State Consumer Disputes Redressal Commission
Manisha Gosain vs M/S Ocus Skyscrapers Relaity Ltd. on 7 May, 2021
IN THE DELHI STATE CONSUMER DISPUTES REDRESSAL COMMISSION
JUDGMENT RESERVED ON: 18.03.2021
JUDGMENT PRONOUNCED ON: 07.05.2021
COMPLAINT NO. 581/2017
IN THE MATTER OF
MRS. MANISHA GOSAIN .......COMPLAINANT
VERSUS
M/S OCUS SKYSCRAPERS REALTY LTD. ....OPPOSITE PARTY
CORAM:
HON'BLE DR. JUSTICE SANGITA DHINGRA SEHGAL
(PRESIDENT)
HON'BLE SH. ANIL SRIVASTAVA, (MEMBER)
Present: Mr. Ruchin Midha, Counsel for the Complainant.
Mr. Vishal Chaudhary, Counsel for the Opposite Party.
PER: HON'BLE DR. JUSTICE SANGITA DHINGRA SEHGAL,
PRESIDENT
JUDGMENT
[Via Video Conferencing]
1. Brief facts necessary for the adjudication of the present complaint are that in February, 2013 the complainant booked a commercial space in the Opposite Party's project "OCUS 24K" located at Sohna Road, Sector 68, Gurgaon, Haryana.The Complainant paid a registration amount of Rs. 4,00,000/- vide cheque bearing No. 209331 to the Opposite Party.
CC 581/2017 Page 1 of 152. Vide letter dated 28.05.2013, the Opposite Party provisionally allotted Unit No. UG-186 admeasuring 361 sq.ft. on the upper ground floor of the Opposite party's project.
3. Subsequently, on 27.06.2013, the complainant made further payment to the extent of Rs. 7,17,542/- vide cheque No. 084713 to the Opposite Party. The Complainant had paid a total amount of Rs. 11,17,542/- even before execution of the Builder Buyer Agreement.
4. Pursuant to this, the Buyer's Agreement was executed between the parties on 24.12.2013 for the aforesaid commercial unit. The total sale consideration payable for the aforesaid unit was agreed at Rs. 42,94,095/-. The Complainants opted for Construction linked payment plan which has been produced below for ready reference:-
S.No. Installment Amount Payable
1. On booking Rs. 3,59,195/-
2. On confirmation of booking Rs. 0.00/-
3. Within 45 days of Allotment Rs. 7,18,390/-
4. On 1st January, 2014 or on casting of Rs.91,6940/-
floor slab of basement Level two (whichever is later)
5. On casting of Ground Floor Slab Rs. 7,18,390/-
6. On casting of Second Floor Slab Rs. 3,95,195/-
7. On Plaster Rs. 3,95,195/-
8. On Elevation Rs. 3,95,195/-
9. On offer to handover possession Rs. 5,03,595/-
TOTAL Rs. 42,94,095/-
CC 581/2017 Page 2 of 155. The Opposite Party raised further demands from the complainant vide their demand letters dated 14.04.2014, 12.06.2014, 12.08.2014 and 25.03.2015.
6. However, the complainant later came to know that the Opposite Party had not taken the necessary sanctions/approvals from the competent authority for construction of the aforesaid. Aggrieved by the same the complainant filed a complaint dated 06.02.2015 with the Hon'ble Chief Minister of Haryana and marked a copy to the Directorate of Town and Country planning , Haryana (hereinafter referred to as DTCP). The DTCP, vide its letter dated 30.03.2015, confirmed that the licence had not been provided to the Opposite party. The relevant portion of the reply of the DTCP has been produced below for ready reference:-
"The above mentioned complaint has been examined, wherein keeping in view the fact that the subject cited licence has not been issued in name of 'Ocus Skyscrapers Reality Ltd' though the colony is being developed by said company, it has been desired to know that whether the transactions done with said developer for commercial units in subject cited licence shall be safe or not. In case, the agreement done between licencee (i.e. Perfect Constech Ltd.) and the developer (Ocus Skyscrapers Reality Ltd) is illegal then request has been made to take appropriate legal action.
In view of above, it is to inform that as per record, the licence No. 76 of 2012 dated 01.08.2012 has been granted to Perfect Constech Ltd. for development of commercial complex and no approval has been taken from the Department for development of the same by Ocus Skyscrapers Reality Ltd. Accordingly, on the basis of the documents received from you on 10.02.2015, the matter is being got examined before taking necessary action as per Act/ Rules."CC 581/2017 Page 3 of 15
7. The Complainants then got served a legal notice dated 06.05.2015 upon the Opposite party and sought refund of the monies paid to the Opposite party.
