17.06.2016
MR. TARAPADA GANGOPADHYAY, HON’BLE MEMBER
The instant Complaint Case u/s 17 of the Consumer Protection Act, 1986 has been filed by the Complainant, being M/s. Paradeep Cargo Carriers Pvt. Ltd., incorporated under the Companies Act, 1956, praying for refund of the booking amount of the flat along with interest @ 18% per annum from 31.12.2007 and also for compensation of Rs. 3,00,000/-, damages of Rs. 3,00,000/- and litigation cost of Rs. 20,000/-.
Facts of the case, as emerging from the materials on records, are, in short, that the Complainant-Private Limited Company entered into an Agreement dated 12.1.2009 with the OP for purchasing a flat bearing No. NRC-173 along with a car-parking space bearing No. NUC064 for a total consideration of Rs. 55,14,595/- for using the flat ‘as a Guest House for their directors’ as mentioned in the BNA filed on behalf of the Complainant-Private Limited Company, and accordingly paid Rs. 3,00,000/- as booking money against Money Receipt No. 158146 dt. 31.12.2007 with the arrangement for payment of the balance amount in instalments as stipulated in the Agreement concerned. The flat along with the car-parking space in question was to be delivered within three years from the date of execution of the Agreement or approval of the building plan whichever is later as per Clause 10.1 of the terms of the Agreement concerned. The Complainant-Private Limited Company had paid Rs. 24,81,461.73 in total out of the Company’s fund although the progress of the construction of the flat was not going on as per time-schedule of the Agreement as alleged.
Despite such payment and slow progress of the construction work compared to the time-schedule mentioned in the Agreement concerned, the OP by its cancellation letter dated 16.9.2010 cancelled the allotment of the flat as well as the car-parking space in question showing the ground of default in payment of balance consideration money as per time-frame mentioned in the Agreement following the OP’s last Notice dated 22.10.2009 to the Complainant-Private Limited Company about his default in payment and cancellation of the allotment in question if the defaulted amount had not been paid within the date fixed in the said cancellation letter. Along with such cancellation the OP, upon forfeiting Rs. 4,20,383.23 as per Clause 12 of the Agreement concerned, refunded to the Complainant-Private Limited Company Rs. 20,61,081.50 by cheque No. 453595 dt. 5.1.2012 drawn on ICICI Bank, Salt Lake Branch, which was encashed on 17.1.2012 in favour of the Complainant-Private Limited Company as evident from the Bank Statement as on 31.1.2012 as available on records.
It is alleged in the Petition of Complaint that such cancellation of allotment of the flat as well as the car-parking space in question was done without any service of prior notice to the Complainant-Private Limited Company and hence, such act on the part of the OP amounts to deficiency in service on the part of the OP.
The Ld. Advocate for the Complainant, filing BNA, submits that the Complainant, a Private Limited Company, entered into an Agreement with the OP for purchase of a flat along with a car-parking space for using the said flat ‘as a guest house for their Directors’ and accordingly, paid to the OP Rs. 24,81,461.73. The Ld. Advocate adds that despite such payment, the OP did not handover the possession to the Complainant-Private Limited Company within three years from the date of the Agreement dated 12.1.2009 as per Clause 10.1 of the said Agreement and thus committed gross deficiency in service.
The Ld. Advocate continues that the Complainant, even being a Private Limited Company and having carried on business activities, falls within the definition of ‘Consumer’ as the flat in question was to be used as a guest house of the company and not to be used for generating profit.
The Ld. Advocate further submits that despite slow progress of construction compared to the time-frame thereof in the said Agreement, the OP cancelled by its letter dated 16.9.2010 the allotment of the flat and the car-parking space in question without serving any prior notice to the Complainant-Private Limited Company in violation of the terms and conditions stipulated in Clause 12 of the said Agreement and forfeited Rs. 4,20,383.23 paid, which also amounts to deficiency in service and unfair trade practice on the part of the OP.
The Ld. Advocate finally concludes that in view of the above submission, the Complaint should be allowed and an order be passed directing refund of the entire money paid together with interest thereon @ 18% per annum along with awarding compensation and litigation cost as prayed for.
