Flat owners' association registered under KAOA can't file consumer complaint: SC

The Supreme Court has held that a flat owners' association registered under the Karnataka Apartment Ownership Act, 1972 is not a voluntary organisation, so it cannot file a complaint under the Consumer Protection Act against any deficiency in goods or services under the welfare legislation.

A bench of Justices Mohan M Shantanagoudar and R Subhash Reddy passed its judgement while dismissing a civil appeal filed by Sobha Hibiscus Condominium against Managing Director of M/s Sobha Developers Ltd.

The court noted that the appellant was a statutory body under the KAOA and consisted of members, who were the owners of the apartments in a multistorey building 'Sobha Hibiscus' situated in Ambalipur Village, Varthur Hobli, of South Bangalore Taluk in Karnataka.

The Karnataka Apartment Ownership Act (KAOA) was enacted with a view to provide for the ownership of an individual apartment in a building and to make such apartment heritable and transferable property. Once the apartments are registered under this Act, the owners, among other rights, would also get an undivided interest in the common areas and facilities of the apartment complex.

However, the mandatory provision of the law for registration of the flat owners' association takes away its volunatariness, precluding it to invoke the consumer law.

Going through the provisions of the Consumer Protection Act, the court said the statute made it clear that any recognised consumer association could file a complaint but such a group had to be of voluntary nature, registered under the Companies Act, 1956 or any other law.

The top court declined to interfere with the order of May 13, 2015, by the National Consumer Disputes Redressal Commission, New Delhi that had said the Condominium has no locus standi to file the complaint since neither it is a ‘consumer’ nor it is a ‘recognised consumer association’ within the meaning of Section 12 of the Act.

The appellant association, consisting of members of flat owners in a building, which has come into existence pursuant to a declaration, required to be made compulsorily under the provisions of 1972 Act, cannot be said to be a voluntary association to maintain a complaint under the provisions of the Act, the court said.