BRIEF NOTES OF ARGUMENT ON BEHALF OF THE APPELLANT

 

I have studied the uploaded Memo of Appeal. The principal defence emerging from the record is that the Respondent’s transaction was pleaded by the Appellant as an investment/security transaction, that the flat had already been sold, and that the District Commission nevertheless directed delivery of possession and execution/registration of conveyance.

For the Appellant, I would structure the oral/written arguments around maintainability, nature of transaction, impossibility of the relief, and error in granting specific performance without properly determining the underlying contractual/property issues.

BRIEF NOTES OF ARGUMENT ON BEHALF OF THE APPELLANT

I. The impugned order proceeds on an erroneous appreciation of the nature of the transaction

1. The Learned District Commission failed to appreciate the specific defence of the Appellant that the transaction between the parties was not a conventional consumer transaction for rendering housing service, but was substantially connected with investment of money, the agreement having been treated by the Appellant as a security document.
2. The Appellant had specifically pleaded that the money received from the Respondent was liable to be refunded with prevailing banking interest and that the Consumer Complaint was premature.
3. Therefore, the primary question which required determination was what was the true and substantive nature of the transaction, rather than merely proceeding upon the nomenclature of the Agreement.
4. It is settled that the substance of the transaction and the actual rights and obligations of the parties have to be examined. In Faqir Chand Gulati v. Uppal Agencies Pvt. Ltd., the Supreme Court emphasized that the nature and substance of an agreement, rather than merely its description, determines its legal character.

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II. The Respondent was required to establish that he was a “consumer” and that there was “deficiency in service”

5. The jurisdiction of the Consumer Commission is dependent upon the existence of a consumer dispute within the meaning of the Consumer Protection Act, 2019.
6. Merely because an Agreement for Sale relating to a flat exists, every dispute arising from such agreement does not automatically become a consumer dispute.
7. The Respondent was required to establish:
• that he hired/availed a service for consideration;
• that the Appellant was providing a service;
• that there was deficiency in such service; and
• that the relief claimed flowed from such deficiency.
8. The Appellant's case is that the transaction was essentially one involving investment/security and not a straightforward consumer-service transaction. This issue required a proper finding based upon the pleadings, evidence, payment records and surrounding circumstances.
9. The Supreme Court in Faqir Chand Gulati v. Uppal Agencies Pvt. Ltd., (2008) 10 SCC 345, explained that where a genuine joint venture exists, the parties are co-adventurers and the relationship is not that of consumer and service provider; the actual character of the transaction has to be determined from its terms and substance.

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III. Mere execution of an Agreement for Sale does not dispense with proof of the consumer-service relationship

10. The Respondent's prayer was not confined to compensation for an established deficiency in service. The principal relief granted was a direction to hand over possession and execute and register a deed of conveyance upon receipt of the balance consideration.
11. The nature of the relief demonstrates that the real controversy concerns enforcement of contractual rights relating to immovable property.
12. Where the dispute is fundamentally one of enforcement of contractual obligations under an agreement for sale, the Commission must carefully examine whether the ingredients of a consumer dispute are actually made out.
13. In Mangilal Soni v. T. Marappa, NCDRC held that where the dispute is essentially non-performance by a vendor under an agreement to sell, the appropriate remedy may lie before the competent civil court for specific performance or other appropriate relief. The principle has subsequently been followed in other consumer decisions.

However, this ground should be argued cautiously, because there are Supreme Court and Calcutta High Court authorities recognizing that consumer fora can, in appropriate housing-service cases, direct execution of conveyance. Therefore, the stronger formulation is that in the present case the Commission failed to first establish the necessary consumer-service relationship and deficiency in service before granting such relief.

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IV. The District Commission failed to properly consider the Appellant's specific defence that the flat had already been sold

14. A very material defence of the Appellant was that the subject flat had already been sold and was no longer in his occupation or possession. This was expressly pleaded in the appeal.
15. Once such a plea was specifically raised, the Learned District Commission ought to have considered:

(a) whether the Appellant continued to have title or possession;

(b) whether the Appellant had legal capacity to convey the property;

(c) whether any subsequent purchaser/third-party interest existed;

(d) whether the subsequent purchaser was a necessary party; and

(e) whether the direction for conveyance could legally and effectively be implemented.

16. An adjudicatory order must be capable of lawful implementation. A direction to convey an immovable property cannot be sustained mechanically when the person against whom the direction is issued asserts that he no longer owns or possesses the property.
17. The Supreme Court in Fortune Infrastructure (Now Known as Hicon Infrastructure) v. Trevor D'Lima, (2018) 5 SCC 442, considered a situation where the property had been transferred to a third party and emphasized the consequences flowing from the seller's inability/unwillingness to transfer the property.
18. The Appellant therefore submits that the Commission ought to have examined the effect of the alleged subsequent sale before directing possession and conveyance.

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V. The relief granted travels beyond a simple consumer deficiency claim

19. The operative portion of the impugned order directs the Appellant to:

• hand over possession of the “B” Schedule flat;
• execute and register the deed of conveyance;
• receive the balance consideration;
• pay Rs.30,000/- compensation; and
• pay Rs.8,000/- litigation costs.

