Avm J. Rajendra, Avsm, Vsm (Retd.) Member
1. The present First Appeal has been filed under Section 19 of the Consumer Protection Act, 1986 (“the Act”) against the Order dated 25.07.2019 passed by the learned State Consumer Disputes Redressal Commission, Delhi (“the State Commission”), in Consumer Complaint No. 863 of 2017, wherein the Complaint was dismissed.
2. The brief facts of the case, as per the Complainant, are that the Complainant/Appellant, based on picture painted by Opposite Party (OP/Respondent herein), booked a residential unit in “Paras Tierea” on 22.06.2010 vide Flat No.ST01/24 12 A in Tower ST01, Type S, Unit Type 1BHK+ 1Ts, admeasuring 450 sq. ft. at GH-001, Sector-137, Expressway, Noida for Rs.16,65,000/- under construction linked plan. An Agreement was executed between them on 30.10.2010. As per Clause 5 of the agreement, the possession was to be handed over within 24 months with grace period of 12 months, from the date of the agreement on 30.10.2010 i.e. by 30.10.2013. The Complainant paid Rs.13,97,446/- till 05.09.2013. Vide letter dated 20.06.2018, OP informed him that area of unit has been increased from 450 to 495 Sq Ft and demanded Rs.1,86,525/- for increased area and Rs.1462/- for maintenance. As possession was not delivered by 30.10.2013, he filed a Consumer Complaint before the State Commission seeking:
(a) Direct the Opposite Party to handover the actual physical possession of the Flat No.STO1/24 12 A in Tower ST01, Type S, Unit Type 1BHK+ 1Ts in the group housing project named "Paras Tierea" located at GH-001, Sector-137, Expressway, Noida having super area of 450 sq. feet to the Complainant within a specified period of time after obtaining completion certificate from the concerned authority with a further direction to the Opposite Party to pay damages at the rate of 18% p.a. on the amount of Rs.13,97,446/- already paid to the Opposite Party w.e.f. October, 2013 till the time actual possession of the flat in question is handed over to the Complainant.
(b) Direct the Opposite party to pay a sum of Rs.5.00 lakhs for causing harassment, mental agony and suffering to the Complainants.
(c) Pass any other order and direction as this Commission may deem fit and proper in the interest of justice.”
3. In the reply filed by the OP, many preliminary objections were raised. It was averred that the territorial and pecuniary jurisdiction of the State Commission was challenged. It was further averred that the delay occurred in handing over the possession of the said unit due to fulfillment of certain conditions and circumstances which were not in control of the Opposite Party. The remaining averments were denied being false and baseless. The Appellant prayed for dismissal of the complaint filed in the case with costs. In addition, the OP has filed an Application dated 18.02.2019 vide diary no.1545 dated 18.02.2019 before the State Commission under Section 18 r/w Section 13 (3B) of the Act seeking rejection of the complaint on the ground that the Complainant has also filed a similar complaint against another builder/ developer on similar cause of action and the same is pending for adjudication before the State Commission titled as ‘Pawan Saluja vs. Supertech Limited being Case No. CC/472/2017. It is averred that the Complainant failed to disclose the said fact in the present matter with an intention to dispose of the same for profit. Hence, the Complainant does not fall within the definition of a Consumer under Section 2(1)(d) of the Consumer Protection Act, 1986. It is prayed that the complaint be rejected on the preliminary issue raised.
4. The Complainant in his Reply contended that he is not engaged in real estate business and booked the residential flats for his own use and his family. He has three children and is under obligation to provide suitable accommodation for their privacy. It is averred that the notice was issued in CC. No.472 of 2017 on 30.08.2017 and the order dated 30.08.2017 was uploaded on the website of the State Commission and the OP filed its Reply on 28.02.2018 i.e. much after the said order dated 30.08.2017. Therefore, the OP raised this false plea to prolong the matter. It is prayed that the Application be dismissed with cost. The Application filed by the OP vide diary No. 1545 dated 18.02.2019 was allowed by the State Commission vide order dated 25.07.2019. Consequently, the complaint was dismissed. However, the Complainant was granted liberty to seek his remedies in Civil Court for specific performance or refund as per law.
5. Being aggrieved, the Appellant/Complainant has filed the present First Appeal No.1728 of 2019 with the following prayer:
(a) Allow the present Appeal and set aside the order dated 25.07.2019 passed by the learned State Consumer Disputes Redressal Commission, Delhi in Complaint No.863 of 2017 and decide the case on its merits.
(b) Pass such other or further order as the Hon’ble Commission deem fit and proper in the facts and circumstances of the case.”
