Sobha Hibiscus Condominium vs Managing Director, M/S. Sobha Developers Ltd. & Anr

R. Subhash Reddy, J

This civil appeal under Section 23 of the Consumer Protection Act, 1986 (for short, ‘the Act’), is filed by the complainant, aggrieved by the

order dated 13.05.2015, passed by the National Consumer Disputes Redressal Commission (NCDRC), New Delhi in Consumer Complaint No.153 of

2010, rejecting the complaint filed by the appellant on the ground that, the appellant-Condominium has no locus standi to file the complaint since neither

it is a ‘consumer’ nor it is a ‘recognised consumer association’ within the meaning of Section 12 of the Act.

The appellant/complainant is a statutory body under provisions of the Karnataka Apartment Ownership Act, 1972 (for short, ‘1972 Act’). It

consists of members, who are the owners of the apartments in a multi-storey building, namely, “Sobha Hibiscus†situated in Amballipur Village,

Varthur Hobli, of South Bangalore Taluk in Karnataka. The appellant-Condominium has come into existence pursuant to a declaration made by the

opposite party under the provisions of 1972 Act. When the appellant has filed complaint claiming certain reliefs before the NCDRC, the same is

resisted by the opposite party, by taking a preliminary objection that the complainant is not a ‘consumer’ within the meaning of the Act,

therefore, has no locus standi to file the complaint. The NCDRC, by referring to relevant provisions of the Act, has recorded a finding that the

complainant is not a ‘recognised consumer association’ within the meaning of Section 12(1)(b) of the Act.

We have heard Sri Rajesh Mahale, learned counsel appearing for the appellant and Sri Basava Prabhu S. Patil, learned senior counsel appearing for

the respondent-opposite parties.

Learned counsel appearing for the appellant has contended that as per the provisions of the Act, any association registered under Companies Act,

1956 or any other law for the time being in force can maintain a complaint. It is submitted that all members of the appellant-Condominium are

members who have purchased flats in the building named as “Sobha Hibiscus†and it is formed with a view to represent the grievances of its

members before the authorities and the tribunal, as such, there is no reason or justification in rejecting the complaint by the NCDRC on the ground that

it has no locus standi to maintain the complaint. In support of his argument, learned counsel has relied on a Full Bench judgment of the NCDRC, New

Delhi in Consumer Case No.560 of 2014 and batch titled Moulivakkam Trust Heights Flats Affected Buyers Association etc. v. M/s. Prime Sristi

Housing Pvt. Ltd. & 29 Ors. Etc 2017 SCC OnLine NCDRC 163.

On the other hand, Sri Basava Prabhu S. Patil, learned senior counsel appearing for the respondents, by taking us to relevant provisions of the 1972

Act and Consumer Protection Act, 1986, has submitted that the appellant cannot be said to be a voluntary consumer association, as per the provisions

of the Act and it is also not a ‘consumer’ within the meaning of the Act. Learned counsel further submitted that the appellant is a body which

has come into existence as per the declaration made by the opposite party, as required under the 1972 Act. It is submitted that as much as it is a body

which has come into existence as per the mandatory provisions of the 1972 Act, as such, it cannot be said to be a voluntary consumer association.

Further it is submitted that as the appellant will not fit into the definition of ‘consumer’ as defined under Section 2(1)(d) of the Act, complaint as

filed, is not maintainable and there are no grounds to interfere with the impugned order passed by the NCDRC as the same is in accordance with law.

Having heard learned counsels on both sides, we have perused the impugned order and other material placed on record. After considering the

submissions made by the learned counsels on both sides with reference to the provisions of the Consumer Protection Act, 1986 and the relevant

provisions of the 1972 Act, we are of the view that there is no merit in this appeal so as to interfere with the impugned order, for the following

reasons.

To maintain a complaint under the provisions of the Act complainant must be either a ‘consumer’ within the meaning of Section 2(1)(d) of

the Act or it must fit into Section 12(1) of the Act. The word ‘consumer’ is defined under Section 2(1)(d) of the Act which reads as under :

“2. Definitions.-(1) In this Act, unless the context otherwise requires,-

…. …. …. ….

(d) “consumerâ€​ means any person who,-

(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment

and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised,

or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such

goods for resale or for any commercial purpose; or

(ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of

deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or

promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the

first mentioned person but does not include a person who avails of such services for any commercial purpose;

Explanation,- For the purposes of this clause, “commercial purpose†does not include use by a person of goods bought and used by him and

services availed by him exclusively for the purposes of earning his livelihood by means of self-employment;â€​

Section 12 of the Act deals with the manner in which complaint shall be made. As per the Section 12(1)(a), a 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 can file a complaint. Under clause (b) of sub-

section (1) of Section 12 of the Act 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 can file a complaint. As per the

Explanation to Section 12 of the Act, ‘recognised consumer association’ means any voluntary consumer association registered under the

Companies Act, 1956 or any other law for the time being in force. It is clear from the Explanation that only a voluntary consumer association

registered under the Companies Act, 1956 or any other law can maintain a complaint under Section 12(1)(b) of the Act. So as to consider whether the

appellant is a voluntary consumer association or not, it is necessary to refer to relevant provisions of the 1972 Act. The Karnataka Apartment

Ownership Act, 1972 is an Act of the State which is enacted with a view to provide for the ownership of an individual apartment in a building and to

make such apartment heritable and transferable property and for matters connected therewith. The appellant body has come into existence pursuant

to a declaration made by the opposite party in terms of the 1972 Act. Section 3(j) of the 1972 Act defines ‘declaration’ as under:

“3. Definitions.-In this Act, unless the context otherwise requires.-

…. …. ….

