'Onus on service provider to prove if transaction is commercial or not'

  • | Saturday | 17th December, 2016

Merely because Anand is staying abroad would not lead to an inference that the flats have been purchased for commercial purpose. It observed that a person who buy and sells houses on a regular basis so as to earn profits could be said to be purchasing them for commercial purpose. Anand was also awarded compensation of Rs 20,000 and Rs 50,000 for the two flats.The developer appealed against the orders. The complaint claimed that he must be given legal possession of the flats along with compensation.The complaint was contested. The developer claimed that the land owner was not a party to the transaction and had been needlessly dragged into litigation.

Goods or services for commercial purposes fall outside the purview of the Consumer Protection Act . Whether a particular transaction is for commercial purpose or not, is a matter of fact, which has to be established on a case to case basis.Case Study: Vasant Prabakar Darekar, proprietor of Darekar Developers, had undertaken a project at Kothrud in Pune, where he was to construct a building. Anand Vyankatesh Horaddi had booked two flats in this project, one flat with a builtup area of 430 sqft for Rs 21,50,000 and the other measuring 870 sqft for Rs 43,50,000.According to the registered agreements executed on June 25, 2010, possession of the flat was to be given within 18 months. Anand made the down payment and availed of a housing loan from the State Bank of India. The last instalment payable at the time of receiving possession was paid through by cheque, and possession was taken over for "fitout" purpose.Anand was shocked when he subsequently received a notice from the developer along with a Deed of Cancellation , alleging that some instalments were outstanding. In the ensuring correspondence, the developer alleged that he had not received the loan amount through the bank.Aggrieved, Anand filed a complaint through his sister and constituted attorney Nirmala Rajendra Horaddi on the strength of a power of attorney given in her favour. This complaint was filed before the Maharashtra State Commission against Vasant Prabhakar Darekar as the developer and also against Satish Prabakar Darekar as the land owner. The complaint claimed that he must be given legal possession of the flats along with compensation.The complaint was contested. The developer claimed that the land owner was not a party to the transaction and had been needlessly dragged into litigation. Since two flats had been booked, the Anand was not a consumer, but an investor, and so the complaint would not be maintainable.In its judgement of August 30, delivered bycalong with P B Joshi, the state commission rejected these defences. It observed that a person who buy and sells houses on a regular basis so as to earn profits could be said to be purchasing them for commercial purpose. Merely because Anand is staying abroad would not lead to an inference that the flats have been purchased for commercial purpose. Since the builder had failed to encash the cheque for the final instalment , Anand was asked to pay the final instalment and the developer was ordered to hand over possession of the flats. Anand was also awarded compensation of Rs 20,000 and Rs 50,000 for the two flats.The developer appealed against the orders. The builder also argued that Anand had not filed his own affidavit, and that of his constituted attorney could was not acceptable.The National Commission observed that the developer's contention that Anand had purchased the flats for commercial purpose was not substantiated by any supporting evidence. So Anand could not be deprived of the remedy under the Consumer Protection Act. Since the builder had not raised any objection before the state commission to the affidavit of evidence being filed by Anand's sister as the constituted attorney, this objection could not be raised in appeal.Accordingly, by its order of December 1, delivered by Justice D K Jain, president of the National Commission along with member M Shreesha, the developer's appeal was dismissed and the order of the state commission was upheld.Conclusion: Thus onus of proving commercial purpose rests on the service provider, who seeks to oust the jurisdiction of the consumer forum. Also, if no objection is taken during the trial of a case, it cannot be raised in appeal.

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