NCDRC: Person who has paid earnest money can be considered ‘consumer’

National Consumer Disputes Redressal Commission (“NCDRC): The NCDRC has held that in transactions where a person has paid an advance amount to show goodwill and a sincere intention of completing the transaction by way of depositing earnest money, he can be considered a consumer.

The appellant had applied to the respondent for allotment of a plot of land and had made an advance payment for the same. He communicated to the respondent a change in his address via to letters but no reply was received. He then sent an email which was acknowledged and a roof of the change was demanded. The appellant replied stating that he had provided the proof in the previous letters but there was again no reply from the respondent.

The petitioner approached the district consumer forum which directed the respondent to allot said land to the appellant but the respondent challenged the district forum’s pecuniary jurisdiction in the state commission which set aside the order. The appellant then approached the NCDRC which rejected his petition. The appellant then again petitioned to the state commission which rejected his application holding that he did not qualify as a ‘consumer’.

The respondent contended before the district forum that the money deposited by the petitioner was adjusted as booking fees and he had failed to pay further amounts required to confirm the booking despite communications sent to his updated address.

The petitioner drew the Commission’s attention to Harminder Kaur, Mandeep Kaur v. Haryana Urban Development Authority, 2013 (4) CPJ 144 where the Commission had held that once money has been deposited by a person, he qualifies as a consumer and since the respondents had encashed the cheque drawn by the petitioner in their favour, he too qualifies as a consumer and the state commission was wrong in relying upon the case of Punjab Urban Planning and Development Authority v. Krishan Pal Chander, 2010 (2) CLT 546, which dealt with different facts.

The Commission perused the evidence and observed that though the builders did send a letter of allotment to the petitioner, they later cancelled it via another letter, but it was incorrect on part of the state commission to hold that this did not amount the petitioner’s request for allotment turning into an actual allotment. Though the same was cancelled the payment of earnest money did make him a consumer, and the case at hand could not be equated to the Krishan Pal case where the matter involved deposition of merely registration amount and not earnest money.

Hence the state commission’s decision was set aside and it was directed to hear the matter again and decide as per law. [CS Grewal v. M/s Taneja Developers and Infrastructure Ltd., FA No. 543/2016, decided on 17-05-2018]

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