisions of rule 8 of Order I of the First Schedule to the Code of Civil procedure, 1908 (5 of 1908) shall apply subject to the modification that every reference therein to a suit or decree shall be construed as a reference to a complaint or the order of the District Forum thereon.”

Civil Procedure Code:

Order I-Parties of Suits

Rule 8. One person may sue or defend on behalf of all in same interest—

(1) Where there are numerous persons having the same interest in one suit,—

(a) one or more of such persons may, with the permission of the Court, sue or be sued, or may defend such suit, on behalf of, or for the benefit of, all persons so interested;

(b) the Court may direct that one or more of such persons may sue or be sued, or may defend such suit, on behalf of, or for the benefit of, all persons so interested.

(2) The Court shall, in every case where a permission or direction is given under sub-rule (1), at the plaintiff’s expense, give notice of the institution of the suit to all persons so interested either by personal service, or, where, by reason of the number of persons or any other cause, such service is not reasonably practicable, by public advertisement, as the Court in each case may direct.

(3) Any person on whose behalf, or for whose benefit, a suit is instituted or defended, under sub-rule (1), may apply to the Court to be made a party to such suit.

(4) No part of the claim in any such suit shall be abandoned under sub-rule (1), and no such suit shall be withdrawn under sub-rule (3), of rule 1 of Order XXIII, and no agreement, compromise or satisfaction shall be recorded in any such suit under rule 3 of that Order, unless the Court has given, at the plaintiff’s expense, notice to all persons so interested in the manner specified in sub-rule (2).

(5) Where any person suing or defending in any such suit does not proceed with due diligence in the suit or defence, the Court may substitute in his place any other person having the same interest in the suit.

(6) A decree passed in a suit under this rule shall be binding on all persons on whose behalf, or for whose benefit, the suit is instituted, or defended, as the case may be.

Explanation.—For the purpose of determining whether the persons who sue or are sued, or defend, have the same interest in one suit, it is not necessary to establish that such persons have the same cause of action as the person on whom behalf, or for whose benefit, they sue or are sued, or defend the suit, as the case may be.

Copy of the judgement:Judgement 07-Dec-2018

-Tushar Kaushik

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