Aggrieved commercial property buyer

Whether a commercial property buyer can approach the consumer courts?


The Consumer Protection Act, 1986 (CPA) defines a consumer as a person who buys any goods/ avails any services for a consideration. The only exception to it being, the goods are not being used for commercial purposes. The Act, however, allows goods to be used for commercial purposes if it is for earning a livelihood by self-employment.

Therefore, a ‘commercial property buyer’ can be termed as a consumer under the CPA if he is using the commercial property for earning a livelihood by self-employment.

Defining ‘commercial use for earning a livelihood’-
The issue arises as to what amounts to ‘commercial use for earning a livelihood’. Many a time even large corporations try to camouflage their commercial activity as “for earning a livelihood by self-employment”.

However, it is the duty of the Consumer Court to decide whether the case is maintainable before the consumer forum or not.

In a case filed before the Delhi State Commission Consumer Court, a woman had filed a complaint as she was having trouble obtaining possession of a shop she had booked in a mall to run her own boutique. The Commission rejected the plea, stating that the complaint falls in the exception to the definition of consumer, i.e. it is a commercial activity.

In an appeal to the National Commission (NCDRC), it dismissed the decision of the State Commission, stating that whether a transaction is for large-scale commercial activity, or for earning livelihood, is a question of fact which has to be decided on a case to case basis, as observed by the Supreme Court in Laxmi Engineering Works v/s P.S.G. Industrial Institute.

If a consumer has established that a transaction, though commercial in nature, is for earning a livelihood, the question should be left open to be determined when the complaint is finally decided. It is not the value of the goods that matters but the purpose to which the goods bought are put to. The several words employed in the explanation, viz.,

  • uses them by himself,

  • exclusively for the purpose of earning his livelihood and

  • by means of self-employment.

For example, a person buys a taxi but drives it himself by earning a livelihood for himself, is covered as a consumer under the Act. However, in another case, purchasing a commercial space for pure business purposes was viewed as an ‘investment for generating profits’ and not considered a consumer under the CPA.

Thus, to answer your question, a ‘commercial property buyer’ can go to the consumer court, provided he can satisfy the court that he is covered under the definition of a consumer as per the Act (CPA, 1986).

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