[Consumer Protection Act] Homebuyer is consumer unless he purchased flat for selling: NCDRC

A homebuyer is a consumer Section 2(1)(d) of the Consumer Protection Act, 1986 unless he is into the activity of buying/ selling the properties and purchased the house for that purpose, the National Consumer Disputes Redressal Commission (NCDRC) has reaffirmed (Aloke Anand V M/S Ireo Pvt Ltd and Ors)..A person who buys a good ceases to be a consumer, only if that person indulges in commercial activities with respect to such goods, the NCDRC said.It, therefore, directed a Gurgaon based real estate developer, Ireo Private Limited, to refund at amount of over ₹2.23 crore along with an interest rate of 10.25 percent per annum for failing to deliver the flat on time (Aloke Anand V M/S Ireo Pvt Ltd and Ors)..A Bench comprising presiding member Justice Deepa Sharma and member Subhash Chandra also directed the builder to pay ₹25,000 as litigation cost to the complainant, Aloke Anand.“Any compensation paid by the opposite party to the complainant towards delay in completion of the project as per the terms and conditions of the agreement shall be adjusted in the interest amount and the balance interest amount shall be paid to the complainant. The Opposite Party shall pay a sum of Rs.25,000 as cost of litigation to the complainant,” the NCDRC said..According to the order, Anand had booked an apartment with the developer in Sector 60, Gurugram in January 2011 and paid over ₹2.23 crore for the flats which cost ₹2.39 crore. The due date of delivery of possession was 42 months with a grace period of six months. However, the delivery was not made in the given time. Anand then moved the commission seeking direction to the developer that the possession should be handed over to him along with compensation for delay or refund of the amount that he paid along with an 18% interest.The developer however, contended that Anand is not a consumer as defined under Section 2(1)(d) of the Consumer Protection Act, 1986 but only an investor since he already has two residential addresses and also invested in another project of theirs. It was further argued that he has invested for commercial gains either through rent or to sell at an appreciated value.The NCDRC placing reliance on Laxmi Engineering Works v. PSG Industrial Institute ruled that a person who buys a good ceases to be a consumer, if that person indulges itself in commercial activities with respect to such goods. In case of purchase of residential houses, it can be said that buyer is not a consumer, only if he indulges in the activity of buying/ selling the properties and purchased it for that purpose."A person who buys a good ceases to be a consumer, if that person indulges itself in commercial activities qua the goods and in case of purchase of residential houses, it can be said that buyer is indulging into the activity of buying / selling the properties and purchased it for that purpose," the order saidThe NCDRC however, held that the burden to prove that the complainant has indulged in the business of sale and purchase of flats lies squarely on the opposite party which, in this case, it failed to do. “There is no contention in the written version that the complainant is indulging in the business of sale / purchase of the properties. Since the opposite party has failed to discharge this burden, we hold that the complainant is a consumer within the meaning of Section 2 (1) (d) of the Act,” the NCDRC said.It, therefore, ruled in favour of the complainant. .[Read Order]