Impleadment Of Unnecessary Parties In Consumer Disputes: Akin To The Principles Of CPC?

Update: 2023-09-27 05:11 GMT
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Consumer disputes are an inherent part of the modern marketplace, and as e-commerce has grown in popularity, they have become even more common. The Consumer Protection Act, 2019 a social welfare legislation in India, deals with protecting consumer rights. The objective of the Act is to protect the interests of the consumers and for timely settlement of disputes so as to safeguard the...

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Consumer disputes are an inherent part of the modern marketplace, and as e-commerce has grown in popularity, they have become even more common. The Consumer Protection Act, 2019 a social welfare legislation in India, deals with protecting consumer rights. The objective of the Act is to protect the interests of the consumers and for timely settlement of disputes so as to safeguard the rights of consumers, such as the right to be protected from the marketing of goods, the right to information about the quality, quantity, effectiveness, of goods, the right to be heard, the right to seek redressal against unfair trade practices of consumers, and the right to consumer education.

Discords between consumers and businesses are bound to arise in today’s fast-paced world. The conflicts may come to light for a plethora of reasons and finding the right party to address these conflicts is essential, and in the majority of cases, this involves the customer and the business cooperating to find a solution. However, in some cases, consumers may involve third parties to the complaint, such as a grievance officer, customer support executives, or other intermediaries, which further increases the difficulty of resolving consumer complaints. The Act's primary objectives do not directly address the issue of third parties being impleaded. To arrive at a fair and just resolution in such circumstances, identifying all pertinent parties and encouraging collaborative efforts becomes even more important.

Under the Consumer Protection Act, the definitions of "complainant" and "complaint" are defined. The term "complainant" has been defined under Section 2(5) of the Act as any number of people or organizations, including customers, registered consumer associations, government agencies (both federal and state), the central authority in charge of overseeing consumer protection, groups of customers with related interests, legal heirs or representatives in the event of a customer's passing, and parents or guardians of minor customers. A "complaint," on the other hand is defined under Section 2(6) of the Consumer Protection Act, as a written claim made by a complainant with the intention of requesting relief under the Act. Such a complaint may cover a range of grievances, including the use of unjust contracts, unethical business practices, or restrictive business practices by traders or service providers. Additionally, it can refer to problems with the standard of the goods bought or agreed upon, shortcomings in the services obtained or used, and situations in which traders/service providers charged prices above those allowed by law, displayed on product packaging, listed on mandated price lists, or agreed upon by parties. Hence, it can be concluded that a complaint under the Consumer Protection Act, would lie against the service provider or the trader only, and by joining unnecessary parties, the complaint would become frivolous against such a party.

In the case of Brahmaputra Biochem Private Ltd v New India Assurance Company & Anr, 2022 LiveLaw (SC) 211, the Supreme Court of India criticized the National Consumer Dispute Resolution Commission’s (NCDRC's) decision to return a complaint in case of a misjoinder of parties, without giving the parties involved a fair hearing. This decision was rejected by the Supreme Court, which ruled that instead of returning the entire complaint in the event of a misjoinder, unnecessary parties should be dropped from the case. Further, the Apex Court emphasized that returning a complaint with the option of filing a new one would raise questions about the statute of limitations. The Court argued that the NCDRC should have simply dismissed a party from the case rather than returning the complaint if it believed that party to be unnecessary or that the pleadings were inconsistent. The Court also stated that the complainant cannot submit a new complaint after the limitation period has passed.

