Sunil Kohli & Anr vs M/S. Purearth Infrastructure Ltd

Sunil Kohli and his wife Meenakshi Kohli have filed the instant complaint on the following allegations:-

It is alleged that the complainants are non-resident Indians presently residing in Denmark. They intend to shift to India. Thus with the intention to

earn their livelihood they booked shop No.P-3-115 having super area 1095 sq. ft. @ 9900 per sq. ft. Total consideration payable for the shop was

Rs.1,08,40,500/-. As per the terms and conditions of the agreement the opposite party had assured to give possession of the shop to the complainants

within two years from the date of commencement of construction. The consideration amount was payable in following manner: -

“i. At Booking 20% of the basic sale price

ii. Within 30 days of booking 20% of the basic sale price

iii. Within 60 days of booking 20% of the basic sale price

iv. Within 90 days of booking 12.5 of the basic sale price.

v. On completion of common Area Flooring 7.5% of the basic sale price

vi. On completion of Façade 7.5% of the basic sale price

vii. On completion of Services 7.5% of the basic sale price

viii. On offer of possession 5% of the basic sale priceâ€​

It is alleged by the complainants that they paid installments of Rs.21,61,100/- on 10 th August, 2007, 10 th September, 2007 and 4 th October, 2007.

They also paid installments amounting to Rs.13,55,063/- on 2.11.2007 and Rs.8,13,038/- on 6 December, 2007. The opposite party thus on receiving

80% of the consideration amount sent two sets of agreement for signatures of the complainants which were signed and returned back to the opposite

party on 10 th March, 2008.

On 18.6.2009 the complainant by way of e-mail sought information about the status of the project as also the date by which the opposite party

proposed to deliver possession of the subject unit. The opposite party vide e-mail dated 29.6.2009 informed that the plaza was ready for possession

except that completion certificate was awaited. Thereafter, on 9 th July, 2009 the opposite party demanded last installment of Rs.5,42,025/- against the

sale consideration which was also paid. It is alleged that despite having received 100% payment of the consideration amount the opposite party has

failed to deliver possession of the subject unit even years after the expiry of the stipulated date of deliver of possession. Claiming this to be unfair

trade practice and deficiency in service on the part of the opposite party, the complainants have raised the consumer dispute seeking following prayer:

-

“i) Direct the OP to pay Rs.1,11,30,501/- (Rupees one crore eleven lakhs thirty thousand five hundred and one) towards compensation which has

become due as on today;

ii) Direct the OP to give possession and title of the said shop to the complainants;

iii) Direct the OP to account for or refund Rs.2,85,131/- with interest of 18% in case the said money has not been accounted for or not paid for

construction of fly over;

iv) Pay compensation of Rs.20,00,000/- for the financial loss, mental and physical agony;

v) Pay Rs.3 lacs towards litigation cost.â€​

The opposite party in its written statement has raised preliminary objection as to locus standi of the complainants to file the complaints on the plea

that the subject shop was booked by the complainants for commercial purpose. Therefore, they cannot be termed consumers as envisaged under

section 2 (1) (d) of the Consumer Protection Act, 1986. So far as merits of the case are concerned, the booking of the shop by the complainants, the

agreed consideration amount as also the payment made by the complainants against the consideration amount in instalments have not been denied.

According to the opposite party, there is no deficiency on its part. It is alleged that the agreement for sale of the subject unit was entered into between

the parties in March 2008 and the completion certificate for the project i.e. Plaza-3 was applied in November 2008. Had the opposite party received

completion certificate in the year 2008, the possession would have been given to the complainant either in 2008 or early 2009.

The government agencies took very long time to give sanction / approval which was beyond the control of the opposite party. The opposite party

received the completion certificate in September 2010 while the opposite party was gearing up for giving possession to the respective allottees, MCD

revoked the completion certificate and sealed the Plaza. This led to litigation. Finally with the intervention of Court, Plaza was desealed in May 2012

and completion certificate was restored. Since then opposite party has been delivering possession of the respective units to the purchasers and by the

date of filing of written statement, 100 sale deeds have been registered in favour of the allottees in Plaza-1 and Plaza-3. It is alleged that complainants

were offered possession of the subject shop in June 2012 but they did not come forward for taking possession and execution and registration of sale

deed. The case of the opposite party, therefore, is that it was prevented from delivering possession of the subject shop to the complainants within the

stipulated period because of non-availability of completion certificate from the concerned authorities which cannot be termed as deficiency in service.

Both the parties submitted evidence in the form of affidavit in support of their respective claim.

We have heard counsel for the parties and perused the record.

The first question which needs to be answered is whether or not the complainants are consumers for the purpose of Consumer Protection Act,

1986 and if not whether the complainant is maintainable?

