Members Can File Consumer Complaint Against Their Co-operative Society, Rules NCDRC
Pranav B Prem
The National Consumer Disputes Redressal Commission (NCDRC), New Delhi bench comprising Mr. Binoy Kumar (Presiding Member) and Justice Saroj Yadav (Member), has held that members of a co-operative housing society can maintain a consumer complaint against the society itself. It set aside the order of the Karnataka State Consumer Disputes Redressal Commission, which had dismissed the appeal filed by the complainants solely on the ground of maintainability. The NCDRC directed the State Commission to decide the matter afresh on merits after considering the binding precedent in Smt. Kalawati & Ors. v. M/s United Vaish Co-operative Thrift and Credit Society Ltd. (2001).
The complainants, who were members of Sunmist Co-operative Housing Society Ltd., had approached the District Consumer Commission alleging deficiency in service and unfair trade practices by the society. The District Commission, after hearing the matter, dismissed the complaint. The complainants then approached the State Commission in first appeal. However, the State Commission rejected the appeal on the sole ground that the complainants being members of the society did not qualify as "consumers" within the meaning of the Consumer Protection Act, and therefore, their original complaint was not maintainable. Aggrieved by the said finding, the complainants filed a revision petition before the NCDRC.
Before the NCDRC, the complainants contended that the State Commission had erred in dismissing the appeal purely on a preliminary ground without examining the case on merits. They relied heavily on the decision of the NCDRC in Smt. Kalawati & Ors., wherein it was held that a member of a society is not the same as the society and can be treated as a consumer in certain cases. They submitted that just as a shareholder is legally distinct from the company in which he holds shares, a member of a society is also distinct from the society as a legal entity. It was further submitted that nothing in the Karnataka Co-operative Societies Act prohibits members from initiating proceedings before consumer fora in cases involving deficiency in service.
The complainants also clarified that the consumer complaint was filed under the Consumer Protection Act, 2019 and not under the 1986 Act as wrongly recorded by the State Commission. It was argued that the State Commission ignored this fact and failed to consider the applicability of the new Act. The petitioners submitted that the reasoning of the State Commission suffered from serious legal infirmity, as it did not deal with the factual or substantive claims raised in the complaint.
The NCDRC, after examining the record, agreed with the submissions made by the complainants. It observed that the State Commission had dismissed the appeal without considering the merits of the case or examining the nature of the relationship between the parties beyond their membership status. The NCDRC pointed out that the legal position with respect to whether a member of a co-operative society can be treated as a "consumer" had already been settled in Smt. Kalawati, and this authority was binding. The NCDRC reiterated that in appropriate situations, where a co-operative society renders service for consideration to its members, the member may invoke the jurisdiction of consumer forums under the Consumer Protection Act.
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The Commission further noted that the complaint involved allegations of deficiency in service and unfair trade practices in the context of a co-operative housing society. The fact that the complainants were members of the society did not automatically deprive them of their right to seek redress under the consumer law. The NCDRC held that the State Commission should not have dismissed the appeal on the ground of maintainability alone without adjudicating on the contentions of the complainants.
Accordingly, the NCDRC set aside the impugned order passed by the Karnataka State Commission and remanded the matter for fresh consideration. The State Commission was directed to hear and dispose of the case on merits, while duly taking into account the decision in Smt. Kalawati and the provisions of the Consumer Protection Act, 2019. The revision petition was accordingly disposed of.
Appearance
For the Appellants: Mr. Anshul Gupta, Advocate, Ms. Chaahat Khanna, Advocate
Cause Title: Anil Khemchand Advani & Anr. V. Sunmist Cooperative Housing Society Ltd.
Case No: Second Appeal No. 25 of 2025
Coram: Hon'ble Mr. Binoy Kumar [Presiding Officer], Hon'ble Mrs. Justice Saroj Yadav [Member]
[Read/Download order]
