M/s INDRAPRASTHA PROMOTERS (P) LTD vs M/s UNITECH LIMITED

Additional evidence by way of affidavit has been filed by the opposite party, which is taken on record. The complainant which is a company incorporated under the Provisions of the Companies Act 1956, booked a residential plot which the opposite party was to develop in its Uniworld City Project in Sector- 97, 106 &107 of Mohali, Punjab, on 31.01.2008, paying a sum of Rs. 12,50,000/- to the opposite party. The said opposite party provisionally allotted plot no. 79 admeasuring 420 sq. mtr. in block-A in Sector 106, to the complainant Company. As per the terms and conditions for registration of provisional allotment, the possession of the plot was to be delivered by the opposite party to the complainant within 36 months from the date of signing of the agreement to sell, subject to force-majeure circumstances and upon registration of the sale

deed, provided all the amounts due and payable had been paid to the opposite party. Another condition of the registration was that the opposite party would pay to the allottee Rs. 50 per sq. yard per month of area of the plot, for any delay in offering possession of the plot beyond the period stipulated therein, subject to force-majeure event. The payment schedule agreed between the parties envisaged payment of Rs. 62,22,010/- in 12 instalments. Admittedly, the complainant paid 11 instalments, whereas the 12 and final instalment was to be paid on the final notice of possession which the opposite party th never issued to the complainant.

Vide letter dated 22.08.2012, the complainant requested the opposite party to transfer the said plot in the personal name of its two Directors namely Mr. Somesh Rai Sahgal and Mrs. Shobhna Sahgal. The opposite party informed the complainant that though every transfer of allotment was subject to transfer charges, they could, as an exception case, allow the transfer of the allotment of plot in the personal name of its two Directors, subject to payment of token money of Rs. 5,000/- plus service tax. Since the possession of the plot has not been delivered to the complainant despite expiry of the time period stipulated at the time of allotment, the complainant is before us by way of this complaint, seeking refund of the amount which it has paid to the opposite party, alongwith rental loss compensation, cost of litigation etc.

The complaint has been resisted by the opposite party, inter-alia, on the ground that the complainant is an investor and not a Consumer within the meaning of Consumer Protection Act.

A perusal of the Memorandum of Association of the complainant Company would show that its main objects are as under:- (i) To acquire by purchase, exchange or otherwise, free hold or lease hold lands and to construct houses and building and to hold or to sell, to give on ownership let, alienate, or otherwise deal with all or any of such lands, lenements or premises and to carry on the business of proprietors of flats, maisonnetts, dwelling houses, shops and offices.

(ii) To carry on the business as construction contractors including irrigation civil, electric, sanitary contractors and government contractors."

It would thus be noted that purchasing land, raising construction on it and then selling flats etc. is one of the main objective behind incorporation of the complainant Company.

The resolution dated 10.04.2006, passed by the complainant Company, the authenticity of which was admitted by the learned counsel for the complainant during the course of hearing, reads as under:- "Resolved that the company invest money for purchase of properties from Unitech Limited for their projects at different places, as may be decided, from time to time, by Shri Somesh Rai Sahgal and/or Smt. Shobhna Sahgal and/or Shri Shekhar Sahgal, Directors of the company, and the said three Directors or any of them be and are hereby authorised to take all the necessary steps on behalf of the company for making the said investments for purchase of properties and/or to sell the same from time to time including signing all the required documents for the purpose of buying or selling."

The above referred resolution when read in the light of the objectives for which the complainant Company was incorporated clearly shows that the plot in question was acquired by the complainant Company as a business investment, which amounts to commercial purpose. The complainant before us is a Company, engaged in the business of buying, developing and selling immovable properties. This is not a case of an individual investing his surplus funds in purchase of a plot or a flat. Therefore the purchase made by the complainant was purely a business activity. Though, vide its letter dated 22.08.2012, the complainant Company requested the opposite party to transfer the aforesaid plot in the name of its two Directors, that request would hardly be relevant since the services of the opposite party were hired or availed by the complainant for commercial purpose. There is absolutely no evidence to show that the plot in question when booked with the opposite party, was acquired for the bonafide residence of the Directors of the complainant Company. The resolution referred above leaves no reasonable doubt that the said plot was acquired as a business investment considering the objectives of the complainant Company. In fact, even in the letter dated 22.08.2012, the complainant clearly maintained that they had invested in the Mohali project of the opposite party. The complainant Company had booked a residential accommodation in a project which Unitech Buildtech Ltd., a sister concern of the opposite party was developing in Kelam Bakkam Road, Chennai who had paid Rs. 10 lakhs to the aforesaid Company. Vide letter dated 07.11.2008, the complainant Company requested Unitech Buildtech Ltd. to either refund the amount of Rs. 10 lakhs which it had paid for allotment of a flat in the above referred project or in the alternative transfer the aforesaid amount to the Uniworld City, Mohali Project of Unitech Ltd. This is yet another proof that the complainant Company has been investing in real estate projects as its business and the plot in question was one such investment made by it.

The learned counsel for the complainant submits that since the complainant Company had requested the opposite party to transfer the plot in question in the personal name of its two Directors and the opposite party had also agreed to the said transfer vide its letter dated 04.10.2012, the acquisition of the plots was for the residence of the Directors and not for earning profit by selling it at a later date. We, however, find ourselves unable to accept the said contention. What is relevant for the purpose of Consumer Protection Act is as to whether the services were hired or availed for a commercial purpose or not. At the time, the plot in question was booked by the complainant with the respondent Company, it was booked as a business investment as would be evident from the resolution dated 10.04.2006. It was not intended to be used for the residence of the Directors. Had the intention been to acquire the plot for residence of its Directors, the resolution passed by the complainant Company would not have referred to the money paid by the Company as an investment. There is no indication in the resolution dated 10.04.2006 that the plot booked with the opposite party was to be used for residence of the Directors of the Company. Moreover, a plot could have been used by the complainant Company for residence of its Directors only after it had raised super structure on it. A vacant plot could not have been used for the residence of the Directors. The very fact that the complainant Company vide letter dated 22.08.2012 sought to transfer the plot in the name of the Directors, is a clear indicator that the acquisition of the plot was not for the residence of the Directors.

About four years had already passed since the letter dated 22.08.2012 was written. The time for handing over the possession of the plot had already expired by that time. Obviously the complainant Company was seeking to make out a case for approaching the Consumer Forum by getting the plot transferred in the name of its Directors knowing it fully well that it would be difficult for it to file a complaint in its own name before a Consumer Forum. Be that as it may, the relevant date for deciding whether the complainant is a Consumer within the meaning of Consumer Protection Act, being the date on which the services are hired or availed, there is no escape from the conclusion that the complainant had hired or availed the services of the opposite party for a commercial purpose.

For the reasons stated hereinabove, the complaint is dismissed. We, however, make it clear that dismissal of the complaint shall not come in the way of the complainant approaching a forum other than a Consumer Forum for the redressal of its grievances.