APPEARED AT THE TIME OF ARGUMENTS

FA No. 941 to 945 of 2015

FA No. 465 to 469 of 2016

PRONOUNCED ON :  26^th MAY 2017

O R D E R

PER DR. B.C. GUPTA, MEMBER

          All the appeals described in the heading above, have been filed under section 19 read with section 21(a)(ii) of the Consumer Protection Act, 1986 against the impugned orders dated 28.08.2015, passed by the Rajasthan State Consumer Disputes Redressal Commission (hereinafter referred to as ‘the State Commission’) in consumer complaints No. 29/2012, 30/2012, 31/2012, 32/2012 & 33/2012, allowing the said complaints.  The complainants have challenged the impugned order, seeking enhancement of compensation granted by the State Commission, whereas the opposite party (OP)/builder Majestic Properties Private Limited have filed five appeals, seeking dismissal of the consumer complaints in question on the main ground that the complainants do not fall under the category of “Consumer” as stated in the Consumer Protection Act, 1986.  This single order shall dispose of all ten first appeals mentioned above, and a copy of the same be placed on each file.  The particulars of the complainants in the five complaints are as follows:-

2.       It is seen from above that one of the complainants is Arun Dhandhania himself, the other complainant is his son Anant Dhandhania and the rest of the three complainants are companies with different names, represented by Arun Dhandhania.  The common issue in all these complaints is that the complainants booked flats with the OP Builder Majestic Properties Private Limited in their residential group-housing complex under the name “Melange Jewels” on the land situated at village Dhankrota, Tehsil Sanganer, District Jaipur, in response to their advertisements in the newspapers.  In CC No. 29/2012, it is stated that the complainant Arun Dhandhania booked an apartment No. 808 in Tower T-7 on 27.09.2006, having the total sale consideration as ₹27,88,425/-, and paid a total sum of ₹9,04,750/- to the OP Builder from time to time till 27.02.2009.  In CC No. 30/2012, Ratnesh Properties Limited booked apartment No. 804 in Tower T-7, costing ₹28,78,750/- and made a total payment of ₹9,06,419/- till 27.02.2009.  In CC No. 31/2012, Anant Dhandhania s/o Arun Dhandhania booked flat No. 807 in Tower T-7 costing ₹27,88,425/- and made payment of ₹9,04,750/- till 27.02.2009.  In CC No. 32/2012, Ratnesh Enterprises booked apartment No. 810 in the same tower, costing ₹28,38,375/- and made a payment of ₹8,88,250/- till 27.02.2009.  In CC No. 33/2012, Ratnesh Industries Private Limited booked apartment No. 801 in the same tower, costing ₹27,98,000/- and paid a sum of ₹8,78,156/- till 27.02.2009.

3.       The case of the complainants is that as per clause 8.1 of the flat buyers’ agreement executed between the parties, the possession of the said flats was to be delivered within 36 months from the date of the agreement.  However, the said period had expired on 07.02.2012, but the OPs had not been able to deliver the property, according to the terms of the agreement.  The complainants demanded that the OPs should be directed to hand over the possession of the said flats within 3 months, or to refund the entire amount deposited with them alongwith interest @18% p.a. compounded annually and also to pay ₹10 lakh as compensation for mental harassment etc.

4.       On the other hand, the case of the OP Builder is that the payment of the amount in question was to be made as per construction-linked plan.  Since most of the applicants for the Project failed to make payment of the respective amounts as per the agreements, the construction could not progress as per schedule and hence, the possession could not be delivered in time.  The OP Builder have taken the main plea that the complainants in all these cases do not fall within the definition of ‘consumer’ under the Consumer Protection Act, 1986, because booking of flats has been made under various names for commercial purpose only and hence, the complaints were liable to be dismissed on this ground alone. 

5.       The State Commission after considering the averments of the parties, allowed all five complaints and directed the OP Builder to deliver the possession of the properties within three months from the date of the order and in case, it was not possible to do so, the amounts deposited by the complainants should be refunded to them alongwith interest @18% p.a. from the date of filing the complaints.  The appellants were also directed to pay compensation of ₹ 2 lakh for mental agony and ₹25,000/- as cost of litigation in each case.  Being aggrieved against the said order of the State Commission, the OP Builder have challenged the same by way of FAs No. 941 to 945/2015, seeking dismissal of the complaints.  On the other hand, the complainants have filed cross appeals, i.e., FA No. 465 to 469/2016, seeking enhancement of compensation and grant of interest from the date of deposit of the amount in question.

6.       During hearing before me, the learned counsel for the OP builder, Majestic Properties Pvt. Ltd. vehemently argued that the complainants were involved in sale-purchase of property as a profession and they had booked apartments in their project with the sole aim of selling them further.  The complainants, therefore, did not fall under the definition of ‘consumer’.  In fact, the main person in the whole affair was Arun Dhandhania, who had booked three flats in the name of various companies, where he himself was Director and one flat in his own name and another in his son’s name.  The learned counsel argued that the main objective of the complainants was to indulge in the real estate business.  Referring to the evidence affidavit filed by Arun Dhandhania in CC No. 30/2012 made by Ratnesh Properties Private Limited, it had nowhere been made clear, how the company needed a flat for their residential purpose.  The learned counsel has drawn attention to a document with the heading ‘advance registration form’ in which, it is stated as follows:-

“I/We wish to register for allotment of a plot/flat/shop of size pent house sq. mtr./sqft. (sq. Yds) in your future project/township likely to come up in the States of UP, Punjab, Haryana, Rajasthan, NCR region.” 

