Representative Consumer Complaints Require Continuous Fulfillment of 'Sameness of Interest' Despite Initial Permission

The petitioner developer assailed an order dated 12.10.2022 by the National Consumer Disputes Redressal Commission (NCDRC).

Initially, three allottees filed a representative complaint under Section 12(1)(c) of the Consumer Protection Act, 1986, regarding the "The Valley" project, citing delays and disputed charges.

The NCDRC granted representative status in 2018.

The three original complainants later settled and withdrew. They were replaced by numerous other allottees subject to specific conditions: they must share all original reliefs, have no other grievances, and haven't approached other forums.

In 2022, the petitioner filed I.A. 4407/2022 challenging the maintainability of the reconstituted complaint as a "class action," arguing a lack of "sameness of interest" among the 49 remaining complainants who occupied diverse factual positions (e.g., subsequent purchasers, those who executed conveyance deeds, or those who accepted prior compensation).

The NCDRC dismissed this application, leading to the present Article 227 petition.

1. Whether the maintainability of the consumer complaint as a representative action was finally concluded in the previous round of litigation before the High Court and Supreme Court

2. Whether the reconstituted group of complainants satisfied the jurisdictional requirement of "same interest" under Section 12(1)(c) of the 1986 Act (now Section 35(1)(c) of the 2019 Act)

3. Whether the NCDRC failed to exercise its jurisdiction by not conducting a complainant-wise scrutiny to ensure compliance with its own impleadment conditions

Section 12(1)(c) of the Consumer Protection Act, 1986 (equivalent to Section 35(1)(c) of the 2019 Act), which permits representative complaints only where "numerous consumers [have] the same interest".

The Supreme Court precedent in Brigade Enterprises Ltd. v. Anil Kumar Virmani, which established that "sameness of cause of action" is not identical to "sameness of interest" and requires a homogeneous class with identical grievances.

Principles of res judicata and "finality of litigation," noting that a changed declaration of law or material changes in facts prevent the application of res judicata to jurisdictional issues in ongoing proceedings, citing Canara Bank v. N.G. Subbaraya Setty.

The High Court rejected the respondents' argument that the Supreme Court's 2019 order had finalized the representative status. It reasoned that the Supreme Court permitted substitution of "appropriate" applicants, implying they must still meet statutory criteria.

The Court found that the NCDRC failed to apply the "sameness of interest" test as elucidated in Brigade Enterprises. Specifically, the NCDRC overlooked that the 49 remaining complainants were a heterogeneous group with differing periods of delay, varying legal statuses (original vs. subsequent buyers), and different prior interactions with the developer (settlements or conveyance deeds).

The Court observed that the NCDRC reversed the statutory test by assuming that a common desire for monetary relief created a "same interest," whereas the law requires the underlying grievance and deficiency to be identical.

Furthermore, the NCDRC failed to verify if the substituted parties complied with the four mandatory conditions set in its own order dated 30.05.2019.

The Court allowed the petition and set aside the NCDRC order dated 12.10.2022. The matter was remitted to the NCDRC to: (i) ascertain the factual status of each surviving complainant; (ii) determine if they constitute a homogeneous class under Section 12(1)(c); and (iii) decide if the matter should proceed as a representative action or be converted into a joint complaint under Section 12(1)(a).

The NCDRC was requested to conclude this exercise within six months.