6. In the Appeal the Appellant mainly raised the following issues:
(a) The impugned order is contrary to object and intent of the Act. The Act has been enacted to provide for better protection of consumer interests and settlement of Consumer disputes.
(b) The facts of the case in its true perspective were swayed away on the contention that he is not a consumer as he booked another flat. He asserted that he is not involved in the real estate business and booked the flat for his use and occupation and to fulfill the requirement of his three grown up children.
(c) No record and evidence to show that he is involved in regular sale-purchase of flats or in real estate business was brought out. Mere bald allegation of the OP of commercial activity/investment is not sufficient. No cogent proof was placed on record by OP.
(d) The citations relied were simply discarded.
(e) Merely booking of more than one flat, would not cease him to be consumer as defined in the Consumer Protection Act.
7. The Respondent/OP in its Reply raised the same objections which were already taken in the Application filed under Section 18 r/w Section 13 (3B) of the Act before the State Commission. He prayed that the Appeal is liable to be dismissed being devoid of any merit.
8. The learned Counsel for the Appellant reiterated the issues raised in the Complainant as well as the replies submitted and forcefully argued the untenability of the impugned order. He placed on reliance on the following judgments in support of his arguments:
(a) Aloke Anand vs. M/s. IREO Pvt. Ltd. & Ors., Consumer Case No.1277 of 2017, decided on 01.11.2021 by the NCDRC.
(b) Akshay Sood vs. M/s. Pal Infrastructure, F.A. No.237 of 2015, decided on 02.01.2017 by the NCDRC.
(c) Pranab Basak vs. Suhas Chatterjee, R.P. No.752/2017, decided on 23.06.2017 by the NCDRC.
(d) Ashish Oberai vs. Emaar MGF Ltd., C.C. No.70 of 2015, decided on 14.09.2016 by the NCDRC.
9. The learned counsel for the Respondent argued in favour of the impugned Order and asserted that the Complainant is not a ‘Consumer’ within the meaning of Section 2(1) (d) of the Consumer Protection Act as he failed to disclose about the another flat booked by him with another builder/ developer M/s. Supertech Limited for which C.C. No.472/2017, decided on 21.12.2020 filed before the State Commission. He has relied upon the following judgments:
a. Rohit Kapoor vs. BPTP & Ors., C.C. No.567/2015, decided on 07.12.2017 by the NCDRC.
b. Pavan Kohli Vs. BPTP & Anr., C.C. No.148/2016, decided on 06.11.2017 by the NCDRC.
c. Sanjay Goel Vs. M/s. Country Colonisers Pvt. Ltd., C.C. No.429/2015, decided on 08.08.2017 by the NCDRC.
10. We have examined the pleadings and associated documents placed on record and rendered thoughtful consideration to the arguments advanced by the learned Counsels for both the parties.
11. The main issues for determination are, in the stated circumstances, whether the Complainant falls within the definition of a ‘Consumer’ under Section 2(1)(d) of the Act; if yes, what is the liability of the OP towards delay in handing over the possession of the unit in question to the Complainant/ Appellant.
12. In this regard, it is an admitted position that the Complainant had booked the subject residential unit with the OP and the OP had failed to deliver the possession of the subject unit within the stipulated period. On account of this deficiency in service by the OP, he filed the Complaint before the State Commission. It is also an admitted position that the Complainant failed to disclose the fact that he booked another flat with M/s. Supertech Ltd. for which CC No. 472/2017 was also filed before the learned State Commission in the Complaint No.863/2017.
13. Section 2 (1) (d) of the Act defines the term ‘Consumer’ as:
"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 promised, 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 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.”
14. Hon’ble Supreme Court in Laxmi Engineering Works Vs. P.S.G. Industrial Institute 1995 AIR 1428 while discussing the scope of Section 2 (1) (d) of the Act has held as under:
“12. Now coming back to the definition of the expression 'consumer' in Section 2(d), a consumer means in so far as is relevant for the purpose of this appeal, (i) a person who buys any goods for consideration; it is immaterial whether the consideration is paid or promised, or partly paid and partly promised, or whether the payment of consideration is deferred; (ii) a person who uses such goods with the approval of the person who buys such goods for consideration (iii) but does not include a person who buys such goods for resale or for any commercial purpose. The expression "resale" is clear enough. Controversy has, however, arisen with respect to meaning of the expression "commercial purpose". It is also not defined in the Act. 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). 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 the 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 "consumer". If the commercial use is by the purchaser himself for the purpose of earing 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 himself for earning his livelihood. A few more illustrations would serve to emphasis 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. This is the necessary limitation flowing from the expressions "used by him", and "by means of self-employment" in the explanation. The ambiguity in the meaning of the words "for the purpose of earning his livelihood" is explained and clarified by the other two sets of words.”
