File joint complaint to fast-track your consumer case STRENGTH IN NUMBERS
SC ruling allowing consumers to jointly file case in national consumer forum will also mean lower legal costs
A recent ruling of the Supreme Court will provide needed relief to people will a common grievance, say, against builders delaying the delivery of flats. The apex court has ruled such flat buyers can get together and approach the National Consumer Disputes Redressal Commission (NCDRC) directly. Consumer activists say the ruling will have a far-reaching impact, beyond the real estate sector.
According to the Consumer Protection Act, the amount in a dispute decides the court a consumer may approach. If it is up to ~20 lakh, a consumer has to file in the district forum. If the amount involved is ~20 lakh-1 crore, the state forum. Only for amounts above ~1 crore may a consumer directly approach the NCDRC.
In recent times, however, home buyers have got together to fight against builders. When many flat buyers get together, the amount involved rises above ~1 crore and they can therefore approach the NCDRC. But, whether such cases were entertained depended on the opinion of individual courts, say lawyers. Some judges allowed such cases to be filed if all the consumers had a common grievance. Others did not on technical grounds.
The recent SC judgment, in a case involving Amrapali Sapphire Developers versus 43 flat buyers, which allowed consumers to approach the NCDRC, will leave no room for discretion. “Since the ruling will be enforceable on all courts in India, whether to allow joint filing will not depend on the view of individual courts,” says Arun Saxena, president, International Consumer Rights Protection Council.
There are a few prerequisites for filing a case jointly. “Consumers need to form a welfare association and register it with the appropriate authority,” points out Nishit Dhruva, managing partner, MDP & Partners. The most common form this can take is a society formed under the Societies Registration Act. The recent judgment says only a recognised body is | Earlier, whether a group of consumers could file a joint complaint in the NCDRC depended on the view of individual courts | Now a Supreme Court has ruled that they can do so | This will mean lower costs for individual consumers and faster justice | According to current laws, however, just a few consumers saying they are happy with the manufacturer can result in the case falling through. Clarity is needed on this eligible to fight such cases.
Experts say filing similar cases separately makes the whole process tedious and inefficient. Joint filing of cases will also make it economical for consumers to fight legal battles, as they will be able to share the costs.
According to advocate D Varadarajan, allowing people to go directly to the NCDRC will also mean faster resolution of cases. Earlier, the whole process took a lot of time as there was scope for the opposite party to file an appeal in the state forum and again in the National Commission. The ruling will have an impact even beyond the real estate sector. For instance, if the smoke emitted by a factory affects an entire locality, people from that locality will be able to come together and file a case.
More clarity is needed for those filing a class action suit for common relief by coming together, says Dhruva. According to interpretation of the current laws, even if one consumer comes to the court and says that he is happy and has no grievance, the suit would fall through. The majority should not suffer because of a few. The courts need to decide on the proportion of consumers that can seek relief even though a few might not have any grievance, he says. A relatively new but potentially negative trend is a nativist political environment that is reviving protectionism, reversing over a half-century of global trade integration. It has been the latest trend in 2016 and 2017. The EU continues to face a number of real and perceived headwinds — financial and political. While domestically oriented data, especially those tracking consumer spending, still point to a recovery, industry and trade-related signposts show sharp declines. Brexit might remain an issue for the EU. Elections in France and Germany might have to deal with a resurgence in isolationist anti-immigration rightwing political parties. In the emerging market space, the direction of the Chinese economy will continue to be a focal point. Recent economic statistics show China’s economy picked up a bit of steam, boosted by government infrastructure spending and property sales. The Nifty hit another new 52week high, rising to 8,992, a tiny improvement on the prior value of 8,982. It remains above 8,900 and continues to test resistance between 8,900 and 9,000. A move past 9,000 would probably lead to the all time high of 9,120 being broken.
Foreign portfolio investors (FPIs) have been net positive since the Union Budget. Domestic institutions have started selling in March. Technical trends remain positive across the broad market with advances comfortably beating declines and outperformance in smaller stocks. The retail attitude is positive. FPI buying has eased the dollar down. Rupee treasury yields have also hardened.
The Nifty Bank has hit all time highs and the Bank index What is your outlook for FPI investments? We are dependent on FPI (foreign portfolio investors) flows to a large extent, though the impact is getting a bit muted, given the strong domestic flows. While there has been volatility over the past few months, the markets have been trading in a broad range since January 2016. FPIs withdrew funds in the last quarter of 2016 owing to uncertainty surrounding the US election, US Fed increasing interest rates, and uncertainty around the globe. Domestically, the macro economic variables of our country have been robust and no negative surprises in the Union Budget 2017-18 helped India being a preferred investment destination in the emerging market space. The recent turnaround in sentiment in the Indian equity market could also be attributed to Q3FY17 corporate earnings, which have indicated that the impact of demonetisation was limited. How do you see the year for emerging markets? Emerging markets started 2016 on a weak note troubled by concerns surrounding China’s economy and uncertainty around global commodities. However, as the year progressed, positive factors, such as improving commodity prices and economic stability, led to emerging-market strength. As a result, emerging markets were among the top performing markets in 2016. The economic condition of major advanced economies still looks weak except the US. Political uncertainty in the Euro zone, disinflationary environment in Japan could keep the developed economies in check. The “hunt for yield” has been a frequently used term in recent years. With low and negative yields on many government bonds globally, we continue to expect investors to look toward emerging-market equities, given the income prospects available. What are your estimates for corporate earnings for FY18 and FY19? The Indian economy is slowly recovering and we expect the earnings cycle to recover in FY18. The demonetisation of the currency has impacted the FY 17 earnings to some extent, but this is likely to be temporary. We also expect some disruptions around the time when GST is likely to be implemented in the first half of FY18. However, we expect earnings to recover at a much faster pace during the second half of FY18. We expect FY18 earnings to grow at 12-14 per cent and FY19 growth to be around 18-20 per cent.