NCDRC Orders Karnataka State Commission to Reconsider Appeal, Citing Landmark Judgment on Consumer Rights of Society Members

April 7, 2025

The New Delhi Bench of the National Consumer Disputes Redressal Commission (NCDRC), comprising Mr. Binoy Kumar (Presiding Member) and Justice Saroj Yadav (Member), has directed the Karnataka State Consumer Disputes Redressal Commission to re-examine a case on its merits. This directive was issued with specific reference to the landmark ruling in Smt. Kalawati & Others vs M/s United Vaish Cooperative Thrift and Credit Society Ltd. (2001), wherein it was held that individual members of a co-operative society can qualify as ‘consumers’ in disputes against the society.

Background of the Case:

The case arose after the Karnataka State Commission dismissed a first appeal filed by the Appellants. The Commission had ruled that no consumer-service provider relationship existed between the Appellants and Sunmist Cooperative Housing Society (Respondent), thereby declaring the original complaint before the District Forum as non-maintainable.

Challenging this decision, the Appellants approached the NCDRC through a second appeal. In support of their appeal, they invoked the Kalawati judgment, where the NCDRC had clarified that co-operative society members are separate legal entities from the society itself and, hence, can seek remedies under the Consumer Protection Act.

The Appellants further argued that Section 93 of the Societies Act does not oust the jurisdiction of consumer forums. Drawing an analogy with corporate law, they pointed out that just as shareholders are distinct from a company, so too are members distinct from a co-operative society, giving them the right to initiate consumer complaints. They also clarified that their complaint had been filed under the Consumer Protection Act, 2019—not the 1986 version, as erroneously recorded by the District Commission.

NCDRC’s Findings:

After reviewing the submissions, the NCDRC concurred with the Appellants’ reasoning and concluded that the Karnataka State Commission had not properly considered the precedent set in Kalawati. Accordingly, it set aside the earlier order and directed the State Commission to hear the matter afresh, ensuring that the legal position laid down in the Kalawati case is duly considered.

Case Details: