BEFORE:

HON’BLE MR. SUBHASH CHANDRA, PRESIDING MEMBER

HON’BLE DR. SADHNA SHANKER, MEMBER

For the Appellant                Mr Sahil Sethi and Ms Arushi Mann,

                                       Advocates  

For the Respondent             Mr Abhinav Ramkrishna and Mr Vaibhav

                                       Sharma, Advocate

ORDER

PER SUBHASH CHANDRA

1.      This First Appeal under Section 51 of the Consumer Protection Act, 2019 (in short, ‘the Act’) challenges order dated 16.12.2020 of the State Consumer Dispute Redressals Commission, Delhi (in short, the ‘State Commission’) in Complaint No. 188 of 2020 holding that the appellants herein are not “consumers” under the purview of the Act and dismissing the complaint filed by them.

2.      The delay of 80 days in the filing of this complaint has been considered in the light of the fact that the impugned order was dated 16. 12.2020 and while the appeal was required to be filed within 30 days of receipt of order, this period coincided with the COVID-19 Pandemic and in terms of the order of the Hon’ble Supreme Court in Suo Moto Writ Petition No. 3 of 2020 dated 10.01.2022 the period for limitation stood extended.

3.      We have heard the learned counsel for both the parties and given careful consideration to the material on record.

4.      The relevant facts of this case, in brief, are that the appellants had each booked one residential apartment constructed by the respondent in 2006 in the respondent’s project “Assotech Springfields” on plot No. GH 10, Sector Zeta, Greater Noida being developed by the respondent for different considerations in respect of each appellant totalling to Rs.2,37,72,351/-. As per allotment letters issued, the respondent promised possession of the apartment booked within 30 months from the date of commencement of construction, i.e., by 01.07.2009 with 6 months of grace period. It is contended that a delay of one year had been admitted by the respondent in procuring an Occupancy Certificate and offer of possession was done on 07.06.2010. According to the appellants, the respondents informed on 02.01.2009 that the super area of the apartments had increased and an additional amount was demanded. However, respondent failed to provide the proof of the actual increase in the super area and therefore the appellants did not comply with the demand raised. As possession was not handed over, appellants filed a complaint before the State Commission under Section 21 of the Consumer Protection Act, 1986 seeking the relief of possession along with compensation for delay in handing over possession with an alternative prayer for the deposited amount to be refunded with interest @18 % p.a. This complaint came to be decided through the order under challenge as per which it was held that the complainants were not “consumers” under Act and therefore, the complaint was dismissed. This order is impugned by way of the present appeal before us.

5.      The contention of the appellants is that the State Commission has erred in holding that the complaint was not maintainable in light of the decision of this Commission in Ambrish Kumar Shukla and 21 Ors. Vs Ferrous Infrastructure Private Ltd., in Consumer Complaint No. 97 of 2016 dated 07.10.2016. It is also contended that the State Commission erred in dismissing the complaint on the ground that the appellants were not “consumers” as they had purchased the apartments for the purpose of investment. The appellants placed reliance upon the judgment of this Commission in Kavita Ahuja Vs Shipra Estate Ltd. and Jai Krishna Estate Developers Pvt. Ltd. in Consumer Complaint No. 137 of 2010 dated 12.05.2015 wherein it was held that “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”. It was contended that the respondent had failed to discharge the onus of proof which was placed on it to establish that the said acquisition was for a commercial purpose intended for the purpose of sale and purchase. It was further contended that the State Commission failed to consider that in the instant case co-allottees of the appellants were their wives and that they were not necessary parties for the adjudication of the complaint. Reliance was placed on the judgment of this Commission in Ansal Lotus Melange Projects Pvt. Ltd. and Anr. Vs Dr Yuti Mukesh Mishra in FA No. 867 of 2013 dated 20.11.2018 wherein it was held that “if the allotee was not satisfied with the changes made in the project and feels that he is adversely affected by these changes, he has the right to seek refund, even if he has given a consent in the allotment letter that opposite parties are entitled to make changes in the plan and to make construction accordingly because the consent was given without knowing full implications of the intended changes that would be made by the opposite parties as the changes were not disclosed to the complainant.” It was, therefore, contended that the complaint had been dismissed on a mere technicality which was not justifiable. It was also averred that the State Commission failed to appreciate that the appellants had been suffering at the hands of the respondent for nearly 11 years on account of delay in the handing over of possession and in not refunding the amount paid amounted to the respondent who were utilising the money deposited by the appellants free of interest. It was therefore prayed that the State Commission's order dated 16.12.2020 be set aside.

