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Kiran Joshi v/s S.M.V. Agencies Pvt. Limited

    First Appeal No. 871 of 2016

    Decided On, 23 October 2018

    At, National Consumer Disputes Redressal Commission NCDRC

    By, THE HONOURABLE MR. PREM NARAIN
    By, PRESIDING MEMBER

    For the Appellant: Gurpreet Singh , Advocate. For the Respondent: Anish Verma, Advocate.



Judgment Text

This appeal has been filed by the appellant Kiran Joshi against the order dated 3.6.2016 of the State Consumer Disputes Redressal Commission, Punjab (in short ‘the State Commission’) passed in Consumer Complaint No.187 of 2014, wherein the consumer complaint filed by the appellant/complainant has been dismissed on the ground that the complainant is not a consumer.

2. Brief facts of the case are that the appellant/complainant booked flat No.N-602 on the 6th floor of Sunrise Greens, Zirakpur District Mohali. The complaint was filed before the State Commission for possession and for cancelling the demand of Rs.6,60,203/- on account of interest raised by the opposite party. The opposite party resisted the complaint on the ground that the complainant had earlier filed another complaint No.141 of 2013 for flat No.H-501 in the same project, which was decided by order dated 8.8.2014. It was claimed that second flat was booked for her son, who was suffering from schizophrenia. The State Commission, however, did not agree with the contention of the complainant and dismissed the complaint as the complainant was not a ‘consumer’ holding that the flat in question has been purchased for commercial purpose.

3. Hence the present appeal.

4. Heard the learned counsel for the parties and perused the record. It has been stated by the learned counsel for the appellant that the complainant has taken two flats. One flat is for the complainant, whereas other flat is for her son, who is suffering from schizophrenia. The State Commission has wrongly observed that the patient of this disease has to live with somebody and therefo

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re, State Commission has found no justification for the second flat to be purchased for the son of the complainant. In support of his argument, learned counsel for the appellant referred to following judgment:

Shri Satish Kumar Pandey & Anr. Vs. M/s. Unitech Ltd., CC 427 of 2014, decided on 08.01.2015 (NC). It has been held that:-

15. It was contended by the learned counsel for the opposite party that some of the complainants plan to shift to the flats booked by them only after their retirement, meaning thereby that right now they do not need a flat for their personal residence and they will let out the flat on taking possession from the opposite party. The contention is that that purchase of the flat by such persons would be for a commercial purpose and, therefore, they are not consumers within the meaning of Section 2(1)(d) of the Consumer Protection Act. I, however, find no merit in this contention. The expression commercial purpose used in Section 2(1)(d) of the Act came up for consideration of this Commission in Kavita Ahuja Vs. Shipra Estates Ltd., CC 137 of 2010 decided on 12-02-2015 and the following view was taken:

“The expression ‘commercial purpose’ has not been defined in the Act and therefore, as held herein below by the Hon’ble Supreme Court in Laxmi Engineering Works Vs. P.S.G. Industrial Institute (1995) 3 SCC 583, we have to go by the dictionary meanings,

“In the absence of a definition, we have to go by its ordinary meaning ‘Commercial’ denotes “pertaining to commerce” (Chamber’s Twentieth Century Dictionary); it means “connected with, or engaged in commerce; mercantile, having profit as the main aim” (Collins English Dictionary) whereas the word ‘commerce’ means “financial transactions especially buying and selling of merchandise on a large scale” (Concise Oxford Dictionary)”.

6. Going by the Dictionary meaning of the expression ‘Commerce’ as far as hiring or availing services are concerned, a person can be said to have hired or availed services only if they are connected or related to the business or commerce in which he is engaged. In other words, the services in order to exclude the hirer from the ambit of Section 2(1)(d) of the Act should be availed for the purpose of promoting, advancing or augmenting an activity, the primary aim of which is to earn profit with use of the said services. It would ordinarily include activities such as manufacturing, trading or rendering services. In the case of the purchase of houses which the service provider undertakes to construct for the purchaser, the purchase can be said to be for a commercial purpose only where it is shown that the purchaser is engaged in the business of purchasing and selling houses and / or plots on a regular basis, solely with a view to make profit by sale of such houses. If however, a house to be constructed by the service provider is purchased by him purely as an investment and he is not undertaking the trading of houses on a regular basis and in the normal course of the business profession or services in which he is engaged, it would be difficult to say that he had purchased houses for a commercial purpose. A person having surplus funds available with him would not like to keep such funds idle and would seek to invest them in such a manner that he gets maximum returns on his investment. He may invest such funds in a Bank Deposits, Shares, Mutual Funds and Bonds or Debentures etc. Likewise, he may also invest his surplus funds in purchase of one or more houses, which is/are proposed to be constructed by the service provider, in the hope that he would get better return on his investment by selling the said house(s) on a future date when the market value of such house (s) is higher than the price paid or agreed to be paid by him. That by itself would not mean that he was engaged in the commerce or business of purchasing and selling the house (s).

