Members of a Society are consumers within the meaning of Consumer Protection Act - India Consumer Forum

Members of a Society are consumers within the meaning of Consumer Protection Act

If one takes cue from the order passed by National Consumer Disputes Redressal Commission in the Revision Petition Nos.823 to 826 of 2001, members of a Society can raise a dispute against the Society and seek redress under Consumer Protection Act.

The Order arises from the petition filed by Smt. Kalawati & Ors. against Ms. United Vaish Co-operative Thirft & Credit Society Ltd. The District Forum had earlier admitted the claim and passed order in favour of the Petitioner. The said Order was subsequently setaside by the State Commission on an Appeal filed by the Respondents. NCDRC however setaside the State Commission’s order and restored the order passed by District Consumer Forum

Two contentions were raised before the State Commissioner on the basis of which the appeal was allowed; (i) that a Forum under the CPA has no jurisdiction over the subject matter of the complaints in view of the provisions of Section 60 read with Section 93 of the Societies Act and (ii) petitioners were not ‘consumers’ availing of ‘services’ as defined under the CPA.

The National Commission overruled State Commission’s order on the following reasoning:

Section 3 of CPA provides as under:
“3. Act not in derogation of any other law.- The provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.”
Section 3 is worded in widest terms and leaves no one in doubt that the provisions of CPA shall be in addition and not in derogation of any other law for the time being in force. Thus even if any other Act provides for any remedy to a litigant for redressal of that remedy a litigant can go to District Forum if he is a ‘consumer’ under CPA. That remedy exists in any other law which creates the right is no bar to District Forum assuming jurisdiction.
Section 93 of the Societies Act, which contains bar of jurisdiction of courts, is as under:
“93. Bar of jurisdiction of courts.- (1) Save as provided in this Act, no civil or revenue court shall have any jurisdiction in respect of-
(a) the registration of a co-operative society or its bye-laws or of an amendment of a bye-law;
(b) the removal of a committee;
(c) any dispute required under section 60 to be referred to the Registrar; and
(d) any matter concerning the winding up and the dissolution of a co-operative society.
2. While a co-operative society is being wound up, no suit or other legal proceedings relating to the business of such society shall be proceeded with or instituted against, the liquidator as such or against the society or any member thereof, except by leave of the Registrar and subject to such terms as he may impose.
3. Save as provided in this Act, no order, decision or award made under this Act shall be questioned in any court on any ground whatsoever.
For one thing a District Forum is not a Civil Court though it may have the trappings of a Civil Court. Neither it is a revenue court. We therefore, do not think that Section 93 of Societies Act would come in the way of the District Forum assuming jurisdiction.

A comparison was made on the wordings of Section 93 of Societies Act with the wordings of Section 105 of the Multi-State Co-operative Societies Act, 1984, Section 18 of the Recovery of Debts Due to Banks & Financial Institutions Act, 1993 and Section 15 of the Railway Claims Tribunal Act, 1987, and it was observed that:

Section 105 of the Multi-State Co-operative Societies Act, 1984 uses the word ‘court’. Jurisdiction of court is thus barred in respect of disputes mentioned in the Section. Other two Acts uses the words not only ‘court’ but also ‘other authority’. District Forum is certainly “other authority” as it is not a court. Both these two Acts certainly bar the jurisdiction of a District Forum to take cognizance of the matter which falls exclusively in the jurisdiction of the Tribunal established under those two Acts but Section 93 of the Societies Act does not bar the jurisdiction of District Forum assuming jurisdiction in the matter.

The National Commission also did not agree with the view of the State Commission that a member cannot be a consumer vis-a-vis the society of which he is a member. It observed that as a member he has certain rights in the society like attending its meeting and right to vote. A member is a separate entity from the Co-operative Society which is just like a shareholder as in the Company registered under the Companies Act, 1986. Here is the society of which the complainants are member which invites deposits and pays interest and is to refund the amount with interest on maturity. Society provides facilities in connection with financing and is certainly rendering services to its members and here is a member who avails of such services. When there is a fault on the part of the society and itself is not paying the amount on fixed deposit receipts on maturity, there is certainly deficiency in service by the society and a complaint lies against society by the member as a complainant …… Thus complainants were certainly consumers and could maintain their complaints in the District Forum.

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