NO AGREEMENT FOR SALE, NO REFUND, RULES MAHARERA, MUMBAI

 

NO AGREEMENT FOR SALE, NO REFUND, RULES MAHARERA

 

Brief Facts

A group of 15 persons who had booked flats in JVPD Properties Pvt. Ltd. (commonly known as Bhagtani group) Serenity project in Powai  filed a complaint with the MahaRERA, Mumbai  claiming refund of the amounts paid by them to the builder together with interest.

The builder  had  only given them allotment letters that contained a clause saying their investments will be refunded with a15 per cent interest if project approvals do not come forth. Similar allotment letters were issued to buyers in Riyo (Mira Road), Sapphire (Dahisar) and Savannah (Kanjurmarg) housing projects. There was no Agreement for Sale.

 

Decision

By his order dated December 29, 2017, Bhalchandra Kapadnis,  the Adjudicating officer and Member, MahaRERA, Mumbai  held that if the builder had not entered into an Agreement for Sale, the purchasers could not approach RERA.

He held that Section 18 clearly stipulates that a promoter is liable to pay interest or compensation if he fails to complete or is unable to give possession of an apartment in accordance with the terms of agreement for sale.

“The Section 18 clearly indicates that there must be an agreement for sale for invoking Section 18. The allottee gets a refund only when the promoter fails to complete the apartment in accordance with the terms of agreement for sale or he is unable to give possession on the date specified in the agreement. Therefore, in the absence of any agreement for sale, section 18 has no role to play. It is necessary to bear in mind that issuance of allotment letter is the first stage and execution of the agreement for sale is the subsequent stage,” said Kapadnis in his ruling.

The affected persons are going to file appeal.
I suggest they approach the Consumer Forums.

MOFA – No conveyance for 21 years – Director of Satellite Developers sentenced to  two years jail

 

MOFA – No conveyance for 21 years – Director of Satellite Developers sentenced to  two years jail


Builders violate the provisions of the Maharashtra Ownership of Flats Act (MOFA) with impunity. But MOFA contains harsh punishments which aggrieved purchasers of flats do not resort to for fear of retaliation or ignorance or both.

The following case is a good example how effective MOFA can be.

 


Facts

 

Ravindra Hingwala, one of the flat owners of a building in Ghatkopar, Mumbai, moved the Magistrate’s Court in 2006 against Kiran Amin, Director of Satellite Developers Pvt. Ltd.  (builder) for not completing the conveyance.  The completion certificate of the building was obtained in 1989. The mandatory housing society was registered in 1996. But conveyance has still not been given.

 

Hingwala told the Magistrate that he had purchased the flat from Jasmine Builders Pvt. Ltd. In 1992, Satellite Developers Pvt. Ltd. took over the rights and liabilities of Jasmine Builders Pvt. Ltd.


Hingwala argued that according to Section 11 of the MOFA, Kiran Amin, Director of Satellite Developers Pvt. Ltd. should have conveyed the property to the housing society within four months from the registration of documents.

 

Builders Arguments

 

The Builder contended that the Complainant could not move the court on his own in the absence of the co-operative housing society.

The Builder also contended that the fact that the question of conveyance is presently a subject of arbitration is a reasonable cause for not handing over possession of the plot to the Complainant and therefore, no offence under Section 13(1) of MOFA is made out.

 

The Builder further contended that new buildings were constructed by the accused in 2003 on the same land, which is required to be conveyed to Gayatri Dham, therefore conveyance cannot be executed in favour of it.

 

(Section 13(1) of MOFA provides that if the promoter is able to show reasonable cause because of which it is not possible to give conveyance, same could not constitute an offence under this Act.)  

 

Decision and Jail

 

Sri V V Patil, Magistrate at Vikhroli Court relied on the observations of the Sessions Court which had dismissed the appeal of the accused against the issuance of process in the case. The Sessions Court had observed that a Complainant, being a member of the society, is entitled to get conveyance on his behalf from the promoters under Section 11 of the MOFA. “Promoters are under legal obligation to convey the title and execute the documents in his favour. They did not convey with this legal provision. The Complainant is, thus, an aggrieved person,” the Sessions Court had said.

 

The Magistrate pointed out that the grounds of reasonable excuse raised by the accused has been rejected by the Bombay High Court and Supreme Court over the years in appeals filed by the accused. “Moreover, the offence was committed in June 1996, and there was no other construction on the land except Gayatri Dham building. Therefore, there was no excuse for the accused to withhold the conveyance,” the Magistrate held.