7.       It is clear from this document that the complainants had made booking for commercial purpose only, and they had not registered themselves for any specific particular property.  The OP Builder had allotted specific flats to each complainant, in response to which, the complainants had surrendered the advance registration and accepted the allotment.  The learned counsel argued that the Project got delayed because the applicants in the Project failed to deposit payment as per the agreement and hence, the construction could not proceed as per schedule.  At that stage, the OP Builder was agreeable to refund the amounts deposited by the complainants without forfeiting any part of the money deposited.  In fact, the OP Builders wrote a letter dated 07.09.2012 to the complainants, explaining the entire situation and making an offer for getting allotment in some alternative project, or to get the refund of the money deposited by them.  However, the complainants never came forward to take refund of their money, or to switch over to an alternative project.  The learned counsel stated that under these circumstances, there was no justification on the part of the State Commission to have awarded interest @18% on the amount deposited by the complainants.  It was the duty of the complainants to prove that the booking had been made for genuine residential purpose.  In view of this situation, all the complaints deserved to be dismissed.

8.       In support of his arguments, the learned counsel has drawn attention to a number of citations as detailed below:-

i.        “Cheema Engineering Services vs. Rajan Singh” [(1997) 1 SCC 131]

ii.       “Jag Mohan Chhabra & Anr. vs. DLF Universal Ltd. [MANU/CF/0268/2007]”

iii.      “Chilukuri Adarsh vs M/s Ess Ess Vee Constructions [MANU/CF/0258/2012]”

iv.      “M/s Nav Bharat Press vs. M/s Sahara Prime City Ltd.” [MANU/CF/0513/2013]  

v.       “Birla technologies Ltd. vs. Neutral Glass and Allied Industries Ltd.” [1 (2011) CPJ 1 (SC)]

vi.      “Ghaziabad Development Authority through Vice-Chairman vs. Purwa Dureja” [MANU/CF/0761/2013]

vii.     “Pharos Solutions Pvt. Ltd. vs. Tata Motors Ltd. & Ors.” [CC No. 306/2014 decided on 01.09.2014]

9.       Per contra, the learned counsel for the complainants argued that the flats in question, had been booked for residential purpose only and the complainants had duly signed the terms and conditions attached with the application form, in which they stated that the booking was being done for residential purpose only.  The learned counsel stated that as per the provisions of the Consumer Protection Act, 1986, a company was covered under the definition of a ‘person’, as defined in the Act and hence, all the complainants fall within the definition of “Consumer”.  In case, the OP Builder had apprehension that the booking was being made for commercial purpose, they should have refrained from making allotment of residential flats in their favour.  Referring to the booking made by the companies, the learned counsel stated that the flats were required for residential purpose for the Directors and employees of the company, and the persons occupying the flats could keep on changing from time to time.  The learned counsel argued that the OP Builder had been using their money since it was deposited and hence, the State Commission should have allowed the grant of interest from the date of deposit and not from the date of filing the complaints. The learned counsel further stated that the OP Builder had not given any response to the legal notice sent by them.  The learned counsel did mention that the objective of two of the companies was to deal in real estate business, but this did not debar them from making applications for the allotment of residential properties.

10.     The learned counsel for the OP Builder further stated that there was some delay in filing the appeals on their behalf, but the appeals filed by the complainants were badly delayed and these had simply been filed as a counter to the appeals filed by the OP Builder.

11.     I have examined the entire material on record and given a thoughtful consideration to the arguments advanced before me.

12.     There is a delay of 52 days in all the five appeals filed by the OP Builder, Majestic Properties Private Limited.  However, there is a delay of 214 days in the five appeals filed by the complainants.  In the application for condonation of delay, the OP Builder stated that they were under the erroneous impression that revision petitions were maintainable against the impugned order passed by the State Commission, for which the permissible time limit was 90 days.  However, when the revision petitions were presented before the Registry of this Commission, the same were returned, stating that only appeals were maintainable, for which the permissible time was 30 days only.  In this manner, the delay took place in filing the present appeals.

13.     In the application for condonation of delay in the appeals filed by the complainants, it has been stated that when the appeals were filed by the OP builders before this Commission, efforts were made by the parties to settle the matter amicably outside the court.  However, the said efforts could not materialise.  The complainants further stated that under Order 41 Rule 22 of the C.P.C., 1908, a party had a legal right to agitate the issue before the higher court. 

