{"id":242879,"date":"2021-01-27T17:30:39","date_gmt":"2021-01-27T12:00:39","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=242879"},"modified":"2021-04-02T18:38:24","modified_gmt":"2021-04-02T13:08:24","slug":"ncdrc-whether-a-company-purchasing-commercial-space-for-its-office-is-consumer-under-consumer-protection-act-2019-commission-answers","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2021\/01\/27\/ncdrc-whether-a-company-purchasing-commercial-space-for-its-office-is-consumer-under-consumer-protection-act-2019-commission-answers\/","title":{"rendered":"NCDRC | Whether a company purchasing commercial space for its office is &#8220;consumer&#8221; under Consumer Protection Act, 2019? Commission answers"},"content":{"rendered":"<p style=\"text-align: justify;\"><strong>National Consumer Disputes Redressal Commission (NCDRC): <\/strong>Dinesh Singh (Presiding Member), expressed that whether, for a particular purpose, a company is a \u2018consumer\u2019, has principally to be determined by examining the facts and specificities of the case.<\/p>\n<p style=\"text-align: justify;\">In the instant matter, the complainant had filed the complaint under Section 58(1) (a) read with Section 59 of the Consumer Protection Act, 2019.<\/p>\n<p style=\"text-align: justify;\">11 units, comprising the entire Mezzanine Floor of Summit Business Bay Andheri, were purchased by the Complainant Co. from the Builder Co. for a total consideration of Rs 17,95,30,000.<\/p>\n<p style=\"text-align: justify;\"><strong>Preliminary Issue:<\/strong><\/p>\n<p style=\"text-align: justify;\"><span style=\"color: #000000;\">Whether the Complainant Co. is a \u2018consumer\u2019 under the Act?<\/span><\/p>\n<p style=\"text-align: justify;\">A Company is included in the definition of \u2018person\u2019 contained in Section 2(31)of the Consumer Protection Act, 2019, it is not <em>per se <\/em>precluded from being \u2018consumer\u2019, provided, if, for a particular purpose, it meets the requirements of \u2018consumer\u2019 as defined in Section 2(7) of the Act 2019.<\/p>\n<p style=\"text-align: justify;\">Further, it was added that:<\/p>\n<p style=\"text-align: justify;\">[a] \u2018housing construction\u2019 under the definition of \u2018service\u2019 in Section 2(42) cannot be construed \u00a0to include construction of a commercial complex for commercial activity; and<\/p>\n<p style=\"text-align: justify;\">[b] commercial space in a commercial complex for an office of a company engaged in a business to generate profit is for \u2018commercial purpose\u2019.<\/p>\n<p style=\"text-align: justify;\">Bench stated that a plain reading of Section (7)(ii) and Section 2(42) of the Act 2019 makes it clear that the Complainant Co., which has purchased commercial space for its office in a commercial complex, is not a \u2018consumer\u2019 under the Act 2019.<\/p>\n<p style=\"text-align: justify;\"><em>\u201c\u2026if, for a particular purpose, a company does not meet the ingredients of \u2018consumer\u2019 under the Act 2019, it will not be left remediless, it can avail of remedies available under other existing laws.\u201d<\/em><\/p>\n<p style=\"text-align: justify;\">Commission referred to the Supreme Court decision in<em> Lilavati Kirtilal Mehta Medical Trust v. Unique Shanti Developers, <\/em><a href=\"http:\/\/www.scconline.com\/DocumentLink\/MNlzf7CF\">(2020) 2 SCC 265<\/a>, wherein it was decided that <em>If, for a particular purpose, a company wants to enter the consumer protection fora, whether or not it is a \u2018consumer\u2019 has to be (reasonably and logically) adjudged in the given facts and specificities of each case (\u201ca straight-jacket formula cannot be adopted in every case\u201d; \u201cThe question of whether a transaction is for a commercial purpose would depend upon the facts and circumstances of each case\u201d).<\/em><\/p>\n<p style=\"text-align: justify;\">Further while addressing the question relating to the purchase of commercial space in a commercial complex, in its own name, as its, the company\u2019s property, its immovable capital assets, Bench stated that:<\/p>\n<p style=\"text-align: justify;\"><strong>\u201ca company creating immovable capital assets in the form of lands and buildings, in its own name, for its office, is differently placed from a company buying a car, in its own name, \u2018solely or principally\u2019 for the personal use of its Directors or employees.\u201d<\/strong><\/p>\n<p style=\"text-align: justify;\">While analysing, another significant aspect that was added by the Bench was that, a company purchasing commercial space for its office in a commercial complex, is materially different from a company indemnifying its raw materials, goods in process, finished goods, plant and machinery, lands and buildings, etc., by taking insurance. In such case, the purpose is indemnification against perils, nothing per se to do \u2018closely and directly\u2019 with its profit-generating activity, the \u2018dominant purpose\u2019 is not linked with its commercial activity, as such the company straightaway falls within the meaning of \u2018consumer\u2019 in accordance with Section 2(7), without necessitating a detailed exposition.<\/p>\n<p style=\"text-align: justify;\">Hence, Complainant\u2019s case that it is a \u2018consumer\u2019 failed on its facts and on the law. Commission also observed that allowing anyone into consumer protection for has adverse ramifications:<\/p>\n<p style=\"text-align: justify;\">[a] evasion of court fee in civil courts; and<\/p>\n<p style=\"text-align: justify;\">[b] eroding into the time and resources of consumer protection fora, which could otherwise be better devoted to the ordinary general consumers, who straightaway fall, <em>ex facie<\/em>, in the definition of \u2018consumer\u2019 (without having to write a treatise to enable their anyhow entry into the fora).<\/p>\n<p style=\"text-align: justify;\">In light of the above discussion, it was found that the complaint was not maintainable before the Commission. [Freight System (India) (P) Ltd. v. Omkar Realtors and Developers (P) Ltd., <a href=\"http:\/\/www.scconline.com\/DocumentLink\/Y716Mcir\">2021 SCC OnLine NCDRC 19<\/a>, decided on 25-01-2021]<\/p>\n<hr \/>\n<p style=\"text-align: justify;\"><strong>Advocates for the parties:<\/strong><\/p>\n<p style=\"text-align: justify;\">For the Complainant: Vivek Kohli, Senior Advocate with Bharti Chawla, Advocate.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>National Consumer Disputes Redressal Commission (NCDRC): Dinesh Singh (Presiding Member), expressed that whether, for a particular purpose, a company is a \u2018consumer\u2019, <\/p>\n","protected":false},"author":8808,"featured_media":199533,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,11],"tags":[39611,34012,14601,29785,2769,33186],"class_list":["post-242879","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-tribunals_commissions_regulatorybodies","tag-commercial-purpose","tag-company","tag-consumer","tag-law","tag-relief","tag-remedy"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.4 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>NCDRC | Whether a company purchasing commercial space for its office is &quot;consumer&quot; under Consumer Protection Act, 2019? 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