Intent Behind Purchasing Shop Was Self – Employment, NCDRC Holds Complainant As Consumer, Orders Refund

The National Commission while holding the builder accountable for failing to provide possession on time directed the builder to refund Rs. 38 lakhs along with interest to the complainant.

Previously, the State Commission had dismissed the complainant's complaint on the grounds that the shop was intended for commercial use and therefore, the complainant did not fall under the definition of a consumer.

Background Facts

The complainant booked a shop on the upper ground floor in the builder's (Opposite Party) commercial project named Drive Mart located in Greater Noida, Uttar Pradesh.

Further, the complainant was informed that if she made an initial payment of Rs. 11,95,000/- to the builder the total sale consideration of the shop would be reduced. Subsequently, the complainant paid approximately Rs. 38,62,000/- to the builder.

On 25.09.2017, the builder executed an allotment agreement in favor of the complainant. As per the agreement the builder was supposed to complete the project within three years with a six month grace period.

However, the builder failed to complete the project and hand over the shop to the complainant. Therefore, being aggrieved the complainant filed a complaint before the State Commission seeking a full refund along with compensation for the hardship caused.

The State Commission dismissed the complaint on the grounds that the unit was intended for commercial use thereby excluding her from consumer protections under Section 2(1)(d) of the Consumer Protection Act, 1986.

Consequently being aggrieved by the dismissal of the complaint the complainant filed an appeal before the National Consumer Disputes Redressal Commission (NCDRC) challenging the State Commission interpretation of the Consumer Act.

Observation by National Commission

The Commission allowed the appeal and held that the complainant intent was to use the property for self-employment. Therefore, the complainant falls under the definition of a consumer under the Consumer Act.

The Commission observed that the delay in handing over possession of the shop has caused significant financial problems and distress to the complainant.

Furthermore, the Commission rejected the builder's contentions that the delay was caused by external factors like litigation and regulatory orders. The Commission found that the builder's actions constituted negligence.

The Commission directed the builder to refund the entire amount of Rs. 38,62,000/- to the complainant with 9% per annum interest calculated from the date of the initial payment until the full repayment is made. Additionally, the Commission directed the builder to pay Rs. 25,000/- to the complainant as litigation costs.

Case – Shraddha Sachan Versus Aura Buildwell Private Limited

Citation – First Appeal No. 933 Of 2020

Counsel for Complainant – Advocate-On-Record Anshul Gupta, Advocate Kirti Dua and Advocate Shubham Kaushik, ANG Partners

Click Here To Read/Download The order