6.      During arguments reliance was placed on the following judgments by the appellant:

(i)      Manpreet Kaur Kang and Anr. Vs Jaiprakash Associates Ltd., Consumer Case No. 3862 of 2017 dated 12.06.2023

(ii)     DLF Home Developers Ltd. (Earlier known as DLF Universal Ltd.) and Anr. Vs Capital Greens Flat Buyers Association etc., Civil Appeal Nos. 3864-3889 of 2020 dated 14.12.2020 of the Supreme Court of India

(iii)    Satyendra Kumar Tomar Vs Chairman and Managing Director, M/s Unitech Ltd., Consumer Case No. 433 of 2015 dated 19.05.2016.

The contention of the appellants is that the impugned order has been incorrectly based on a belated application in MA No. 2034 of 2016 dated 18.02.2016 after seven years of the filing of the complaint requiring the appellants to furnish affidavits disclosing complete details of other residential properties owned by each of them. It was also averred that the impugned order was wrongly based on the ratio of this Commission's judgment in Manohar Damecha Vs Lavasa Corporation in Consumer Complaint No. 1326 of 2015 dated 01.02.2016.

7.     Appellants contended that the allegation that the apartments in question had been booked by them for commercial purposes was a bald allegation and was not supported by any evidence. It was also contended that as per the judgment of the Hon’ble Supreme Court in Laxmi Engineering Works Vs PSG Industrial Institute, (1995) 3 SCC 583, it had been held that even if a person buys more than one residential property, it could not be presumed that the properties had been purchased for a “commercial purpose”, unless it was shown that the purchaser was engaged in the business of selling or purchasing houses on a regular basis. On the issue of the definition of commercial purpose, it was contended that the finding of the State Commission was contrary to the following judgments of this Commission:

1. Jagannath D Hirya and Anr. Vs Lodha Crown Buildmart Pvt., Ltd. And Ors – III (2019) CPJ 281 (NC);
2. Pinki Saini Vs Imperia Structure Ltd., III (2018) CPJ 609 (NC); and
3. Mehnga Singh Khera and Anr., Vs Unitech Ltd., I (2020) CPJ 93 (NC)

8.     It was argued that the impugned order was bad in law in holding that appellants had not disclosed whether they were holding any other property in India and that no opportunity was provided to file affidavits in this regard. Therefore, the conclusion was based on presumptions. It was argued that the finding that the complaint was not maintainable since the allotments were in joint names of husbands and wives and only the husbands had filed the complaint was argued to be incorrect since the wives were co-allotees and not strangers. Therefore, this ground was stated to be hyper technical and the dismissal of the complaint on this ground was perverse. Reliance was placed on several judgments as under:

1. Vibha Bakshi Gokhale & Anr., Vs Gruhashilp Constructions and Ors., II (2019) CPJ 108 (SC);
2. Jeevan Bima Nagar Flat Owners Vs Life Insurance Corporation of India and Ors., I (2013) CPJ 408 (NC);
3. Maharashtra State Seeds Corporation Ltd. and Anr., Vs Abhimanu Bhaurao Mane and Ors., III (2018) CPJ 499 (NC);
4. Smt Savita Garg Vs The Director, National Heart Institute IV (2004) CPJ 40 (SC); and
5. Union of India Vs Major J P S Malhi and Ors., I (2019) CPJ 5 (NC)