8. Aggrieved by the aforesaid, the Complainant approached the District Forum, pursuant to which, the Opposite Party canceled the allotment of the complainant vide letter dated 18.01.2017.
9. The complaint was thereafter returned from the District Forum on the ground that it was beyond the pecuniary jurisdiction of the District Forum.The complainant then approached this commission alleging deficiency of services on part of the Opposite Party.
10. The Opposite Party has contested the present case and has raised certain preliminary objections as to the Maintainability of the complaint case. The Opposite Party has contended (a) that the complainant is not a "Consumer" as defined under the Consumer Protection Act, 1986 as the complainant has booked the said commercial unit to earn profits on investment and therefore, the same amounts to commercial purpose (b) that the Opposite Party has the necessary sanctions to construct the project and hence the Complainant has failed to establish any kind of deficiency in providing services by the Opposite Party. Pressing the aforesaid preliminary objections, the Opposite Party prayed that the present Consumer Complaint should be dismissed.
11. The complainant filed their Rejoinder rebutting the written statement filed by the Opposite Party. Both the parties filed their Evidence by way of Affidavit in order to prove their averments on record and the case was listed for Final Arguments.
12. We have heard the counsel for both the parties and perused through the material on record.
CC 581/2017 Page 4 of 1513. The fact that the complainant had booked a commercial unit with the Opposite Party is not in dispute from the evidence on record. Moreover, in its written statement, the Opposite Party has not denied the receipt of an amount of Rs. 11,17,542/- paid by the complainant, hence, the same stands unrebutted.
14. Before delving into the merits of the case, we deem it appropriate to adjudicate preliminary issues of law as to the maintainability of the consumer complaint.
COMPLAINANT- A CONSUMER OR NOT?
15. The first leg of argument of the Opposite Party is that the Complainant is not a consumer within the meaning of the Consumer Protection Act, 1986 and cannot invoke the provisions of the Act. The counsel for Opposite Party has alleged that the Complainant have booked the said unit for Commercial Purpose.
16. This aspect as to what constitutes "Commercial Purpose" has been elaborately dealt with by the Hon'ble Apex Court in Lilavati Kirtilal Mehta Medical Trust vs. Unique Shanti Developers and Ors. reported at (2020) 2 SCC 265. The relevant portion has been reproduced as under:
12. In Laxmi Engg. [Laxmi Engg. Works v. PSG Industrial Institute, (1995) 3 SCC 583] , which is one of the leading authorities on this point, a two-Judge Bench of this Court elucidated upon the meaning of "commercial purpose" as follows: (SCC pp. 591-92, paras 10-11) "10. A review of the provisions of the Act discloses that the quasi-judicial bodies/authorities/agencies created by the Act known as District Forums, State Commissions CC 581/2017 Page 5 of 15 and the National Commission are not courts though invested with some of the powers of a civil court. They are quasi-judicial tribunals brought into existence to render inexpensive and speedy remedies to consumers. ... The idea was to help the consumers get justice and fair treatment in the matter of goods and services purchased and availed by them in a market dominated by large trading and manufacturing bodies. Indeed, the entire Act revolves round the consumer and is designed to protect his interest. The Act provides for "business-to-
consumer" disputes and not for "business-to- business" disputes. This scheme of the Act, in our opinion, is relevant to and helps in interpreting the words that fall for consideration in this appeal.
11. ... Controversy has, however, arisen with respect to meaning of the expression "commercial purpose". It is also not defined in the Act. In the absence of a definition, we have to go by its ordinary meaning. "Commercial" denotes "pertaining to commerce" (Chamber's Twentieth Century Dictionary); it means "connected with, or engaged in commerce; mercantile; having profit as the main aim"
(Collins English Dictionary) whereas the word "commerce" means "financial transactions especially buying and selling of merchandise, on a large scale" (Concise Oxford Dictionary). The National Commission appears to have been taking a consistent view that where a person purchases goods 'with a view to using such goods for carrying on any activity on a large scale for the purpose of earning profit' he will not be a "consumer"
within the meaning of Section 2(1)(d)(i) of the Act. ... The Explanation reduces the question, what is a "commercial purpose", to a question of fact to be decided in the facts of each case. It is not the value of the goods that matters but CC 581/2017 Page 6 of 15 the purpose to which the goods bought are put to. The several words employed in the Explanation viz. "uses them by himself", "exclusively for the purpose of earning his livelihood" and "by means of self-
employment" make the intention of Parliament abundantly clear, that the goods bought must be used by the buyer himself, by employing himself for earning his livelihood."