7. Generating profit by way of trading, in my view is altogether different from earning capital gains on account of appreciation in the market value of the property unless it is shown that the person acquiring the property was engaged in such acquisition on a regular basis and it was by way of a business activity.”

If a person is residing, say, in a government accommodation and, therefore, does not immediately need to occupy a residential flat and, hence let it out in the interregnum till he retires and has to vacate the government accommodation it cannot be said that the residential accommodation is acquired by him for a commercial purpose. The objective behind acquiring accommodation is to live in it, though on a future date. Mere postponement of the date on which the purchaser has to shift to the residential accommodation does not convert the purpose for which accommodation is acquired to a commercial purpose. I, therefore, find no merit in the contention.”

5. Learned counsel further stated that the flat has not been purchased for any commercial purpose as the complainant is not engaged in trading of the flats. The opposite party has not filed any document or any other proof to show that the complainant is engaged in any trading of such flats or in any profit making by booking these flats.

6. Learned counsel for the appellant further argued that the complaint was filed for directing the opposite party not to charge interest on the instalment as a demand of Rs.6,60,203 was raised by the opposite party.

7. On the other hand, learned counsel for the respondent stated that in fact, apart from the two flats having been booked by the complainant, another flat was also booked by the husband of the complainant and in all they have booked three flats. The State Commission has recorded this fact in its order. Thus, clearly, then family has purchased so many flats for reselling and for earning profit as they would be living only in one flat. The State Commission has relied on the following judgments:-

“(1) Smt. Madhu Saigal & Anr. V. M/s. Omaxe Buildhome Pvt. Ltd. & Anr. [2014 (3) CPR 265 (NC)]

(2) Pramod Kumar Arora (Dr.) & another V. DLF Homes Panchkula Pvt. Ltd. [2015 (4) CLT 482]

8. In the above judgments, this Commission has taken a view that if more than one residential unit was booked by the complainant, that would be deemed to be for a commercial purpose. The complainant would not be deemed to be a ‘consumer’ within the ambit of the Consumer Protection Act, 1986.

9. I have given a thoughtful consideration to the arguments advanced by both the learned counsel for the parties and have examined the material on record. So far as the present complaint is concerned, this is in respect of flat No.N-602 and the complainant has also booked flat H-501 for which another complaint CC No.141 of 2013 was filed and that was disposed of vide order dated 8.8.2014. However, the husband, though part of the family, is an independent allottee and cannot be clubbed with the present complaint. Thus, the case of the complainant would be examined in respect of having booked two flats only. This Commission has elaborated the commercial purpose in respect of the booking of flats and plots in some of its judgements and it has been held that merely booking of more than one flat would not disentitle the complainant to file consumer complaint.

10. In fact, this Commission in a number of recent judgments has taken a view that if the complainant is not involved in trade or business of the house/ flats/plots, he will not be barred from filing complaint. This Commission in the case of Aashish Oberai Vs. Emaar MGF Land Limited, Consumer Case No. 70 of 2015, decided on 14.09.2016, held as follows:-

“In the case of the purchase of the houses which a builder undertakes to construct for the buyer, the purchase can be said to be for a commercial purpose where it is shown, by producing evidence, that the buyer is engaged in the business of a buying and selling of houses and or plots as a trading activity, with a view to make profits by sale of such houses or plots. A person cannot be said to have purchased a house for a commercial purpose only by proving that he owns or had purchased more than one houses or plots. In a given case, separate houses may be purchased by a person for the individual use of his family members. A person owning a house in a city A may also purchase a house in city B for the purpose of staying in that house during short visits to that city. A person may buy two or three houses if the requirement of his family cannot be met in one house. Therefore, it would not be correct to say that in every case where a person owns more than one house, the acquisition of the house is for a commercial purpose”.

