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Singhal Finstock (P) Ltd., Through its Director I.C. Singhal & Another v/s Jaypee Infratech Ltd. Through its Director Having office at Jaypee Greens & Others

    Decided On, 01 October 2012
    At, National Consumer Disputes Redressal Commission NCDRC
    By, MEMBER
    For the Complainant : Aseem Mehrotra, Advocate. For the Opposite Parties : -----

Judgment Text

1. The principal question which swirls around the whole controversy is whether the purpose to purchase of these apartments is for self employment or self use or for commercial purposes to earn profits.

2. Singhal Finstock (P) Limited, complainant No. 1, is a company incorporated under the Companies Act, 1956. Mr. Anish Singhal, complainant No. 2 is one of its directors. The complainants are aggrieved by the deficiency in service of opposite parties, namely, Jaypee Infratech Ltd.-opposite party No. 1, Jaiprakash Associates Ltd.-opposite party No. 2, Renaissance Realty-opposite party No. 3. Their allegation is that the opposite parties are not issuing the allotment letter in respect of one flat though the booking amount was paid on 25.3.2011 through cheque. The cheque was duly encashed on 4.4.2011. In the application form and brochure, the opposite parties stated that the area of the flat would be 4400 sq. feet whereas the opposite parties have allotted only 2215 sq. feet. They are trying to charge for parking area illegally.

3. As a matter of fact, the complainants booked two apartments with the opposite parties in joint names and paid Rs. 8 lakh each. These residential plots were booked by the complainants for the residence of directors. Provisional allotment letter was issued in respect of one flat only in August, 2011. Thereafter, there was correspondence between the parties but it did not produce the desired result.

4. Consequently, the present complaint was filed with the following prayers:-

'a) direct the opposite party No. 1 party to issue Provisional Allotment Letter in respect of Unit bearing KUB No. 08-0402 as per the price prevailing in March, 2011 i.e. like that of Unit bearing KUB No. 08-0302;

b) direct the Opposite party No. 1 to hand over flat measuring 4400 sq. ft. in respect of the Units bearing Unit bearing KUB No. 08-0302 and Unit bearing KUB No. 08-0402 with a normal super area on actual basis;

c) direct the Opposite party No. 1 and 2 not to charge towards car parking as the same is illegal and against law declared in Nahalchand Laloochand Private Ltd. vs. Panchali Cooperative Housing Society Ltd. (2010) ( SCC 536;

d) direct the opposite parties to change/redraft terms and conditions of their contracts with apartment and plot buyers which are fair, logical, realistic, no misuse or diversion of investor’s funds, expenditure on actual basis with no malafide intentions of making super profits, in a transparent and honest manner to save hundreds of thousands real estate investors from the high handedness, arm twisting and one sided behaviour of real estate developers till regulators like SEBI are established by Govt. of India and State Governments in the interest of investors.

e) award sum of Rs.10,00,000 (ten lacs) as damages to the complainant’s for the harassment caused to them;

e) award cost of Rs. 1 lac for the instant proceedings

f) pass any other order or further order(s) as this Hon’ble Commission may deem fit and proper in the facts and circumstances of the case.'

5. We have heard the learned counsel for the complainants at the time of admission of this case. Learned counsel for the petitioner vehemently argued that both the plots are being purchased for the residence of the directors of the company. It is averred in para 24 of the complaint, 'The complainants as informed investors have been raising these issues in general on various platforms Department of Urban Housing Govt. of India and regulatory bodies like Competition Commission of India and Confederation of Real Estate Developers of India etc. The Competition Commission of India is investigating the grievances and affairs of real estate developers and Govt. of India is in advanced stage of setting up a regulator for real estate developers like SEBI. Some press cuttings in this regard are attached. The opposite parties No. 1 is a builder and the activity carried on by it falls within the definition of ‘service’ as defined under Section 2(o) of the Act. The complainants are consumers within the definition of Section 2(d) of the Act as the apartments in question were purchased for residential use of the Directors'.

6. It is thus clear that the complainants have nowhere stated as to how they are consumers in the above quoted para. They have admitted that they are investors. They have also filed memorandum of association. Para 5 and 6 run as follows:-

'5. To purchase or otherwise acquire, construct, carry out, equip, maintain, alter, improve develop, manage, work, control and superintend factories, any plants, warehouses workshops, sheds, dwellings, offices, shops, stores, buildings, telephones, electric and gas works and all kinds of works, machinery, apparatus, labour lines and houses warehouses and such other works and conveniences necessary for carrying on the main business of the company.

6. To acquire and takeover the whole or any part of the business, goodwill, trade marks, properties and liabilities of any person or persons, firms, companies or undertakings other existing or new engaged in or carrying on or proposing to possessed of any property or rights suitable for the main business or the company and to pay for the same either n cash or in shares or party in cash and party in shares.'

7. It is pertinent to note that they have not clearly stated that for whom, the above said two houses will be used for residential purpose. They have not stated that these apartments are not taken for resale purposes. They have also not stated whether those directors are having residential accommodation. The argument advanced by learned counsel for the complainant is not supported by any cogent and plausible evidence.

8. The term ‘consumer’ has been defined in Section 2(1)(d) of the Consumer Protection Act, which reads as under:

'2 (1) (d) – 'consumer' means any person who, --

(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

(ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promise, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person but does not include a person who avails of such services for any commercial purpose'.

[Explanation- For the purposes of this clause, 'commercial purpose' does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self-employment'].

Learned counsel for the complainants failed to show that this case falls within this category.