9.     Appellants further contended that the State Commission had incorrectly held that the delay on part of the respondent in offering delivery of flats of approximately four months was tolerable and condonable since the delay was of about one year and no reason for the delay had been provided which was contrary to the judgments of this Commission in the following cases:

1. Baba Estates and Colonizers and Anr., Vs Vishal Singh III (2018) CPJ 216 (NC);
2. Manu Dev Dahiya and Anr. Vs Ansal Buildwell Limited & Ors., I (2020) CPJ 168 (NC);
3. BPTP Ltd., Vs Pradeep Sharma I (2020) CPJ 283 (NC)
4. Kolkata West International City Vs Devasis Rudra II (2019) CPJ 29 (SC);
5. Pioneer Urban Land and Infrastructure Ltd., Vs Govindan Raghavan, Geetu Gidwani Verma and Anr., II (2019) CPJ 34 (SC);
6. Rajiv Marwah and Anr., Vs Eldeco Infrastructure and Properties Ltd., IV (2018) CPJ 209 (NC); and
7. Subhash Mangla and Anr., Vs M3M India Ltd., and Anr. I (2020) CPJ 14 (NC)

10.   It was also argued that the offer of possession without obtaining completion certificate cannot be considered to be a genuine offer of possession and that a consumer could not be compelled to accept possession at a belated stage but was entitled to seek refund of the amount paid by him. Reliance was placed on the judgment of the Hon’ble Supreme Court in Kolkata West International City Pvt. Ltd. Vs. Devasis Rudra, (2020) 18 SCC 613 and Pioneer Urban Land and Infrastructure Ltd. Vs. Govindan Raghavan, in CA No. 12238 of 2018 decided 02.04.2019, (2019) 5 SCC 725.

11.    It was further argued that the impugned order had failed to consider that the increase in the super area by 142 sq ft had not been established by the respondents as demanded by the appellants. Therefore, as per the decision of this Commission in Ludhiana Improvement Trust Vs Basant Lal, I (2016) CPJ 48 (NC) complainants/appellants were not liable to pay for the excess area in the absence of proof. In this connection, reliance was placed on Emaar MGF Land Ltd. Vs Dayal Singh and Anr., IV (2015) CPJ 294 (NC).  It was therefore argued that deficiency on the part of the respondent had commenced from the date when possession was not given as per the stipulated time without reasons in the contract as per the law laid down in Ansal Housing and Construction Ltd. Vs Sudhanshu Bihari Lal Gourk, IV (2015) CPJ 484 (NC) and Emaar MGF Land Ltd. Vs Dilshad Gill III (2015) CPJ 329 (NC). It was therefore prayed that the appeal be allowed.

12.   Per contra, it was contended on the part of the respondent that the appellants were residents of the United Kingdom and had filed an application seeking to implead the co-allottees, who are their wives, as complainants for the first time in the appeal before this Commission. They were not made parties to the original complaint nor were pleaded to be aggrieved parties. It was contended that the present appeal had been filed contrary to settled principles of law since it had been filed by the appellants through an Authorized Representative residing in India. It was also alleged that this person had been authorized by separate authority letters which lacked legal sanctity as there was no properly executed authority/ special or General Power of Attorney duly notarized in the High Commission/Consulate. It is argued that the provisions of the Civil Procedure Code apply before the consumer fora and that the requirements of law have to be satisfied in order to recognize this power of attorney holder.

13.   The reliance of the State Commission on Amit Sharma is contested on the ground that the facts were different and in the present matter the wives were neither incapacitated or had authorized the husbands to file the complaint. It was contended that the authority given to the Power of Attorney holder and the Vakalatnama filed by the counsels appearing for the appellants could not be considered to be legally valid or conveying an authority to sign pleadings which had been specifically opposed by the respondent by way of reply to IA no. 4299 of 2021 filed by appellants who were the wives of the appellants.

