SOBHA HIBISCUS CONDOMINIUMversusMANAGING DIRECTOR, M/S. SOBHA DEVELOPERS LTD. & ANR

824                      [2020]REPORTS
               SUPREME COURT    3 S.C.R. 824              [2020] 3 S.C.R.


A                   SOBHA HIBISCUS CONDOMINIUM
                                       v.
           MANAGING DIRECTOR, M/S. SOBHA DEVELOPERS
                          LTD. & ANR
B                        (Civil Appeal No.1118 of 2016)
                             FEBRUARY 14, 2020
                 [MOHAN M. SHANTANAGOUDAR AND
                      R. SUBHASH REDDY, JJ.]
             Consumer Protection Act, 1986: s.2(1)(d) and s.12(1) and its
C
      Explanation – Consumer – Meaning of – Appellant is a statutory
      body under the provisions of Karnataka Apartment Ownership Act,
      1972 – It consisted of members of the apartments in a multi storey
      building as per the declaration of opposite party under the 1972
      Act – Appellant filed complaint before National Commission –
D     Complaint resisted on the ground that the appellant is not a consumer
      within the meaning of Act, therefore, has no locus standi to file
      complaint – National Commission rejected the complaint holding
      that the appellant was not a recognised consumer association within
      the meaning of s.12(1)(b) of the Act – Held : Conjoint reading of
      the various relevant provisions of the 1972 Act and the Bye-laws of
E
      the Appellant- Condominium showed that appellant came into
      existence as per the mandatory provisions under the 1972 Act –
      Explanation to s.12 of the Act makes it clear that, the recognised
      consumer association as referred under s.12(1)(b) of the Act means
      any voluntary consumer association registered under the Companies
F     Act, 1956 or any other law for the time being in force – By applying
      Explanation, the appellant cannot be said to be a voluntary
      consumer association so as to maintain a complaint petition – A
      voluntary consumer association is 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
G
      provisions of law – Appellant 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
      – Further, it does not fall within the definition of ‘consumer’ as
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                                      824
  SOBHA HIBISCUS CONDOMINIUM v. MANAGING DIRECTOR,                    825
              M/S. SOBHA DEVELOPERS LTD.

defined under s.2(1)(d) of the Act –Karnataka Apartment Ownership     A
Act, 1972.
      Dismissing the appeal, the Court
      HELD: 1. 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     B
12(1) of the Act. 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            C
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         D
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. The Karnataka Apartment Ownership Act,
1972 is an Act of the State which is enacted with a view to provide   E
for the ownership of an individual apartment in a building and to
make such apartment heritable and transferable property and for
matters connected therewith. 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. The appellant body came into existence pursuant to         F
clause (8) of the Declaration. [Paras 7-9][828-F; 829 E-H; 830 A-
E]
      2. A conjoint reading of the various relevant provisions of
the 1972 Act and the Bye-laws of the Condominium would show
that the appellant-body has come into existence as per the            G
mandatory provisions under the 1972 Act. It is an Act to provide
ownership of an individual apartment in a building and to make
such apartment heritable and transferable property. The
Explanation to Section 12 of the Act makes it clear that, the
recognised consumer association as referred under Section             H
826             SUPREME COURT REPORTS                      [2020] 3 S.C.R.


A     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
B
      Act. 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,
C     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. [Para 9][830 G-H; 832
      D-F]
D             Moulivakkam Trust Heights Flats Affected Buyers
              Association etc. v. M/s. Prime Sristi Housing Pvt. Ltd.
              & 29 Ors. Etc. 2017 SCC OnLine NCDRC 163 – relied
              on.
              Black’s Law Dictionary IX Edn. – referred to.
E             CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1118 of
      2016.
            From the Judgment and Order dated 13.05.2015 of the National
      Consumer Disputes Redressal Commission at New Delhi in Complaint
      No. 153 of 2010.
F
             Basava Prabhu S. Patil, Sr. Adv., Ashwani Kumar, S.P. Kamrah,
      Ms. Iti Sharma, Ms. Peeha Verma, Puneet Sharma, Rajesh Mahale,
      Shivendra Dwivedi, Syed Faizan Ali, Ms. Tejaswini Misra, Rachit Batra,
      Ms. Sunita Sharma, Rohit Vats, Daya Krishan Sharma, Anoop Kr.
      Srivastav, Shivkumar Gavalkar, R.N. Pareek, Vipin Kumar Saxena,
G     Shailesh Madiyal, Sudhanshu Prakash, Kartik Anand, Advs. for the
      appearing parties.




