ELEMENT OF COMMERCIAL PURPOSE IN HOUSING MATTERS UNDER SCAN

Commercial purpose has not been specifically defined in the Consumer Protection Act and hence it has been decided in the light of various judgments pronounced by the apex court.Courts are discussing the matters comparing with self livelihood and often distinguish them on the yardstick of profit and loss, quantum of business etc. With the passage of time now people do invest their money in other than normal business activities and one such area chosen is investing in properties which attracts huge benefits. This is the new investment mode and now such investments are also under scan of courts and recently National Commission has refused to entertain a case of deficiency in services by shifting its stand in such matters. In number of cases recently National commission as well as Apex court has observed that basically flats so purchased are not meant for residence but are owned by companies for the use o their officers.

In a matter of Kavita Ahuja v/s Shipra Estate Ltd v/s Jai Krishna Estate Developers Pvt. Ltd 1(2016)CPJ 31 (NC)  & GVSN Murthy v/s Ms Suchir India Infratechp. Ltd. FA NO.65 of 2014 decided on 11.8.2015 it was held by the Hon’ble National commission as hereunder -

“the general rule is that the consumer can purchase only one house ,if he is asking for exception , in that event, it is the complainant and nobody else who is carry the ball in proving that he has not purchased the same for commercial purpose “

In the above case complainant is stationed at Panipat and he is purchasing the flat six in number in kundli Panipat. During the arguments, complainant could not give any reason or motive for purchasing such flats.

In yet another case of Satish Kumar Gajanand Gupta V/S Srushti Sangam Enterprises India Ltd. &Others111 (2012) CPJ 265 NC Consumer complaint no.296/2011 decided on 3.7.2012, it was observed -

“Petitioner was not a consumer when he intended to purchase some permanent accommodation at Mumbai for his stay during his business visits from Delhi to save on expenditure incurred for hotels for that purpose he booked two flats.”

M/S Purusharth Assocites Ltd.V/S Uppal housing Ltd. Plaza &Others 111 (2012)CPJ 300(NC)Complaint case no.112 of 2012 decided on 5.7.2012 is another case of the similar nature wherein it was held by the National commission and was further confirmed by the Apex court Supreme court vide SLP on 7.1.2013 that:

“..it has been argued that these flats will be used for officers of the company .Complainant could not deny that those officers would trasact the commercial activity .A bare look on this resolution goes to show that these flats would be meant for commercial purpose

Placing reliance on Laxmi engineering works v/s P.S.G Industrial institute ,1995 CPJ 3 SCC583 Apex court in the matter of kalpvruksha Charitable  Trust v Toshniwal BrothersPvt Ltd. 111 1999CPJ 26 SC  had relied upon the “project documents “ submitted for bank loan for deciding whether the project was commercial in nature

There is one more interesting situation that people are purchasing virtual space, imaginary one which may exist in future and one can sell it at premium rate Monster estate Pvt. Ltd v/s Arlee Infrastructure Pvt. Ltd V1 (2010) CPJ 299 NC is a such case where dispute had arisen in connection with purchase of space, National commission held in this case -

“Even if complainant was a private limited company and was treated as person,purchase of virtual space could not be for living or self livelihood ,it is for commercial purpose only “

.This is the new investment mode under scan of courts and recently Court observed that booking of more than one flat or flats in various builders’ schemes are also commercial activity for the purpose of profit and resale and not for residential purpose.

National commission has decided a case in the matter between DLF Limited&others and Abdul Azam, Abdul Basit, Abdul Waseem, 11(2015) CPJ344 (NC) on 05.02.2015 on the above issue wherein appeals in six cases decided by the honorable State Commission of Delhi had been filed. The question of jurisdiction of the consumer courts is the main plea contending complainant is not a consumer as the purchase of flat was meant for commercial purpose.

Delhi state consumer dispute redressal commission pronounced six orders  in six individual cases on 2.6.2006 .Three out of these matters relate to the flats booked by the complainants in Richmond Park Project of DLF Universal Ltd. Other three matters relate to booking of flats by the same complainants in Regency Park Project of the same DLF Universal Ltd.  

VISBA is a partnership firm; three partners of the firm are complainants against DLF Universal Ltd for deficiency in services for non delivery of flats within specific time. All the three partners had booked flats for the purpose of gain and yielding more benefit in different schemes of opposite party as said above. This fact could be very well proved from a letter written by the firm on their letterhead and admitted that all investment was made for multiplying money .Not only this ,it was also contended in the letter that they were the regular investors in properties and they have properties with DLF -Regency park, Rechmond park, Shopping mall and Supermart. Contents of their letter is reproduced as hereunder-

We are one of the regular investors of your esteemed organization .At present we have the following properties with you –

REGENCY PARK      Y-212

                                    Y-202

Y-203

                        RECHMOND PARK F-061

                                                            F-062

                                                            F-052

                        SHOPPING MALL 0-125               

                        SUPERMART         C-041C

 

They further stated-

“You would recall that we had made the booking only for investment sake to earn more yield on our money .we had booked these flats at peak time assuming that money will multiply with your esteemed organization .But due to depressed market, the rates of properties have gone down drastically and we have lots of money in the above deals instead of earning some money.”

Beyond any reasonable doubt, all these bookings were for the commercial purpose.                       On the basis of this admission National Commission held that if more than one flat is booked, it is treated as booking for investment purpose even the nature of property is residential.

 

Dr Prem Lata

 

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