Real estate company held consumer despite business status when purchasing flat for director's personal residence

The SC dismissed the appeal in a consumer dispute involving property allotment. The respondent company, despite being in real estate business, was held to be a consumer as the flat was purchased for personal residence of a director's family, not for commercial purposes. The court found the appellant guilty of unfair trade practice and deficiency in service due to double allotment and unjustified cancellation with forfeiture of deposited amount. The SC upheld NCDRC's direction to refund Rs. 7,16,41,493/- with 6% interest, directing immediate payment of Rs. 3 crore within two weeks and balance by December 31, 2024, with recovery powers to Collector if defaulted.

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Issues:
1. Whether the respondent qualifies as a 'consumer' under the Consumer Protection Act, 2019.
2. Whether there was a deficiency in service or unfair trade practice by the appellant in the allotment and subsequent cancellation of the flat, leading to the forfeiture of the deposited amount.

Analysis:

Issue 1:
The National Consumer Disputes Redressal Commission (NCDRC) held the respondent to be a 'consumer' under the Act, citing previous court decisions. The Act defines a 'consumer' as a person who buys goods for personal use, excluding those for resale or commercial purposes. The Supreme Court affirmed this interpretation, emphasizing that the dominant intention behind the purchase determines if it was for commercial purposes. In this case, the respondent bought the flat for personal use, not for commercial gain, as evidenced by the purpose of residence for a director and his family. The burden of proving commercial intent lay with the appellant, who failed to provide evidence connecting the purchase to real estate business. Therefore, the complaint was deemed maintainable.

Issue 2:
Regarding the second issue, the Court found that the appellant had committed a deficiency in service and unfair trade practice. The confusion arose due to the double allotment of the flat to both the respondent and another individual. This confusion persisted until resolved by a rectification deed in 2018. The Court ruled that the appellant unjustly terminated the allotment and forfeited the deposited amount before resolving the double allotment issue. As a result, the appellant's actions were deemed unfair, leading to a deficiency in service. The Court upheld the NCDRC's decision to direct the refund of the forfeited amount with compensation. The appellant was instructed to refund the amount within a specified timeframe, failing which the Collector could recover the sum as arrears of land revenue.

In conclusion, the Supreme Court dismissed the appeal, affirming the NCDRC's decision on both issues and directing the appellant to refund the amount as ordered.

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