The judgment, delivered by Justices Sudhanshu Dhulia and Ahsanuddin Amanullah on March 20, 2025, examined whether a property seller could be considered a "consumer" in relation to a finance company that had sanctioned a home loan to the property's buyer.
"The complainant-respondent cannot be said to be a 'consumer' under the Act as it had no privity of contract with the appellant, due regard being had to the totality of the factual matrix," Justice Amanullah stated in the ruling.
Case Overview
The case stemmed from a 2008 transaction where Nanda sold his flat in Airoli, Navi Mumbai to Mubarak Vahid Patel for Rs.32 lakh. The property was initially mortgaged with ICICI Bank for a loan of Rs.17.64 lakh.
According to court documents, Patel secured a home loan of Rs.23.40 lakh from Citicorp Finance, which disbursed Rs.17.80 lakh to clear Nanda's existing loan with ICICI Bank. The dispute arose when Nanda claimed a "Tripartite Agreement" existed between himself, Patel, and Citicorp Finance, which allegedly obligated the finance company to pay the entire balance consideration of Rs.31 lakh directly to him.
Legal Reasoning
Justice Amanullah emphasized that "the onus is on the person who asserts a fact to prove it," noting that Nanda had produced only "an unsigned, unstamped and partly blank document" as evidence of the purported tripartite agreement.
The Court highlighted a fundamental principle of consumer law: "In Indian Oil Corporation v Consumer Protection Council, Kerala, (1994) 1 SCC 397, it was held that as there was no privity of contract between the concerned parties therein, no 'deficiency' would arise and the action (complaint) would not be maintainable before the concerned Consumer Forum."
In a more recent precedent cited by the Court, "In Janpriya Buildestate Pvt. Ltd. v Amit Soni, 2021 SCC OnLine SC 1269, the Court held... when there is no privity between the complainant and the opposite party, the opposite party could not become liable under the Act."
Procedural Issues
The judgment also addressed significant procedural lapses, noting that despite the appellant raising the issue of limitation (the complaint was filed in 2018 for a cause of action from 2008), "the Impugned Order is silent on the said score."
The Court further observed that "Another specific plea by the appellant, that the borrower should have been joined in the proceedings before the NCDRC has also gone unanswered." The bench noted that the borrower was "at the very least a proper party" and possibly "a necessary party in the complaint."
This landmark ruling clarifies the scope of "consumer" under consumer protection laws and reaffirms the necessity of establishing privity of contract in consumer disputes involving financial institutions.
Read The Judgment Here
keywords: consumer rights, tripartite agreement, privity of contract, NCDRC, consumer protection, financial institutions
