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‘Consumer protection is for consumers not commerce’

Saavi Gupta had purchased four properties including a penthouse apartment from Omxame Azorim Developers. Her father, Dr Sanjeev Gupta, had contributed money for its purchase and was dealing with the builder on her behalf. Till November 2010, the Guptas paid several instalments but these were not been paid by the due dates.

In December 2010, the builder sent a letter intimating that the price of the penthouse apartment had been revised from Rs 4.04 crore to Rs 4.35 crore. By this time the Guptas had already paid Rs 2.17 crore, which was more than half its cost. The Guptas protested against the unilateral revision in price. The builder did not pay heed but merely extended the time for making payments and thereafter cancelled the booking. The Guptas then filed a complaint before the National Commission, claiming they should be re-allotted the ap artment at the original rate, or be awarded a compensation of Rs 5 crore, along with 24% interest.

The Commission observed that all the four properties had been booked in the same name. In his affidavit, Dr Gupta had explained that the penthouse apartment was purchased to improve his daughter Saavi's future and marriage prospects; the second property was purchased for himself, his wife and his parents and the third property was purchased for his minor son. The Commission noted that the affidavit was silent about the fourth property. The maintainability of the dispute would hinge on whether the Guptas could be termed "consumers" or not. This required the Commission to ascertain the objective in purchase of the four properties, viz. to earn profits; for self-employment or for own use.

The Commission considered several of its own judgements and those of the Supreme Court. In Bihar School Examination Board v/s Suresh Prasad Sinha [IV (2009) CPJ 34 (SC)], the apex court held that a consumer is a person who avails any service for consideration, but would exclude those who avail of services for commercial purpose. In Monstera Estate Pvt. Ltd. v/s Ardee Infrastructure Pvt. Ltd. [IV (2010) CPJ 299 (NC)], the National Commission had held that purchase of space by a company for its showroom would be construed as a service for "commercial purpose", which would take the dispute out of the ambit of the Consumer Protection Act. The Commission, dismissing the complaint, held that the Guptas could not be conside red consumers as the properties had been purchased as an investment.

Impact: A person who invests in real estate to earn income or benefit from capital appreciation would be an investor. A consumer is one who buys goods or avails of service for his own use. A consumer complaint can be filed only if a buyer fits within the definition of consumer, otherwise his remedy lies before a civil court.

Article referred: http://timesofindia.indiatimes.com/City/Mumbai/Consumer-protection-is-for-consumers-not-commerce/articleshow/27761685.cms

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