 

The Magistrate said, “For more than 10 years, the complainant is awaiting conveyance of the plot, which the accused failed to give. Considering the facts of the case, the conduct of the accused and intention of the legislature behind enacting the legislation, I am of the view that the accused be dealt with necessary punishment under the Act.”


Sri V V Patil, the Magistrate found Kiran Amin, Director of Satellite Developers Pvt. Ltd, guilty under the provisions of the Maharashtra Ownership of Flats Act (MOFA) and sentenced him to simple imprisonment for 2 years.

 

I am giving the link to the full decision:

http://services.ecourts.gov.in/ecourtindia/cases/display_pdf.php?filename=/orders/200349000972006_1.pdf&caseno=Summons%20Cases%20SS/4900097/2006&cCode=12&appFlag=

State Police Complaints Authority, Maharashtra

State Police Complaints Authority, Maharashtra

If you are not satisfied with the working of the police, like not registering FIR, etc.

You can send your complaint to the above authority for quick redressal.

Unfortunately, it does not have a proper web site…….

 

16 November 2017

I visited the office of the State Police Complaints Authority personally to file a complaint against the police for not registering an FIR.
The office people were nice.
Let us see the outcome.

Maharashtra Real Estate Regulatory Authority (MahaRERA)

 

Maharashtra Real Estate Regulatory Authority (Maha RERA)

RERA has effectively started functioning in Maharashtra.

Maharashtra Government had established Maha RERA on March 8, 2017 for regulation and promotion of real estate sector in the state, with its headquarters in Mumbai.

The RERA act, lays rules and regulation for the real estate sector. It is aimed to bring in much needed transparency, efficiency, and professionalism that will further strengthen home buyers’ confidence.
 

Gautam Chatterjee appointed first Chairman of MahaRERA 

RERA-Real Estate Regulatory Authority came into effect from May 1, 2017.

Gautam Chaterjee, an IAS Officer, has been appointed the first Chairman of the Maharashtra Real Estate Regulatory Authority (Maha RERA).


First Case to be decided under RERA

In its  first case,  taken up suo moto, the RERA authority imposed penalty of Rs. 1.2 lakhs on Sai real estate consultant firm

In its first decision in a case taken up suo moto,  the Real Estate Regulatory Authority (RERA) norms that have given a big boost to home buyers, a Chembur-based real estate consultant firm has been asked to pay Rs 1.2 lakh as fine for a misleading advertisement of an ongoing construction project.

Penalised under Maharashtra Real Estate Regulatory Authority (MahaRERA) act, Sai Estate Consultant became the first firm to be fined under the act. The Authority’s order, issued on Monday,  stated that the consultant was guilty of advertising a project which wasn’t registered with it at the time of advertising.

Under the new rules, advertising for sale of flats in projects that are not registered with the Authority is considered as a violation under the rules of the regulatory body. The firm, which advertised a project of Haware builders in Thane, has also been asked to withdraw the advertisement and restrain from promoting it in absence of the Authority’s registration.

In addition to the fine, the firm has also been asked to tender an apology. The action comes as result of a complaint, filed in this regard from consumer activist outfit, the Mumbai Grahak Panchayat. “We welcome this bold order, and hope builders and real estate agents learn lessons from it,” the activist outfit was quoted as saying by Indian Express.

The entire decision is available at the following site:

https://maharera.mahaonline.gov.in/Site/Upload/pdf/Legal-Advisor-MahaRERA-Vs-Sai-Estate-Consultant-Chembur-Pvt-Ltd-Suo-Motu-Case-No-1-of-2017-dated-5-06-2017.pdf


Important Links

The MAHARERA site states that even if you have filed a complaint in the Consumer Forum, you can with draw the same, and file the Complaint or application in RERA.

https://maharerait.mahaonline.gov.in/PDF/FAQMergedPDF.pdf

  1. If the buyer wants to file a complaint in Consumer Court, is there any bar under the Act?

Ans: No. As per section 79 of the Act, civil courts are barred from entertaining disputes (suits or proceedings) in respect of matters which Real Estate Regulatory Authority or the adjudicating officer or the Appellate Tribunal is empowered under the Act to determine. However, the consumer forums (National, State or District) have not been barred from the ambit of the Act. Section 71 proviso permits the complainant to withdraw his complaint as regards matters under section 12, 14, 18 and section 19, from the consumer forum and file it with the adjudicating officer appointed under the Act.

