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Rishi Malhotra v. M/s. Blue Coast Infrastructure Development Pvt. Ltd. & 5 Ors

Rishi Malhotra v. M/s. Blue Coast Infrastructure Development Pvt. Ltd. & 5 Ors

(National Consumer Disputes Redressal Commission, New Delhi)

Consumer Case No. 369/2015 | 08-02-2017

Rishi Malhotra an American citizen has filed the present complaint alleging that on 8.2.2013 opposite parties No. 2 & 3 entered into a tripartite agreement with the complainant to construct and transfer on lease holding basis one commercial space unit No.19-C & 22, Ground Floor, Sheraton Chandigarh Hotel, Chandigarh. As per the agreement the lease of the unit was to continue until September, 2077 and the consideration amount was Rs.94,80,000/-. Pursuant to the agreement the complainant paid the entire consideration amount vide two cheques worth Rs.18,96,000/- and Rs.75,84,000/- respectively dated 8.1.2013 and 5.2.2013. It is alleged that the possession of the property was to be handed over to the complainant within 12 months of the agreement i.e. on or before 8.2.2014. It is the case of the complainant that despite of the complainant having complied with his part of the agreement the opposite parties have failed to deliver possession of the subject unit to the complainant. It is also alleged that vide clause 41 of the tripartite agreement till the date of the first lease the complainant was to receive minimum monthly return of Rs.71,000/- w.e.f. 1.2.2013 from opposite party No.1 company. Opposite party No.1 commenced making payment of the monthly return from 16.3.2013 onwards. However, after November, 2013 the payments have become less frequent compelling the complainant to continuously follow up the missed payments. The last payment of monthly assured return was made for the months of February, March & April, 2014 on 31.5.2014. Thereafter, the further payments of monthly assured return have been stopped. Claiming the failure of the opposite parties to deliver possession of the subject units within the agreed time frame and also failure on the part of the opposite parties to make timely payments to assure monthly return to be unfair trade practice and deficiency in service, the complainant has filed the instant consumer complaint.

2. The opposite parties on being served with the notice of the complaint have taken objection as to the maintainability of the complaint. The plea of the opposite parties is that bare perusal of the tripartite agreement and the allegations in the complaint would show that the services of the opposite parties were allegedly hired/availed in respective of commercial premises. Therefore, the complainant is not a consumer as envisaged under Section 2 (1) (d) of the Consumer Protection Act, 1986 (for short the Act). Consequently, the consumer complaint is not maintainable.

3. I have heard learned counsel for the parties on the preliminary issue of maintainability and perused the record. In order to appreciate the contention of the respective parties, it would be useful to have a look on the definition of consumer as envisaged under Section 2 (1) (d) of the. The Section reads as under: - d) "consumer" means 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 or partly promised, or under any system of deferred payment when such use is made with the 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 a 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 of ; such services for any commercial purposes . For the purposes of this clause, commercial purpose does Explanation not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self-employment

4. On reading of the above, it is clear that consumer is a person who buys goods or hires or avails of services of any one for consideration present, past or future. The section however carves out an exception by providing that the person who has purchased goods or hired/availed of services for commercial purpose, shall not be included in the definition of consumer.

5. Admittedly, in the instant case the complainant has entered into a tripartite agreement with the opposite parties in respect of a commercial unit/space No.19-C & 22 at the ground floor of the development project undertaken by the opposite party, namely, Sheraton Chandigarh Hotel, Chandigarh. Thus, it is clear that the services of the opposite parties were availed by the complainant for commercial purpose.

6. Learned counsel for the complainant has submitted that the term Consumer has been given a limited definition in the explanation to Section 2 (1) (d) of thewhich provides that commercial purpose does not include use by a person of goods bought or services availed by him exclusively for the purpose of earning his livelihood by means of self-employment. It is contended that the case of the complainant is covered under the explanation. In support of this contention, learned counsel for the complainant has drawn my attention to the affidavit of the complainant dated 20.5.2016 filed pursuant to the direction of the predecessor Bench dated

3.5.2016. Learned counsel has submitted that from the affidavit it is clear that the complainant had booked the subject commercial unit No.19-C & 22 with the intention to augment the pension income of his parents from the opening of the said shops and also with a view to use those shops as primary source of his livelihood on his return from America. Therefore, the case of the complainant is squarely covered by the explanation to Section 2 (1) (d) of the.

