IMPORTANT POINT
Flat Buyer’s Agreement – Purchase and sale of goods for resale or for commercial purpose is excluded from purview of definition of “consumer” – Ordinarily “commercial purpose” is understood to include manufacturing/industrial activity – Dominant intention or dominant purpose of transaction is to be looked into to find out if it had any nexus with some kind of profit generation as part of commercial activities.

JUDGMENT :

(Pankaj Mithal, J.) :

1. This is a statutory appeal under Section 67 of the Consumer Protection Act, 2019,¹[hereinafter referred to as ‘the Act’].

2. The challenge in the appeal is to the judgment and order dated 23.12.2022 passed by the National Consumer Disputes Redressal Commission,²[in short ‘NCDRC’] in Consumer Complaint No.141 of 2020. NCDRC by the said judgment and order has partly allowed the complaint of the respondent and directed the appellant to refund within 2 months an amount of Rs.7,16,41,493/- (Rupees Seven Crore Sixteen Lakh Forty One Thousand Four Hundred and Ninety Three only) along with delay compensation @ 6% per annum from the respective dates of deposits till its payment, failing which the rate of interest payable would stand increased to 9% per annum.

3. The respondent is a private limited company in the business of real estate development. It booked a flat for residential use of one of its directors and his family members with the appellant on 22.09.2015 in its project ‘Omkar 1973 Worli’ on payment of booking amount of Rs.51,00,000/- (Rupees Fifty One Lakh only). Subsequently, respondent paid part consideration i.e. a total of Rs.6,79,97,071/- (Rupees Six Crore Seventy Nine Lakh Ninety Seven Thousand and Seventy One only) to appellant.

4. Thereafter, the respondent was issued an Allotment Letter dated 29.06.2016 with addenda dated 30.06.2016 whereby Flat No.5001, 50th Floor, Tower-B of the said project was allotted to it on a total sale consideration of Rs.34,50,00,000/- (Rupees Thirty Four Crore Fifty Lakh only). The date of possession was mentioned as latest by 31.12.2018 in the letter of allotment.

5. The appellant on 08.03.2017 advanced the date of possession from 31.12.2018 to the first quarter of 2017. On the basis of the part occupancy certificate received by appellant on 07.03.2017 from Slum Rehabilitation Authority, the respondent was asked to take possession of the allotted flat immediately and was directed to pay the balance amount of Rs.28,87,80,526/- (Rupees Twenty Eight Crores Eighty Seven Lakhs Eighty Thousand Five Hundred Twenty Six only) within 30 days.

6. The respondent tried to arrange necessary finance for the purpose through financial institutions but failed. The respondent, through the correspondence with the financial institutions, came to know that the flat allotted to him, is already reserved/allotted to one Mr. Nakul Arya. The respondent on 18.03.2017, probably for want of arrangement of necessary funds, part occupancy certificate and due to the allotment of the said flat to one another person, declined to take possession and to pay the balance amount as required by the appellant. The appellant, thus, cancelled the booking/allotment of the respondent vide Termination Letter dated 31.08.2017.

7. The respondent, thus, issued a letter dated 22.09.2017 seeking refund of the entire amount of Rs.7,16,41,493/- (Rupees Seven Crore Sixteen Lakh Forty One Thousand Four Hundred and Ninety Three only) along with interest. The appellant, instead of refunding the amount, vide letter dated 18.11.2017 forfeited the amount deposited by the respondent.

8. In the above background, the respondent approached the NCDRC complaining about the deficiency in services and of adopting unfair trade practices with the prayer to refund the entire amount deposited by it with 18% interest along with litigation expenses and compensation for mental harassment and torture.

9. The appellant contested the complaint by filing its written reply alleging that the respondent is not a consumer within the purview of Section 2 (7) of the Act. It alleged that since respondent is a real estate development company and that it had purchased the flat for commercial purpose, therefore, the complaint is not maintainable. The allotment of the respondent was rightly cancelled as despite demand it failed to pay the balance sale consideration. The appellant had the right to advance the date of delivery of possession and that there