Last Updated on August 28, 2021 by Satish Mishra
COMMERCIAL PURPOSE NOT COVERED U/S 17(1) (a) (i), CONSUMER PROTECTION ACT, 1986
Judgement Digest: KUSUM KAPOOR V. M/S SPIRIT INFRASTRUCTURE PVT. LTD.
Case Briefing:
The present complaint is filed by the complainant under Section 17(1) (a) (i) of the Consumer Protection Act, 1986 (in short, the Act).
The complainant entered into Memorandum of Understanding (in short, the MoU) with the opposite party on 31.01.2011 for the allotment of one bedroom unit in the proposed Hotel Complex, to be known as Blessings, situated at Ajnala Road, Amritsar, (hereinafter referred to as the unit) along with advance money of Rs.2,00,000/-. As per the MoU, the unit was allotted to her. The total consideration of the unit was Rs.40,50,000/- and complainant paid whole amount till dated17.05.2012.
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As per the terms of the MoU, the opposite party agreed to pay the advance rental/return of Rs.37,500/-, per month, for the first 36 months of the date of the execution thereof till the commencement of the business. The possession of the unit was to be delivered within three years from the date of start of the construction of the project.
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After 15.03.2013, the opposite party stopped making payment of the advance rental to her. Thereafter, she sent e-mails dated 10.06.2014 and 30.06.2014, requesting it to pay the advance rental, but nothing was paid. By virtue of Clause-8 of the MoU, the opposite party is liable to pay the Minimum Guaranteed Amount of Rs.1,12,500/-, per quarter, for the unit, in question, until the commencement of the commercial operation.
The Ld. counsel cited the judgment of Punjab University Vs. Unit Trust of India & Ors. 2014, AIR 3670, SC and submitted that even if the complainant invested in the Hotel Complex, which is a commercial purpose, complainant falls under the definition of the consumer as she invested her hard-earned money for earning the rental.
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Judgement of the case:
The facts in Punjab University’s case (supra) are altogether different. The facts of the present case cannot be equated with the facts of that case.
In that case, the amount was invested by the University with reinvestment option of the dividend with UTI and the scheme of the UTI guaranteed protection of original capital and assured a return of 16% per annum, payable half yearly. Thereafter, further investment was made in the other scheme, floated by the UTI, and as per that scheme, the dividend was payable on maturity and minimum interest at the rate of 13.5% per annum was assured. The question arose, whether in respect of these investments, the University can be termed as consumer, as per the definition contained in the Act. While deciding that question, the Hon’ble Supreme Court recorded its finding, as to what is a commercial purpose for the purposes of that definition.
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It was held that the commercial purpose would cover an undertaking, the object of which is to make profit out of the undertakings. The investment, so made by the University, was not held to be a commercial activity in the peculiar circumstances of that case; by making observation that the services of UTI were availed for the betterment of the employees, by making the investment and no benefit, by way of profit, was to accrue to the University; thereby improving its balance-sheet, in view of the definition of the word commerce and under those circumstances, the University cannot be said to be indulging in any commercial activity, thus excluding itself from the definition of the consumer. It was further made clear that the intent of the Universities in the dispute was not profiteering and the same was for benevolent interest and there is no intention whatsoever that the investment was made for commercial purpose or gain.
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Therefore, the complainant invested in a commercial property for making profit and when such is the case, she cannot be termed as a consumer, hence complaint is not maintainable.
This post is written by Sonica Dhankhar.
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