Land Mark Decision by Supreme Court- Flat buyers can directly approach to the Apex Consumer Commission

The Supreme Court in its recent judgment in December 2019 has upheld the order of the National Consumer Disputes Redressal Commission that, flat buyers can jointly approach the apex Commission in case of a dispute with a builder or realtor.

According to the Consumer Protection Act 1986, if the cost involved is less than Rs 1 crore then, the complainant has to first file the complaint at the district consumer forum. The builder submitted before the bench, that the cost of each flat was less than Rs 1 crore and therefore, the buyers were individually ineligible and incapable of directly approaching the National Consumer Disputes Redressal Commission.

A bench headed by Justice Dipak Misra and included AM Khanwilkar and MM Shantanagoudar, rejected the appeal of Amrapali Sapphire Developers Pvt. Ltd., challenging the National Commission decision on the ground that a complaint can be filed directly before the National Commission if the total value of the disputed deal is over Rs 1 crore (according to the Consumer Protection Act 1986), and the 43 buyers cannot file a joint complaint before the National Consumer Disputes Redressal Commission.

The 43 buyers of the flats from real estate developer Amrapali got together and hold hands and formed Amrapali Sapphire Flat Buyers Welfare Association, to file the complaint against the builder in May 2016, for delay in handing over possession of their flats which was already decided in the agreement.

In the present case, the apex Commission had allowed various individuals, who bought flats to club their cases to cross Rs 1 crore set price ceiling (as per Consumer Protection Act 1986), which was challenged by the builder before the apex court.

In 2016, the National Commission had passed the decision in favor of the 43 flat owners in Amrapali Sapphire housing project, saying that they could form an association and it is not against the statute to achieve the pecuniary limit of Rs 1 crore, for approaching it directly.

It was held by the Supreme Court in 2019 that, “Once it is accepted and recognized that a consumer complaint on behalf of more than one consumer can be filed by a recognized association, it cannot be disputed that it is the aggregate or total value of the services which has to be taken for the purpose of determining pecuniary jurisdiction of the consumer forum before which the complaint is filed or taken.”

The court also referred to the case, Public Health Engineering Department v. Upbhokta Sanrakshan Samiti which was decided by the Apex Commission in which also it was decided that the pecuniary jurisdiction by forming an association under section 11 of the Act of 1986. It was finally held, while considering the observation made by the National Commission of the present case. The apex Commission had observed that, the aggregate or total value of services of the flat buyers on whose behalf this complaint was filed was taken, then it exceeded Rs 1 crore and therefore, it has the jurisdiction to entertain the complaint.

The apex court’s ruling comes as a relief for others stuck with delayed flats to approach the apex consumer commission in a similar manner. This judgment would surely be a land mark decision of the Supreme Court in the protection of Consumer Rights as this will curtail the arbitrary and fancies of the realtors which has always ruined and distorted the rights of the consumers.



-Muskan Katthal

Dharmashastra National law University