This discussion has been going on for very long with expert members even contradicting their own opinions given earlier. For instance Mr. Kishor Mehta said 2 years ago and repeated 2 days back that builder cannot sell or allot stilt or parking spaces. But in between 11 months ago he quoted the bye-laws to say “Member may hold parking space/ stilt if he is allotted the same, and he shall have a right to transfer the same to other eligible member of the same Society.”
If a builder cannot sell a parking lot, who allots it to the member and how can he hold a parking space with a right to transfer it to another member?
The problem is that people read the first and last sentences of a judgment and come to hasty conclusions. The Supreme Court judgment was with regard to a particular case on which the judgment was given. Otherwise sale, purchase and ownership of an immovable property, whether it is to park a car or to construct a house or any other, is a fundamental right. I hasten to add here that I am not using the word “fundamental” with the same meaning as it has in our Constitution. If someone can suggest an alternative adjective to avoid confusion, I welcome it.
The second question is whether consumer courts have jurisdiction over disputes between a member and his Society. Notwithstanding several judgments, my answer to this question is an emphatic “no”. In all such cases the Societies have lost the case because their lawyers have miserably failed them.
I wish to state here that all co-operative societies are not similar. A co-operative housing society is in a class by itself. It is different from a co-operative bank or a co-operative store. A housing society is a group of consumers who have come together and organised themselves to get various services to themselves. The services are rendered by outside individuals and bodies and the elected Managing Committee of the Society get the services performed, collect funds from members and pay for the services without retaining any money for the Society itself. In fact if any excess funds are collected from the members it remains in the accounts of the Society for future expenditure on behalf of the members. The Society is bound to render account to each member, how much was collected from him and how the amounts collected from him were applied to various items of expenditure. The Society is only a route to transfer funds from the members to the service providers. Such an arrangement is called mutuality. In fact the amounts collected from members are not “income” for the purpose of Income-tax Act. A Society is liable to pay income-tax only on outside incomes such as bank interest, which do not come into the mutuality principle.
The Consumer Protection Act, 1986 [the Act] is intended to protect consumers from others, who are collectively known as the Opposite Party, who include manufacturers, dealers and sellers of goods, service providers etc. So far in disputes between a member of a Society and the Society in consumer courts the member who is the complainant has been considered under the term “consumer” and the Society under the term “service provider” I am proceeding here to show that neither of the term is applicable under the Act.
Section 2 (d)(ii) of the Act defines a Consumer thus:
(d) “Consumer” means any person who –
(ii) hires or avails of any services for a consideration (italics mine) which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who buys such goods for consideration paid or promised or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person but does not include a person who avails of such services for any commercial purposes.
What a Society member pays to the Society does not include any consideration to the Society. The entire amount the member pays is passed on to the service provider, who is an outsider. Hence a member of a Co-operative Housing Society is not a “consumer” under the Act.
Further subsection (o) of the same section says:
(o) “service” means service of any descripttion which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing, insurance, transport, processing, supplying electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service.
A Society does not collect for itself any amount for providing the services. Whatever is collected from the members is passed on to the service providers outside the Society. Members of the Managing Committee, who have their own full time vocations to earn their own livelihood, are only volunteers, who spare their valuable time to serve the Society. In fact even if the Managing Committee members are paid any remuneration, the Society would not become a “service provider”, because the Managing Committee members are only salaried servants of the Society just like other servants like sweepers.
I do not say that there cannot be any dispute between a member and his Society. My only contention is that the Act, in its present form is not equipped to give solution to the dispute. Often the judgment of a consumer court can give funny and disastrous results. It will be funny for onlookers and disastrous for the parties involved. I illustrate here one case.
In multi-storied buildings it is very common that there is leakage from the upper floor to the lower floor. In one such case in a co-operative society in Mumbai the member residing in a flat on the lower floor filed a complaint in the consumer court against his own Society and the member on the upper floor. The case as stated was that the member on the upper floor had carried out some repairs, renovations or other work in his flat, which resulted into leakage down to the lower floor flat. The complaints of the member, on the lower floor, to the Society and the member on the upper floor went unheeded and hence the lower floor member went before the consumer forum. The lawyers of the Society implicitly admitted that they were “service providers” under the Act and presented their own side of the case. They did not dispute the jurisdiction of the consumer forum to try the case on the lines mentioned above by me. The lawyers of Opposite Party No.2, the upper floor member, gave a routine rebuttal of everything.
The Consumer Forum ordered the Society to pay to the Complainant the cost of repairs. It let off the upper floor member saying that he was not a “service provider” under the Act.
What happened afterwards? :
The lower floor member carried out the repairs and presented his bills to the Society. The Society called a General Body Meeting, apprised them of the award of the consumer forum and asked the members (including the complainant) to share the cost. The members refused and said that the MC members should themselves shell out the amount from their own pockets. Now the Society has gone on appeal before the State Commission. It will be interesting to see the decision of the Commission.
This case illustrates that Consumer court cannot adjudicate between a member and the Society of a Co-operative Housing Society. The real person who should have been held responsible was the upper floor member. It is not only that he has to bear the cost, but the leakage cannot be stopped without working on the upper floor. It means that the case should have gone before a court, which could order the upper floor member to allow workers to enter upon his flat and do the repairs including undoing of any cosmetic work done by him under the threat of eviction otherwise. Only Co-operative Courts are equipped for that.
There is a story about Lord Shiva in the South. Once upon a time a kingdom was flooded and the king had to mobilize labour force to contain the floods by constructing bunds. He ordered every household in his kingdom to depute one person for the labour force. There was an old lady living alone and making life by selling breads. She did not have anyone to be sent. Lord Shiva appeared before her like a labourer and offered his services. In return she was to give him enough bread to eat. Lord Shiva ate to his heart’s content and went away. Later when the work was over the king came making his round. He saw the worker sleeping well. He became angry. He took out his whip and lashed him on his back. Everyone present there, including the king, felt the lash on their backs. If a Society is punished every member including the complainant gets punished.
![Dr. MPS RAMANI Ph.D.[Tech.]](/img/avatars/my_avatars/84227.jpg)
