Plot owner in MoU can move consumer forum

The owner of a plot who signs a memorandum of understanding (MoU) with a builder for raising multi-storeyed apartments is a ‘consumer’ and, therefore, can sue the builder for deficiency in service, the Supreme Court ruled, overruling the National Consumer Commission and the Andhra Pradesh consumer commission. According to the Consumer Protection Act, a person who obtains goods or avails of any services for “resale or for any commercial purpose” is not a consumer and he cannot move the consumer forums. In this case, Bunga Babu versus Sri Vasudeva Constructions, the owner of two plots, signed MoUs and divided the number of apartments between them. The project was delayed and there were several other complaints against the construction firm. The owner moved the Vizag consumer forum, which ordered compensation be paid to him. Appeals were moved before the state commission and the National Commission. Both took the view that the landowner was not a consumer entitled to move consumer courts. According to them, the owner wanted to sell the apartments or let these on rent to earn profit. As this was ‘commercial purpose’, the owner was not a consumer who could move consumer forums. The Supreme Court reversed the finding, stating that the MoU did not make the landowner a “partner or co-adventurer” in commerce.