Case Note & Summary
The Supreme Court allowed the appeal filed by the Association for Consumer Welfare and Aid against the order of the National Consumer Disputes Redressal Commission (NCDRC) dated 31 July 2018, which had directed the deletion of Three C Universal Developers Private Limited (second respondent) from the array of parties in a consumer complaint. The consumer complaint sought diverse reliefs including possession of flats, common amenities, and restraint on charging additional amounts. The appellant association represented buyers of the real estate project 'Lotus Panache'. The complaint alleged that the second respondent was the main promoter and was jointly and severally liable with the first respondent (Granite Gate Properties Private Limited). The NCDRC deleted the second respondent solely on the ground that the consumers did not hire or avail services of that party. The Supreme Court noted that under Section 2(zk) of the Real Estate (Regulation and Development) Act, 2016, the definition of 'promoter' includes both the entity constructing the building and the entity selling apartments, and the Explanation provides for joint liability. The Court found that the averments in the complaint and the material on record, including the allotment letters and the project registration with the Uttar Pradesh Real Estate Regulatory Authority, indicated a connection between the second respondent and the project. Therefore, the Court held that deletion at the preliminary stage was not warranted. The appeal was allowed, the impugned order was set aside, and the second respondent was restored as a party to the proceedings before the NCDRC. The Court clarified that all rights and contentions of the parties were kept open. A companion appeal (Civil Appeal No. 1501 of 2019) was also disposed of in similar terms.
Headnote
A) Real Estate Law - Promoter - Definition - Section 2(zk) of the Real Estate (Regulation and Development) Act, 2016 - The definition of 'promoter' includes both the entity constructing the building and the entity selling apartments or plots; the Explanation provides that where these are different persons, both shall be deemed promoters and jointly liable. - The Court held that on the basis of averments in the complaint and material on record, it could not be concluded that the second respondent was unconnected with the project, and deletion at this stage was not warranted. (Paras 4-5) B) Consumer Law - Impleadment of Parties - Deletion at Preliminary Stage - Consumer Protection Act, 1986 - The NCDRC cannot delete a party from the array without adjudicating the merits if there is prima facie material showing the party's connection with the project. - The Court set aside the deletion order and restored the second respondent as a party, keeping all rights and contentions open. (Paras 5-6)
Issue of Consideration
Whether the National Consumer Disputes Redressal Commission (NCDRC) was justified in deleting the second respondent (Three C Universal Developers Private Limited) from the array of parties in a consumer complaint at the preliminary stage, without adjudicating the merits.
Final Decision
The Supreme Court allowed the appeal, set aside the NCDRC order dated 31 July 2018, and restored the second respondent (Three C Universal Developers Private Limited) as a party to the proceedings before the NCDRC. The complaint shall stand admitted against both the first and second respondents for final disposal. All rights and contentions of the parties are kept open. No order as to costs.
Law Points
- Promoter definition under RERA includes entities constructing or selling apartments
- joint liability of multiple promoters
- consumer complaint cannot be dismissed at threshold if there is prima facie material showing connection with project
