LEGAL MATTERS

Buying Houses for Commercial Purposes?

Consumer courts may not handle disputes

Anybody who files a complaint at the consumer forum has to be a ‘consumer’ – in other words, an individual should not file a complaint if the product or service concerned is for commercial purposes. Although the term ‘commercial purpose’ is not defined anywhere in the Consumer Protection Act, the jury panel, while deciding the maintainability of a complaint, does look at the purpose for which the individual is procuring the product or the service in question. The jury often distinguishes the personal and the commercial purpose with the yardstick of ‘profit and loss’ involved or the quantum of business.

In the previous issue (August 2015), in this section we had discussed about certain parameters, or ‘maintainability criteria’, for any complaint to be accepted for hearing at a consumer forum. The article covered aspects that you needed to know in order to ensure that your complaint was not rejected at the forum.

In real estate matters, property purchased for commercial activities such as shopping malls, shops, factory plots, and industrial land in special economic zones are not handled in consumer forums as they are completely ‘commercial’ and out of the jurisdiction of the consumer forum.

Residential Property

Residential property falls within the jurisdiction of consumer forums as long as the consumer or the complainant is able to justify that the property in question is only meant for personal use.

Considering that residential property is one of the commonest investments that people make – with expectations

It is essential for the complainant to establish the purpose of his property should there be a dispute. If he is buying the property only to invest in it and sell it in future, then the purpose is certainly commercial and the appeal in forum is not

maintainable.