14.   On merits, it was contended that it was apparent from the record i.e. allotment letter and the final demand letter that the appellants had resided outside India for more than 180 days in a given financial year and as such they were Non-Resident Indians (NRIs). According to respondents, the purchase of flats by appellant was an investment intended for profit through sale and therefore the present case was covered by the judgment of this Commission in Manohar Dhamecha (supra). According to the respondents, the State Commission had correctly relied upon this judgment and therefore the complaint had been correctly adjudicated as not being maintainable. According to the respondent, the appellants had failed to disclose that the respondent had been provided 45 days’ time by the State Commission vide its order dated 23.04.2010 to complete construction and offer possession. It was submitted that despite completion of work to offer possession within 45 days as per this direction by 02.07.2010, appellants failed to approach the respondent to take possession or make payment. Therefore, apart from non-joinder of the necessary parties, the Appellants had also failed to disclose the true facts of the case. Reliance was placed on the judgment of this commission in Shalabh Nigam vs Orris Infrastructure Pvt Ltd., in CC no.1702 of 2016 dated 06.05.2019 that an allotee was entitled seek refund only if possession was inordinately delayed. Since, the State Commission's order categorically mentioned that Occupation Certificate was received on 07.06.2010, and the promised delivery was January 2010, the delay of four months was condonable. Insofar as the issue of increase in the super area was concerned, it was contended that the same was within the permissible limits under the builder-buyer agreement and therefore the instant appeal deserved to be dismissed.

15.   From a perusal of the records and the submissions before us, it is apparent that the appellants, who are unrelated to each other, had booked apartments with the respondent on various dates in 2006 and paid various sums as per table below:

It is also evident that the Appellants are all professionals/ employed or homemakers in the United Kingdom at various locations. The complainants claim that a cumulatively of Rs 2,37,72,351/- was paid in 2006 which constituted 95% of the value of the four apartments. Possession was promised within 30 months, as per Clause 13A of the Allotment Letter from the date of commencement of construction, which was 01.07.2006. As per Clause 35 of the allotment letter, respondent was liable to pay a penalty in case of delay beyond the grace period of 6 months of @ Rs 5/- per sq ft per month, for the period of delay. There was an unjustified failure to hand over possession by January 2009. Appellants contested the offer of possession with increase in the super built area which was not explained to them. On part of the respondent, it is contended that increase in area was permissible as per the Agreement between the parties. Appellants, vide IA 6450 of 2014 dated 16.09.2014, pressed the alternate prayer for refund of money deposited by them as the first option since they were not interested in taking possession as the respondent was demanding a highly exorbitant amount as a precondition for possession.

16.   As per the impugned order in terms of the directions of the Hon’ble Supreme Court dated 13.09.2019 in Civil Appeal No. 2908 of 2018, the State Commission held the matter squarely covered by its judgement in Rameshwar Prasad Srivastava & Ors. Vs. Dwarkadhis Projects Private Limited an Ors. (2019) 2 SCC 417 and considered the matter afresh from the stage at which it was before the National Commission.
Considering the pleadings, evidence and written arguments before this Commission, the State Commission vide its order dated 16.12.2020 in Complaint No. 188 of 2020 held that the appellants had been offered possession on 30.06.2009 along with a demand for extra payment for the increase in the super built area of the project. The State Commission held that as per the judgment of this Commission in P.N.Gupta vs. New India Assurance Co. Ltd. & Anr., Revision Petition No. 3821 of 2013 dated 19-11-2013 and Amit Sharma vs. BHEL, II (2013) CPJ 505 (NC) which squarely apply to the facts of this case, appellants were not “consumers” under the Act. IA 2034 of 2016 was therefore allowed and the complaint was held liable to be dismissed.

17.   As the project was found to be incomplete on site and likely to take a longer period of time, the relief sought in the complaint was to direct the respondents to hand over immediate possession or possession within a reasonable time with interest at 18% per annum on the deposited amounts till delivery or in the alternative to refund the amount paid with interest at 18% per annum from the date of deposit till the date of payment along with compensation of Rs 45 lakhs for 9 persons for mental agony, harassment and hardship and legal costs of Rs 1,04,000/-.

