With properties in Mumbai being redeveloped, an interesting question is cropping up. Is the person who gives a property for redevelopment a consumer or a joint venture partner with the developer?
With properties in Mumbai being redeveloped, an interesting question is cropping up. Is the person who gives a property for redevelopment a consumer or a joint venture partner with the developer? This question was answered recently by the Supreme Court in Faqir Chand Gulati vs Uppal Agencies Pvt. Ltd.
Gulati had a property in Delhi, which he gave to the agency on the condition that the ground floor of the building, which was being built, be given to him. The developers agreed and started the construction after taking permission from the municipal corporation of Delhi. Later, the builders carried out unauthorised changes in the original plan and completed the building with alterations which were not there in the original plan.
Gulati’s flat was handed over to his son in his absence. On his return, Gulati demanded the changes to be undone. He wanted his flat according to the original plan. The builders paid no heed to his pleas and the matter landed in the district consumer dispute forum, Delhi.
Here, the forum held that the deal between Gulati and the company was a joint venture and that he would not qualify as a consumer in the circumstances of the case. In appeal, the state commission, and thereafter the national commission also reiterated the forum’s opinion.
Gulati took the matter to the Supreme Court, which handed down a landmark judgment. Relying on several judgments on similar issues, the Supreme Court said that when a land owner enters into a contract with a builder for putting up a structure and if there is any violation of the terms and conditions of the same, there is clear deficiency of service by the builder and the owner can claim to be a consumer.
Further, a joint venture is one in which both persons share the fruits of building together, which was not the case here since Gulati got only a flat in return for the plot and did not share the profits in any way. The SC directed the matter to be re-heard by the district forum. Gulati got a sum of Rs25,000 as costs of litigation for his efforts in the matter.
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