Supreme Court

Bunga Daniel babu v. Vasudeva Constructions and ors.

22.07.2016

Consumer

Not precluded as ‘consumer’ even if outcome commercial

Unless a party approaching the consumer disputes redressal forums is a partner or a co-adventurer in a business from which dispute arises, it remains a ‘consumer’ within the meaning of the Consumer Disputes Act 1986.

In the instant case, the appellant owned several plots in order to develop which it entered into a Memorandum of Understanding with the respondent; respondent would construct a multi-storied building, and proceeds from the sale of the apartments would be shared proportionally between the parties.

Subsequently, construction took three years longer than was envisaged in the MoU and appellant approached the consumer dispute redressal forum claiming additional compensation from the respondent. In its defence, respondent claimed that since the transaction entered between them was of a commercial nature, appellant was not a ‘consumer’ under the Consumer Protection Act 1986. The Supreme Court, in assessing whether the appellant could be considered a consumer, examined the joint venture agreement between the parties. It noted that the MoU was not in support of the respondent as the appellant had neither any say nor control over construction and did not participate in respondent’s business.

It was therefore a consumer for the purposes of the Act. The matter was remitted to the State Dispute Redressal Commission for re-adjudication.

Relevant

Punjab University v. Unit Trust of India MANU/SC/0599/2014
Additional Commissioner of Income Tax, Gujarat vs. Surat Art Silk Cloth Manufacturers Association MANU/SC/0296/1979
Section 2 of the Consumer Protection Act, 1986

‘Consumer’ disputes before NCDRC

Tags : consumer protection commercial joint venture

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