(emphasis supplied)
13. In the aforementioned discussion in Laxmi Engg. [Laxmi Engg. Works v. PSG Industrial Institute, (1995) 3 SCC 583] , this Court relied upon Synco Textiles (P) Ltd. v. Greaves Cotton and Co. Ltd. [Synco Textiles (P) Ltd. v. Greaves Cotton and Co. Ltd., 1990 SCC OnLine NCDRC 3 : (1991) 1 CPJ 499] In Synco Textiles [Synco Textiles (P) Ltd. v. Greaves Cotton and Co. Ltd., 1990 SCC OnLine NCDRC 3 : (1991) 1 CPJ 499] , a four-Member Bench of the National Commission headed by V. Balakrishna Eradi, J., expounded upon the meaning of the term "commercial purpose", prior to the insertion of the Explanation clause to Section 2(1)(d) of the 1986 Act: (Synco Textiles case [Synco Textiles (P) Ltd. v. Greaves Cotton and Co. Ltd., 1990 SCC OnLine NCDRC 3 :
(1991) 1 CPJ 499] , SCC OnLine NCDRC paras 5-6 &
8) "5. ...The words "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....
6. Going by the plain dictionary meaning of the words used in the definition section the intention of Parliament must be understood to be to exclude from the scope of the expression "consumer" any person who buys goods for the purpose of their being used in any activity engaged on a large scale for the purpose of making profit. ... It is obvious that Parliament CC 581/2017 Page 7 of 15 intended to restrict the benefits of the Act to ordinary consumers purchasing goods either for their own consumption or even for use in some small venture which they may have embarked upon in order to make a living as distinct from large scale manufacturing or processing activity carried on for profit. In order that exclusion clause should apply it is however necessary that there should be a close nexus between the transaction of purchase of goods and the large scale activity carried on for earning profit.
8. There is a close and direct nexus between the purpose of purchase of the generating sets and the commercial activity of manufacturing of edible oils for trade carried on by the appellant company, since the generating sets were intended to be used, as and when the need arose, for generating electric current for manufacture of edible oils for the purpose of trade. We do not, therefore, find any reason to interfere with the view taken by the State Commission that the appellant is not a "consumer"."
(emphasis supplied)
14. Recently, a two-Judge Bench of this Court, comprising of one of us, in Paramount Digital Colour Lab [Paramount Digital Colour Lab v. AGFA (India) (P) Ltd., (2018) 14 SCC 81 : (2018) 4 SCC (Civ) 467] has re-emphasised the importance of there being a "close nexus" between the purpose for which the good or service is availed of and a large-scale profit activity in order to classify such a transaction as commercial in nature, as illustrated below: (Paramount Digital Colour Lab case [Paramount Digital Colour Lab v. AGFA (India) (P) Ltd., (2018) 14 SCC 81 : (2018) 4 SCC (Civ) 467] , SCC pp. 85 & 87, paras 12 & 17) "12. ... It is therefore clear, that despite "commercial activity", whether a person CC 581/2017 Page 8 of 15 would fall within the definition of "consumer" or not would be a question of fact in every case. Such question of fact ought to be decided in the facts and circumstances of each case.
17. ... Since there is nothing on record to show that they wanted the machine to be installed for a commercial purpose and not exclusively for the purposes of earning their livelihood by means of self-employment, the National Commission was not justified in concluding that the appellants have utilised the services of an operator or a helper to run a commercial venture. One machine does not need many operators or helpers to complete the work entrusted. Since the appellants were two partners, they must have been doing the work on their own, of course, may be with the aid of a helper or an operator. The machine would not have been used in a large-scale profit- making activity but, on the contrary, the appellants purchased the machine for their own utility, personal handling and for their small venture which they had embarked upon to make a livelihood. The same is distinct from large-scale manufacturing or processing activity carried on for huge profits. There is no close nexus between the transaction of purchase of the machine and the alleged large- scale activity carried on for earning profit. Since the appellants had got no employment and they were unemployed graduates, that too without finances, it is but natural for them to raise a loan to start the business of photography on a small scale for earning their livelihood."
