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Tenants of buildings under redevelopment are consumers

More and more old and dilapidated buildings are going in for redevelopment. The builder makes money by selling flats to new purchasers, but considers it onerous to provide accommodation to the existing tenants without charging money. Since free services are excluded from the purview of the Consumer Protection Act, would the tenants be entitled to file a consumer complaint for deficiency in service against a builder?

Case Study: Jagdishbhai had a tailoring shop on tenancy basis in Moon House. The landlord sold the property to Surbhih Realtors, which decided to demolish the old building and construct a commercial property. Jagdishbhai was to be given shop no. 1 admeasuring 26.29 sq m in the new property in lieu of his existing shop. An agreement was executed, under which the builder agreed to bear expenses of registration of the sale deed. Possession of the shop was to be given in a month. In case of delay, the builder had agreed to pay Rs 10,000 per month.

The builder failed to give possession of the shop and offered an alternative one on the rear side of the complex. Since it was not acceptable to Jagdishbhai, he filed a complaint before the district forum for a direction to the builder to hand over shop no. 1 and to pay Rs 10,000 per month for the delay. The builder opposed the maintainability of the complaint, contending that Jagdishbhai was not a consumer since the transaction did not involve any payment or consideration. The builder argued it was a landlord-tenant dispute and not maintainable before the consumer forum.

 Article referred: http://timesofindia.indiatimes.com/city/mumbai/Tenants-of-buildings-under-redevelopment-are-consumers/articleshow/44796079.cms

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