On the other hand, the Ld. Advocate for the OP submits that the Complainant, being a Private Limited Company and having engaged in business activities and run by more than ‘one person’ as Directors, does not fall within the definition of ‘Consumer’ as defined u/s 2(1)(d) of the Consumer Protection Act, 1986 as the said business activities are not for the exclusive purpose of earning livelihood by means of self-employment of the Complainant-Private Limited Company as per Explanation appended to Section 2(1)(d) of the Consumer Protection Act, 1986. In this connection, the Ld. Advocate refers to the following decisions:
- Moran Plantation Pvt. Ltd., Parasramka Holding Pvt. Ltd. and Mili Marketing Pvt. Ltd. Vs. Ambience Private Ltd., reported in IV (2013) CPJ 313 (NC),
- Advik Industries Ltd. Vs. Uppal Housing Limited & Anr., reported in IV (2012) CPJ 159 (NC),
- Gaur Arunima Impex International Pvt. Ltd. Vs. U.P.Housing and Development Board, reported in IV (2013) CPJ 537 (NC), and
- Manu Talwar and Ors. Vs. BPTP Ltd., reported in IV (2015) CPJ 396 (NC).
The Ld. Advocate also submits that the allotment of the flat and the car-parking space in question was cancelled by a letter dated 16.9.2010 for default by the Complainant-Private Limited Company in payment of instalments after due service of last letter dated 22.10.2009 followed by several previous letters and hence, the allotted flat and the car-parking space in question was cancelled in compliance with the terms and conditions of the Agreement in question after service of Notice.
The Ld. Advocate adds that after such cancellation of the allotment upon due service of Notice to the Complainant-Private Limited Company, as mentioned earlier, the said flat was sold out to a third party as per terms and conditions laid down in Clause 12 of the Agreement concerned and the refundable money was refunded by cheque to the Complainant-Private Limited Company after deducting the amount deductable as per terms and conditions of the said Agreement and the said cheque was encashed in favour of the Complainant-Private Limited Company.
The Ld. Advocate concludes that in view of the aforesaid submission, the instant Complaint should be dismissed, the same having not fallen within the purview of the Consumer Protection Act, 1986 and also the Complainant-Private Limited Company having accepted the amount of refund by encashing the cheque of refund implying thereby the acquiescence of the Complainant-Private Limited Company in cancellation of the flat and the car-parking space in question.
Heard both the sides, considered their rival submissions and perused the materials on records.
Before adverting to the other issues involved in the case it appears to be expedient to decide whether the Complainant-Private Limited Company falls within the definition of ‘Consumer’ under the Consumer Protection Act, 1986 and thus falls within the purview of the said Act or not.
Evidently, the Complainant is admittedly a Private Limited Company and engaged in carrying on ‘commercial’ activities, which cannot be for its earning livelihood by means of self-employment as the Company is run by more than one person as Directors who work for many shareholders of the Company. Even if a Private Limited Company, as is the present Complainant, is treated as a ‘person’, the purchase of space, as is the guest house in the case on hand, cannot be for earning livelihood of the Company, but for commercial purpose as was observed by the Hon’ble National Commission in Monstera Estate Pvt. Ltd. Vs. Ardee Infrastructure Pvt. Ltd., reported in IV (2011) CPJ 299 (NC). The decision of the Hon’ble Supreme Court in Shri Harnam Singh v. Shalimar Estate Pvt. Ltd. & Ors., reported in III(2012) CPJ 225 (SC) is also of help in this matter.
Further, the flat in question was intended to be purchased from the fund of the Company for its use as a guest house for the Directors who are engaged with commercial activities.
In view of the aforesaid evidence on records, discussion and having due regard to the decisions of the Hon’ble National Commission and the Hon’ble Apex Court as referred to hereinbefore and also in view of the another decision of the Hon’ble National Commission in Mcs Computer Services (P) Ltd vs Allena Auto Industries Pvt. Ltd., where the ratio was decided to the effect that a Private Limited Company cannot file a complaint under the Consumer Protection Act, 1986 as the Private Limited Company, as in the present case, does not fall within the definition of ‘Consumer’ as defined u/s 2(1)(d) of the Consumer Protection Act, 1986.
In this view of the case, I refrain myself from expressing my views in respect of other issues involved in the case.
In the result, the instant Complaint is dismissed, the same being beyond the purview of the Consumer Protection Act, 1986 and the Complainant being not a ‘Consumer’ under the said Act. However, the Complainant is at liberty to move the appropriate forum in accordance with law.
