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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
V.K. Jain, Presiding Member
Springdale Core Consultants Pvt. Ltd. —Complainant
versus
Pioneer Urban Land and Infrastructure
Ltd. —Opp. Party
Consumer Case No.349 of 2017
Decided on 14.7.2020
Counsel for the Parties:
For the Complainant:Mr. Aditya Parolia, Advocate
For the Opp. Party:Mr. Nikhil Nayyar, Sr. Advocate and Mr. T.V.S. Raghavendra, Advocate
IMPORTANT POINT
If a house / residential plot is booked / purchased by a company for residential use of its Directors / employees company will be a consumer within meaning of Section 2(1)(d) of Consumer Protection Act.
Headnote:
Consumer Protection Act, 1986 – Section 2(1)(d) – Real estate – Flat-Buyers Agreement – Delay in handing over possession of flat – If a house / residential plot is booked / purchased by a company for residential use of its Directors / employees company will be a consumer within meaning of Section 2(1)(d) of Consumer Protection Act, so far as such a booking / purchase is concerned – Grant of compensation linked with rental value alone would be an incentive for builder to prolong completion of construction and an unscrupulous builder may go to the extent of diverting funds collected from flat buyers of a particular project to its other project – Balanced approach has to be adopted so as to take care of genuine interest of parties concerned while giving preference to interest of consumer – Opposite party shall deliver possession of allotted flat complete in all respects to complainant within eight weeks – Opposite party shall pay compensation in form of 6% simple interest – Complainant shall also be entitled to Rs.50,000/- as costs of litigation. Paras 5, 14 and 16)
Result: Complaint allowed.
ORDER (ORAL)
V.K. Jain, Presiding Member—The complainant company booked a residential apartment with the opposite party for the residence of its Director (s) in a project namely ‘ARAYA’, which the opposite party was to develop in Gurgaon. The sale price of the apartment was agreed at Rs.5,11,01,238/- . An allotment letter dated 29.11.2011 was issued to the complainant, followed by the execution of the agreement on 13.3.2012. As per Clause 11.2 of the Agreement, the developer was to make all efforts to apply for the occupancy certificate within 39 months from the excavation, though it was also entitled to a grace period of six months for applying and obtaining the requisite occupancy. Computed accordingly, the occupancy certificate ought to have been applied by 04.9.2015 and obtained by 04.3.2016. That having not been done, the complainant has approached this Commission by way of this consumer complaint, seeking possession of the allotted flat with compensation etc., or refund of the amount paid to the opposite party, in case the possession cannot be delivered within eight months of the completion.
2. The learned counsel for the complainant states on instructions that the complainant is ready and willing to take possession even at a belated stage.
3. The complaint has been resisted by the opposite party which has taken a preliminary objection that being a company, the complainant is not a consumer. On merits, it has been denied that the booking was made for the residence of the Director (s) of the complainant company. It was however, admitted in the written version filed by the opposite party that the possession of the allotted flat had not been offered to the complainant.
4. The opposite party obtained the requisite occupancy certificate during pendency of this complaint on 03.4.2019 and offered possession to the complainant on the same day.
5. As far as preliminary objection taken by the opposite party is concerned, the issue stands settled by a Larger Bench of this Commission in a reference made in this very consumer complaint. The Larger Bench vide its order dated 16.3.2020, held as under:
“1. It is the purpose for which the residential plot / house is booked / purchased, which is material for determining whether the purchaser is a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act. The legal status of the purchaser, be it an individual, a partnership, an Association of Persons, a Trust, a Society or a Company is immaterial for such determination.
2. If a house / residential plot is booked / purchased by a company for the residential use of its Directors / employees the company will be a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act, as far as such a booking / purchase is concerned.
3. If a house / residential plot is bought / booked by a company as a part of its business activities and such purchase / booking has a close and direct nexus with the regular profit generating activities of the company, it will not be a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act as far as such a purchase / booking is concerned.”
6. The next question which arises for consideration is as to whether the flat was booked by the complainant for the residence of its Director(s) or was booked for speculative purposes, as is claimed by the opposite party. The complainant has placed on record a Resolution passed by its Board of Directors on 14.11.2011, thereby resolving to book this flat for the residence of one of the Directors of the company namely Dr. (Mrs.) Kirat Cheema. The submission of the learned senior counsel for the opposite party is that the complainant being a private limited company, the resolution may have been manufactured at a later date. This is also his submission that as per the information provided by the company to the Registrar of Companies, the business activities of the complainant were confined to Amritsar and all the Directors of
