Own more than one property? You can still approach consumer forums – NCDRC

We have always stressed on the fact that you should look no further than Consumer Forum when it comes to issues in residential properties. It’s is worth highlighting that not everyone can approach the consumer forums. For example, if the matter is related to commercial properties (office space, hotels, shops etc.), you can’t seek justice from Consumer Forums and you shall have to approach the other civil courts.

While it is clear that the forum has no jurisdiction on the properties purchased for commercial purposes, the section 2 (1) (d) is often misinterpreted in the case of residential properties and even cases where buyer own more than one property in the same project or elsewhere have been rejected. The immediate case of Pranav Mittal vs Dynamic Infradevelopers (Tulsi Residency at Parimma Marg, Goverdhan) for clarifies three important questions.

  1. Can a buyer with multiple property approach Consumer Forum and does consumer forum have jurisdiction in such case as per the Act.
    • Yes but with some conditions. Read details below.
  2. Can multiple independent sale deeds be clubbed to attract the pecuniary jurisdiction of the State Commission?
    • No.
  3. Can a consumer file case after sale deed is executed in his favor.
    • Yes.

Case Study

Section 2 (1) (d) of the Consumer Protection Act 1986 defines someone as a consumer. A person is a consumer if the goods in question have been procured for livelihood and not for the commercial purposes. Read below for more technical definition of the same.

(d)  “consumer” means any person who—

(i)    buys any goods for a consideration which has been paid or promised ………………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 purposes;

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;

 Let’s go over each of the points in detail.

1) Jurisdiction of Consumer Forum if buyer own more than one property

The NCDRC made following observations when the State Commission, Delhi ruled that the buyer can’t be a consumer under Section 2(1) (d) of the Act.

The finding of the State Commission is, that since the Complainant has purchased three flats it can be construed that it is for earning profit and therefore, purchased for the commercial purpose.

Commercial purpose is a mixed question to be decided by the facts of each case, it is not the “value of goods” that matters, but the purpose for which the goods bought, is what is to be considered.  This Commission in Kavit Ahuja Versus Shipra Estate Ltd. & Jaikrishna Estate Developers Pvt. Ltd. & Ors., I (2016) CPJ 31 (NC) has laid down that merely because the Complainant has booked three flats, it cannot be said that it is for commercial purpose and that the Complainant falls within the definition of “Consumer” within Section 2(1)(d) of the Act. The purchase can be said to be for a commercial purpose only when it is shown that the purchaser is engaged in the business of purchasing and selling houses/plots on a regular basis, solely with the view to make a profit by the sale of such houses. Without expressing final opinion, I am of the prima facie view that unless it is shown by bringing on record, some cogent material that a purchaser is engaged in the purchase and sale of flats/ houses on regular basis with a view to make profit by such sale, a mere purchase of more than one flat would not per se be sufficient to hold that the purchase was for “commercial purpose”. It is manifest from the order that after the pleadings and evidence has been brought on record, the fora would decide the question on its jurisdiction to entertain Complaints, before proceeding to deal with the rival stands of the claims made in the Complaints. This Commission also dealt with this aspect of purchase of more than one flat, whether it can be construed as commercial purpose or not in another decision dated 21.07.2015 in First Appeal No. 531 of 2015 between Sai Everest Developers & Anr. Vs. Harbans Singh Kohli & Ors.

The aforementioned law laid down by this commission establishes that onus to prove whether the purchase of houses is for commercial purpose or not shifts to the Opposite Party and in the instant case the State Commission has dismissed the Complaints in limine.

2) Clubbing more than one sale deeds  to attract the pecuniary jurisdiction of the State Commission

The finding of the State Commission was that the Complainant has clubbed three independent sale deeds to attract the pecuniary jurisdiction of the State Commission and that he ought to have filed three separate Complaints about each property.

In the view of the matter, I do not find any illegality in the last finding of the State Commission that the Complainant ought to have filed three separate Complaints, as three independent sale deeds were executed where the value of goods and services and compensation claimed in each Complaint does not attract the jurisdiction vested with the State Commission. It is needless to add that it would be open to the Complainants to file the Complaints before an appropriate Forum, if so advised, along with application for condonation of delay. In that event, their application for condonation of delay shall be considered keeping in view the observations of the Hon’ble Supreme Court in Laxmi Engineering works Vs. P.S.G. Industrial Institute, 1995 SCC(3) 583.

3) Filing consumer case even if sale deed is executed

The finding of the State Commission that once the sale deed is executed and possession is offered, the purchaser ceases to be a “Consumer” is contrary to what has been laid down by this commission in Yash Pal Marwaha versus Pushpa Builders Ltd. & Anr., II (2006) CPJ 259(NC).

The Hon’ble Supreme Court in Meerut Development Authority Vs. Mukesh Kumar Gupta, IV (2012) CPJ 12 (SC) held as follows:

“ 3. The learned counsel the petitioner made efforts to convince us that the complaint filed by the respondent in  2009 was hopelessly time barred because the cause of action accrued to the respondent in 1992 and the Consumer forums committed serious error by ordaining execution of the sale deed and at the same time relieving the respondent of his obligation to pay interest for delayed payment of the balance price of the plot but we have not at all felt impressed.

4. In our view, the complainant filed by the respondent who had patiently waited for 27 years with the hope that he will get the plot was rightly not dismissed by the District forum as barred by limitation because he had recurring cause for filing a complaint in the matter of non-delivery of possession of the plot.”

Hence, keeping in view the aforementioned judgment and facts of the case that there is a specific prayer for delivery of possession, it is held that there is a continuing cause of action and the Complaint cannot be said to be barred by limitation.

Conclusion

It is good that the NCDRC have once again stressed on the fact that having more than one property doesn’t mean that they are for a commercial purpose. As long as the buyer can justify the non-commercial use of the properties, he can very well approach consumer forums.

FIRST APPEAL NO. 115 OF 2017

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