Consumer Protection Act meant to encourage consumerism, says Supreme Court

The Supreme Court on Monday said the Consumer Protection Act, 2019, is meant to encourage consumerism in the country and any technical approach in construing its provisions against consumers would defeat the objective behind its enactment.

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

The apex court's observations came while dealing with appeals against a National Consumer Disputes Redressal Commission (NCDRC) order passed in a matter relating to completion of a housing project.

The bench said the Consumer Protection Act has got a "laudable objective" and the 2019 law facilitates consumers to approach forums by providing a very flexible procedure.

 

"It is meant to encourage consumerism in the country. Any technical approach in construing the provisions against the consumer would go against the very objective behind the enactment," it said.

The bench noted that the appellant before it is an flat allottees' association registered under Section 6 of the Haryana Registration and Regulation of Societies (HRRS) Act, 2012, while the respondent is a builder tasked with the development of the housing project.

In its verdict, the bench also observed that the association had approached the NCDRC alleging that the builder has failed in the obligation to construct and complete the promised flats within the timeline agreed upon and also questioning the additional demands raised.

Later, a complaint was filed by the builder with the District Registrar of Societies alleging that the aims and objectives enunciated in the bye-laws of the appellant association were not in conformity with the HRRS Act, the top court noted.

Referring to the details of the matter, the bench observed that the state registrar of Haryana had directed the association to amend its bylaws within six months indicating that any failure to comply would result in cancellation of registration granted already.

The association did make an amendment which was duly registered by the Gurugram district registrar in November 2019, it noted.

It also noted that subsequently, the Gurugram district registrar by an order in June 2020 put on hold the amendments, as certified earlier, on the premise that the period of six months granted expired. The registrar general of Haryana dismissed the appeal finding no error in the order of the state registrar, the bench observed.

The bench noted that the appellant's registration was not cancelled.

It observed that later, the orders passed by the state registrar and the registrar general of Haryana in the matter were challenged before the Punjab and Haryana High Court along with an application for stay, and though, the matter was still pending adjudication, there was no interim order as of now.

The bench noted that the appellant had filed an application bringing to the notice of the NCDRC the pendency of the writ petition before the high court. The commission had adjourned the matter awaiting appropriate orders in the petition, it noted.

The association had approached the apex court seeking to set aside the NCDRC's order.

"Complaints have already been registered, and in any case, the issue pertaining to registration and the bye-laws has 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 bench said.

It noted that even after five years, the appellant association is unable to proceed and the cases have not progressed.

"In such view of the matter, 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," the bench said.