(emphasis supplied) Therefore this Court in Paramount Digital Colour Lab [Paramount Digital Colour Lab v. AGFA (India) (P) Ltd., (2018) 14 SCC 81 : (2018) 4 SCC (Civ) 467] held that the purchase of a machine for the appellants' CC 581/2017 Page 9 of 15 photography business, which was a small-scale business meant for earning their livelihood, would not be interpreted as being for a "commercial purpose".
15. It is true that the aforementioned decisions were rendered in the context of deciding whether the goods or services availed of in the facts of those cases were for a commercial purpose or exclusively for the purpose of self-employment. This does not mean, however, that in every case a negative test has to be adopted wherein any activity that does not fall within the ambit of "earning livelihood by means of self- employment" would necessarily be for a commercial purpose. We reject Respondent 1's argument in this regard. The Explanation clause to Section 2(1)(d) of the 1986 Act is only clarificatory in nature, as was highlighted by this Court in Laxmi Engg. [Laxmi Engg. Works v. PSG Industrial Institute, (1995) 3 SCC 583] :
(SCC p. 594, para 14) "14. Yet another clarification; the Explanation, in our opinion is only explanatory; it is more in the nature of a clarification--a fact which would become evident if one examines the definition (minus the Explanation) in the context and scheme of the enactment. As indicated earlier, the Explanation broadly affirms the decisions of the National Commission. It merely makes explicit what was implicit in the Act. It is not as if the law is changed by the said Explanation; it has been merely made clearer."
Therefore the Explanation clause only re-affirms the definition of "consumer" as it already exists.
16. Ultimately, whether or not a person is a consumer or whether an activity is meant for a commercial purpose will depend upon the facts and circumstances of each case. It may be the case that a person who engages in commercial activities has purchased a good or availed of a service for their personal use and consumption, or for the personal use of a beneficiary, CC 581/2017 Page 10 of 15 and such purchase is not linked to their ordinary profit-generating activities or for creation of self- employment. Such a person may still claim to be a "consumer." For example, a large corporation may hire the services of a caterer or a 5-star hotel for hosting a function for its employees and their families. If there is any deficiency in service, the service- provider cannot claim that merely because the person availing of the service is a profit-generating entity, and because such transaction does not relate to generation of livelihood through self-employment, they do not fall under the definition of a "consumer". A commercial entity may also be a consumer depending upon the facts of the case. It is not the identity of the person but the purpose for which the transaction is made which is relevant.
***
19. To summarize from the above discussion, though a straight-jacket formula cannot be adopted in every case, the following broad principles can be culled out for determining whether an activity or transaction is 'for a commercial purpose':
(19.1) The question of whether a transaction is for a commercial purpose would depend upon the facts and circumstances of each case. However, ordinarily, 'commercial purpose' is understood to include manufacturing/industrial activity or business-to- business transactions between commercial entities. (19.2) The purchase of the good or service should have a close and direct nexus with a profit-generating activity. (19.3) The identity of the person making the purchase or the value of the transaction is not conclusive to the question of whether it is for a commercial purpose. It has to be seen whether the dominant intention or dominant purpose for the transaction was to facilitate some kind of profit generation for the purchaser and/or their beneficiary. (19.4) If it is found that the dominant purpose behind purchasing the good or service was for the personal use and consumption of the purchaser and/or their beneficiary, or is otherwise not linked to any CC 581/2017 Page 11 of 15 commercial activity, the question of whether such a purchase was for the purpose of 'generating livelihood by means of self- employment' need not be looked into.
(emphasis supplied)"
17. We also tend to rely on dicta of the Hon'ble National Commission in CC-1122/2018 titled Narinder Kumar Bairwal and Ors. vs. Ramprastha Promoters and Developers Pvt. Ltd. and Ors. decided on 01.11.2019, wherein, the Hon'ble National Commission has held as under:
"19. The contention of the Learned Counsel that the said Apartments were purchased for commercial purpose is not supported by any documentary evidence as the onus shifts to the Opposite Parties to establish that the Complainants have purchased the same to indulge in 'purchase and sale of flats' as was held by this Commission in Kavit Ahuja vs. Shipra Estates I (2016) CPJ 31. The Opposite Parties failed to discharge their onus and we hence hold that the Complainants are 'Consumers' as defined under Section 2(1)(d) of the Act."
