Supreme Court stresses Consumer Protection Act proposes to invigorate business

Supreme Court stresses Consumer Protection Act proposes to invigorate business

Holds that a steadfast procedure would damage the concept of trade

The Supreme Court has held that the Consumer Protection Act, 2019, is meant to encourage consumerism in the country. It added that any technical approach in construing its provisions against consumers would defeat the objective behind its enactment.

A bench of Justice J K Maheshwari and Justice M M Sundresh said, “A pedantic and hyper-technical approach" would cause damage to the very concept of consumerism.

The observations came in the wake of appeals against a National Consumer Disputes Redressal Commission (NCDRC) order passed in a matter relating to the completion of a housing project.

The bench said the Consumer Protection Act had a "laudable objective" and facilitated consumers to approach forums by providing a very flexible procedure.

While the appellant was a flat allottees' association registered under Section 6 of the Haryana Registration and Regulation of Societies (HRRS) Act, 2012, the respondent was a builder tasked to undertake the housing project.

The bench observed that the association had approached the NCDRC alleging that the builder failed to construct the flats within the timeline and also raised additional demands.

On the other hand, the builder filed a complaint with the District Registrar of Societies alleging the aims and objectives in the bylaws of the association were not in conformity with the HRRS Act.

The bench noted that the state registrar of Haryana had directed the association to amend its bylaws within six months, failing which would result in the cancellation of the granted registration. The association made an amendment, which was registered by the Gurugram district registrar in November 2019.

However, the apex court observed that in June 2020, the Gurugram district registrar had put on hold the amendment on the premise that the granted period of six months had expired. The registrar general of Haryana dismissed the appeal finding no error in the order of the state registrar. This meant that the appellant's registration was not canceled.

The judges noted that the orders passed by the state registrar and the registrar general of Haryana were challenged before the Punjab and Haryana High Court along with an application for stay. Since the matter was pending adjudication, there was no interim order.

The court held that the appellant had filed an application bringing to the notice of NCDRC the pendency of the writ petition before the high court. The commission had adjourned the matter awaiting appropriate orders. The association approached the apex court seeking to set aside NCDRC's order.

Thus Justice Maheshwari and Justice Sundresh held, "The complaints have already been registered, and in any case, the issue pertaining to registration and the bylaws have got no relevancy, particularly in light of the submission made by the counsel for the appellant that affidavits have been filed by individual allottees. A pedantic and hyper-technical approach would cause damage to the very concept of consumerism.”

The court said that even after five years, the association was unable to proceed and the cases had not progressed.

The bench ruled, "Therefore, the impugned orders are set aside and the appeals are allowed. Pending applications, if any, are disposed of. The national commission shall proceed to hear the matters on merits, expeditiously.”