7. Learned counsel for the complainant has also contended that unless there is evidence to the contrary from the allegations in the complaint it cannot be concluded that the subject units were booked by the complainant for commercial purpose. It is contended that the Co-ordinate Bench of this Commission in the matter of M/s Harsolia Motors vs. M/s National Insurance Co. Ltd. has dealt with the meaning of term Consumer and observed on the basis of (1)/2005 CPJ (NC) the meaning of term consumer in Oxford Dictionary that the word commercial means

having profit as primary object rather than artistic etc. value.
Learned counsel has also referred to the judgment of the Honble Supreme Court in the matter of Laxmi Engineering Works Vs. PSG wherein Honble Supreme Court has explained the Industrial Institute (1995) 3 SCC 583 meaning of commercial purpose as under: -
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(d)(i) of the. Broadly affirming the said view and more particularly with a view to obviate any confusion the expression large scale is not a very precise expression Parliament stepped in and added the explanation to Section 2(d)(i) by Ordinance/ Amendment Act , 1993. The explanation excludes certain purposes from the purview of the expression commercial purpose a case of exception to an exception. Let us elaborate: a person who buys a typewriter or a car and uses them for his personal use is certainly a consumer but a person who buys a typewriter or a car for typing others work for consideration or for plying the car as a taxi can be said to be using the typewriter/car for a commercial purpose. The explanation however clarifies that in certain situations, purchase of goods for commercial purpose would not yet take the purchaser out of the definition of expression consumer. If the commercial use is by the purchaser himself for the purpose of earning his livelihood by means of self-employment, such purchaser of goods is yet a consumer. In the illustration given above, if the purchaser himself works on typewriter or plies the car as a taxi himself, he does not cease to be a consumer. In other words, if the buyer of goods uses them himself, i.e., by self-employment, for earning his livelihood, it would not be treated as a commercial purpose and he does not cease to be a consumer for the purposes of the. 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 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. A few more illustrations would serve to emphasize what we say. A person who purchases an auto-rickshaw to ply it himself on hire for earning his livelihood would be a consumer. Similarly, a purchaser of a truck who purchases it for plying it as a public carrier by himself would be a consumer. A person who purchases a lathe machine or other machine to operate it himself for earning his livelihood would be a consumer. (In the above illustrations, if such buyer takes the assistance of one or two persons to assist/help him in operating the vehicle or machinery, he does not cease to be a consumer.) As against this a person who purchases an auto-rickshaw, a car or a lathe machine or other machine to be plied or operated exclusively by another person would not be a consumer.


8. Learned counsel has contended that in view of the aforesaid judgments the subject transaction between the parties cannot be said to be entered into for commercial purpose. Complainant has also relied upon the judgment of Co-Ordinate Bench of this Commission in CC88/2012 titled decided on 9.9.2014 and Kushal K. Rana vs. DLF Commercial Complex Ltd. in the matter of decided on Inder Nath Mehra & Ors. vs. Purearth Infrastructure Ltd. 15.5.2015.

9. In my view, the above-noted judgments relied upon by the complainant are of no avail to the complainant as the judgments are based upon their own peculiar facts. In order to bring the case within the explanation to Section 2 (1) (d) of thethe complainant has to show that he had booked the commercial premises exclusively for the purpose of earning his livelihood by way of self-employment. As per the complainants own admission in his affidavit, he is a US citizen and is presently working as a Consultant in software development and earning monthly income of approximately 8,000 USD. Therefore, it cannot be said that the shops in question were booked by the complainant exclusively for the purpose of earning his livelihood by way of self-employment. The plea of the complainant, that his plan is to use the aforesaid shops for earning his livelihood on his return from USA, is farfetched because no details have been given as to when the complainant is planning to return India. Otherwise also, once the complainant has taken US citizenship his coming back to India is highly remote. So far as the plea regarding the augmenting the pensioner income of his parents is concerned, that cannot be termed as booking of the shops with a view to use the shops to earn the livelihood by way of self-employment.

