Faqir Chand Gulati v Uppal Agencies Case Summary 2008

Faqir Chand Gulati v Uppal Agencies Case Summary 2008

Faqir Chand Gulati v Uppal Agencies Case deals with the meaning of ‘service’ in cases of agreement of sharing of floors in apartment buildings, as per Consumer Protection Act.

Facts Faqir Chand Gulati v Uppal Agencies Case:

  • FC Gulati (plaintiff-appellant) is a landowner who agrees with a builder, for construction of an apartment building and for sharing of the constructed area (Ground floor to owner & 1st and 2nd floor to builder).
  • Builder after completion of the construction didn’t provide completion certificate and C&D forms from MCD. Now, the MCD is threatening to demolish the construction because of some deviations in it.
  • Complaint to District Forum, State Commission & National Commission were dismissed as they found the deal as a collaboration agreement, was in a joint venture or agreement to collaborate; that the agreement contemplated “sharing” of constructed area, that is the entire ground floor of the building by the landowner and the remaining area by the builder; that the agreement did not have any element of hiring any services; and that, therefore, the appellant was not a “consumer” and the builder was not a “service-provider” under the CPA 1986.
  • This appeal is by special leave against the decision of National Commission.

Contentions and Issues:

1. Whether the said deal makes the builder (respondent) a ‘service provider’ and the owner (plaintiff) as a ‘consumer’?

Ratio and Decision:

1. The sharing of floors was a consideration which can’t be termed as ‘joint venture’. And according to New Horizons Ltd. v. Union of India 1995 SCC of this Court, a joint venture is an association of two or more persons to carry out a single business enterprise for profit, which is governed by rules as partnerships.

2. The basic scheme of the agreement was that the builder should construct and deliver a house (ground floor of the building) to the owner and if there was any deficiency in fulfilling the obligations undertaken in connection with such construction, there would be a deficiency in service; and that, therefore, where the term relating to construction off the ground floor for his benefit is concerned, the builder (defendant-respondent) was a service provider and owner (plaintiff-appellant) was a consumer.

3. Appeal allowed. The appellant’s complaint is held to be maintainable. The District Forum is directed to consider the matter on merits and dispose of the matter under law, within six months of receipt of this order.

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