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SUPREME COURT OF INDIA
S. RAVINDRA BHAT, ARAVIND KUMAR, JJ.
Rohit Chaudhary and Another – Appellants
Versus
M/s Vipul Ltd. – Respondent
Civil Appeal No. 5858 of 2015
Decided On : 06-09-2023
(A) Consumer Protection Act, 1986 – Section 2(1)(d)[Consumer Protection Act, 2019 – Section 2(7)(ii)(a)] – Commercial Purpose – Parliament has excluded from scope of ‘Consumer’ for igniting proceedings under the Act, a person who obtains goods or services for re-sale or for any commercial purpose – If commercial use is by purchaser himself for the purpose of earning his livelihood by means of self-employment, such purchaser of goods would continue to be a ‘consumer’ – When there is assertion in complaint filed before Consumer Court or Commission that such goods are purchased for earning livelihood, such complaint cannot be nipped at the bud and dismissed – Evidence tendered by parties will have to be evaluated on the basis of pleadings and thereafter conclusion be arrived at – There cannot be any defined formula with mathematical precision to examine claims for non-suiting complainant on account of such complaint not falling within definition of expression ‘consumer’ as defined under Section 2(1)(d). (Paras 11 and 12)
(B) Consumer Protection Act, 1986 – Section 2(1)(d)[Consumer Protection Act, 2019 – Section 2(7)(ii)(a)] – Consumer complaint – Maintainability – Commercial Purpose – Purchase of commercial space – Non-delivery of possession of office space allotted – Complaint dismissed by NCDRC holding that commercial space booked by appellants was for earning profit and not for the purpose of earning livelihood by way of self-employment – Appellants have specifically pleaded that they were in search of office space for their self-employment and to run their business and earn their livelihood – He has nowhere stated that he had proposed to purchase office space from respondent for the purpose of either selling the same for higher price or said property was being purchased as investment for being sold in future – It is not pleaded in counter affidavit filed by respondent that commercial space allotted to appellants is ready for occupation – Order passed by NCDRC set aside and respondent directed to refund principal amount with 12% interest. (Paras 11, 13, 15, 16 and 17)
Facts of the case:
Interpretation of word and expression “Commercial Purpose” defined under Section 2(1)(d) of Consumer Protection Act, 1986 is the pivotal issue in this appeal.
Findings of Court:
On account of inaction of respondent in not complying with their demand, appellants got issued a legal notice calling upon respondent to refund Rs.93,62,025/- which is inclusive of principal amount of Rs.51,10,117/- and Rs.42,52,143/- towards interests accrued thereon calculated @ 18% per annum and also demanded compensation of Rs.50,000,00/- towards mental agony by terminating the agreement.
Result : Appeal allowed.
The legal document discusses the interpretation of the term "Commercial Purpose" within the context of the Consumer Protection Act, particularly focusing on whether a purchaser of goods or services qualifies as a "consumer" when the goods are purchased for earning a livelihood through self-employment. The key points are:
The definition of "consumer" excludes those who obtain goods or services for resale or for any commercial purpose, unless the commercial use is by the purchaser himself for earning his livelihood by means of self-employment (!) (!) .
When a person buys goods for personal use or for self-employment aimed at earning a livelihood, such use does not constitute a "commercial purpose" that would exclude them from the definition of "consumer" (!) (!) .
The purpose behind the purchase—whether for personal livelihood or profit-making—is a question of fact that must be determined based on the circumstances of each case (!) .
The intention of Parliament was to protect individuals who purchase goods for their own use or self-employment, not for large-scale profit or resale activities (!) (!) .
Evidence such as statements made by the purchaser, the nature of the transaction, and the use of the goods are relevant in assessing whether the purpose is for earning livelihood or for commercial profit (!) (!) .
In the specific case discussed, the appellants had pleaded that they purchased the commercial space for their self-employment and to run their business, which qualifies them as consumers under the Act. The court found that their intent to use the property for their livelihood was credible and that the earlier statements suggesting profit motive did not negate their claim of being consumers (!) (!) .
