Rahul Jain vs M/S. Exact Developers & Promoters Ltd

Heard Mr. Raunak Jain, Advocate, for the complainant and Dr. Bipin K. Dwivedi, Advocate, for the opposite party.

Rahul Jain has filed above complaint for directing the opposite party to (i) refund Rs.6264063/- with interest @18% per annum from the date of respective deposit till its realization; (ii) pay Rs.1000000/-, as compensation for mental agony and harassment; (iii) pay Rs.200000/- as litigation costs; and (iv) any other relief which is deemed fit and proper in the facts and circumstances of the case.

The complainant stated that M/s. Exact Developers & Promoters Limited (the opposite party) was a company, registered under the Companies Act, 1956 and engaged in the business of development and construction of group housing project/commercial building and selling its unit to the prospective buyers. The opposite party launched a project of commercial building, in the name of “The Ace”, at village Lakhnaula, CIP Manesar, on NH-8, Gurgaon, in the year 2007 and made wide publicity of its facilities and amenities. The complainant was earning his livelihood by trading steel products in Kanpur, Uttar Pradesh. The complainant felt need and requirement to open an office in Gurgaon region as this region was booming in infrastructure and real estate sectors and this office space would be closer to his prospective customer base and to secure orders of steel products and to earn his livelihood. Believing upon the representations of the opposite party, the complainant booked a commercial space on 06.02.2007 and deposited booking amount of Rs.1650000/-. The opposite party vide Provisional Allotment Letter dated 25.04.2007, allotted Unit No.504 Tower-A, super area 1055 sq.ft. total consideration of Rs.6593750/- and executed Buyer’s Agreement on 07.12.2007. Payment plan was “construction link payment plan”. The complainant paid the instalments on time as per demand of the opposite party and paid Rs.6264063/- till October, 2011. Clause-15 of the agreement provides that the opposite party shall deliver possession within a period of 24 months from the date of the agreement or approval of building plan, whichever is later. The date of agreement was later and period of 24 months expired on 06.12.2009. The opposite party did not make any communication during November, 2011 to January, 2013. The opposite party issued a letter dated 28.01.2013, for taking fit-out possession with demand of Rs.329687/- in the head of balance consideration and in various other heads. The complainant, through email dated 30.01.2013, sought for adjusting delay compensation payable to him and the details of the amount payable in the heads of EDC+IDC, covered car parking charges, Interest Bearing Maintenance Security and electric meter charges. Thereafter, the complainant made various telephone calls in the office of opposite party in that respect but no suitable reply was given. The complainant wrote another emails dated 17.04.2013 and 26.04.2013, in this respect, which were not responded. The complainant visited the site in September, 2013 and found that the construction was incomplete and proceeding as snails pace. The complainant then wrote email dated 18.09.2013, for refund of his entire amount with interest due to inordinate delay. The complainant gave a legal notice dated 09.08.2014, for refund of his amount with interest. In spite of service of the notice, money was not refunded then the complainant filed CC/479/2014 praying for refund with interest, before Delhi State Consumer Disputes Redressal Commission, who, vide order dated 01.09.2017, returned the complaint holding that it had no pecuniary jurisdiction. Then this complaint was filed on 12.09.2017, alleging deficiency in service. The complainant alleged that due date of possession expired in December, 2009 while “occupation certificate” was issued on 27.03.2014. There was more than four years delay but the opposite party did not give any delay compensation although realized 95% of the consideration till October, 2011. The construction was incomplete even in September, 2013. There is no provision for fit-out possession in the agreement, as such offer of fit-out possession vide letter dated 28.01.2013 was illegal.  Inspite of repeated request, the opposite party did not supply the details of other demand.

The opposite party filed written reply on 06.11.2018, in which, booking of the commercial space, allotment of the commercial space, execution of the agreement and deposits made by the complainant, have not been denied. The opposite parties stated that the Director, Town and Country Planning, Haryana, granted permission to change the land use of the project land on 28.12.2004 and 08.02.2005 and approved building plan on 28.12.2005. The opposite party obtained Environmental Clearance from Ministry of Environment and Forests on 20.07.2007. Director, Town and Country Planning, Haryana approved revised building plan on 22.05.2008. Airport Authority of India gave NOC on 27.06.2008. The opposite party gave contract for construction to M/s. S.P. Contract Pvt. Ltd. The project land was outside the limits of Municipal Corporation Gurgaon. Urban Planning and Development Haryana took time in approval of Zonal Plan. In spite of deposit of External Development Charges, HUDA took time in development of external infrastructure. M/s. S.P. Contract Pvt. Ltd. also created dispute and delayed the construction. Punjab and Haryana High Court, vide order dated 21.08.2012 passed in CWP No.20032 of 2008, banned use of ground water in construction. Department of Town and Country Planning, Haryana took about one year in providing STP water for construction. During that period, the construction work was stopped. STP water required carriage in tanker, due to which the work had become slow and cost has increased. Haryana State Pollution Control Board used to stop civil construction work time to time for environmental reasons. The opposite party completed construction and offered fit-out possession on 28.01.2013 but the complainant did not turn up to take possession. The opposite party applied for issue of “occupation certificate” on 31.01.2013. Fire NOC was issued on 28.08.2015 and “occupation certificate” was issued on 04.11.2015. The opposite party offered possession to the complainant vide letter dated 05.04.2016. The opposite party supplied Final Statement of his Account on 29.04.2016, in which, delay compensation of Rs.601472/- was credited. The opposite party issued reminder dated 22.07.2016 for taking possession. Delay was caused for the reasons beyond the control of the opposite party and liable to be condoned under clause-15 of the agreement. Various queries and legal notice of the complainant were replied time to time. The complainant is a speculative investor and now the market in real estate has gone down as such the complaint was filed for refund with interest @18% per annum. The complainant booked commercial space for expansion of his business with a motive to increase profit. The complainant does not fall within the meaning of ‘consumer’ and the complaint is not maintainable. There was no deficiency in service on the part of the opposite party and the complaint is liable to be dismissed.

