Company Law Journal: An analysis of the provisions for Class Action law suits under the Consumer Protection Act for home buyers

The real estate market in India is mushrooming at breakneck speed. The rise in population and a growing middle class has necessitated and propelled the real estate boom in India. With the rise in number of these real estate projects, builders have resorted to unethical practices such as late delivery, deficiency of services, etc. This has adversely affected myriad home buyers. Many a times, consumers, as a group, approach the National Consumer Disputes Redressal Commission for redress. A class action suit allows home buyers to pool resources in terms of time, effort and money to fight the powerful builders in court more effectively. A typical defence taken by builders is that since the claim amount prayed for by each of the buyers is less than the statutory minimum for approaching these forums; therefore, they must file a complaint in the district forums or State Commissions. There is ambiguity regarding whether these home buyers can approach the National Commission together. This article will argue that the provisions of the Consumer Protection Act, 1986, are clear and lucid inasmuch as they allow consumers to file class action suits.

The provisions of the Act thus have to be construed in favour of the consumer to achieve the purpose of enactment as it is a social benefit oriented legislation.