15. From the above, it is apparent that a person who buys goods ceases to be a consumer, if that person indulges itself in commercial activities qua the goods and in case of purchase of residential houses, it can be said that buyer is indulging into the activity of buying / selling the properties and purchased it for that purpose.
16. It is settled proposition that burden is upon the OP to prove that the Complainant is indulging in commercial activities of sale and purchase of the flats and that he had booked the subject flat with the intention to sell it to earn profit as part of his commercial activities. This Commission in Kavita Ahuja Vs. Shipra Estate Ltd. and Jai Krishna Estate Developers Pvt. Ltd. 1 (2016) CPJ 131 (NC) has clearly held as under:
6. …xxx…..
“ 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).
xxxx…
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. xxxxx….”
17. Similarly, the National Commission observed in the case of Aloke Anand Vs. M/s. IREO Pvt. Ltd., C.C. No.1277 of 2017, decided on 01.11.2021.
18. It is, therefore, clear that burden is squarely upon the OP to prove the fact that Complainant is indulging in the business of sale and purchase of the flats. There is no contention in the written version as well as Application filed under Section 18 r/w Section 13 (3B) of the Act that the complainant is indulging in the business of sale/ purchase of the properties except that the Complainant has failed to disclose the booking of another residential flat. On the other hand, the Complainant in his Reply to the said Application asserted that he has three children, and he is under obligation to provide suitable accommodation to them. Since the OP failed to discharge this burden, we hold that Complainant is ‘Consumer’ within the meaning of Section 2(1)(d) of the Act.
19. Now, regarding the liability of the OP towards the delay in handing over the possession of the unit in question to the Complainant/ Appellant, it is seen from Clause 5(a) of the Agreement dated 30.10.2010, the possession of the residential unit in question was to be delivered with 24 months with additional grace period of 12 months from the Agreement dated 30.10.2010 i.e. by 30.10.2013. However, the Opposite Party offered the possession vide letter dated 20.06.2018 to the Complainant. Therefore, it is clear that there is delay in handing over the possession of the said residential unit from 31.10.2013 to 19.06.2018.
20. While there are number of landmark judgments of the Hon'ble Supreme Court holding Builders responsible to pay compensation in case of delay in handing over the possession, the issue to be also decided in this case is what would be the reasonable quantum of interest that is be paid. In this regard, in the recent judgment of the Hon'ble Supreme Court in the case of DLF Home Developers Ltd. vs. Capital Greens Flat Buyers Assn., (2021) 5 SCC 537, it was held that:
"It is true that in the present case, the contractual rate of Rs.10 per square foot per month is double the rate fixed in the agreements Page 10 of 13 of FA No.225 of 2020 in the above case. On the other hand, the court must be conscious of the fact that the situation in the real estate market in Delhi is very distinct from that in Bengaluru both in terms of rentals and land values. This has not been disputed. The flat buyers had to suffer on account of a substantial delay on the part of the appellants. In such a situation, they cannot be constrained to the compensation of Rs.10 per square foot provided by the agreements for flat purchase. However, having regard to all the facts and circumstances, we are of the view that the compensation on account of delay should be brought down from 7% to 6%. Moreover, the amount, if any, which has been paid in terms of the contractual rate shall be adjusted while computing the balance"
21. In view of the foregoing, the impugned Order dated 25.07.2019 passed by the State Commission in CC No.863 of 2017 is, therefore, set aside. Consequently, F.A. No.1728 of 2019 is allowed and the following directions are passed: -
ORDER
I. The Respondent/Opposite Party is directed to handover the possession of the Flat No.ST01/24 12 A in Tower ST01, Type S, Unit Type 1BHK+ 1Ts, admeasuring 495 sq. ft. located at GH-001, Sector-137, Expressway, Noida to the Complainant/ Appellant, within two months from the date of this order.
II. The Respondent/Opposite Party is directed to pay simple interest @ 6% per annum on Rs.13,97,446/- (consideration) paid by the Complainant/Appellant, from the date when the delivery of possession was due i.e. 31.10.2013 till offer of possession to the Complainant on 20.06.2018. This payment shall be made within one month from the date of this order. In the event of delay in payment beyond one month, the interest applicable shall be @ 9% per annum for such extended period till the realization of the entire amount.
III. The Appellant/Complainant is also directed to pay Rs.1,84,275 + Rs.2,250 = Rs.1,86,525/- (the balance amount of consideration with respect to the Flat in question vide letter 20.06.2018 to the Respondent/Opposite Party, within one month from the date of receipt of this order.
22. There shall be no order as to costs. All the pending Applications, if any, stand disposed of accordingly.