18.   On merits, the delay of about 4 months was considered acceptable, tolerable and condonable and that the increase of 142 sq ft super area was within the permissible 10% variation and covered by the Agreement. The complaint was therefore dismissed.

19.   From an analysis of the material on record and the submissions made, it would appear that although the appellants are agitating a grievance which has certain commonalities, the complaint has not been allowed as a complaint under Section 12(1) (c ) of the Act. The complaint urges various reliefs, notably for possession and of refund in the alternative. The defence of the respondents is that the appellants are not “consumers” under the Act and therefore the complaint is ab initio void and therefore the State Commission had rightly held accordingly and dismissed the complaint.

20.   However, it is also seen that the respondents have not discharged the onus of proving that the appellants were engaged in the business of buying and selling of flats except to state that they were residents of the United Kingdom and were NRIs and therefore contended that they were not entitled to be considered as “consumers” under the Act. Objection was also taken that the complainants had not ensured a proper joinder of parties and filed joint complaints with their wives (co-allotees). The maintainability of the complaint was further challenged on the ground that the authorization given to the Power of Attorney holder was incorrect in that the authorization was not legally executed in the prescribed manner before the Indian High Commission located in United Kingdom.

21.   The State Commission, in holding the appellants to not be “consumers” has not relied on any cogent evidence provided by the respondent. While it is true that the appellants have not filed the complaint in the manner prescribed they cannot be ousted merely on this ground after the complaint having pended for so long and in view of the fact that admittedly consideration was deposited with the respondent and were assured of possession being handed over within 30 months of commencement of construction, with a 6 month grace period. It is also not denied that the amount that is now being demanded by the respondent to hand over possession exceeds the agreed consideration although it is also on the grounds of the increase in the super area which, as per the allotment and as held by the State Commission, is within the permissible limit. A certain variation in the increase in the super built area in projects has been considered to be acceptable by both the Supreme Court and this Commission in various cases. The order of the State Commission in ousting the appellants purely on the ground of not being “consumers” without the respondents discharging the onus of proof to establish them to be so, cannot be upheld in terms of Kavita Ahuja (supra) and Lakshmi Engineering Works (supra).

22.   As per section 2 (1) (d) of the Consumer Protection Act, a consumer is defined as under:

“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) 1[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 1[hires or avails of] the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payments, when such services are availed of with the approval of the first-mentioned person;

2[Explanation: -- For the purposes of sub-clause (i), "commercial purpose" does not include use by a consumer of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self-employment;] 

23.   The State Commission has held that the appellants are not “consumers” under the Act for the reason that the contention of the opposite party/respondent that the complainants/appellants were not bona fide purchasers as they had no intention of settling in India and had not returned to India even after booking the flats in 2006 till the filing of the complaint in 2020, i.e., after more than 14 years. They had also not filed affidavits to state whether they owned any other property or had booked any other property in India. The State Commission therefore concluded that the arguments of the respondents were therefore ‘tenable’. It had held, based on Manohar Dhamecha (supra), that appellants who were NRIs could not be permitted to avoid paying court fee by adopting the route under the Consumer Act since that would defeat the purpose of the Act itself. It also relied on this Commission’s judgment in M/s Orissa Vegetable Oil Complex Ltd. Vs. State of Orissa, III (1993) CPJ 407 on this aspect and held that such a tendency should be discouraged.

24.    We do not find the rationale of the State Commission justifiable. On the moot issue of whether the appellants are “consumers”, the settled law is that unless the booking of a residential unit is established through cogently led evidence to have been done with an intention for purchase and sale for profit, the onus of which lies upon the party making that assertion, it cannot be held that the allottee was not a “consumer”.