It was also observed as follows:-

“It would be pertinent to note that there is no evidence of the complainant having purchased and then sold any residential property. Therefore, it would be difficult to say that he was engaged in the business of the buying and selling of the property or that villa in question was booked by him for speculative purposes”.

11. In another case, Kavita Ahuja Vs. Shipra Estate Ltd. & Jai Krishna Estate Developers Pvt. Ltd., I(2016) CPJ31(NC), wherein three flats were booked by the complainant, this Commission held the complainant to be a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1986 and held as follows:-

“In the case of the purchase of houses which the service provider undertakes to construct for the purchaser, the purchase can be said to be for a commercial purpose only where it is shown that the purchaser is engaged in the business of purchasing and selling houses and / or plots on a regular basis, solely with a view to make profit by sale of such houses. If however, a house to be constructed by the service provider is purchased by him purely as an investment and he is not undertaking the trading of houses on a regular basis and in the normal course of the business profession or services in which he is engaged, it would be difficult to say that he had purchased houses for a commercial purpose. A person having surplus funds available with him would not like to keep such funds idle and would seek to invest them in such a manner that he gets maximum returns on his investment. He may invest such funds in a Bank Deposits, Shares, Mutual Funds and Bonds or Debentures etc. Likewise, he may also invest his surplus funds in purchase of one or more houses, which is/are proposed to be constructed by the service provider, in the hope that he would get better return on his investment by selling the said house(s) on a future date when the market value of such house (s) is higher than the price paid or agreed to be paid by him. That by itself would not mean that he was engaged in the commerce or business of purchasing and selling the house (s).

7. Generating profit by way of trading, in my view is altogether different from earning capital gains on account of appreciation in the market value of the property unless it is shown that the person acquiring the property was engaged in such acquisition on a regular basis and it was by way of a business activity.

8. As observed by the Hon’ble Supreme Court in Laxmi Engineering Works (supra) what is a ‘commercial purpose’ is a question of fact to be decided in the facts of each case and it is not the value of the goods that matters but the purpose for which the goods brought are put to. The same would be equally applicable to for hiring or availing services.

9. In any case, it is not appropriate to classify such acquisition as a commercial activity merely on the basis of the number of houses purchased by a person, unless it is shown that he was engaged in the business of selling and purchasing of houses on a regular basis. If, for instance, a person has two-three children in his family and he purchased three houses one for each of them, it would be difficult to say that the said houses were purchased by him for a commercial purpose. His intention in such a case is not to make profit at a future date but is to provide residential accommodation to his children on account of the love and affection he has for his children. To take another example, if a person has a house say in Delhi but he has business in other places as well and therefore, purchases one or more houses at other places where he has to live presently in connection with the business carried by him, it would be difficult to say that such acquisition is for commercial purpose. To give one more example, a person owning a house in a Metropolitan city such as Delhi, or Mumbai, may acquire a house at a hill station or a place, which is less crowded and more peaceful than a Metropolitan city, in my view, it cannot be said that such acquisition would be for commercial purpose. In yet another case, a person may be owning a house but the accommodation may not be sufficient for him and his family, if he acquires one or more additional houses, it cannot be said that he has acquired them for commercial purpose. Many more such examples can be given. Therefore, it cannot be said that merely because of the complainant had agreed to purchase three flats in the same complex the said acquisition was for a commercial purpose”.

12. This Commission, in Rajesh Malhotra & Ors. Vs. Acron Developers & 2 Ors., First Appeal No. 1287 of 2014, decided on 05.11.2015 held as follows:-

“12. Therefore, in order to determine whether the goods are purchased for commercial purpose, the basic pre-requisite would be whether the subject goods have been purchased or the services availed of with the prime motive of trading or business activity in them, for the purpose of making profit, which, as held in Laxmi Engineering (supra) is always a question of fact to be decided in the facts and circumstances of each case”.

13. In the present case, clearly the opposite party has not filed any proof that the complainant is involved in regular purchasing and selling of flats. Clearly the act of trading or business on the part of the complainant has not been established. On the basis of the above judgments, it is clear that the State Commission has taken an erroneous view of the fact that the complainant had booked two flats one for herself and another for her son. Accordingly, the complainant would be treated as a consumer under the Consumer Protection Act, 1986.

14. Based on the above considerations, I find merit in the appeal and the same is allowed. The order dated 3.6.2016 of the State Commission is set aside. The matter is remanded to the State Commission for deciding the complaint on merits in a time bound manner preferably within a period of six months.

15. Parties to appear before the State Commission on 29.11. 2018.
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