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SC – Consumer – Leasing a residential flat not commercial purpose – Consumer Rights of Home Buyer restored

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appellants filed a complaint before the NCDRC for seeking a direction to the respondents to pay (i) Rs. 1,59,89,994/- being 18% interest; (ii) Rs.50,00,000/- as compensation for mental agony and harassment; (iii) Rs.15,00,000/- as compensation due to the change in location of Tower C; (iv) Rs.35,61,494/- as excess amount realized towards fixtures and fitting; (v) Rs.2,50,000/- as the litigation costs; and (vi) any other relief which is deemed fit and proper.

The respondent no.1 alleged that the appellants have purchased the flat for commercial purpose, it was let out after taking possession and therefore, they are not consumers.

The determinative question is whether the dominant intention or dominant purpose behind purchasing the flat was to facilitate profit generation through commercial activity, and whether there exists a close and direct nexus between the purchase and such profit-generating activity. The respondents have not placed any cogent material on record to establish such nexus. The mere factum of leasing out the flat does not, by itself, demonstrate that the appellants purchased the property with the dominant purpose of engaging in commercial activity. The question of what constitutes ‘commercial purpose’ is a question of fact to be decided in the circumstances of each case based on the purpose to which the goods/properties were purchased.

Lease the flat does not amount to “commercial purpose” for the Consumer Protection Act and does not exclude status of the complainant as “consumer”.

SC – Leasing or Renting of a residential flat does not automatically strip of the consumer rights unless dominant purpose was commercial profit.

SC on Commercial Purpose & Leasing of the Flat for Consumer Protection Act and Status of Complainant as Consumer

SC – Leasing a residential flat on rent does not amount to commercial purpose – Consumer Rights of the Complainant – Home Buyer were restored

SC – Developers must establish clear evidence of commercial intent or commercial purpose if they wish to exclude home buyers from the definition of “consumer”.

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