Landowners, who have no money to construct houses on their plots and enter into collaboration agreements with builders to get a flat, are consumers and can sue the contractor for deficiency in the dwelling unit delivered to him, ruled the Supreme Court.
In Delhi, this is popularly known as joint-venture agreements, development agreements or collaboration agreements, where the landowner provides the land to the builder to construct several flats. The landowner gets one or two flats in return for the land he had provided to the builder.
One Faqir Chand Gulati had entered into such a collaboration agreement with a builder, Uppal Agencies Pvt Ltd, for construction of several flats on his plot at L-3, Kailash Colony, a south Delhi locality.
However, the builder deviated from the sanctioned plan and constructed many additional flats. The Municipal Corporation of Delhi had once sealed the premises and then demolished the illegal portion of the construction.
When the ground floor flat was delivered to Gulati, he found that there were several deficiencies and deviations from the original plan agreed to between him and the developer. He moved the consumer forum citing deficiency in service on the part of the developer.
The district forum, the state commission and the national commission unanimously held that the landowner in joint-venture agreements could not claim to be a consumer as he was co-partner in the construction of the flats on the land provided by him.
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