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  SOBHA HIBISCUS CONDOMINIUM v. MANAGING DIRECTOR,                              827
              M/S. SOBHA DEVELOPERS LTD.

      The Judgment of the Court was delivered by                                A
      R. SUBHASH REDDY, J.
       1. 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                   B
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.
       2. The appellant/complainant is a statutory body under provisions        C
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         D
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        E
the complainant is not a ‘recognised consumer association’ within the
meaning of Section 12(1)(b) of the Act.
       3. 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.                                  F
       4. 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                G
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
                                                                                H
828              SUPREME COURT REPORTS                          [2020] 3 S.C.R.


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.1
              5. On the other hand, Sri Basava Prabhu S. Patil, learned senior
B     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
C     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)
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.
             6. Having heard learned counsels on both sides, we have perused
      the impugned order and other material placed on record. After considering
E     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.

F           7. 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 :

G              “2. Definitions.-(1) In this Act, unless the context otherwise
               requires,-
               …. …. …. ….
               (d) “consumer” means any person who,-

      1
H         2017 SCC OnLine NCDRC 163
  SOBHA HIBISCUS CONDOMINIUM v. MANAGING DIRECTOR,                              829
    M/S. SOBHA DEVELOPERS LTD. [R. SUBHASH REDDY, J.]

      (i)   buys any goods for a consideration which has been paid or           A
            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
                                                                                B
            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                C
           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      D
           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         E
            the purposes of earning his livelihood by means of self-
            employment;”
       8. 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           F
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           G
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        H
830            SUPREME COURT REPORTS                           [2020] 3 S.C.R.


A     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
B
      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.-
            …. …. ….
C           (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:”
             As per Section 13 of the 1972 Act, Declarations, Deeds of
D     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
E     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
F           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
G
            “Sobha Hibiscus Condominium” and be bound by the Deed of
            Declaration and Exhibits thereto.”
             9. 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
H
  SOBHA HIBISCUS CONDOMINIUM v. MANAGING DIRECTOR,                             831
    M/S. SOBHA DEVELOPERS LTD. [R. SUBHASH REDDY, J.]

mandatory provisions under the 1972 Act. It is clear from the objects of       A
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
                                                                               B
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        C
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. 2.
      Unconstrained by interference; not impelled by outside influence         D
      voluntary statement. 3. Without valuable consideration or legal
      obligation; gratuitous voluntary gift. 4. Having merely nominal
      consideration voluntary deed. Voluntariness”.
      The term ‘voluntary’ as defined in Oxford Dictionary reads as
under :                                                                        E
      “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       F
      etc.: made without money or other consideration being given or
      promised in return. Growing wild or naturally; or spontaneous
      growth. Volunteer
      3. …. ….
      4.a. Assumed or adopted by free choice; freely chosen or                 G
      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.
                                                                               H
832              SUPREME COURT REPORTS                          [2020] 3 S.C.R.


A            5. Done by deliberate intent; designed, intentional
             6. Of the will: free, unforced, unconstrained.
             7. 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
B            of such volunteers.
             8. Freely or spontaneously bestowed or made; contributed from
             personal choice or impulse or from generous or charitable motives.
             9. …. ….
C            10. 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
D            voluntarism in respect of Church, schools, etc.”..
             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
E
      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.
             10. The learned counsel appearing for the respondents also relied
      on the very same judgment in the case of Moulivakkam Trust Heights
F
      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.
G            11. 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.

H
      Devika Gujral                                                Appeal dismissed.