The case also highlights that in the absence of evidence that the property was ready for occupation or that possession was being delivered, the court may direct refund of the amount paid with interest, especially when the contractual obligations were not fulfilled within the stipulated time (!) (!) .
The decision underscores that the determination of whether a purchase is for a commercial purpose is fact-specific, and complaints asserting purchase for earning livelihood should not be dismissed solely on the basis of the nature of the transaction, provided the evidence supports such a claim (!) (!) .
In summary, the legal principle established is that goods purchased for self-employment with the aim of earning a livelihood do not fall outside the scope of "consumer" under the Act, unless the purpose is primarily profit or resale. The purpose and intent at the time of purchase, supported by evidence, are crucial in such determinations.
JUDGMENT :
ARAVIND KUMAR, J.
1. The interpretation of the word and expression “Commercial Purpose” defined under Section 2(1)(d) of the Consumer Protection Act, 1986 (hereinafter referred to as the ‘Act’ for the sake of brevity) is the pivotal issue in this appeal.
FACTUAL MATRIX
2. The appellants intended to purchase a commercial space in the project called ‘Vipul World Commercial’ situated at Gurugram, Haryana, promoted by the respondent. After having come to know that Mrs. Bindu Rawlley and Mr. Talwinder Singh intended to sell their shares in office unit No. 306 on the third floor in the aforesaid commercial complex allotted to them by the respondent, appellants agreed to purchase the same and accordingly made payment of entire agreed amount to their vendors. Recognizing the said transfer, the names of the appellants came to be recorded by the respondent in substitution to the names of the vendors of appellants. The customer code allotted to the original allotees was continued in the name of the appellants. It was agreed between the appellants and their vendors that appellants would pay a sum of Rs. 18,07,100 to the original allotees and the balance amount of Rs. 34,27,050 to the respondent as and when demanded by the respondent. In furtherance of the same and on payment to the original allotees, the fact of such sale of shares was intimated to the respondent.
3. Subsequent to the aforesaid circumstance, respondent raised a demand on the appellants and accordingly the amount was paid which was outstanding as on the date of demand. The respondent issued the receipt and also allotment letter allotting commercial space in “Vipul Business Park” 105 and thereafter re-allotted Unit No. 814 on 8th Floor for a sale consideration of Rs. 51,51,415. This unilateral change was objected to by the appellants and in response to the same the respondent threatened to forfeit the amount paid till date and also to cancel the allotment of the office space.
4. Respondent forwarded a buyer’s agreement to the appellant and called upon them to return the same after signing and same was duly complied under the circumstances that prevailed. The respondent had agreed to deliver possession of the premises to the appellants within 24 months from the date of execution of such agreement and for reasons unknown, the same was not delivered. In the interregnum, appellants continued to pay instalments as and when demands were raised by the respondent (same has been denied by respondent). As per the statement of account issued by the respondent to the appellants, they have acknowledged total receipt of Rs. 50,28,122/- and payment of Rs. 81,995/- made towards service tax was not reflected in the statement of accounts. As per the payment schedule forwarded by the respondent to the appellants, a sum of Rs. 2,47,148/- was due and payable to the respondent by the appellants within 30 days from the date of possession notice, which was not issued.
5. On account of non-intimation about delivery of possession of the office space unit allotted to the appellants and the inaction of the respondent in not delivering possession of the office space allotted, the appellants approached the National Consumer Redressal Commission at New Delhi by filing a complaint, which was preceded by issuance of a legal notice whereunder the appellants demanded refund of Rs. 51,10,117/- and interest @ of 18% P.A. amounting to Rs. 42,52,143/- after terminating the buyer’s agreement dated 27.11.2009. A further sum of Rs. 50 lakhs was also claimed towards mental agony. The Commission by impugned order dated 11.05.2015, dismissed the complaint in limine on the ground of maintainability holding that appellants are not ‘consumers’ as defined under Section 2(1) (d) of the Act as appellants were already carrying on business for the purposes of their livelihood and therefore, it cannot be said that the property which was the subject matter of the complaint before the Commission was being purchased by them
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