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You don’t have to pay cash to be termed a consumer

One need not pay cash in lieu of services to qualify as a customer as defined by the 1986 Consumer Protection Act.

mumbai Updated: May 02, 2012 01:19 IST
Kanchan Chaudhari
Kanchan Chaudhari
Hindustan Times

One need not pay cash in lieu of services to qualify as a customer as defined by the 1986 Consumer Protection Act.

The National Consumer Disputes Redressal Commission (NCDRC) has held three city residents, who had paid a builder in kind, as consumers.

The NCDRC has now remanded the complaint filed by Jogeshwari residents Vasant Toraskar, Suman Toraskar and Mohini Deodhar against Shreeji Builders to the Maharashtra State Consumer Disputes Redressal Commission (MSCDRC).

The trio had paid in “kind’ – part development rights of their plot at Jogeshwari – for the builder’s services. They had executed an agreement in November 1987 under which the builder was to give them free three flats (two admeasuring 500 square feet each and the third admeasuring 230 square feet) and a shop, and a cash payment of Rs1 lakh each.

In return, the builder had been granted rights to develop the property and retain the rest of the constructed area.

The builder, however, handed over only one flat, prompting them to approach the MSCRDC in 2003. They had sought that the builder hand over the remaining two flats and the shop, and had also sought compensation of Rs1.25 lakh each.

The State Commission had rejected their plea observing the agreement between the plot owners and the builder was for a fully commercial joint venture with no element of hiring of services. It declined to treat the plot owners as ‘consumers’.

The NCDRC, however, did not find any clause in the agreement which could show that it was in the nature of a single business operated for joint profit for both the parties and, therefore, the transaction could not be termed as a joint venture.

“The consideration, in so far as the builder is concerned, comes in the form of the land for the project, less the cost of the flats and the shop agreed to be built for the plot owners,” the NCDRC observed.

“We have no hesitation in holding that the complainants are consumers with respect to Shreeji Builders, within the meaning of Section 2(1) (d) of the Consumer Protection Act, 1986.”

First Published: May 02, 2012 01:17 IST