Supreme Court Clarifies 'Commercial Purpose' in Real Estate Consumer Rights

The Supreme Court ruled that merely leasing out a flat does not classify the buyer as having a 'commercial purpose' to exclude them from being a 'consumer' under the Consumer Protection Act. This decision came after Vinit Bahri's appeal against NCDRC, highlighting the need to prove commercial intent.

The Supreme Court has delivered a landmark judgment clarifying the definition of 'consumer' under the Consumer Protection Act. The court declared that mere leasing of a residential property does not automatically classify a purchaser as involved in 'commercial purpose,' thus not excluding them from consumer rights.

This decision came after Vinit Bahri appealed against an order from the National Consumer Disputes Redressal Commission (NCDRC) that rejected his complaint over a delayed flat possession. The NCDRC's dismissal was based on the assumption that Bahri's leasing of the property indicated a commercial intent.

The Supreme Court emphasized that the onus lies on builders to prove the commercial nature of such transactions. The bench noted that unless it's demonstrated that the purchase was primarily for profit-generation, the buyer should retain their consumer rights.

(With inputs from agencies.)