9. In BiharSchoolExamination Board Vs. Suresh Prasad Sinha, IV (2009) CPJ 34 at 36(SC) : AIR 2010 SC 93 : (2009) 8 SCC 483 the Apex Court has held, as under :-

'Consumer – Definition of:- According to the definition of ‘consumer’ in Section 2(d) of the Act, a person who hires or avails of any services for a consideration, is a consumer. The following category of service-availors will not be consumers : (i) persons who avail any service for any commercial purpose; (ii) persons who avail any free service; (iii) persons who avail any service under any contract of service. A consumer is entitled to file a complaint under the Act if there is any deficiency in service provided or rendered by the service provider'.

10. ThisCommission in Monstera Estate Pvt. Ltd. Vs. Ardee Infrastructure Pvt. Ltd. – IV (2010) CPJ 299 (NC) has held that:-

'Housing – Purchase of space for commercial purpose – There was delay in possession. Complainant was a private limited company. Complainant was nominated for allotment of showroom. Possession not given. Sale deed was not executed. Deficiency in service was alleged. Even if private limited company was treated as ‘person’ purchase of space could not be for earning its livelihood. Purchase of space was for commercial purpose'.

11. Again,this Commission in M/s. Harsolia Motors Vs. National Insurance Co. Ltd., in First Appeal Nos. 159, 160 & 161 OF 2004, decided on 03.12.2004, has held as under:-

'In support of his submission, learned counsel Sh.Sharma, referred to the judicial dictionary meaning of the words ‘commercial purpose’ which is as under:-

'The word 'commercial' according to the Oxford Dictionary means viewed as a matter of profit and loss. The word 'purpose' means 'object which is in view or for which is made' : 'aim' 'amend'. The word 'commercial purposes' would, therefore, cover an undertaking the object of which is to make a profit out of the undertakings. (Municipal Board, Unnao Vs. The State of U.P. 1957 All. L.J. 479 at 498)'.

'According to Oxford dictionary, it means 'Viewed as a matter of profit or loss'.

'The word 'commercial' is defined in the Concise Oxford Dictionary, New Edition of the 1990, at page 227, the word 'commercial' is defined as ‘having profit as a primary aim rather than artistic etc. value’ (Vide Dena Bank, Ahmednagar Vs. Prakash Birbhan Katariya, AIR 1994 Bom 343 at 345)'.

12. It was further held inLaxmi Engineering Works Vs. PSG Industrial Institute, (1995) 3 SCC 583, by the Hon’ble Apex Court as under :

'The National Commission appears to have been taking a consistent view that where a person purchases goods 'with a view to using such goods for carrying on any activity on a large scale for the purpose of earning profit', he will not be a ‘consumer’, within the meaning of Section 2 (d) (i) of the Act. Broadly affirming the said view and more particularly, with a view to obviate any confusion – the expression 'large scale' is not a very precise expression – Parliament stepped in and added the explanation to Section 2(d)(i) by Ordinance/ Amendment Act, 1993. The explanation excludes certain purposes from the purview of the expression 'commercial purpose' – a case of exception to an exception. Let us elaborate : a person who buys a typewriter or a car and uses them for his personal use is certainly a ‘consumer’ but a person who buys a typewriter or a car for typing others’ work, for consideration or for plying the car as a ‘taxi’, can be said to be using the typewriter/car for a commercial purpose. The explanation however clarifies that in certain situations, purchase of goods for 'commercial purpose' would not yet take the purchaser out of the definition of expression of expression ‘consumer’. If the commercial use is by the purchaser himself for the purpose of earning his livelihood by means of ‘self-employment’, such purchaser of goods is yet a ‘consumer’. In the illustration given above, if the purchaser himself works on typewriter or plies the car as a taxi himself, he does not cease to be a consumer. In other words, if the buyer of goods uses them himself, i.e. by self-employment, for earning his livelihood, it would not be treated as a 'commercial purpose' and he does not cease to be a consumer for the purposes of the Act. The explanation reduces the question, what is a 'commercial purpose', to a question of fact to be decided in the facts of each case. It is not the value of the goods that matters but the purpose to which the goods bought are put to. The several words employed in the explanation, viz, 'uses them by himself', 'exclusively for the purpose of earning his livelihood' and 'by means of self-employment' make the intention of Parliament abundantly clear, that the goods bought must be used by the buyer himself, by employing him

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self for earning his livelihood. A few more illustrations would serve to emphasise what we say. A person who purchases an auto-rickshaw to ply it himself on hire for earning his livelihood would be a consumer. Similarly, a purchaser of a truck who purchases it for plying it as a public carrier by himself would be a consumer. A person who purchases a lathe machine or other machine to operate it himself for earning his livelihood would be a consumer. (In the above illustrations, if such buyer takes the assistance of one or two persons to assist/help him in operating the vehicle or machinery, he does not cease to be a consumer). As against this, a person who purchases an auto-rickshaw, a car or a lathe machine or other machine to be plied or operated exclusively by another person, would not be a consumer'. 13. Also, seeRajasthan State Industrial Development & Investment Corporation Vs. Diksha Enterprises, III (2010) CPJ 333 (NC) andthis Commission’s judgment in RP 1129 OF 2012, Shri Harnam Singh Vs. Shalimar Estate Pvt. Ltd. & Ors., decided on 29th May, 2012. 14. In the light of discussion, we find that the present complaint is not maintainable. The complainants can seek redressal of their grievance in another forum. We dismiss the complaint but liberty is given to seek redressal of their grievance before any other forum/civil court except the consumer forum.