20. Thus, the principal relief is effectively enforcement of the alleged contractual right to obtain the immovable property.
21. The Commission could exercise such jurisdiction only after properly determining that the agreement represented a consumer-service arrangement and that the failure complained of constituted deficiency in service.
22. The impugned order, according to the Appellant, does not adequately deal with the defence that the transaction was an investment/security arrangement and that the flat had already been sold.

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VI. The complaint was premature and the Appellant's offer of refund was material

23. The Appellant had pleaded that he was prepared to refund the money received from the Respondent together with prevailing banking interest.
24. This aspect assumes considerable significance because the Respondent's alleged entitlement to the particular flat depended upon the continuing existence and enforceability of the contractual arrangement.
25. If the property had ceased to be available with the Appellant, the Commission ought to have examined whether the appropriate relief, if any, was refund with reasonable interest/compensation, rather than directing conveyance of property which the Appellant claimed he no longer possessed.
26. The Supreme Court in Fortune Infrastructure v. Trevor D'Lima recognized the importance of considering appropriate monetary relief where transfer of the property itself cannot be effected.

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VII. The finding of the District Commission is not supported by adequate consideration of the defence evidence

27. The Appellant participated in the proceeding and filed his written version, evidence on affidavit and other pleadings. The appeal records that the Appellant specifically raised the above defences.
28. The impugned order, however, required to deal with the material defence of:

“investment/security transaction + refund with interest + sale of flat + non-availability of possession.”

29. A decision affecting valuable contractual and property rights ought to contain findings on these material issues.
30. The Appellant can therefore contend that the impugned order suffers from non-consideration of material evidence and material pleadings, resulting in miscarriage of justice.

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VIII. Important distinction regarding Sunil Kohli

31. The Respondent may rely upon Sunil Kohli v. Purearth Infrastructure Ltd., Civil Appeal Nos.9004-9005 of 2018, decided on 1 October 2019, where the Supreme Court held that purchase of a commercial premises does not by itself exclude a person from being a consumer where the premises are intended to be used personally for earning livelihood through self-employment.
32. The said decision does not automatically answer the present case, because the Appellant's defence is not merely that the property was intended for commercial use. The Appellant's case goes to the very character of the transaction, namely that it was an investment/security arrangement and not the conventional hiring/availing of housing services.
33. Accordingly, the Appellant should distinguish Sunil Kohli on facts rather than attempting to contend that every purchaser of a property is outside the Consumer Protection Act.

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Judicial References — Most Useful for the Appellant

Sl.	Judicial reference	Proposition useful to Appellant
1	Faqir Chand Gulati v. Uppal Agencies Pvt. Ltd., (2008) 10 SCC 345	Nature/substance of transaction determines whether relationship is consumer-service provider or genuine joint venture/co-adventure.
2	Fortune Infrastructure (Now Known as Hicon Infrastructure) v. Trevor D'Lima, (2018) 5 SCC 442	Consequences where seller/developer transfers property to a third party; appropriate relief must be considered where property cannot be transferred.
3	Mangilal Soni v. T. Marappa, NCDRC, 25.03.2011	Pure non-performance of an agreement to sell may require remedy before competent civil court; useful for challenging a complaint that is essentially contractual.
4	Sunil Kohli v. Purearth Infrastructure Ltd., Civil Appeal Nos. 9004-9005/2018, decided 01.10.2019	Commercial purpose/self-employment test; useful principally for distinguishing the Respondent's case depending on evidence.
5	Smt. Rita Das v. Mrs. Jayashri Ghosh & Ors., Calcutta High Court, 14.12.2011	Important Calcutta authority concerning agreement for sale, consumer jurisdiction and execution/registration of conveyance. It should be distinguished rather than ignored.

A particularly important caution

I would not make the proposition “Consumer Commission has absolutely no jurisdiction to order execution of a sale deed” the central ground. The Calcutta High Court has taken a contrary view in appropriate circumstances in Rita Das, relying upon Supreme Court authority.

The stronger appellate argument is:

Even assuming that a Consumer Commission possesses jurisdiction in an appropriate housing transaction to direct execution of conveyance, such jurisdiction could not properly be exercised in the present case without first determining whether the Respondent was a consumer, whether the transaction was genuinely a consumer-service transaction, whether deficiency in service was established, and whether the Appellant continued to have title/possession and legal capacity to convey the subject flat.

That formulation avoids an overbroad proposition and directly attacks the factual and legal foundation of the particular impugned order.

Suggested final prayer in argument

The Appellant may therefore submit that the impugned order dated 01.12.2023 be set aside and CC/361/2021 be dismissed; alternatively, if the State Commission finds that some monetary liability is established, the relief may be appropriately moulded by directing refund of the amount actually received with reasonable interest, instead of compelling conveyance of a property which, according to the Appellant's specific case, had already been sold. The appeal itself seeks setting aside of the impugned order and dismissal of the complaint, with an alternative prayer for stay.

If this is to be filed as the Appellant's Brief Notes of Argument, I would recommend converting the above into a formal 4–6 page “Brief Notes of Argument on behalf of the Appellant” with numbered propositions, statutory provisions under the Consumer Protection Act, 2019, and a separate “List of Judicial Authorities” with SCC/AIR citations.