10. Complainant has placed on record photocopy of the tripartite agreement executed between the parties. In order to appreciate whether or not the complainant had hired services of the opposite party for commercial purpose, it would be useful to have a look on some of the recitals/terms of the tripartite agreement which are reproduced as under: -
Whereas the Chandigarh Housing Board as converted the use of land from industrial to commercial use vide its letter bearing No.CHB/CEO/Land Use/2007/2238 dated February 5, 2008. Whereas the said land is being developed into a Five Star Hotel (hereinafter referred to as Sheraton Chandigarh Hotel or Hotel) with a part of its to be developed as commercial retail area divided into identified area (hereinafter referred to as Plaza) specifications whereof are attached herewith a Schedule I to this agreement. The unit holder(s) hereby covenants with the marketing company and the lessee and agrees to use the said studio/unit for permitted/lawful purposes only and not to carry on or permit to be carried on in the said studio or in any part thereof, any activity which shall be or is likely to be in contravention of the statutory bye-laws, rules and regulations, or unlawful obnoxious or of nuisance, anyone or disturbance to other occupants of the building or store any goods of hazardous or combustible nature or which are so heavy as to affect the construction or the structure of the said building or any part thereof. Further all the rights and obligations of the unit holder(s) including the nature and kind of commercial activity to be carried out in the unit/studio and the use of the trade name shall be subject to the approval by the lessee who in turn shall be guided by the standards and guidelines laid down by the operator of the hotel. The operator of the hotel shall be appointed by the lessee at its exclusive discretion. Lessee shall also have the right to review and approve first sub-lease/sub-letting of the unit/studio. Any sub-lease/sub-letting of the unit by the Marketing Company after the firs lease, shall be subject to the NOC from the lessee of the hotel. The unit holder will receive monthly return of Rs.250/- per sq. ft. on full consideration till the date of first lease as assured by the marketing company. After receiving the consideration of Rs.94,80,00/- (Ninety four lakh eighty thousand only), by the marketing company monthly assured return of Rs.250/- per sq. ft. will be payable to the unit holder. At the time of offer of possession the marketing company assures to sub-let the unit at minimum monthly lease rentals of Rs.250/- per sq. ft. to the unit holder calculated on the super area of the unit under this agreement. The marketing company is committed to lease the premises at 250/- per sq. ft. The marketing company assures to compensate the rent difference for the period of first lease if the said unit is leased below Rs.250/- per sq. ft. Any monthly rentals over and above Rs.250/- per sq. ft. shall assure to the benefit of the unit holder. The said minimum monthly assured returns shall be Rs.250/- payable after the receipt of full consideration by the marketing company. The payment of monthly rentals shall be subject to the deduction of applicable withholding taxes. Any indirect applicable taxes such as VAT, GST and service tax shall be borne by the unit holder(s).


11. On bare reading of the above it is clear that the units booked by the complainant are commercial property and they were supposed to be used for commercial purpose. Thus, it cannot be disputed that the complainant had hired or availed of services of the opposite party for commercial purpose.

12. In view of the discussion above, as the complainant had availed of services of the opposite party for commercial purpose, he is not a consumer as envisaged under Section 2 (i) (d) of the. Thus, the complainant has no locus standi to file a consumer complaint. Complaint is accordingly rejected.

13. The complainant, however, shall be at liberty to avail of his remedy by approaching the appropriate Forum on the same cause of action. ......................J AJIT BHARIHOKE PRESIDING MEMBER

Advocate List
Bench
  • MR. AJIT BHARIHOKE, PRESIDING MEMBER
Eq Citations
  • 1 (2017) CPJ 541 (NC)
  • LQ/NCDRC/2017/372
Head Note

A. Consumer Protection — Consumer Forums — Revision — Revisional powers — Exercise of — Held, powers of revisional jurisdiction could be exercised only, if there was a patent error of jurisdiction or miscarriage of justice in the orders passed by the Consumer Fora below — Revision petition dismissed as there was no infirmity, irregularity or jurisdictional error in the order passed by the State Commission — Carriers Act, 1865, S. 10 — Consumer Protection Act, 1986, Ss. 21 & 22 .