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Judgment
THIS order shall decide the above said three cases. The complainants, namely, M/s. Moran Plantation Pvt. Ltd., M/s. Parasramka Holding Pvt. Ltd., and M/s. Mili Marketing Pvt. Ltd., are stated to be sister concerns. M/s. Ambience Private Ltd., O.P., is the same in all the three cases. In all the three cases, similar questions of facts and law are involved. Consequently, this judgment will decide all the three cases by a common judgment. We will take up the facts from Consumer Complaint No. 307 of 2012, detailed above. The main question pivots around the controversy "Whether a Private Company, for the purposes of getting apartment, is a ''Consumer'', under the given circumstances - In all the cases, the complainants applied for booking one apartment, each, measuring approximately, 7362.76 sq.ft. each. The complainant paid an amount of Rs. 50,00,000 each, to the O.P., on 24.3.2007. The said amounts were acknowledged by O.P. vide its letter dated 10.4.2007. The O.P. sent the Brochure and Scheme for payment of instalments. One of the clauses provided for the completion of the flat and the delivery thereof to the Buyer within a period of 3 years of the execution of Flat Buyer''s Agreement, which was supposed to have been executed between the complainant and O.P. soon after the aforesaid transaction had taken place.
ON 8.2.2008, the O.P. informed the complainant that the construction was going on in full swing and the O.P. had completed excavation of the Basement and commenced the structure work, besides informing the complainant that its apartment No. 1602, had been shifted in Block ''J'' on the same floor and mentioned that the area would be 7672.14 sq.ft instead of 7362.76 sq.ft., in each of the case. The complainant objected to the O.P. about increase of area and change of flat. The complainant also asked to execute the agreement, but it was put off, on one pretext or the other. The complainant was also informed that the Apartment Buyer''s Agreement was executed only after receipt of 60% of the payment from the prospective Buyers. The complainant was surprised to receive such like letter. The Company had assured that the flats would be ready within a period of 36 months from the date of execution of the Apartment Buyer''s Agreement. In between, the relations between the parties were far from being cordial. O.P. had threatened to cancel the flat, a show -cause notice was also given. After much deliberations and discussions, the Apartment Buyer''s Agreement came to be signed formally, on 27.10.2009. There was delay in construction of the apartment. On 23.12.2009, the O.P. raised a demand in the sum of Rs. 24,00,000 The work was still incomplete. In between, there was disputes of payment and further demands made by the O.P.. The complainant has been paying all the instalments. The total price of the apartment was Rs. 7,49,04,637.50, each, out of which the complainant has already paid a sum more than 70% of the total amount, through instalments. The complainant has not yet got the possession of the premises. It is alleged that the O.P. is trying to extort more and more money from the complainant and is guilty of deficiency. Consequently, the present complaint was filed with the following prayer (a) Pass an order setting aside the letter of 21.9.2012, thereby allegedly raising the illegal demand of interest;
(b) Pass an order setting aside the letter dated 23.10.2012 and directing the O.P. not to cancel the allotment of the complainant of flat No. H -102 as threatened vide letter dated 23.10.2012, which if done would be illegal and unwarranted in the facts and circumstances of the case;
(c) Pass an order declaring the apportionment of the amount towards interest to be illegal and direct the O.P. to apportion all the payments toward sale consideration only;
(d) Pass an order restraining the opposite party from taking any steps towards putting the property up for sale or creating any third -party interest as threatened by the opposite party and/or interfere with the rights of the complainant in the said property in any manner whatsoever;
(e) Pass an order directing opposite party to pay interest @ 24% per annum on the amount paid to the opposite party so far and remaining with the opposite party after the date originally contemplated date of completion by October, 2010;
(f) Pass an order directing the O.P. to compensate the complainant suitably for having put the complainant to lot of harassment and agony;
(g) Award cost and compensation in favour of the complainant;
(h) May pass any other order in favour of the complainant as the Hon''ble Commission may deem it fit and proper in the facts and circumstances of the case.
SINCE the Counsel for the O.P. has called into question the jurisdiction of this Commission, therefore, we are bound to decide this point, first of all, as per the law laid down by the Hon''ble Apex Court in the case K. Sagar, Managing Director, Kiran Chit Fund, Musheerabad v. A. Bal Reddy & Anr., : (2008) 7 SCC 166.
THE learned Counsel for the complainant vehemently argued that the complainant is a "consumer". He has invited our attention towards the case decided on 9.2.2009, by Hon''ble Supreme Court, in Karnataka Power Transmission Corporation & Anr. v. Ashok Iron Works Pot Ltd., : [2009] 1 SCR 1109, in which it was held: In view of the discussion already made by us above, while dealing with the contentions (ii) and (iii) in Civil Appeal No. 1879/2003, it has to be held that the complaint by H.V. Balchandra Rao is covered under Section 2(1)(d)(i)(ii) of the Act, 1986.
