IMPORTANT POINT
Merely because complainant had booked more than one flat, it would not per se amount to commercial purpose.

D.K. Jain, President—By these Appeals, under Section 19 of the Consumer Protection Act, 1986 (for short “the Act”), the Complainants in Complaints no.37, 38 and 41 of 2012, question the correctness and legality of a common order, dated 03.06.2013 passed by the Karnataka State Consumer Disputes Redressal Commission at Bangalore (for short “the State Commission”). By the impugned order, the State Commission has dismissed the said Complaints on the ground that having purchased more than two flats, the Complainants were not “Consumers within the meaning of Section 2 (1) (d) of the Act, observing thus:

“The fact is that all the complainants intended to purchase more than two flats in their favour from the opposite parties which appear to be for commercial purpose. Therefore taking into consideration the facts and circumstances, in our view, the main object of purchasing the flats by entering into agreements with the opposite parties by the complainants is for commercial activity and as per Section 2(1)(d) of the CP Act, they cannot be construed as ‘consumers’. Their main intention is to purchase the flats and to dispose of them or to let out only with a view to get rental income. Therefore, in our considered opinion, if at all if the OPs have entered into with the complainants the sale agreement and construction agreement and failed to complete the construction of the flats and handover the possession by executing the registered sale deeds, then the remedy available for the complainants to approach the Civil Court as they are not the ‘consumers’. Therefore, we do not see any prima facie case to admit these complaints and therefore they are liable to be dismissed at the stage of admission.”

2. During the pendency of these Appeals, the Appellant in FA No.596 of 2013, namely, Smt. Vimla Agarwal passed away. On Appellants’ moving an application (IA 8200/2015), vide order dated 28.01.2016, her legal representatives were brought on record. Amended Memo of Parties name has been filed. Respondents No.2 and 3, viz., the Builder and its Managing Director respectively have been served by substituted means, viz. by publication, for which requisite affidavit has been filed by the Appellants.

3. Despite service, Respondents No.2 and 3 still remain unrepresented. Accordingly, I have heard learned Counsel for the Appellants and Respondent no.1, the owner of the land, on which the subject flats have been constructed by the Builder on his 60% share in the land.

4. Bearing in mind the afore-extracted observations of the State Commission, I am of the opinion that in the light of the recent decisions of this Commission, which seem to have escaped the notice of the State Commission, the impugned order cannot be sustained. In the said decisions, it has been held that merely because a Complainant had booked more than one flat, it would not per se amount to commercial purpose as stipulated in the said Section, unless some material comes on record, evidencing that the Complainant had booked the flats for the purpose of selling them for profit. A bald averment in the Written Version to the effect that the same were booked for commercial purposes would not be sufficient to hold that the booking/purchase was for commercial purpose. It has also been held that mere letting out of a residential house or flat would not also per se amount to commercial purpose as contemplated in the said Section. (see: Rajesh Malhotra & Ors. Vs. Acron Developers & Ors., II (2016) CPJ 125 (NC))

5. A bare reading of the afore-extracted paragraph makes it clear that although the State Commission was not sure about the purpose for which the flats in question were purchased by the Complainants, yet it went on to return a finding that the main object of purchasing the flats, by entering into Agreement with the Opposite Parties by the Complainants, was for commercial purpose.

6. In my view, the afore-noted decision of this Commission is on all fours to the facts at hand, and the imp