Web Site of MahaRERA

Link to the Web site of RERA where you can download the Act, Rules and  other documents.

https://maharera.mahaonline.gov.in/Home/Index

 

 

Public Garden converted into Club House – Chief Justice visits site

 

In a rare action, the Chief Justice of Bombay High Court goes incognito and catches a Builder’s lie.

By Alka Dhupkar, Mumbai Mirror | Updated: May 6, 2017, 08.05 AM IST

Final order likely next month; PIL says garden turned into clubhouse
Justice Chellur was stopped from entering a public park at Cuffe Parade, confirming allegations that the builder had turned it into a private space

A huge land parcel in south Mumbai will be thrown open to public after Manjula Chellur, chief justice of the Bombay High Court, inspected it incognito and found that allegations of a developer taking it over illegally were true.


Justice Chellur posed as a regular Mumbaikar out on a stroll last week when she was prevented by the builder’s security guards from entering the premises, abutting the 32-storey DSK Durgamata luxurious apartments at Cuffe Parade. It comes as no surprise that Justice Chellur, in her observation yesterday, said the premises should be restored as a public open space, and the security of the premises be taken over by the BMC. The matter has been posted for a final hearing next month. The case pertains to the 16,000 sq ft plot on Prakash Pethe Marg where DSK Developers were allowed to construct a gymnasium on 33% of the plot area. The remaining 67% – almost 11,000 sq ft – was to be developed for public usage.

A petition filed in HC by activist Sanjay Kokate said the builder usurped a plot to build a clubhouse, leaving little space for citizens. The petition added that the builder violated several conditions of the agreement with the BMC.

Nearly eight months after the petition was filed, the high court in March this year directed that a technical expert will inspect the plot. While an inspection committee submitted its report yesterday damning the builder, Justice Chellur, who experienced first-hand what hundreds of citizens attempting to access the garden go through, said the plot must be restored as public space immediately.

While representatives of DSK Developers refused to comment on Friday’s verdict, the inspection committee comprising officials of the Maharashtra State Legal Services Authority and the Bombay HC said it found nothing for the public at the premises. In a seven-page report, the committee said, “We did not find any equipment for children to play… no swings, no slides, nor benches there. There was a garden which could, at best, be described as a `landscape garden’, not a recreation garden.”

The report also said there were no signs that said the plot was for public usage. “Entry to the said area is restricted by deploying security guards at the gate. The access way is used by the occupants of the DSK tower for ingress. We were stopped at the entrance by the security guards, and allowed to enter only after disclosing our identities,” the report said.

Petitioner Kokate’s lawyer Yusuf Iqbal Yusuf said the case was a classic example of a public property being converted for personal use. “An independent surveyor appointed by the HC last year prepared a fake report to favour DSK. The chief justice, however, appointed court officers to inspect the premises. Also, in the most proactive manner, the chief justice herself visited the premises without informing anyone and said she was also prevented from entering the premises. The court has now posted the matter to June for passing final orders,” Iqbal said.

 

(Reproduced from Mumbai Mirror.)

 

Builder liable to hand over areas shown open in the original plans (even if the constructions are made with the approval of the Municipal Corporation)

 

Duty of  Builder :

To pay Interest and compensation for delayed possession;  builder liable to hand  over areas shown open in the original plans (even if the constructions are made with the approval of the Municipal Corporation) and that  no fees can be collected for car parking spaces.

 

In CONSUMER CASE NO. 1479 OF 2015

DEVELOPERS TOWNSHIP PROPERTY OWNERS WELFARE SOCIETY
505, Hemkunt Chambers, 89 Nehru Place,
New Delhi – 110 019.                                                         ………..Complainant(s)

Versus

JAIPRAKASH ASSOCIATES LIMITED
Jaypee Greens, Sector -128, Noida – 201 304
Uttar Pradesh. …………………………………………………………….Opp.Party(s)

 

By its order dated 2 May 2016, NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI

Decided the following issues.

 

Interest and compensation for delayed possession;  builder liable to hand  handing over areas shown open in the original plans (even if the constructions are made with the approval of the Municipal Corporation) and that  no fees can be collected for car parking spaces.