This must be borne in mind that the cause of action arose in this case, in the year 1992 -93. The amendment of the C.P. Act, 1986, was made in the year, w.e.f. 15.3.2003, that amendment was not considered in this case.
COUNSEL for the complainant has also cited another judgment of this Commission reported in Harsolia Motors v. National Insurance Co, Ltd., I : (2005) C.P.J 27 (NC).
THAT judgment pertains to the insurance policy. It was held that taking of the insurance policy is for protection of the interest of the assured in the "articles" or "goods" and not for making any profit or trading for carrying on commercial purposes. Reference was made to New Delhi Municipal Council v. Sohan Lal Sachdev (Dead) represented by Mrs. Hirinder Sachdev, W/o. late Sohan Lal Sachdev, 83 : (2000) DLT 664 (SC) : II(2000) SLT 13 : II (2000) 2 SCC 494, wherein the Hon''ble Apex Court considered the meaning of the words "commerce" and "commercial purpose" in the context of a question where use of premise for the purpose of guest house can be termed as domestic use, for the purpose of electricity charges by the New Delhi Municipal Council (N.D.M.C.). Lastly, it was held in the authority: 25. Further, from the aforesaid discussion, it is apparent that even taking wide meaning of the words ''for any commercial purpose'' it would mean that goods purchased or services hired should be used in any activity directly intended to generate profit. Profit is the main aim of commercial purpose. But, in a case where goods purchased or services hired in an activity which is not directly intended to generate profit, it would not be commercial purpose.
In this view of the matter, a person who takes insurance policy to cover the envisaged risk does not take the policy for commercial purpose. Policy is only for indemnification and actual loss. It is not intended to generate profit.
On the other hand. Counsel for the O.P. has cited the following authorities. Laxmi Engineering Works v. P.S.G. Industrial Institute, II : (1995) C.P.J 1 (SC) : (1995) 3 SCC 583, and three judgments of this Commission.
INSTEAD of touching the heart of the problem, the learned Counsel for the complainant has tried to skirt it Counsel for the complainant has himself invited the attention of this Commission towards Memorandum of Association, the relevant extracts run as follows: III. The object for which the company is established are:
(a) Main objects to be pursued on incorporation:
(1) To carry on the business of planters, cultivators, manufacturers, buyers, sellers, importers and exporters of tea, tea seed, rubber, timber, rhea, sisal and other fibres and to render the same marketable and to buy, sell, trade and deal in any such produce either in its prepared, manufactured or raw state, and to manufacture and sell tea shook, tea boxes and other articles used in connection with the cultivation manufacture packing or sale of tea and other produce, and to carry on any business connected with any of the above purposes or convenient to be carried on therewith.
(b) Objects incidental or ancillary to the attainment of main objects:
(1) To lend invest or deal with money either with or without interest or security, including in current or deposit account with any Bank or Banks, other person or persons and also in investment in shares, securities, bonds and debentures, upon such terms, conditions and manner as may, from time -to -time, be determined and to receive money on deposit or loan upon such terms and conditions as the Company may approve, provided that the Company shall not do any banking business as defined under the Banking Regulations Act, 1949.
IN the same judgment, 14 and 15 run as follows: 14. To acquire by purchase, lease, exchange, hire or otherwise develop or operate land, buildings and hereditaments of any tenure or description and any estate or interest therein and any right over to connected with land and building situated and develop or to turn the same to account as may seem expedient and in particular, by preparing buildings sites and by constructing, reconstructing, altering improving, decorating, furnishing and maintaining hotels rooms, inns, flats, houses, restaurants, markets, shops, workshops, mills, factories, warehouses, cold storages, wharves, godowns, offices, safe deposit vaults, hostels, gardens, swimming pools, play -ground, buildings, works and conveniences of all kinds and by leasing, hiring or deposing of the same.
To manage land, building and other properties, whether belonging to the company or not, and to collect rents and income, and to supply tenants and occupiers and others refreshments, attendance, light, waiting rooms, reading rooms, meeting room; electric conveniences and other advantages.
It must be borne in mind that the amendments made in Section 2(1)(d)(ii) on 15.3.2003 are of infinite importance. Those have changed the law altogether. It will be worthwhile to reproduce the definition of term "consumer", as under: (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 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 purpose":
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.
AS per Explanation, vide amendment dated 15.3.2003, it is thus clear that it was never averred that these flats would be used exclusively for the purposes of earning their livelihood by means of self -employment. These words are conspicuously missing in the averments.
IN a judgment of this Commission, in Monstera Estate Pvt. Ltd. v. Ardee Infrastructure Pvt. Ltd., IV, (2010) C.P.J 299 (NC), has held that: Housing - -Purchase of space for commercial purpose - -There was delay in possession. Complainant was a private limited company. Complainant was nominated for allotment of showroom. Possession not given. Sale deed was not executed. Deficiency in service was alleged. It was held that even if private limited company was treated as ''person'', purchase of space could not be for earning its livelihood. Purchase of ''space'' was for commercial purpose.