25.   As per section 7 of the Consumer Protection Act, 2019 a consumer is defined as under:

“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 payments, when such services are availed of with the approval of the first-mentioned person;

2[Explanation: -- For the purposes of sub-clause (i), "commercial purpose" does not include use by a consumer of goods bought and used by him exclusively for the purpose of earning his livelihood, by means of self-employment;] 

26.   It is an admitted fact that the appellants have paid various amounts to the respondent as per a valid allotment letter towards the agreed sale consideration for the respective flats booked by them. It is also a fact that the respondent has not been able to establish conclusively as per the onus cast upon him that the respondents are investors engaged in the purchase and sale of flats. There is no bar under the provisions of the Act prohibiting NRIs from booking and purchasing flats.
In the absence of this fundamental fact being established, the conclusion of the State Commission that the appellants were not “consumers” under the Act cannot be appreciated or accepted.

27.   The law laid down by the Hon’ble Supreme Court in Laxmi Engineering (supra) with regard to ‘commercial purpose’ reads as under:

that a home buyer may book more than one flat if the requirements of his family necessitate it and can be justified. Mere booking of more flats than one, in other words, cannot be construed to constitute ‘commercial purpose’.

This Commission in Kavita Ahuja (supra) has also held as under:

(as) the onus to prove that the complainants were engaged in the business of real estate and buying and selling of property lay upon the opposite party which had not been discharged, this contention does not sustain.

28.   Therefore, merely because the applicants are NRIs and there has been a passage of 14 years cannot be the reason to oust them as “consumers”.

29.   There is no restriction on a Non-Resident Indian (NRI) from holding residential property in India. The finding that the contention of the respondent was tenable for this reason is not based on any evidence or legal precedent and must be held to be based on conjectures and surmises. Consequently, the same is not justifiable.

30.    The State Commission has clearly fallen into error in being guided by the ratio of the judgments in Dhamecha (supra) and M/s Orissa Vegetable Oil Complex Ltd. (supra) which are not pleadings before it and pertain to the scope of the Act with regard to money suits. In the instant case, refund was only the alternate prayer. The State Commission’s finding therefore, cannot be sustained.

31.   The State Commission has relied on the judgments of this Commission in Amit Sharma (supra) and P.N Gupta (supra) to hold that a representative or legal heir of one or more consumers can file a complaint only in the case of the death of a consumer. The filing of a complaint by one or more consumers can be done if there are numerous consumers and have a commonality of interest. It has also been held that in such a case, one or more consumers can file the complaint. However, in P.N. Gupta (supra) it had been held that a co-policy holder could also have filed the complaint along with her son and husband and the finding of the District Forum that the complaint was not maintainable as it was filed by her father-in-law was upheld. In the case on hand, complaints are filed by individuals who had been allotted the flats jointly with their wives. However, the complaints were filed individually by the husbands without the joinder of the wives as co-complainant in each case. A subsequent Interim Application was, however, filed for their impleadment/joinder as complainants. This IA does not appear to have been allowed. Consequently, the complaints before the State Commission stood in the name of the present appellants. The order of the State Commission is silent on the reasons for not allowing this IA.

32.   The issue of the Power of Attorney also warrants consideration. It is apparent from the record that the Power of Attorney (Letter of Authority) executed by the appellants in the name of Mr Vinay Kumar Mahajan has been done by them and not the co-complainants who had sought to be impleaded in the matter. It is also evident that the execution of the Power of Attorney is legally flawed in that it has not been executed in the prescribed manner as required under the Code of Civil Procedure. The finding of the State Commission on this aspect cannot be found fault with. Its view that a legally executed Power of Attorney in respect of all the complainants is essential is legally the correct position which cannot be disputed. 

33.   In view of the foregoing discussion, the order of the State Commission is set aside with the following directions:

1. The appellants are held to be “consumers” under the Consumer Protection Act;
2. Appellants are permitted to file a revised Memo of Parties bringing on record the co-allottees as complainants;
3. Appellants shall, if they so desire file a fresh Power of Attorney which shall be duly executed as per law; and
4. Both parties shall appear before the State Commission on 18^th December 2024 which is directed to consider the matter on merits as per law, preferably within a period of 4 months.

35.   It is made clear that at this stage we do not wish to express any views on the merits of the case.

36.    Pending IAs, if any, stand disposed of with this order.