18. From the aforesaid dicta of the Hon'ble Supreme Court and the Hon'ble National Commission, it flows that it is for the Opposite Party to prove that the unit purchased was for commercial purpose, by way of some documentary proof and a bald statement is not sufficient to raise adverse inference against the Complainant. It is a well-established principle of evidence that suspicion cannot take place of proof, which is also applicable to the present case. Consequently, the contention of the Opposite Party that the complainant is not a consumer since the commercial unit has been taken for investment purposes holds no ground for want of proper, admissible evidence.
CC 581/2017 Page 12 of 15WHETHER THE OPPOSITE PARTY HAD NECESSARY SANCTIONS/LICENCE FROM THE COMPETENT AUTHORITY?
19. The Opposite Party has further contended that it had all the necessary sanctions from the competent authority for construction of the aforesaid unit. The Opposite Party has placed reliance on the intimation by the DTCP, Haryana dated 29.08.2017 wherein it had renewed Licence No. 76 of 2012, which was granted to M/S Perfect Constech Pvt. Ltd. for setting up of commercial colony which was renewed up to 31.07.2018.
20. The Opposite Party has also relied on the collaboration agreement dated 25.03.2013 entered between the opposite party and M/S Perfect Constech Pvt. Ltd. for setting up of the commercial colony and to execute the construction of the aforesaid project. The Opposite Party has also placed on record the General Power of Attorney dated 25.03.2013 on behalf of M/S Perfect Constech Pvt. Ltd. , granting the Opposite Party the power of attorney to execute swift construction of the project and take whatever steps necessary for the selling and construction of the commercial unit in the said project.
21. The complainant vide its rejoinder has further brought to our notice towards the Haryana Development and Regulation of Urban Areas Act, 1975 through which the complainant has alleged that details of any such collaboration agreement must be informed to the office of DTCP. However, on perusal of the Haryana Development and Regulation of Urban Areas Act, 1975, we do not find such a stipulation. The relevant sections are produced below:-
CC 581/2017 Page 13 of 15"(d1) `developer' means an individual, company, association, firm or a limited liability partnership, designated through a collaboration/ development agreement with the owner for making an application for grant of licence and for completion of formalities required on behalf of such owner to develop a colony;
3. Application for licence. - (1) Any owner desiring to convert his land into a colony, shall, unless exempted under Section 9, make an application, to the Director, for the grant of a licence to develop a colony in the prescribed form and pay for it such fee and conversion charges as may be prescribed. [***]:
Provided that if the conversion charges have already been paid under the provisions of the punjab Scheduled Roads and Controlled Areas Restriction of Unregulated Development Act, 1963 (41 of 1963), no such charges shall be payable under this section:
[Provided further that the schedule of payment of fee and charges for various licence colonies shall be such, as may be specified by the Government by directions issued from time to time under section 9A of this Act.] [Provided further that owner may enter into an agreement jointly or severally with a developer for pooling of land for grant of licence:]......."
22. Upon perusal of the aforesaid definitions and the General Power of Attorney executed by M/S Perfect Constech Pvt. Ltd, it is clear that the Opposite Party played the role of the "developer" in the said project and that M/S Perfect Constech Pvt. Ltd. was the owner. The collaboration agreement and the General Power of Attorney as executed between the Opposite party and M/S Perfect Constech Pvt.
Ltd. was valid till 31.07.2018 and the aforesaid executions provided the Opposite party to execute the said commercial project even if the Licence was granted to M/S Perfect Constech Pvt. Ltd.
CC 581/2017 Page 14 of 1523. The complainant approached this commission on the sole ground that the Opposite Party lacked the necessary sanctions from the Competent Authority, however, we come to a different conclusion, the Opposite Party was competent to execute the Buyer's agreement with the complainant and execute construction of the aforesaid commercial project.
24. Henceforth, we find that there is no deficiency of services on part of the Opposite Party and hence the complaint is liable to be dismissed.
25. Applications pending, if any, stands disposed of in terms of the aforesaid judgment.
26. A copy of this judgment be provided to all the parties free of cost as mandated by the Consumer Protection Act, 1986. The judgment be uploaded forthwith on the website of the commission for the perusal of the parties.
27. File be consigned to record room along with a copy of this Judgment.
(DR. JUSTICE SANGITA DHINGRA SEHGAL) PRESIDENT (ANIL SRIVASTAVA) MEMBER Pronounced On:
07.05.2021 CC 581/2017 Page 15 of 15