14.     It is clear from above that the OP builder have taken the stand that they were under a wrong impression that revision petitions were maintainable against the impugned order of the State Commission, for which a time limit of 90 days has been prescribed.  Considering the plea taken by the OP builder on its face value, the reasons advanced by them for the delay in question seem to be convincing.  The delay of 52 days in filing the appeals by the OP builder is, therefore, ordered to be condoned.  However, the appeals filed by the complainants seem to be an afterthought and these were filed as a counter to the appeals filed by the OP builder.  However, since there is justification for condoning the delay of 52 days on the part of the OP builder to file the appeals and the validity of the impugned order is being adjudicated in any case, the delay in filing the appeals by the complainants is also ordered to be condoned.  Consequently, all these appeals, filed by both the parties, are being decided on merits.

15.     The factual matrix of the case makes it very clear that the complainants and the OP Builder entered into agreements between them, under which the OP Builder was required to provide residential apartments to the complainants within the settled time schedule.  The case of the OP Builder is that it was a construction-linked plan; and since the money could not be deposited by most of the allottees in time, the construction could not proceed as per schedule.  However, the basic legal question to be decided in the present case is, whether the complainants fall under the definition of ‘consumer’ as defined in the Consumer Protection Act, 1986 or not.  It has been stated in section 2(d) of the Consumer Protection Act, as follows:-

“2(d)    "consumer" means any person who —

(i)         ………………….

                        ………………….

(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;”

16.     The facts involved in these cases show that the main person in the whole episode is Arun Dhandhania who booked one residential flat for himself, one for his son and three other flats in the names of various companies, which were operating through him only, as Director.  Although booking in three cases has been made in the name of three different companies, it has not been made clear anywhere in the evidence produced by the complainants that the said property was required for residential purpose in any manner.  During arguments, it was stated that the residential property was required for the purpose of housing various directors/employees from time to time.  It has nowhere been stated, however, that the property was required for the personal use of a particular director.  In case, the property was to be used for the general purpose of lodging various directors/employees from time to time, it shall fall under the definition of commercial activity only.  On the other hand, the learned counsel for the OP Builder has vehemently argued that the basic objective of the companies involved was to deal in real estate business and the booking of the properties had been made for commercial purpose only.

17.     The definition of “Consumer” as stated above does mention that commercial purpose does not include the services availed by a person exclusively for the purpose of earning his livelihood by means of self-employment.  The factual position of the case makes it clear that the complainants are in no position to derive the benefits of the Explanation attached with section 2(d) of the Act in any manner, as they have led no evidence to show that they had made booking of the apartments in question, with the intention of earning their livelihood by means of self-employment.  On the other hand, a perusal of the complaints in question and even the pleas taken in the grounds of appeal filed by the complainants reveals that the complainants have nowhere stated in these documents that they had booked the properties for sole residential purpose only.  In the complaints filed by Arun Dhandhania as well as Anant Dhandhania also, the complainants have nowhere clarified that properties being booked were meant for their own personal use or accommodation only.  The plea taken by the OP builder, therefore, that the sole purpose of booking all these properties was for commercial purpose only, has not been controverted by the material produced on record.  The judgments and the orders made from time to time by the Hon’ble Supreme Court and this Commission, as relied upon by the learned counsel for the OP Builder as reproduced at para 8 above are, therefore, fully applicable in the present case and lead to the irresistible conclusion that the consumer complaints were not maintainable before the Consumer Fora.

18.     The learned counsel for the OP Builder has drawn attention to the ‘advance registration form’ submitted by one of the companies Ratnesh Properties Pvt. Limited to the OP Builder, in which it has been clearly stated that they were making registration for allotment of plot/flat/shop in the future projects of the OP Builder in various States of Northern India.  The wording of this form indicates clearly that the registration had been made by the complainant for commercial purpose only.  Had the complainants required the properties for their own personal or residential use, they could not have made registration in different States over a large territory of the country.

19.     The matter has been considered by this Commission in a number of judgments passed earlier from time to time.  In “Kavita Ahuja vs Shipra Estate Ltd. & Anr.” [CC No. 137 of 2010 decided on 12.02.2015], this Commission stated categorically that the mere booking of more than one flat shall not constitute a commercial purpose, provided evidence had been given that the property being booked was meant for genuine residential purpose of the family members of the complainant and not for the purpose of sale-purchase of property.  In the instant case, flats have been booked by Arun Dhandhania, acting on behalf of himself or on behalf of three companies, but it has not been made clear that the booking had been made for residential purpose only and not for the purpose of sale-purchase of the property.

20.     From the foregoing discussion, it is clearly brought out that the complainants do not fall within the definition of ‘consumer’ as defined under the Consumer Protection Act, 1986 and hence, the complaints filed by them were not maintainable before the Consumer Fora in any manner.  I have no reason to agree with the findings of the State Commission that the commercial purpose for the premises can be inferred only when some commercial activity is carried out by the complainant in the flats, after obtaining the possession of the same.  It was the duty of the complainants to prove that the booking done by them was not for a commercial purpose and that, they fall within the definition of ‘Consumer’ under the Act.  The appeals filed by the OP Builder, i.e., FA No. 941 to 945/2015 are, therefore, allowed.  The appeals filed by the complainants, i.e., FA No. 465 to 469 / 2016 are ordered to be dismissed.  As a consequence, the impugned orders passed by the State Commission are set aside and the consumer complaints no. 29 to 33 of 2012 are dismissed.   There shall be no order as to costs.