Learned Shri Gaurav Mitra, Advocate for the opposite party has contended that undisputedly the complainants had booked an industrial unit in the

development project undertaken by the opposite party. From this it is evident that services of the opposite party were hired/availed by the complainants

for commercial purpose, as such in view of the inbuilt exception in the definition of “Consumerâ€​ the complainants cannot be termed as consumers.

That being the case they have no locus standi to maintain the consumer complaint and the complaint is liable to be dismissed.

Learned counsel for the complainants on the contrary has taken us through the definition of “Consumer†as provided under Section 2 (1) (d)

of the Consumer Protection Act, 1986 and submitted that the complainants had booked the subject premises with the intention to use the same for

self-employment for earning their livelihood. Therefore, their case is covered under the explanation to the definition of “Consumer†and they are

not excluded from the definition of Consumer. Expanding on the argument, learned counsel for the complainants has submitted that the complainants

intended to run the business of distribution of “Change of Scandianvia Products in India†from the said premises. In support of the above, learned

counsel for the complainants has drawn our attention to annexure C-1 to the complaint i.e. certificate issued by Shri Claus Walther Jenson, CEO of

Change of Scandinavia confirming that the complainant Sunil Kohli has required the rights for distribution of change, Chic and Charade products in

India.

In order to appreciate the contention of the parties, it would be useful to have a look on definition of term “Consumer†as provided under

Section 2 (1) (d) of the Act. The definition is reproduced as under: -

“(d) ""consumer"" means any person whoâ€

(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 prom-ised, 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 .â€" 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-employmentâ€​

On a bare reading of the above, it is clear that the consumer is a person who buys any goods or hires or avails of any services for consideration

but does not include a person who buys goods or hires or avails or services for any commercial purpose.

Stand of the complainants is that they had booked a shop in the development project Plaza-3, Central Square, Bara Hindu Rao, Delhi undertaken

by the opposite party. From this it is evident that the services of the opposite party were hired/availed by the complainants for purchasing a

commercial unit, therefore in view of the exception carved out in the definition the complainants are excluded from the definition of consumer for the

purpose of the Act, unless their case is covered under the exclusion clause to Section 2 (1) (d) of the Act.

The explanation to the definition of consumer reproduced above gives a restricted meaning to the term “Commercial purpose†by providing

that “Commercial purpose†does not include use by a person of goods bout and used by him and services hired/availed by him exclusively for the

purpose of earning his livelihood by means of self-employment.

The stand of the complainants is that their case is squarely covered under the explanation because they had booked the said shop with the intention

to earn their livelihood by opening a store of “lingerie†by the brand name of “Change†in the said shop. In order to prove the aforesaid fact,

the complainants are relying upon a certificate reiterated to have been issued by the CEO of “Change of Scandinavia Products in Indiaâ€.

Aforesaid certificate reads as under: -

 “CHANGE

To whom it may concern

Change of Scandinavia A/S

Farum Gydevej 73,

DK0-3520 Farum

Tel: (+45) 44990230

Fax: (+45) 44990234

E-mail: ewjachange.com

Reg. No.: 18563703

2006-08-04

Reg.: Distribution of right’s for Change of Scandianvia Products in India

As CEO of Change of Scandinavia A/S I hereby confirm that Mr. Sunil Kohli has required the rights for distribution of Change, Chic and Charade

products in India.

The rights are valid until further notice is given.

Kind Regards,

Change of Scandinavia A/S

Claus Walhter Jensenâ€​

On reading of the above, it appears that this certificate certifies that complainant Sunil Kohli was given rights of distribution of change, chic and

charade products in India and the subject right was valid till further notice. The certificate is dated 26.8.2004. There is no evidence on record to show

that the complainants after 26.8.2004 undertook the distribution business at any given time before booking the subject premises in August, 2007. This

circumstance raises a strong suspicion against the correctness of the certificate. Under natural course of circumstances no business house would give

distribution rights of its products to someone who fails to take any initiative for distribution of the products of the said manufacturer for years together.

Had this certificate been genuine, there must have been some written contract between the parties i.e. the Change of Scandinavi Products and the

complainant No.1 defining the terms and conditions of the distribution rights. No such agreement has been placed on record.

Thus, under the circumstances, we are not inclined to accept the plea of the complainants that they had booked the subject premises with the intention

to open a shop for running a distributorship of the aforesaid products with a view to earn livelihood by means of self-employment. Thus, the case of

the complainants does not fall within the explanation to the definition of term “Consumerâ€. As the complainants had booked the commercial

premises, it can be safely concluded that they had hired/availed of the services of the opposite party for commercial purpose, as such they are not the

consumers as envisaged under Section 2 (1) (d) of the Act. As the complainants are not consumers, they have no locus standi to file the consumer

complaint. Consequently, the complaint is dismissed as not maintainable.

This order will not come in the way of the complainants to avail of their remedy by approaching the appropriate Fora.