Order Name: Urban Improvement Trust, Bikaner Vs. Babulal Jat
Case No.: R.P. No. 1057/2020
The National Consumer Disputes Redressal Commission, led by AVM J. Rajendra, has clarified that individuals who purchase property through auctions are not regarded as consumers under the law. Consequently, complaints stemming from public auctions cannot be addressed in consumer courts.
Case Overview:
A complaint was lodged by an individual who bought a residential plot from an auction conducted by the Urban Improvement Trust. After paying 25% of the total cost upfront, the buyer discovered that the plot was already occupied and involved in a legal dispute, complete with a court-issued stay order. Despite this, the developer demanded the remaining payment. The buyer asked for a plot inspection and resolution of the legal issue before proceeding with the payment. However, the developer took no action. The buyer then sought a refund with interest, but after nearly three years, the developer agreed only to return the principal amount without interest. Dissatisfied, the buyer filed a consumer complaint, claiming the developer engaged in unfair trade practices.
The District Forum sided with the buyer, instructing the developer to pay interest at 9% per annum on the amount of Rs. 4,33,000, alongside Rs. 20,000 for mental distress and Rs. 5,000 for litigation costs. The developer challenged this decision in the State Commission of Rajasthan, which upheld the initial ruling. This prompted the developer to escalate the matter to the National Commission.
Developer’s Argument:
The developer argued that since the buyer participated in an auction, they do not qualify as a "consumer." Therefore, the dispute should not be treated as a consumer issue. They maintained that auctions are conducted on an "as is where is" basis, and participants understand the inherent risks. They also argued that they acted fairly by refunding the principal amount and that interest was not legally required. The developer claimed the dispute was civil in nature and should not fall within the jurisdiction of consumer forums.
National Commission’s Findings:
The National Commission agreed with the developer, referencing the Supreme Court ruling in UT Chandigarh Administration & Anr. vs. Amarjeet Singh & Ors., which stated that auction purchasers are not consumers. The Commission also cited Mohd Siddique Khan vs. Forest Division Officer, supporting this stance. Therefore, the Commission allowed the developer’s petition, overturning the decisions of the District and State Commissions, and dismissed the buyer’s consumer complaint. However, the buyer may pursue remedies in other legal forums.
Takeaway:
This ruling emphasizes that auction participants are not considered consumers under the Consumer Protection Act. If you face issues with properties purchased at auctions, these are likely outside the jurisdiction of consumer courts, and you may need to explore other legal avenues for resolution.