In M/s. Purusharath Builders Pvt. Ltd. v. M/s. Uppal Housing Ltd. & Anr., III : (2012) C.P.J 500 (NC) : decided by this Commission, comprising Justice J.M. Malik, Presiding Member and Sh. Vinay Kumar, Hon''ble Member, on 5.7.2012, held as under: M/s. Purusharath Builders had purchased flats for the use of its officers. Learned Counsel for the complainant argued that these flats will be used for the officers of the company. Learned Counsel for the complainant could not deny that those officers would transact the commercial activity. A bare -look on this Resolution clearly goes to show that these flats would be meant for commercial purposes.
AGGRIEVED by that order, SLP was filed by the complainant, before the Hon''ble Supreme Court. The Hon''ble Supreme Court in Civil Appeal Nos. 8990 -8991 of 2012, vide order dated 7.1.2013, held: We have heard learned Counsel for the appellants, and perused the record. We do not see any cogent reason to entertain the appeals. The judgment impugned does not warrant any interference. The Civil Appeals are dismissed.
IT is clear that the object of the complainant is to re -sell the same and collect the rent. These flats were not taken for personal use of ''consumer''. The Hon''ble Apex Court in Laxmi Engineering Works v. P.S.G. Industrial Institute (supra), held: 11. ...(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(1)(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 - Parliament stepped in and added the explanation to Section 2(d)(i) by Ordinance/Amendment Act, 1993.
In Satish Kumar Gajanand Gupta v. M/s. Srushti Sangam Enterprises (India) Ltd., & Ant., III : (2012) C.P.J 264 (NC) : Consumer Complaint No. 296 of 2011, decided by this Commission, through the Bench headed by Justice R.C. Jain, on 3.7.2012, held: We have considered the contention raised by the learned Counsel but we do not quite agree with his plea as the complainant, in our view, does not qualify to be a ''consumer'' as defined in Section 2(1)(d) of the Consumer Protection Act, 1986. We say so because as per his own admission the complainant is a resident of Delhi and he intends to purchase some permanent accommodation at Mumbai for his stay during his business visits to save on the expenditure incurred in hotels. For that purpose, he has booked not one but two flats. Clearly, the transaction is relatable to his business activity and, therefore, it will fall in the category of ''commercial purpose'', which has been taken out of the purview of the Consumer Protection Act, 1986 vide Amendment Act No. 62 of 2002, effective from 15th of March, 2003.
AGAIN , this Commission, in the case of Jag Mohan Chhabra & Anr. v. DLF Universal Ltd., IV : (2007) C.P.J 199 (NC), (Original Petition No. 91 of 2006, decided on 23.8.2007), held in a somewhat similar case, that the complaint was not maintainable under the Consumer Protection Act, 1986. This Commission held: 2. We have heard Mr. K.P.S. Rao for the complainants on admission. Evidently, ground, first and second floors in Town Houses and apartment No. 308B in Hamilton Court were purchased by the complainants for earning profits and transaction is thus relatable to commercial purpose and complainants not being the "consumers" within the meaning of Section 2(1)(d) of Consumer Protection Act, 1986, the complaint itself is not maintainable under the Act. Moreover, for adjudicating the claim made, voluminous evidence will be needed and the complaint, therefore, cannot be decided in summary procedure under the Act.
It had therefore, disposed of the complaint, with liberty to the complainant to approach Civil Court.
THE said order has since been upheld by the Hon''ble Supreme Court, as Civil Appeal Nos. 6030 -6031 of 2008, vide order dated 29.9.2008. This Bench also, took the same view in another case reported in Singhal Finstock (P) Ltd. Through its Director I.C. Singhal & Ors. v. Jaypee Infratech Ltd. Through its Director, IV : (2012) C.P.J 330 (NC), in Consumer Complaint No. 250 of 2012, decided on 1.10.2012, as under: The word "commercial" according to the Oxford Dictionary, means viewed as a matter of profit and loss. The word "purpose" means "object which is in view or for which is made", "aim", "amend". The word "Commercial purposes" would, therefore, cover an undertaking the object of which is to make a profit out of the undertakings. (Municipal Board, Unnao v. The State of U.P.,, 1957 All. L.J. 479 at 498). According to Oxford Dictionary, it means "Viewed as a matter of profit or loss.
The word "commercial" is defined in the Concise Oxford Dictionary, New Edition of the 1990, at page 227, the word "Commercial" is defined as ''having profit as a primary aim rather than artistic, etc. value (Vide Dena Bank, Ahmednagar v. Prakash Birbhan Katariya, : AIR 1994 Bom. 343 at p. 345).
Thus, collection of rent is earning profits. In the facts of the present case, we maintain the same view, and while dismissing the complaints, as not maintainable, reserve the rights of the complainants to approach the appropriate Civil Court to seek their remedy, if so advised. They may take advantage of the ruling of the Supreme Court in the case of Laxmi Engineering Works v. P.S.G. Industrial Institute (supra), to seek exclusion of the time spent in prosecuting these complaints before this Commission.