Owning Of Two Residential Properties At A Time, Can Not Change The Status Of Buyer From Consumer To Commercial Investor

Till recently, it was considered that an individual can occupy just one flat. If he purchases several flat, then it is presumed that the purchase is for the commercial reason such as rental property or long term investments etc. Several cases in the consumer forums were dismissed for this reason. The National Commission has clarified on legal requirements in this regard.

Owning Of Two Residential Properties At A Time Can Not Change The Status Of Buyer From Consumer To Commercial Investor

There is a case study published in the newspaper when the cases of grieved home buyers were dismissed on this point. In one such case of Rajesh and Deepa Malhotra with their sons Rohan and Parvan, all residents of Gurgaon housing project, booked two villas in Goa that were being constructed by Acron Developers. The villas were booked under two agreements, the very first in the name of the parents with one son, as well as the second in the name of the parents with the other son. The total cost of both the villas was approximately Rs1.38 crores. Possession was supposed to be delivered in April 2007.

When Malhotra inquired about the progress of the construction, the builder failed to furnish these details, and instead threatened to terminate the agreements for non-payment of installments. The builder also collected various additional amounts. Before the Goa State Commission up against the developer along with its directors for a refund of the wrongly collected extra amount, Malhotra filed a complaint. The builder contested the complaint.

The State Commission concluded that the villas were purchased for the commercial purpose. Additionally, it observed there were two agreements in various names, so one combined complaint could not be filed for two separate transactions. It dismissed the complaint and ordered Malhotra’s to pay Rs.ten thousand for misusing the provisions of the Consumer Protection Act.

Malhotra’s challenged this order in appeal. The National Commission observed that commercial purpose would need to be determined on the basis of the primary motive of trading or business activity for the purpose of making a profit. The mere assertion by the builder that the properties are purchased for commercial purpose is not sufficient. The National Commission also observed that two villas were purchased by the parents, one for every son. Even if a residential house, flat, or villa is let out, it could not add up to commercial purpose. Accordingly, by order dated 5.11.2015 delivered by the Bench of Justice D.K. Jain and M. Shreesha, the National Commission allowed Malhotra’s appeal and hold them to be the rightful consumers and sent the complaint back to the State Commission for the decision on merits. Additionally, costs of Rs.25,000 was also awarded to the Malhotras. Exactly the same view was reiterated throughout the second round of appeal, in which the same Bench passed an order on May 16 directing their state Commission to determine the complaint expeditiously on merits within six months.

In another such case of Ms. Vimala Agarwal who had purchased two flats from Saijayini Housing , the Karnataka State Commission dismissed the complaint with the observation that the purchase of two flats proves that the investment made was for your commercial purpose and hence the complainant does not fit in the definition of consumer prescribed by the consumer protection act of India. Whereas, Justice D.K. Jain, then president of the National Commission, stated in an order dated August 19 that a complaint can not be dismissed on a presumption without considering this matter on the basis of evidence produced during the course of adjudication of the complaint.

The National Commission has now clarified the law on this subject and no case of this nature cannot be dismissed merely on the assumption of commercial usage of property if the user owns more than one property.

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Post Author: IHP News Network

4 thoughts on “Owning Of Two Residential Properties At A Time, Can Not Change The Status Of Buyer From Consumer To Commercial Investor

  • Deepika Malik

    (August 30, 2016 - 9:10 pm)

    Kochi Marine Drive – Destination for an uber luxurious home
    At present, the outlook for the overall real estate market may not seem very positive, but the converse is true in case of the luxury housing segment. In India, this particular segment has certainly evolved over the years, with builders and developers surpassing the expectations of real estate investors. A couple of years ago, a coveted locality or address was sufficient to lure luxury home buyers. However, globetrotting Indians now have a taste of what defines world-class luxury; hence, they demand more than just a desirable address, and real estate developers are more than happy to oblige. This segment has attracted a lot of NRIs who not only want a plush home replete with state-of-the-art amenities, but also want an overall opulent lifestyle for which they are open to looking beyond bustling metropolitan cities like Mumbai and Delhi.
    Kochi, Nagpur, Chandigarh and Coimbatore are some of the cities that offer this enticing combination. Kochi in Kerala is a particular hot favorite in the real estate market as it flaunts the potential Smart City tag given by the Government. The combination of solid infrastructure and connectivity benefits are the fundamental reasons behind a builder or developer’s choice of smart cities as a destination for high-end properties. With new projects in Kochi coming up in various areas of the city, the areas themselves are getting a facelift in terms of connectivity and infrastructure.
    Prime localities in Kochi, like Marine Drive, mainly offer luxury multi-storey and water-front apartments, and villas designed by globally acclaimed designers and landscaping artists. This locale will also be in proximity to the newly proposed metro and railway station. Many of the upcoming projects in Kochi belonging to the luxury segment boast of world-class designs and amenities that don’t compromise on elegance and grandeur.
    Luxury housing in India is undoubtedly slated to be the next big thing. Thus, it is advisable to be prudent and invest as early as possible to reap the benefits.
    Tata Realty And Infrastructure Ltd
    Goshree Pachalam Link Road, Marine Drive,
    Kochi- 682018
    Contact No Tel : +91 9037700111 & 0484 6400020 / 21
    Email ID tritvam@tata.com

  • pradeep peter

    (August 30, 2016 - 11:43 pm)

    Its really a good information for many people who own or buy two properties and who can fight against justice

  • Key 2 Homes

    (September 3, 2016 - 4:13 pm)

    Very informative article. I appreciate your efforts to write such an excellent Blog for us. It will be very helpful for everyone.

    We are a property dealer and offering
    residential apartments in the different areas of Lucknow.

  • Deepa Karmakar

    (September 3, 2016 - 6:37 pm)

    Useful Blog ..

    Check out 2 best projects of upcoming tie 2 cities .

    Nagpur – http://www.capitolheights.in/
    Kochi – http://www.tritvam.com

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