Mere Ownership Of Multiple Properties Doesn't Imply Commercial Intent: Delhi State Commission Holds Omaxe Ltd. Liable For Deficiency In Service

Brief Facts of the Case

The complainants booked a flat in the 'Royal Street' project by Oxame Ltd/builder. Despite timely payments totaling Rs. 39,60,002.04, the builder failed to deliver possession within the agreed timeframe of 18/24 months. After an excessive delay, the builder demanded extra payments and eventually offered possession with incomplete and defective construction. Despite promises to rectify the issues, the builder has not left the flat uninhabitable. Aggrieved by this, the complainants filed a consumer complaint before the State Commission and sought possession of the flat, a refund of excess payments, and compensation for the delay and inconvenience caused by the builder's actions.

Contentions of the Builder

The builder contested the case and raised preliminary objections regarding the complaint's maintainability. It was argued that the complainants were not consumers under the Consumer Protection Act 1986, as their investment was aimed at profit, constituting a commercial purpose. They also contended that the commission lacked territorial jurisdiction and cited an arbitration clause in the allotment letter, barring the commission's jurisdiction. The builder asserted that they had offered possession of the flat within the stipulated period as per the agreement, thus denying any deficiency on their part. They urged the commission to dismiss the complaint based on these objections.

Observations by the State Commission

The State Commission deliberated on whether the complainants qualified as 'consumers' under the Consumer Protection Act 1986. Referencing legal cases like Aashish Oberai Vs. Emaar MGF Land Limited (2017) CPJ 17(NC) and Narinder Kumar Bairwal vs. Ramprastha Promoters and Developers Pvt. Ltd. (2019), the commission underscored that mere ownership of multiple properties doesn't necessarily imply commercial intent. Lacking documentary proof of commercial purpose, the builder's objection was dismissed. Regarding jurisdiction, the commission affirmed its authority based on the builder's office location, citing Rohit Srivastava v. Paramount Villas Pvt. Ltd. (2017 SCC OnLine NCDRC 1198). Despite an arbitration clause in the agreement, the commission maintained jurisdiction, as the complainants opted for consumer protection remedies, aligning with Emaar MGF Land Limited vs. Aftab Singh (2019) CPJ 5 (SC). The commission noted the builder's failure to deliver possession within the agreed period, identifying a deficiency of service, as per Arifur Rahman Khan vs. DLF Southern Homes Pvt. Ltd. (2020 (3) RCR (Civil) 544).

The State Commission allowed the complaint and directed the builder to pay the penalty for delayed possession @ Rs. 5 per sq. ft per month along with a sum of Rs. 1,00,000 as cost for mental agony and harassment to the Complainant. It also directed the builder to pay a litigation cost of Rs. Rs. 50,000.

Case Title: Ms. Pratima Saini Vs. M/S Omaxe Ltd.

Case Number: C.C. No. 425/2018

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