An Investor Is Not A Consumer;NCDRC

A bench of The National Consumer Disputes Redressal Commission (NCDRC), comprising Sri C. Vishwanath and Sri Subhash Chandra has disposed of a consumer complaint filed by an individual against a company holding that an investor is not a consumer. This was an original complaint filed directly before the NCDRC asking for a relief of 5,00,30,000/- INR. According to the complainant, he invested 17,00,000/- initially based on a Memorandum of Understanding (MoU) with the opposite company/builder. Afterwards, he sent over a draft with a certain sum of money and then informed the builder that the leftover sum, which was already agreed upon by both the parties, would be made after execution of the agreement. However, the builder took a unilateral decision and increased the balance amount that was to be paid. Subsequently, the complainant expressed his unwillingness in the project and requested the builder to refund the money he had already paid along with the compound interest. Following this, the builder entered a settlement with the complainant to satisfy the amount owed to the latter and as a result of this, he was promised two residential flats for his personal use in an upcoming project of the builder. The complainant made an extra payment to book the flats and the same was acknowledged by the builder. Later, the complainant came to know that no work was being done on this particular project even after five years had surpassed the date agreed upon, by both the parties. The complainant sought refund of full value of the flats along with interest and demanded punitive damages. The builder failed to comply with the demands of the complainant and, hence so the complainant served a legal notice asking for an amount of 5,00,30,000/- INR. In response to this, the opposite party sent a reply to get the sale deed executed and also named an arbitrator. According to the complainant, he had not consented to arbitration and thus filed the Complaint before the NCDRC. The reasoning given by the complainant for filing this complaint was that he had lost faith that the flats would be delivered to him in view of the unwarranted delay that was caused. It was argued that the complainant fell within the purview of the definition of a "consumer" and that the reason for which he gave the money to the opposite parties initially is of no relevance, the contractual promise that was made later on in settlement of the former deal was to be regarded as paramount. The builder (opposite party to the complaint ) resisted the complaint on the following grounds: The complainant is subject to the limitation under Section 24-A of the Consumer Protection Act, 1986, due to the fact that the alleged cause of action occurred 2 years prior to the filing of this complaint.The relationship between the two involved parties was not that of a consumer and a service provider, but instead the complainant acted from the position of an investor as he initially entered into an agreement with the opposite parties with a profit-motive, and only after that did complainant enter into an agreement to acquire the flats in lieu of the investment. This complaint has been filed to harass them as they had already sent a letter offering the flats to the complainant, but the latter did not take possession of it. It is to be understood that the agreement entered by both the parties regarding the flats is only an extension of the complainant's role as a partner/investor. The NCDRC bench, held that the whole transaction between the parties is commercial in nature, it has come out that the complainant in fact, had invested the amount in the project from the position of a partner. The bench accepted the argument of the opposite parties and stated that the complainant's role was that of an investor rather than that of a "consumer" under the provisions of the Consumer Protection Act, 1986 as the settlement agreement was only an extension to his role as an investor. The objective of the agreement for the two flats between the complainant and the opposite parties was to realize the debt and interest accrued thereof by the latter and due to this, the debt is to be regarded as extinguished. Furthermore, the bench stated that the claim raised by the complainant is only for the furtherance of gain for the original investment that was made The NCDRC dismissed the complaint as not maintainable, but complainant has been given the liberty to approach the appropriate forum to seek remedy for his grievances. Case Titile: SURENDRA KAPUR vs . M/s PUJA CONSTRUCTION LTD. & 3 ORS Click Here To Read/Download Order

An Investor Is Not A Consumer;NCDRC

Parvathy Roy

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