 

“ 31. This Commission in the case of M/s G.G. Associates & Ors. Vs. Commodore Ravindra Kumar Narad & Anr. Revision Petition No. 1647 of 2014, decided on 16.10.2014, placed reliance on a Ruling reported in Kalpita Enclave Co-op. Housing Society Ltd. Vs. Kiran Builder of the Hon’ble Bombay High Cour t, it was observed that “if the original plans and specifications on the basis of which the persons were persuaded to purchase the flats discloses that certain areas will be kept open it would be clear contravention of the agreement as well as the law if the promoter proceeds to construct additional structure on those places even with the sanction of the Municipal Corporation”.

 

“ FINAL ORDER :

i) It was stated by the counsel for the OP at Bar that they would send offers of possession of allotment within three months from 22.04.2016. There is already huge delay. We accept the offer made on behalf of the OP and direct the OP to handover the possession of the premises in dispute within three months from 22.04.2016 to 21.07.2016, otherwise, it will pay penalty in the sum of Rs.5,000/- per flat / per allottee/allottees, per day, till the needful is done; -15

ii) For the delayed period, the OP is directed to pay interest @ 12% p.a., on the amount(s) deposited by the respective complainants w.e.f. 39 months’ from the date of respective provisional allotment letters, till the actual physical possession as per prayer clause (a), is handed over by the OP. All the necessary documents, common areas and facilities be also provided.

iii) The OP is further directed to provide adequate car parking spaces in the project for the complainants therein and refund the excess amount, if any, collected from the members of the Complainant Society towards car parking slots, with interest @ 12% p.a., from the date(s) of charging, till its realization.

iv) As per law laid down in K.A. Nagamani (supra), we further impose costs in the sum of Rs.50,000/- payable to each of the flat allottee / allottees, total being Rs.5,00,000/-, for all the flat owners. The said amount be paid within 90 days’ from the date of receipt of copy of this order, otherwise, it will carry interest @ 9% p.a., till its realization.

Link to the full decision:

file:///C:/Users/Eleena/Downloads/National%20Commission%20judgement2016-05-02%20(1).pdf

Separate conveyance must for each housing society on one plot

 

Separate conveyance must for each housing society on a plot

Jehangir B Gai | TNN | Mar 22, 2010, 05.17 AM IST

Builder held liable to execute separate conveyance for each society building

 

BACKDROP: It is common to come across builders failing to execute conveyance to retain their hold over the land. This is not permissible, as per a recent ruling of the Consumer Forum for Mumbai Suburban District, in the case of Mamta-D Co-operative Housing Society v/s Gundecha Builders.

 

Case Study: Gundecha Builder had constructed four buildings at Prabhadevi. These were named Mamta-A, B, C and D Co-operative Housing Society. Of these, Mamta-D CHS raised a grievance against the builder, stating that its members had purchased flats by paying the entire consideration and taking possession in December 1984, and thereafter the society was formed and registered in December 1989, yet the conveyance was not executed as required by law. The society also wrote to the builder and demanded that he construct independent boundary walls for their building and execute conveyance. Since the builder failed to pay heed, in May 2001, the society filed a consumer complaint against the builder.

 

The builder contested the complaint. He claimed that that since the four buildings were constructed on one plot of land, it was not possible to get the mutation done in the land records for sub-division of the plots. Consequently, it would not be possible to execute separate conveyance for Mamta-D Society. He claimed that when the construction work on the plot is completed, he would execute the conveyance for all the buildings, and the society should bear with the delay. The builder stated that the complaint was devoid of any merit and should be dismissed. The society claimed that the builder’s stand was incorrect because the four buildings were not joined, each had a separate entrance and it was possible to construct independent boundary walls around each building.

 

After hearing advocates Uday Wavikar and Mr Wankhade for the society and advocate Bhandari for the builder, the forum observed that the builder was bound by the terms and conditions of the agreement and was also required to abide by the provisions of the Maharashtra Ownership Flats Act (MOFA). The law casts a duty on a builder to execute conveyance within four months of formation of the society. As this has not been done, the builder is guilty of violating the law and there is a deficiency in the service rendered by him.

 

The Forum noted that in the present case, when the complaint was argued out in the year 2010, the builder had not yet executed conveyance even though more than 20 years had elapsed from the date of formation of the society. The forum also observed that builders try to delay or withhold conveyance to take advantage of any subsequent increase in FSI, which is not legally permissible. Conveyance has to be executed within four months of formation of the society, and in case any additional FSI is available, its benefit accrues to the society which is the real owner of the land.