In the case of Taneja Developers and Infrastructure Ltd. & Or’s. Regd. v Devinder Singh and Ors, 2013 SCC Online NCDRC 885, a plot was purchased by one Chandrika Parsad from opposite parties and this plot was thereafter re-sold firstly to one Jatinder Singh and thereafter to one Prabhjot Singh from whom it was repurchased by the complainant. Before purchasing the plot from Prabhjot Singh, the complainant approached the OP Builders who gave him statement of accounts in which it was shown that a balance amount of Rs. 1,68,750/- was due in respect of the plot in question. Thereafter, on receipt of transfer fee, the OP Builders transferred the plot in question in favour of the complainant. Another due amount of Rs. 1,62,500/- was demanded by the OPs from the complainant which the complainant could not pay due to financial difficulty. For non-payment of the amount, the OPs cancelled the allotment in favour of the complainant. The complainant, therefore, approached the District Forum by filing a consumer complaint. During the pendency of the complaint in the District Forum, the petitioners filed an application in which it was stated that in the statement of accounts given to the complainant by the petitioners, there was an entry showing credit of amount of Rs. 6,87,500/- to the account of the Prabhjot Singh, predecessor in interest of the complainant which actually credited to the statement of accounts as a result of a clerical error. It was alleged by the petitioners that this amount was wrongly reflected to the credit of Prabhjot Singh in the statement of accounts supplied to the Respondent although this amount was never paid by Prabhjot Singh and no receipt was ever issued by the petitioners to Prabhjot Singh qua this amount. The complainant opposed this application by filing a reply stating that for their right, if any, against the said Prabhjot Singh, the OP Builders should file a separate case against Prabhjot Singh. The District Forum after hearing the parties dismissed the application. The State Commission also rejected the petitioners' request to add Prabhjot Singh (a third party) as a party in a consumer protection case. It was argued that Prabhjot Singh ought to be included because he was the successor in the service provider's best interests, but the Commission disapproved. The Consumer Protection Act’s object was considered by the Commission to support its position that complaints should be made to the service provider, in this case, the petitioner rather than Prabhjot Singh. It was also mentioned that violating the Act by attending unnecessary parties could result in penalties. The Commission also held that if the complaint is determined to be frivolous against any of the opposing parties, Section 26 of the Consumer Protection Act would be applicable to punish the inclusion of individuals as parties. Moreover, it was also held that in proceedings under the Consumer Protection Act, the complaint would lie against the service provider. The NCDRC upheld the State Commission's decision, by holding that it was in line with legal provisions, and dismissed the revision petition.

In India, there has been a strong debate as to how the Civil Procedure Code (CPC) should be applied to consumer disputes under the Consumer Protection Act. However, the contentious issue of whether or not CPC principles should be applied to consumer disputes in India continues to be fueled by the delicate balance between legislative intent and the need for justice. As stated in Section 100, the provisions of the Consumer Protection Act are in addition to and do not supersede any other laws. Even Section 38, which describes how the Commission investigates complaints, does not specifically say that CPC provisions do not apply and the same has been discussed by the Supreme Court in the case of Brigade Enterprise Ltd. v. AnilKumar Virmani,(2022)4 SCC 138, wherein the apex court had the opportunity to discuss the applicability of the provision of CPC vis-à-vis the Consumer Protection Act. Be that as it may, the provisions of CPC have been applied by the commissions for the impleadment of parties in consumer disputes and this has also helped in striking off the unnecessary parties to the proceedings, paving the way for eliminating frivolous litigation at the threshold.

In the case of Mumbai International Airport Pvt. Ltd. v. Regency Convention Centre and Hotels Pvt. Ltd. and No Or’s., 2010 SCC 417, it has been held that the dominus litis (master of the suit), the plaintiff, is generally free to choose whom to sue and cannot be forced to include parties against their will. However, Order 1, Rule 10(2) of the Code of Civil Procedure, 1908, applies to this general rule. The court may add or strike out parties at any time during the course of the proceedings, either upon application or even without it, as it sees fit. If a "necessary party" is absent, the lawsuit may be dismissed because there cannot be an effective decree without them. A person is a "proper party" if, even if the decree is not directly against them, their presence would allow the court to fully and effectively decide all issues in dispute.

In the case of Kranti Arora v. Digjam Ltd. & O.P. Khaitan, 2022 LiveLaw (Del) 666 the Delhi High Court has emphasized that the "dominus litis," or plaintiff, in a lawsuit, cannot be forced to file a claim against someone from whom they are not seeking any relief. The court made it clear that even though the plaintiff is in charge of the lawsuit and should name the parties they want to name as defendants, this does not preclude the addition of a third party as a necessary party in the future. The court stated that a third party may be involved if their presence is required to successfully resolve the dispute and if they could suffer legally as a result of the lawsuit's outcome.

From the overview of the aforesaid discussion, it can be concluded that the legislature has made various provisions of the CPC applicable to consumer proceedings but it has intentionally excluded all other provisions of the CPC from being applicable. However, as per the Consumer Protection Act, the provisions are in addition to and not in derogation of the provisions of any other law. Therefore, for impleadment of parties, there is no express provision in the Consumer Protection Act that excludes the applicability of CPC as be garnered from the catena of judgments discussed hereinabove. An unnecessary party is not essential for the adjudication of the dispute as this will result in thoughtless and unnecessary wastage of the commission time wherein the unnecessary party would, in no manner whatsoever be of any help to the disputing parties. The courts should strike off the unnecessary parties to a dispute, at the inception only so that the resolution of the disputes is speedy, without hindrance, and ensures the administration of principles of natural justice, fairness, and good conscience are maintained.

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