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Person who has paid earnest money can be considered ‘consumer’

In CS Grewal v. M/s Taneja Developers and Infrastructure Ltd., the appellant had applied to the respondent for allotment of a plot of land and had made an advance payment for the same. He communicated to the respondent a change in his address via to letters but no reply was received. He then sent an email which was acknowledged and a proof of the change was demanded. The appellant replied stating that he had provided the proof in the previous letters but there was again no reply from the respondent. The petitioner approached the district consumer forum which directed the respondent to allot said land to the appellant but the respondent challenged the district forum’s pecuniary jurisdiction in the state commission which set aside the order.

The said complaint was ordered to be dismissed by the State Commission on the ground that the appellant/complainant C.S. Grewal did not fall under the definition of 'consumer' u/s 2(1)(d) of the Act and hence, the consumer complaint was not maintainable.  It was held by the State Commission that the complainant had only applied for an allotment of plot and his application had not matured into an 'allotment' and hence, he could not be called a 'consumer'.

On appeal the NCDRC perused the evidence and observed that though the builders did send a letter of allotment to the petitioner, they later cancelled it via another letter, but it was incorrect on part of the state commission to hold that this did not amount the petitioner’s request for allotment turning into an actual allotment. Though the same was cancelled the payment of earnest money did make him a consumer, and the case at hand could not be equated to the Krishan Pal case where the matter involved deposition of merely registration amount and not earnest money.


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