 

G L Chavan, delivering the judgment on behalf of the Bench comprising himself and President Suman Mahajan, upheld the complaint. By an order dated February 26, 2010, the builder was directed to construct an independent boundary wall for the society and also execute conveyance. Six months’ time was given for compliance of this order. In case of non-compliance within this period, the builder was liable to pay a compensation of Rs 50 to the society for each day’s delay. In addition, Rs 5,000 was awarded as costs.

 

Impact: The compensation of Rs 50 per day for each day of default and delay in executing conveyance should send a strong signal to other builders to desist from adopting similar unfair practices.

 

The latest update:

Gundecha Builders filed appeal against this order. The following is the latest status:

STATE CONSUMER DISPUTES REDRESSAL COMMISSION, MAHARASHTRA, MUMBAI 
APPEAL NO. A/10/369
 
M/S.GUNDECHA BUILDERS Vs. MAMTA D CO-OP. HSG. SOC.LTD.
 
BEFORE: Justice R. C. Chavan, President Dhanraj Khamatkar, Member
 
   
Dated : 22nd  June 2015
ORDER: Advocate Mr.Mohit Bhansali is present for the appellant.  Advocate Mr.Uday Wavikar is present for the respondent.  Both the Ld.Counsel state that they are trying to settle the matter amicable and therefore, seek time. Time is granted.  Matter is adjourned to 26/08/2015.

 

MOFA is applicable to all old projects


MOFA is applicable to all old projects

Ahmed Ali| TNN | Feb 5, 2017, 06.30 AM IST


Some Advocates and Police Officers try to avoid filing FIRs under MPFA on the pretext that MOFA has been replaced by RERA. This is not a fact.
As today’s news item shows, MOFA is still alive and applicable.

 

MUMBAI: There is more trouble in the offing for the Jain brothers of Kamla Landmarc, a construction company, who have been arrested for duping investors. The EOW of Mumbai police has written to the ED about possible money laundering involving proceeds from the fraud that they suspect has touched Rs 200 crore.

Jitendra Jain, his brother Jinendra and brother-in-law Ketan Shah were arrested last November for duping investors by accepting bookings but not handing over flats or godowns, and forging property documents like commencement certificate and other development documents from BMC. So far, 16 FIRs have been registered against them. “As our investigation is on, more and more complaints are pouring in. Till now, there are around 150 victims who have been duped. We expect around six-seven more offences to be registered,” said a police officer.


The trio will find it difficult to obtain bail, claimed cops, because the police have invoked stringent sections of the 
Maharashtra Ownership of Flats Act (MOFA) in almost all the cases. Now, if ED begins a probe into money laundering, their woes will continue.


The police have frozen 200 bank accounts with Rs 8 crore linked to the builder brothers, FDs worth Rs 6 crore in various banks, 23 properties across the city and seven high-end cars.


Giving examples of the fraud, cops said the Jains accepted bookings for two industrial godowns at Hindustan Naka in Kandivli from two garment traders, but did not give them possession even after the deadline. During inquiries, it transpired that the builder brothers had sold 448 galas in the building, but only 107 agreements were registered, and only 96 were issued allotment letters. It also emerged that BMC had given permission for five floors, but the builders added two more. The BMC has served a demolition notice. In all, 200 were duped of Rs 21 crore.

 

In another case, the builder accepted bookings from 25 buyers and constructed a 17-floor highrise — Shimmer society in Santacruz (west) — though he had CC permission for only five floors. The buyers approached the Bombay high court, which directed the police to book the Jains. “In most of these offences, the modus operandi is almost same,” said police inspector Rajendra Pardeshi, who is heading the probe team that includes police officers Vishal Padir and Vikrant Shirshaat.

National Green Tribunal decides on municipal issues such as parking spaces, recreation grounds and fire safety within the scope of environment jurisdiction


By this judgment, for the first time, the National Green Tribunal brought municipal issues such as parking spaces, recreation grounds and fire safety within the scope of environment jurisdiction.”

 

Judgement of the National Green Tribunal (Principal Bench, New Delhi) in the matter of Sunil Kumar Chugh & Ors. Vs. Secretary, Environment Department, Govt. of Maharashtra & amp; Ors. dated 03/09/2015

In this landmark order The National Green Tribunal, directed a developer to remit Rs 3 crore towards the environmental relief fund and stopped the construction and sale of a slum rehabilitation project at Antop Hill, Mumbai till the amount was paid and plans amended to include additional parking space.