(j) ‘Declaration’ means the instrument by which the property is submitted to the provisions of this Act, as hereinafter provided, and such

Declaration as from time to time may be lawfully amended:â€​

As per Section 13 of the 1972 Act, Declarations, Deeds of Apartments and copies of floor plans are required to be registered under provisions of the

Registration Act, 1908. A copy of the Deed of Declaration dated 22.05.2006 is placed on record and the same is a declaration under provisions of the

said Act by the opposite party. The name of appellant body as “Sobha Hibiscus Condominium†has come into existence pursuant to clause (8) of

the Declaration. The bye-laws framed by the appellant-Condominium are also placed on record. Bye-law No.5 of the Bye-laws deals with the

Members of Association which reads as under :

“5) MEMBERS OF ASSOCIATION:

5.1) All persons who have purchased constructed Apartments in the “Sobha Hibiscus†shall execute respective declarations under Section 5(ii) of

the Karnataka Apartment Ownership Act, 1972 submitting their Apartments to the provisions of the Act. All persons who become the owner of the

Apartment, shall acquire 10 shares of the “Sobha Hibiscus Condominium†by paying Rs.1000/- and on acquisition, shall become the members of

the “Sobha Hibiscus Condominiumâ€​ and be bound by the Deed of Declaration and Exhibits thereto.â€​

On a conjoint reading of the various relevant provisions of the 1972 Act and the Bye-laws of the Condominium referred above, we are of the view

that the appellant-body has come into existence as per the mandatory provisions under the 1972 Act. It is clear from the objects of the said Act, that it

is an Act to provide ownership of an individual apartment in a building and to make such apartment heritable and transferable property. In view of the

mandatory provisions of the 1972 Act the appellant cannot be said to be a voluntary registered association for the purpose of filing a complaint before

the competent authority under the provisions of the Act. The Explanation to Section 12 of the Act makes it clear that, the recognised consumer

association as referred under Section 12(1)(b) of the Act means any voluntary consumer association registered under the Companies Act, 1956 or any

other law for the time being in force. By applying the said Explanation, the appellant cannot be said to be a voluntary consumer association so as to

maintain a petition. Further, it will not fall within the definition of ‘consumer’ as defined under Section 2(1)(d) of the Act. The term

‘voluntary’ has been defined in Black’s Law Dictionary IX Edn. as under :

“voluntary, (14c) 1. Done by design or intention voluntary act.

Unconstrained by interference; not impelled by outside influence voluntary statement. 3. Without valuable consideration or legal obligation;

gratuitous voluntary gift. 4. Having merely nominal consideration voluntary deed. Voluntarinessâ€​.

The term ‘voluntary’ as defined in Oxford Dictionary reads as under :

“2. Of an action: performed or done of one’s own will, impulse, or choice; not constrained, promoted, or suggested by another. Also more

widely, left to choice, not required or imposed, optional. Of an oath, a confession, etc: voluntarily made or given; not imposed or prompted by a promise

or threat. Of a conveyance, a disposition etc.: made without money or other consideration being given or promised in return. Growing wild or naturally;

or spontaneous growth. Volunteer

…. ….

4.a. Assumed or adopted by free choice; freely chosen or undertaken; (of work) unpaid b. Brought about by one’s own choice or deliberate

action; self-inflicted, self-induced. C. Of a society, association, etc.: entered into a free choice. Also consisting of volunteers.

Done by deliberate intent; designed, intentional

Of the will: free, unforced, unconstrained.

Of a person: acting from personal choice or impulse, willingly, or spontaneously, in a specified capacity. Also, endowed with the faculty of willing.

B. Serving as a volunteer soldier. Also, composed of such volunteers.

Freely or spontaneously bestowed or made; contributed from personal choice or impulse or from generous or charitable motives.

…. ….

Of an institution, organisation, etc.: maintained or supported solely or largely by voluntary contributions. Also more widely, existing through

voluntary support, not established by statute; in the UK, (of a school) built by a voluntary institution but maintained by a local education authority. B.

of, pertaining to, or advocating voluntarism in respect of Church, schools, etc.â€​..

In essence, a voluntary consumer association will be a body formed by a group of persons coming together, of their own will and without any pressure

or influence from anyone and without being mandated by any other provisions of law. The appellant association which consists of members of flat

owners in a building, which has come into existence pursuant to a declaration which is required to be made compulsorily under the provisions of 1972

Act, cannot be said to be a voluntary association to maintain a complaint under the provisions of the Act.

The learned counsel appearing for the respondents also relied on the very same judgment in the case of Moulivakkam Trust Heights Flats

Affected Buyers Association etc.1 In the aforesaid decision, a Full Bench of the National Commission has taken a view that even a Residents’

Welfare Association, if registered under a statute will qualify as a consumer association under the provisions of Section 12 of the Act provided, it

qualifies as a voluntary association.

For the aforesaid reasons and in view of the reasons recorded in the impugned order by the NCDRC, we do not find any merit in this appeal so as

to interfere with the same. The civil appeal is accordingly dismissed with no order as to costs.