NCDRC allows issuance of public notice in class action complaint
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NCDRC allows issuance of public notice in class action complaint

Varun Chirumamilla

The National Consumer Disputes Redressal Commission (NCDRC) has allowed a public notice to be issued in a class action complaint instituted by a medical imaging company against Tata Communications Limited.

The complainant, Mahajan Imaging Private Ltd, had moved a class action suit against Tata Communications seeking compensation for having lost their data. The complainant had entered into a contract with Tata to preserve clinical records of their customers in 2012 but lost access to the data in 2016.

Notices sent to Tata Communications asking for methods of retrieval of data fell on deaf ears, resulting in the loss of prescriptions, reports, research data and other important data. Thus, the complainant decided to approach the NCDRC.

The issue before the Bench of President Justice DK Jain and member M Shreesha was whether a public notice could be issued in a class action case, when it was contended that the complainant did not fall under the scope of the definition of ‘consumer’ under Section 2(1)(d) of the Consumer Protection Act (Act).

Counsel for Tata Communications Ashish Dholakia argued that the complainant had entered into a contract with his clients to maintain clinical records of their customers for commercial purposes. Hence, the complainant company did not fall within the definition of consumer under the Act.

Dholakia told the Commission that since this was the case, the complainant had no statutory right to approach the NCDRC either in an independent or in a representative capacity. It was argued that a public notice could only be issued after the Commission had conclusively decided on whether or not the complainant qualified as a consumer under the Act.

The class action element was also contested before the court by Dholakia. He argued that the invocation of Section 12 (i) (c) (dealing with class action cases) was unjustified as there was no commonality of interest between the complainant and other consumers who were availing of his client’s services.

Further, it was contended that the terms of the contract precluded his client from any liability resulting from a loss of data.

Tishampati Sen, who appeared for the complainant, said that Tata Communications had lost clinical data entrusted to them for preservation by his clients. He argued that the said data had no connection to any commercial gain or revenue generation. Hence, it could not be argued that his client is not a consumer under the Act.

He also argued that whether or not his client is a ‘consumer’ was a matter that could be decided only after both parties had led evidence in support of their pleadings. This aspect could not be decided at the stage where permission was being sought to pursue the complaint on behalf of other similarly wronged parties and for the issuance of public notice to apprise them of the complaint.

The Commission agreed with Sen’s contention that evidence would have to be led by both parties before reaching a conclusion on whether or not the complainant was a consumer. For the present, the Bench took a prima facie view that the complainant was a consumer.

The Bench went on to observe that a public notice deserves to be issued in the case, given that otherwise stakeholders would be deprived of the right to voice their views on the complaint.

In this regard, it found that there was no bar under the CPC which prohibited such public notice from being issued.

In particular, the Court found that under Order 1, Rule 8 of the CPC (dealing with representative suits), there is no bar on issuing a public notice to stakeholders before granting permission to sue or be sued in a representative capacity.

Referring to Section 13 (6) of the Act, it was also noted that the Act calls for the application of Order 1, Rule 8 of the CPC in complaints that are filed in a representative capacity.

Therefore the Bench ordered that public notice of the institution of the complaint be published in the Statesman and Navhind Times newspapers, on a prima facie view that the complainant is a consumer.

Read the order

Mahajan-Imaging-vs.-TCS_Order-dt.-29.06.2018-watermark-2.pdf
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