Class action lawsuits to ensure quick relief for homebuyers

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All owners in a housing project with ‘common’ grievances to be made party to proceedings against builder; to be awarded compensation too.

Homebuyers with common interests and grievances in one housing project can come together as one group and file a class action lawsuit against a builder under Section 12 (1) (c) of the Consumer Protection Act.

The National Consumer Disputes Redressal Commission (NCDRC) clarification that all homebuyers in a housing project who may or may not have filed cases against developers, are eligible for compensation or benefits, comes as good news for buyers. Everyone who has invested in a project will automatically be a party to a case filed against the builder provided they have a common interest and a “common grievance.”

A larger Bench of the NCDRC has said that a complaint filed for the benefit of or on behalf of all allottees of a project irrespective of the size of their respective flats or plots, date of purchase and price paid for property who have a common grievance (ie delay in delivery) would be maintainable under Section 12 (1) (c) of the Consumer Protection Act. The relief claimed will be identical in case the builder fails to deliver on time or give refund “with or without compensation claimed for all of them,” the Bench interpreted when issues relating to the concerned Section were referred to it.

“The interest of the persons on whose behalf the claim is brought must be common or they must have a common grievance which they seek to get addressed. The defect or deficiency in the goods purchased, or the services hired or availed of by them should be the same for all the consumers on whose behalf or for whose benefit the complaint is filed. Therefore, the oneness of the interest is akin to a common grievance against the same person,’’ it says.
The objective behind permitting a class action such as a complaint under Section 12 (1) (C) of the Consumer Protection Act is to facilitate the decision of a consumer dispute in which a large number of consumers are interested. There should be no need for each of them to file individual complaints. It is necessary for such a complaint to be filed on behalf of or for the benefit of all the persons having such a community of interest,” it says.

Source: HT Estates