Case: SANJAY BANSAL Vs. M/S VIPUL LTD. (FORMERLY KNOWN AS VIPUL INFRASTRUCTURE DEVELOPERS LTD.)

3. The respondents raised a preliminary objection to the maintainability of the complaint in their counter affidavit on the ground that since the appellant had booked four flats, the purpose was resale and commercial gain. Hence, it was pleaded that the appellant is not a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1986 ( Act). The averments in that regard in the objection raised by the second respondent are as follows:-1. …The complainant had applied for these flats with a clear intention of resale. The purpose by applying for four flats i.e. on such a large scale by the complainant was only resale for commercial gain. The complainant, as is apparent from his complaint, intended to make short term profits by selling the four flats which were tentatively allotted to his; subject to certain conditions. The complainant had no intention to use the four flats as a residential / dwelling unit for himself or his family……4. The appellant contested the above objections and stated that the flats were not intended for commercial resale but for the members of his family. The appellant has made the following averments in response:1. It is admitted the complainant applied for the allotment of four flats in the Orchid Petals housing project, but it is denied that the complainant applied for the flats for commercial resale and to earn commercial gains there-from. The complainant wanted to live near his family members and therefore, he applied for the flats. It is surprising he applied for the flats. It is surprising that how and in what manner the defendant no. 2 suo motto came to the conclusion of the intention of the complainant of not using the flats as residential house for himself or his family mem- bers and also about his financial capacity to pay the installments of the flats. The complainant belongs to prestigious alumini of India Institute of Management and is a successful entrepreneur having an Income of Rs. 2.18 Crore as per the ITR of As- sessment Year 2005-2006, Rs. 1.52 Crore as per the ITR of Assessment Year 2004-2005, therefore the op- posite Parties allegation that the complainant has no capacity to pay is incorrect5. The NCDRC rejected the consumer complaint and upheld the objection. The grounds which weighed with the NCDRC emerge from the following extract from its decision:7. ... The fact that the complainant had booked four flats makes it clear that the aforesaid book- ing obviously was not for the purpose of residence and the hidden purpose behind aforesaid four book- ings was to make profits on re-sale of the proper- ties. Our aforesaid conclusion is strengthened from the fact that the complainant admittedly booked four flats knowing fully well that the oppo- site parties did not have necessary sanctions and approvals for the project at the relevant time. The plea of the complainant that he had booked those flats for himself and his family members is not ac- ceptable for the reason that in the complaint the complainant has not clarified who were the family members for whose residence he had booked those flats. The complainant has placed on record the terms and conditions for registration and allotment of flats in the aforesaid project. On perusal of the terms and conditions signed by the complainant for respective flats it is clear that all these terms and conditions vis a vis the booked flats are signed by the complainant at Gurgaon on 4 th August 2004 as sole/1st applicant. Though there is a column for signature of second applicant, it has not been signed by anyone. Had the plea of the com- plainant that he had booked those flats for the residence of his family members been correct, he would have obtained the signatures of the respec- tive family members as second applicant for whom the respective flats were booked. Thus, we have no hesitation in concluding that the flats in question have been booked by the complainant with the inten- tion to make commercial gains by re-selling the flats on completion at higher rate.

Court's reasoning:
8. We find that the NCDRC has proceeded to decide the objections to the maintainability of the complaint on an ipse dixit. The fact that an individual has booked four flats may not by itself be a circumstance on the basis of which a conclusive presumption can be drawn that he or she is not a consumer in the absence of evidence regarding the purpose of the purchase. Ultimately, it is a matter to be decided on the basis of evidence whether, as the appellant pleads, the flats were booked not for the purposes of resale, but for the members of his family. The appellant has seriously contested the claim of the developer that the flats were booked by way of an investment, for commercial resale9. At this stage before the NCDRC, there was no material on the basis of which a conclusion could have been drawn one way or the other. The NCDRC has sought to buttress its finding by recording that the appellant had booked the flats at a stage when sanction and approval for the project had not been obtained. This again may not strictly be a relevant consideration since a prospective buyer may invest in a building project bonafide, placing trust in the reputation of the builder to deliver possession. The fact that the appellant did not specifically mention the names of the members of his family may be one factor which may be placed in the balance in the ultimate decision. However, a finding, whether the appellant is nor is not a consumer should have been arrived at after the pleadings were complete and the parties had an opportunity to adduce evidence in support of their respective cases. Absent such an exercise, the decision of the NCDRC rests purely on assumption or surmise.