NCDRC Affirms Members’ Right to Sue Their Co-Op Society for Deficiency in Service

Facts of the Case

The case revolves around a dispute between a member of a co-operative housing society and the society itself. The complainant, Anil Advani, alleged that the co-operative society failed to provide essential services and engaged in unfair practices, leading to grievances requiring legal intervention. The core issue was whether members of a co-operative society could be classified as ‘consumers’ under the Consumer Protection Act, 2019.

Legal Issues

1. Whether a co-operative society’s services to its members fall within the ambit of ‘service’ under the Consumer Protection Act?
   
2. Can a member of a co-operative society institute a consumer complaint against the society for deficiency in service?
   

Arguments by the Parties

• Complainant’s Arguments:
  
  • The complainant contended that the society had failed in its duty to provide essential services such as maintenance, repair work, and financial transparency.
    
  • Cited precedents where co-operative societies were held accountable for their service-related obligations.
    
  • Argued that he was a ‘consumer’ as per the definition under the Consumer Protection Act since he availed services from the society in exchange for maintenance charges.
    
    
• Respondent’s Arguments:
  
  • The co-operative society maintained that disputes among members and the society should be resolved under the co-operative societies’ internal dispute resolution mechanism.
    
  • It asserted that members of a society do not fall under the category of ‘consumers’ as the society operates on a principle of mutual benefit rather than a service-provider-consumer relationship.
    
  • It also relied on past judgments that restricted the scope of the Consumer Protection Act in the context of co-operative societies.
    

Court’s Reasoning and Judgment

The NCDRC ruled in favor of the complainant, holding that:

• Applicability of the Consumer Protection Act: The commission observed that members availing maintenance and other society-related services are indeed ‘consumers’ under the Act, provided that these services are not rendered gratuitously.
  
• Deficiency in Service: The court found that the society had failed to fulfill its obligations, causing inconvenience to the complainant. Such lapses in service are actionable under consumer law.
  
• Precedents Relied Upon: The court referred to significant past judgments, including:
  
  • K.K. Modi vs. K.N. Modi & Ors. (1998) – Discussing the scope of consumer disputes.
    
  • Zoroastrian Co-Op Housing Society Ltd. vs. District Registrar (2005) – Analyzing co-operative societies’ governance vis-à-vis consumer rights.
    
  • Secretary, Thirumurugan Co-op Agricultural Credit Society vs. M. Lalitha (2004) – Holding that co-operative societies providing financial services fall under consumer law.
    

Significance of the Judgment

This ruling sets a precedent for co-operative society members to seek redress under consumer law for any service-related deficiencies. It expands the scope of consumer rights, ensuring that members are not left without remedy against mismanagement and non-performance of societies.

Conclusion

The NCDRC’s decision reaffirms the principle that consumer protection laws apply to housing co-operative societies. It provides relief to members who suffer from deficient services, compelling societies to uphold their commitments. This landmark ruling will likely influence future litigation concerning the accountability of co-operative societies.

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