Consumer forums can fight only for consumers

A consumer complaint was filed by the Society for Consumer & Investors Protection, a voluntary organisation, along with Sampark Securities and its director, Ankur Sachdeva. The dispute was regarding the allotment of a shop-cum-office plot for which the company had been declared the successful bidder in an auction by Haryana State Industrial & Infrastructure Development Corporation.

The company's bid of Rs 3 crore was the highest. It deposited 10 per cent of the bid amount, after which the allotment letter was issued. Later, further payment of Rs 45 lakh was made, upon which possession was to be handed over. The remaining amount was payable in eight half-yearly instalments of Rs 28.12 lakh.

The corporation failed to give possession as the file had not been received back from its head office. Despite this lapse on its part, the corporation issued a show cause notice to the company for failure to pay the half-yearly instalments, and threatened to initiate legal action. The company approached, and a complaint was filed before the National Commission.

The Haryana corporation contested the complaint and questioned its maintainability contending that the company and its director were not consumers as defined under the Consumer Protection Act, as the dispute was regarding a commercial plot. It also argued a consumer organisation was not entitled to file a complaint.

The National Commission observed the company was the highest bidder for a plot auctioned on "as is where is basis", so there was no element of service involved. Also, after the amendment in 2003, services for commercial purposes were excluded from the purview of the Act. The company tried to bypass the legal hurdle by contending the plot was to be used for earning livelihood. The National Commission trashed this argument by holding only individuals can earn their livelihood and not a corporate body or a company.

To salvage the situation, it was argued the complaint would be maintainable since the first complainant was a voluntary consumer organisation. The corporation, on the other hand, argued the voluntary consumer organisation had no right to file a complaint. The National Commission observed the Act permits a recognised voluntary consumer organisation to be a complainant.

Since the Society for Consumers & Investors Protection is a registered society, it would be entitled to file a complaint, provided such complaint was for or on behalf of aggrieved consumers. Since the Society does not have any independent interest in the plot, and the grievance is on behalf of a company, which is not a consumer, the Commission concluded a voluntary consumer organisation cannot file a complaint on behalf of those who are not consumers as defined under the Act.

Accordingly, by its order of July 26, 2016, delivered by Ajit Bharihoke, the National Commission dismissed the complaint, holding that it was not maintainable, but granted liberty to initiate legal proceedings before an appropriate court for deciding the dispute.

One can conclude a consumer organisation can file a complaint on behalf of an aggrieved party. However, such a party must fit the definition of consumer. Those who are not consumers cannot get a back-door entry into consumer courts to redress their grievances by making a consumer organisation file a complaint on their behalf. The question of earning a livelihood is applicable only to individuals, not to companies.

The author is a consumer activist