Consumer panel tweaks rules to help buyers of goods valued under `1-cr

NEW DELHI: In a move that will encourage more consumers to take up class action as primary choice of grievance redressal, the National Consumer Disputes Redressal Commission (NCDRC) has ruled that consumers with a similar complaint against the same party can approach it directly if the collective value of goods or services and compensation claimed is more than `1 crore. Till now, consumers could not approach the commission as the value claimed was calculated individually.

Experts say the verdict will reduce the time spent on litigation and also encourage consumers with similar complaints to come together and fight the case collectively, which is a class action.

A three-member bench of NCDRC also clarified that class action can be filed only on behalf of or for the benefit of all the consumers, having a common grievance and seeking identical relief against the same person.

The primary objective behind permitting a class action suit is to facilitate the decision of a consumer dispute in which a large number of people are interested, without recourse to each of them filing an individual complaint, the apex consumer forum remarked. “A complaint on behalf of only some of them therefore will not be maintainable,” it said.

If there are more than one class action suits on the same issue, the complaint instituted first under Section 12(1)(c) of the Consumer Protection Act will continue. The remaining complaints can join the first suit, the commission ruled.

“A group of cooperative societies, firms, association or other society cannot file such a complaint unless such society etc. itself is a consumer,” the commission said.

The commission said it would also be necessary for the bench, hearing the case, to either give individual notices or public notice of the institution of the complaint to all the persons on whose behalf or for whose benefit the complaint is instituted.

“If for instance, a house is sold for more than `1 crore, certain defects are found in the house, and the cost of removing those defects is `5 lakh, the complaint would have to be filed before this commission, the value of the services itself being more than `1 crore,” it said.

“This judgment may well serve as the watershed moment for class action to really gain momentum in India,” counsel (real estate) Vaibhav Gaggar said.