SC to the rescue of group housing society members
Societies cannot overlook responsibilites as their members are covered by Consumer Protection Act, rules SC
It is a settled law that consumer courts can decide on grievances against builders or developers in whose projects the allottees have booked apar t ments. The Supreme Court, in the case of Virender Jain vs Alaknanda Cooperative Group Housing Society Limited and others, set at rest the issue of consumer courts having jurisdiction in cases where a member has a grievance against the cooperative group housing society he or she belongs to despite the Cooperative Society Act having a specific remedy.
In the case, the complainants were enrolled as members of the Alaknanda Cooperative Group Housing Society Limited Gurgaon. They had applied for type ‘A’ flats which were being constructed by the society on land allotted to it by the author- ity. The complainants had deposited payment for the property in instalments over a period of around eight years. Thereafter, the housing society returned the amount and indirectly terminated their membership on the grounds of their failing to deposit the instalments of the first and second stage of construction and the instalment of the cost of land allotted by the authority to the society.
The complainants filed a plea with the District Consumer Disputes Redressal Forum, Gurgaon, under Section 12 of the Consumer Protection Act, 1986. The housing society claimed that the complainants did not fall within the definition of ‘consumer’ as per the Consumer Protection Act, 1986, and that the only remedy they had was to file a petition as per the Haryana Cooperative Societies Act, 1984, which was a special statute.
The District Forum overruled the society’s objection and held that the remedy provided under the Haryana Cooperative Societies Act, 1984, was an additional remedy and it was not in derogation to remedy provided under other acts. It is the choice of the complainants to either avail of the remedy under the Consumer Protection Act or any other applicable law. However, District Forum dismissed the complaint on the ground that there was no deficiency in the service provided by the housing society.
The complainants appealed to the State Commission and t hereafter t o t he National Commission, but i n both forums their appeals were not entertained on the ground that the complainants did not comewithin the purview of the term ‘consumer’ as per the Consumer Protection Act, 1986. Thereafter, the complainants approached the Supreme Court.
The apex court discussed its decision in the Lucknow Development Authority vs MK Gupta (1994) case wherein it was observed that if “… authority undertakes to construct building or allot houses or building sites to citizens either as amenity or as benefit then it amounts to rendering of service and will be covered in the expression ‘service made available to potential users’. A person who applies for allotment of a building site or for a flat constructed by the development authority or enters into an agreement with a builder or a contractor is a potential user and nature of transaction is covered in the expression ‘service of any description’. It further indicates that the definition is not exhaustive. The inclusive clause succeeded in widening its scope but not exhausting the services which could be covered in the earlier part. So any service – except when it is free of charge or under a constraint of personal service - is included in it.”
On the basis of the judgments in the above mentioned cases, the apex court held that the complainants who had deposited instalments for the flats being constructed by the housing society were covered by the definition of ‘consumer’ as per the Consumer Protection Act and it set aside the orders passed by the National Commission and t he State Commission and remanded the complaints to the State Commission for adjudication.