Consumer Complaint Cannot Be Dismissed Due to Non-Joinder of Party: NCDRC Remands Petition Filed by Cholamandalam Finance

Summary:

In the recent judgment the Hon’ble National Consumer Disputes Redressal Commission (NCDRC), firmly established that a consumer complaint cannot be dismissed merely based on non-joinder of a party if an effective order can still be issued without their presence. The present case involved a critical dispute between Cholamandalam Investment & Finance Ltd. and Uttam Rao Pawade regarding the company’s failure to issue a No Objection Certificate (NOC) after loan repayment and a demand for an adjustment of ₹1,00,000.

Facts:

1. The complainant decisively filed a consumer complaint against Shree Motors (the dealer) and Cholamandalam Investment & Finance Ltd. (the appellant), which led to a significant disagreement.

2. The complainant obtained a loan from the appellant to acquire a car.

3. The appellant egregiously failed to issue the NOC after the full repayment of the loan, citing an unresolved adjustment of ₹1 lakh paid to the dealer as the rationale for this delay.

4. In pursuit of justice, the complainant approached the Hon’ble District Consumer Dispute Redressal Commission, Ankola asserting (DCDRC) a lack of service.

5. On January 7, 2015, the DCDRC issued a clear and immediate order for the appellant to provide the NOC.

   – The Commission mandated the prompt issuance of the NOC;

   – A compensation of ₹20,000 and ₹3,000 in litigation costs to the complainant; &

   – The dealer was directed to pay ₹10,000 in damages.

6. The appellant being aggrieved by the said order of the DCDRC filed an appeal before the Hon’ble Maharashtra State Consumer Commission, arguing that the proceedings were flawed due to the dealer’s non-participation.

7. On August 9, 2016, the State Commission dismissed the appeal, asserting that the dealer’s culpability had been adequately addressed and that the proceedings remained valid, irrespective of the dealer’s absence.

8. Dissatisfied with the State Commission’s ruling, the appellant filed an appeal before the Hon’ble National Consumer Disputes Redressal Commission (NCDRC) for revision of the said order, arguing that the proceedings were illegal due to the dealer’s non-joinder.

Issues:

– Was the dismissal of the appeal based on the non-joinder of the dealer justified?

– Should procedural technicalities override the pursuit of substantive justice?

Judgment:

The Hon’ble NCDRC unequivocally ruled that the non-joinder of the dealer was insufficient justification for dismissing the appeal. Since no specific remedy was sought against the dealer in the complaint, their absence did not impede the case. The dealer became a performa respondent following the Commission’s order. Thus, the Hon’ble NCDRC allowed the revision petition and remanded the case to the State Commission for further proceedings.

Important Legal Concepts Used:

1. Dominus Litis Doctrine: The complainant possesses the exclusive right to choose the parties against whom relief is sought as the dominus litis (master of the suit). Parties against whom no claim is made cannot be compelled to join.

2. Savita Garg v. National Heart Institute Director, (2004) 8 SCC 56: The Court emphasized that procedural errors must not overshadow substantive fairness; a consumer complaint should never be dismissed solely due to non-joinder or misjoinder of the parties.

3. Additional Member, Board of Revenue v. Udit Narain Singh Malpaharia: The Court reiterated that an effective order can still be rendered in the presence of necessary parties, even with the proper party absent.                                                                  

Prioritizing Fairness Over Strict Procedures: 

The Hon’ble NCDRC sent a strong message, that substantive fairness must take precedence over procedural issues in consumer forums. Upholding the ideals of fairness and justice that consumer commissions were created to protect is incompatible with dismissing legitimate claims on rigid procedural grounds.

Observation of the Hon’ble NCDRC:

The State Commission was unequivocally instructed to proceed with the case, recognizing the dealer as a performa respondent. The NCDRC emphasized that its observations pertained exclusively to procedural matters without expressing any opinion on the case’s merits.

Analysis:

In this pivotal consumer dispute, the NCDRC has reinforced the critical importance of substantive justice over procedural formalities. The commission firmly asserted that a consumer complaint cannot be rejected/ dismissed solely on the grounds of non-joinder if an effective resolution can be achieved. This ruling underscores the principle that consumer redressal systems must prioritize the interests of the aggrieved party and guarantee a fair trial. The decision not only reinforces the integrity of the legal system in disputes between dealers and financial institutions but also highlights a consumer-centric approach in redressal forums. The Hon’ble NCDRC ruling ensures that the procedural errors cannot undermine the substantive rights of consumers, aligning perfectly with the broader objectives of India’s consumer protection laws.

Case Title: Cholamandalam Investment & Finance Ltd. v. Uttam Rao Pawade & Anr.
Case No: Revision Petition No. 3169 OF 2016
Date of Pronouncement: 27.08.2024