IMPORTANT POINTS
Purchasing flats for providing hostel facilities to the hospital nurses is not ‘commercial purpose’.
Principles for determining whether an activity or transaction is ‘for a commercial purpose’ culled out.

JUDGMENT :

MOHAN M. SHANTANAGOUDAR, J.

1. This appeal arises out of judgment of the National Consumer Disputes Redressal Commission (‘National Commission’) dated 25.10.2016 dismissing the Appellant’s Review Application No. 76/2016 against the order dated 1.3.2016 by which the National Commission dismissed the Appellant’s Consumer Complaint No. 117/2016.

2. The Appellant’s case is that Respondent No. 1/Opposite Party No. 1 had developed two buildings ‘Madhuvan’ with thirty two ‘1 BHK’ flats in colony ‘Shanti Park’ in Thane, Maharashtra. Out of these the Appellant/complainant trust took possession of 29 flats for provision of hostel facilities to nurses employed by Lilavati Hospital, which is run by the Appellant trust. 29 agreements to sell were executed in respect of each flat on 25.11.1995, which were registered on 16.3.1996, and entire consideration amount was paid for the same. The architect issued completion certificate in respect of the flats on 17.2.1997. The flats were used for the purpose of hostel facilities till 2002. However, within 2-3 years of completion of the project, because of alleged poor building quality, the structure became dilapidated. The appellant vacated the flats in 2002 and since 2004, the flats are lying unused.

In the meanwhile, an interim Board of Trustees was constituted by this Court by order dated 21.5.2014 in SLP No. 3772/2014, which is a separate litigation concerning dispute over control of the appellant trust between different groups of trustees. The aforesaid interim Board of Trustees called for a structural report from M/s Raje Consultants, which submitted their report in September 2015 finding that the cost of repairs would be more than the cost of reconstruction. The appellant also claims that Respondent No. 1 obtained the occupation certificate for the flats by playing fraud upon the local municipal corporation. Hence the appellant filed Consumer Complaint No. 117/2016 before the National Commission claiming Rs 7,65,95,400/- in compensation on account of annual loss of rent from 2002 to 2015, cost of reconstruction of building ‘Madhuvan’ and future loss of rent of Rs 35,00,000/-per year, along with Rs 5,00,000/- in damages.

Initially, the National Commission by order dated 1.3.2016 dismissed the complaint as barred by limitation on the ground that cause of action for raising the complaint arose in 2004, the year since when the flats are lying unused; however the complaint was filed in 2016. Under Section 24A of the Consumer Protection Act, 1986 (‘1986 Act’) the period of limitation for filing a complaint is two years, hence the complaint was time-barred. The National Commission further held that the pending litigation between the trustees in SLP No. 3772/2014 (supra) is not sufficient to explain the delay as the dispute concerning constitution of Board of Trustees of the appellant trust arose in 2014 whereas it was not the appellant’s case that there was no competent Board of Trustees in 2004 when the cause of action arose.

Subsequently the National Commission in the impugned judgment, hearing Review Application No. 76 of 2016 against the order dated 1.3.2016 (supra), found that it had incorrectly recorded in the aforesaid order that ‘conveyance deeds’ of the 29 flats were registered on 16.3.1996, whereas what was registered by the appellants was actually agreements to sell. Hence on account of this error on the face of the record, the National Commission recalled the order dated 1.3.2016. However the National Commission again proceeded to dismiss the complaint, this time on the ground that the appellant trust was not a ‘consumer’ within the meaning of Section 2(1)(d) of the 1986 Act as the aforesaid section excludes a person who obtains goods and services for a ‘commercial purpose’; that since providing hostel facility to the nurses is directly connected to the commercial purpose of running the hospital, and is consideration for the work done by them in the hospital, the appellant would not