The order was in an appeal filed by Sunil Chugh against environmental clearances granted to Priyali Builders last March for construction on a 6,500- sq m plot in Sion-Koliwada despite violations to the town planning and environmental laws.

After hearing advocate Aditya Pratap for Chugh, Vikas Malhotra for the environment department, Anand Yagnik for the Slum Rehabilitation Authority (SRA) as well as others, the tribunal panel, headed by former Supreme Court judge Swatanter Kumar, held that the builder needs to correct certain lapses in the project.

The panel directed the builder to pay Rs 3 crore to the SRA within a fortnight and Rs 32 lakh towards deficient recreational area to the Maharashtra Pollution Control Board for incurring expenses on environmental and ecological rehabilitation. The tribunal said that the developer must modify the building plans and get them approved for additional parking space in the sale building from the seventh storey upward to make parking space available for both the rehabilitation building and the sale building. It also imposed a Rs 1 lakh cost on the builder.

The land, which was encroached by slums, was reserved for a municipal office and road when the builder submitted a proposal to the SRA to rehabilitate 324 tenements in 1997. Five years later, the builder got the first letter of intent for 14,600 sq m built-up area and was later granted permission for more construction, which the tribunal was told exceeded 20,000 sq m attracting a prior environment clearance.

The builder said the SRA had permitted reduction in the amenity area to 8% and allowed the recreational area above the podium level. But the tribunal observed that the SC held that “right to clean and healthy environment is within the ambit of Article 21 (right to life) and that open land around a building can only be at the ground level, not podium”.

Observing lack of paucity of parking space, the tribunal directed that “three floors shall be made available from seventh floor onwards from the area available for construction of flats…to ensure adequate parking spaces…and ensure that vehicles do not spill out on the streets resulting in congestion and prevent adverse impacts on the environment”.

The judgment written by judicial member U D Salvi said the term built-up area includes both FSI and non-FSI areas. In this case, the built-up area was 30,000 sq m, which included over 12,000 sq m of non-FSI area. This will help end the practice of builders trying to separate the two to evade environment clearance, said a lawyer.

 

 Link to the full decision:

http://www.indiaenvironmentportal.org.in/files/building%20environment%20clearance%20NGT%20Mumbai.pdf

Purchase of two flats does not indicate purchase for Commercial Purpose


Purchase of two flats does not indicate purchase for Commercial Purpose

 

Till recently, it was considered that a person can occupy only one flat. If he purchases
more than one 
 flat, it was presumed that the purchase was for the commercial purpose of investment, and complaints were dismissed. The National Commission has now clarified the law on the subject.

 

Rajesh and Deepa Malhotra along with their sons Rohan and Parvan, all belonging to Gurgaon, booked two villas in Goa which were being constructed by Acron Developers. The villas were booked under two agreements, the first in the name of the parents with one son, and the second in the name of the parents with the other son. The total cost of both the villas was about Rs1.38 crores. Possession was to be given in April 2007.

 

When Malhotras inquired about the progress of the construction, the builder did not furnish this information, and instead threatened to terminate the agreements for non-payment of instalments. The builder also collected various additional amounts. Malhotras filed a complaint before the Goa State Commission against the developer and its directors for a refund of the wrongly collected amounts. The builder contested the complaint.

 

The State Commission concluded that the villas were meant that they were purchased for commercial purpose. It also observed that there were two agreements in different names, so one combined complaint could not be filed for two separate transactions. It dismissed the complaint, and ordered Malhotras to pay Rs.10,000 for misusing the provisions of the Consumer Protection Act.


Malhotras challenged this order in appeal. The National Commission observed that commercial purpose would have to be determined on the basis of the primary motive of trading or business activity for the purpose of making profit. Mere assertion by the builder that the properties have been purchased for commercial purpose is not sufficient. The National Commission also observed that two villas were purchased by the parents, one for each son. Even if a residential house, flat, or villa is let out, it would not amount 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, held them to be consumers, and remanded the matter back to the State Commission.

 

Link to the full decision:

http://cms.nic.in/ncdrcusersWeb/GetJudgement.do?method=GetJudgement&caseidin=0%2F0%2FFA%2F1287%2F2014&dtofhearing=2015-11-05