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SAI EVEREST DEVELOPERS & ANR. v. HARBANS SINGH KOHLI & 2 ORS.
Factual and Procedural Background
The case concerns complaints admitted by the State Commission regarding the purchase of multiple flats by the complainant. The opponents objected to the maintainability of the complaints on the ground that purchasing more than one property was for commercial purposes. The State Commission admitted the complaints and directed the opponents to file written versions, with the question of jurisdiction and maintainability to be examined at the final hearing. The appeals challenge this admission and procedural direction.
Legal Issues Presented
- Whether the State Commission was justified in admitting the complaints without deciding at the threshold the maintainability objection based on the allegation that purchase of multiple flats was for commercial purposes.
- Whether the mere purchase of more than one flat can be held to be for commercial purposes without cogent material showing that the purchaser is engaged in the business of buying and selling properties for profit.
- Whether the question of jurisdiction of the State Commission to entertain the complaints should be decided as a preliminary issue or after the pleadings and evidence are filed.
Arguments of the Parties
Appellants' Arguments
- The appellants contended that when jurisdiction of the forum is challenged at the outset, such objection must be adjudicated as a preliminary issue before proceeding to merits.
- Reliance was placed on the Supreme Court decision in K. Sagar, Managing Director, Kiran Chit Fund, Musheerabad Versus A. Bal Reddy And Anr. (2008) 7 SCC 166, which supports the preliminary adjudication of jurisdictional objections.
Opponents' Arguments
The opinion does not contain a detailed account of the opponents' legal arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| K. Sagar, Managing Director, Kiran Chit Fund, Musheerabad Versus A. Bal Reddy And Anr. (2008) 7 SCC 166 | Preliminary adjudication of jurisdictional objections before proceeding to merits. | The court held that the State Commission's approach to admit complaints and decide jurisdiction after pleadings and evidence is in consonance with this precedent. |
Court's Reasoning and Analysis
The court observed that a blanket proposition that purchasing more than one property automatically implies commercial purpose is not justified. It emphasized that unless cogent material is brought on record showing the purchaser is engaged in buying and selling flats regularly for profit, mere purchase of multiple flats does not establish commercial purpose.
The court found no illegality in the State Commission admitting the complaints and directing the appellants to file written versions. It reasoned that the question of jurisdiction and maintainability would be decided after the pleadings and evidence are filed, which aligns with the Supreme Court's ratio in K. Sagar. Thus, the court endorsed a procedural approach where jurisdictional objections are not necessarily decided at the threshold but can be examined after a full hearing of evidence.
Holding and Implications
The court dismissed the appeals with the observation that the State Commission was justified in admitting the complaints and that the question of jurisdiction and commercial purpose would be examined at the final hearing.
The direct effect of this decision is that the complaints remain admitted and the appellants must file written versions to enable full adjudication on merits, including jurisdictional issues. No new precedent was established, and the ruling reaffirms the procedural principle that jurisdictional objections can be decided after evidence and pleadings are complete rather than as a preliminary issue in all cases.
do not lay down any blanket proposition that purchase of more than one property would automatically result into conclusion that such purpose is for commercial purpose by way of investment. In any case, this comment may be ignored. At the time of hearing the matters will be heard on merits finally. In our view, we see no difficulty in admitting the complaints. Therefore, complaints are admitted. Notice after admission is waived by the opponents. Adjourn on 03/07/2015 for filing written version by the opponents. Ad-interim relief if any, to continue till then.
Mr. Vali, learned Counsel appearing for the Appellants, has vehemently submitted that it is settled proposition of law that when a question of jurisdiction of the Forum to entertain the Complaint is raised at the threshold, such an objection has to be adjudicated as a preliminary objection. In support, reliance is placed on a decision of the Honble Supreme Court in K. Sagar, Managing Director, Kiran Chit Fund, Musheerabad Versus A. Bal Reddy And Anr., (2008) 7 SCC 166.
Thus, the short question for consideration at this stage is as to whether the State Commission was justified in admitting the Complaints by observing that the question of maintainability of the Complaints on the ground that purchase of four flats for being gifted to the four daughters of the Complainant amounts to commercial purpose, shall be examined at the time of final hearing of the Complaints.
Without expressing final opinion on the afore-stated proposition, we are of the viewprima facie that unless it is shown by bringing on record some cogent material that a purchaser is engaged in the purchase and sale of flats/houses on regular basis with a view to make profit by sale of flats/houses, a mere purchase of a more than one flat would not be sufficient to hold thatper se the purchase was for commercial purposes.
In that view of the matter, we do not find any illegality in the impugned order, directing the Appellants herein to file their written versions, which would be necessary for effectual adjudication on the said objection as well. It is manifest from the order that after the pleadings and evidence has been brought on record, the State Commission would decide the question of its jurisdiction to entertain the Complaints, before proceeding to deal with the rival stands on the claims made in the Complaints. The said exercise would be in consonance with the ratio of the decision of the Honble Supreme Court in K. Sagar (supra).
In the result, the Appeals fail and are dismissed but with the above observations. in limine ......................J D.K. JAIN PRESIDENT ......................
M. SHREESHA MEMBER
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