The complainant filed Rejoinder Reply, Affidavit of Evidence of Rahul Jain and documentary evidence. The opposite party filed Affidavit of Evidence of Sushil Kumar and documentary evidence. Both the parties have filed written synopsis. The opposite party raised a preliminary objection that the complainant had booked commercial space for expansion of his business with a motive to increase profit and he does not fall within the meaning of ‘consumer’ and the complaint is not maintainable.

I have considered the arguments of the counsel for the parties and examined the record. The word “consumer” has been defined under Section 2(1)(d) and word “service” has been defined under Section 2(1)(o) of the Consumer Protection Act, 1986, (hereinafter referred to as the Act) which are quoted below:-

Section-2 (1) (d).- “consumer” mean 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 and partly promised, or under any system of deferred payment, when such use is made with 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 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 such services for any commercial purpose;

Explanation.- For the purpose 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 livelihood by means of self-employment.

Section 2(1) (o):- “service” means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service;”

The term “housing construction” was added by Act No.50 of 1993, under Section-2(1)(o) of the Act. Earlier the Explanation was added by Act No. 50 of 1993 w.e.f. 18.06.1993 under Sction-2(1)(d)(i) of the Act. By Act No. 62 of 2002, w.e.f. 15.03.2003, Section-2(1)(d) (ii) was also amended and the term “but does not include a person who avails such services for any commercial purpose” was added in it and the Explanation was placed in last.

Scope of the expressions “commercial purpose” and “exclusively for the purposes of earning livelihood by means of self-employment” came up for consideration before Supreme Court in relation to purchase of goods in Laxmi Engineering Works Vs. P.S.G. Industrial Institute, (1995) 3 SCC 583. In which, it has been held that the Explanation was an exception to an exception. Expression “commercial purpose” has not been defined, as such, its dictionary meaning has to be taken into consideration. “Commerce” means financial transaction, especially buying and selling of merchandise on large scale. In view of the Explanation the term “large scale” has no significance. As the Explanation excludes the transaction which was done for “exclusively for the purposes of earning livelihood by means of self-employment”, from the purview of commercial purpose as such purchase of commercial goods for earning livelihood by means of self-employment, will not exclude such a buyer from the purview of the “consumer” so long as it is used by the buyer or his family members or with the help of one or two other persons. It is question of fact and has to be decided in each case independently.

The interpretation of the phrase “commercial purpose” again came up for consideration in Lilavati Kirtilal Mehta Medical Trust Vs. Unique Shanti Developers and others, (2020) 2 SCC 265, Supreme Court has given various guidelines for deciding the commercial purposes i.e (i) manufacturing/industrial activities or business-to-business transactions between the commercial entities. (ii) the purchase of the good or service should have close and direct nexus with a profit-generating activity then it would be terms as “commercial purpose”. In Shrikant G. Mantri Vs. Punjab National Bank, (2022) 5 SCC 42, held that it is the purpose to which the goods so bought or put is material for deciding as to whether it was for commercial purpose or not. The legislative intent is to keep the commercial transactions out of the purview of the said Act. In National Insurance Company Limited Vs. Harsolia Motors, 2023 SCC OnLine SC 409, held that the goods purchased or services availed should be used in any activity directly intended to generate profit, which is main aim of commercial purpose, in order to apply exception. In Sunil Kohli Vs. Purearth Infrastructure Ltd., (2020) 12 SCC 235, where commercial space was booked for doing business by way of self-employment, Supreme Court held that this case falls within Explanation to Section-2(1)(d) of the Consumer Protection Act, 1986.

In the light of aforesaid principles, the present case has to be examined. The complainant stated that he was earning his livelihood by trading steel products in Kanpur, Uttar Pradesh. The complainant felt need and requirement to open an office in Gurgaon region as this region was booming in infrastructure and real estate sectors and this office space would be closer to his prospective customer base and to secure orders of steel products and to earn his livelihood. The complainant has filed his Trade Tax Registration Certificate, showing that he was doing business in the name of “M/s. The Indian Steel & Metal Product” in Kanpur and registered with Sale Tax Department since 18.06.1987. From above admissions, it proved that the complainant was earning his livelihood from “M/s. The Indian Steel & Metal Product” in Kanpur since 1987. He booked the present commercial space, availing the services of opposite party for “commercial purpose”, as dominant purpose was for expanding his business on large scale and generating profit and not exclusively for earning livelihood by way of self-employment. As such Explanation of Section 2(1)(d) is not attracted in this case and the complainant is not a “consumer” and the complaint is not maintainable.

A four Members Bench of this Commission in Synco Textiles Pvt. Ltd. Vs. Greaves Colton & Company Ltd., 1990 SCC OnLine NCDRC 3, held that the expression “for any commercial purpose” are wide enough to take in all cases, where goods are purchased for being used in any activity directly intended to generate profit. Going to the plain dictionary meaning of the words used in the definition section, the intension of the Parliament must be understood to be to exclude from the scope of the expression ‘consumer’ any person who buys goods for the purposes of their being used in any activity engaged on a large scale for the purposes of making profit. The Parliament wanted to exclude from the scope of the definition not merely persons who obtains goods for resale but also those who purchase goods with a view of using such goods for carrying on any activity on a large scale for the purposes of earning profit. This judgement has been approved in Laxmi Engineering’s case (supra). This view has again affirmed in Shrikant G. Mantri’s case (supra).

ORDER

In view of aforesaid discussions, the complaint is dismissed as not maintainable, with liberty to approach appropriate forum for required relief.