Featured image for Supreme Court Judgment dated 10-05-2019 in case of petitioner name Anjum Hussain & Others vs Intellicity Business Park Pvt.
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Supreme Court Ruling on Consumer Protection and Builder-Buyer Agreements

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The Supreme Court of India has delivered a landmark judgment in a case concerning consumer rights under the Consumer Protection Act, 1986. The case, filed by multiple homebuyers against Intellicity Business Park Pvt. Ltd., questioned whether buyers of commercial units in a real estate project could be considered ‘consumers’ and entitled to relief under the Consumer Protection Act.

Background of the Case

The appellants, who had booked small commercial office spaces in a project named ‘Intellicity’ at Greater Noida, claimed that the builder failed to deliver possession within the agreed period of four years. The Builder-Buyer Agreements were executed in 2013, but the project remained incomplete even after the promised timeline. The homebuyers, therefore, approached the National Consumer Disputes Redressal Commission (NCDRC) seeking refunds along with interest and compensation.

Legal Issues Considered

  • Whether buyers of commercial units qualify as ‘consumers’ under the Consumer Protection Act.
  • Whether the case was maintainable as a class-action suit under Section 12(1)(c) of the Consumer Protection Act.
  • Whether the delay in possession entitled buyers to a refund with interest.

Arguments by the Petitioners

  • The buyers had booked office spaces for self-employment and livelihood, thus falling within the definition of ‘consumer’ under the Act.
  • The developer failed to deliver possession as per the Builder-Buyer Agreement, leading to financial loss and hardship.
  • The case qualified as a class-action lawsuit since it involved multiple buyers affected by the same grievance.

Arguments by the Respondents

  • Buyers of commercial spaces do not fall under the definition of ‘consumer’ as per Section 2(1)(d) of the Consumer Protection Act.
  • The delay was due to force majeure conditions, including unforeseen regulatory hurdles.
  • Buyers had the option of seeking an extension instead of a refund.

Supreme Court’s Observations

1. Definition of ‘Consumer’ Under the Consumer Protection Act

  • The Court clarified that individuals purchasing commercial properties for self-employment qualify as ‘consumers.’
  • If a person books a commercial unit for investment purposes, they do not fall within the definition of ‘consumer.’

2. Class-Action Suit Under Section 12(1)(c)

  • The Court ruled that a complaint under Section 12(1)(c) must be filed on behalf of all buyers having the same interest.
  • In the present case, the buyers did not prove that all units were booked for self-employment; hence, the class-action suit was not maintainable.

3. Delay in Possession and Buyer’s Rights

  • The Court observed that the builder’s failure to deliver the project within the promised timeframe amounted to a deficiency in service.
  • The buyers were entitled to refunds with interest under consumer protection laws.

Final Judgment

  • The Supreme Court allowed the appeal and restored the individual complaints.
  • The class-action claim under Section 12(1)(c) was rejected.
  • The builder was directed to refund the buyers with interest.

Implications of the Judgment

1. Strengthened Consumer Rights

  • The judgment reinforces the rights of homebuyers and small business owners against defaulting builders.
  • It clarifies the conditions under which buyers of commercial units can seek legal remedy.

2. Precedent for Class-Action Suits

  • The ruling provides guidance on when a case can be considered a valid class-action lawsuit.
  • It ensures that only those with a shared grievance can collectively file complaints.

3. Impact on Real Estate Developers

  • The ruling discourages builders from delaying projects without consequences.
  • It mandates greater accountability in the execution of Builder-Buyer Agreements.

Conclusion

The Supreme Court’s decision in this case sets a significant precedent for real estate disputes involving commercial buyers. It upholds consumer rights while providing clarity on the applicability of class-action lawsuits. The judgment will serve as a crucial reference in future real estate litigations.


Petitioner Name: Anjum Hussain & Others.
Respondent Name: Intellicity Business Park Pvt. Ltd. & Others.
Judgment By: Justice Justice Uday Umesh Lalit.
Place Of Incident: Greater Noida, India.
Judgment Date: 10-05-2019.

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