Any person claiming compensation in relation to the acquisition proceedings can seek relief directly against the Authority so acquiring & demolishing.
The Karnataka State Consumer Disputes Redressal Commission, Bengaluru, dismissed a complaint seeking compensation for the demolition of a building by the Bangalore Development Authority (BDA). The Commission held that the dispute was civil in nature and did not fall within the scope of the Consumer Protection Act, as no consumer-service provider relationship existed between the parties.
Sri. Murugan V/s. D. Sudhindra Rao, State Consumer Commission Karnataka
Dated: O6th Day of April 2026
Date of filing: 10.02.2016 &Date of disposal: 06.04.2026
The complainant purchased the property No. 20(21), situated at Hennur Village, Bangalore North Taluk, measuring 40 x 30 feet from Sri. D. Raghottamacharya through a power of attorney executed on 22.07.1991. He further stated that he had already been put in possession of the property under an agreement dated 02.04.1989 and hence claimed ownership and possession of Property.
The complainant stated that he constructed a residential building on the property after spending nearly Rs.20 lakh and had been regularly paying taxes and electricity charges. BDA demolished the structure on 10.09.2014 and took possession of the property without prior notice…
Aggrieved , the complainant filed a complaint before the Consumer Disputes Redressal Commission seeking a direction against the opposite party to pay Rs. 40,00,000 as compensation, along with Rs. 50,000 towards mental agony and litigation expenses.
Court Observations
Perusing Section 2(1)(d) of the Consumer Protection Act, the Court noted that the term ‘consumer’ encompasses any person who buys goods or avails services for consideration, but excludes a person who obtains such goods for resale or for any commercial purpose.
“While the 1986 Act does not exhaustively define ‘commercial purpose’, though the Explanation to Section 2(1)(d) carves out an exception for self-employment and earning livelihood, the dominant intention or dominant purpose of the transaction is determinative of whether the purchaser falls within the exclusion clause.”
Referring to judicial precedents on the subject, like Lilavati Kirtilal Mehta Medical Trust v. Unique Shanti Developers and Shriram Chits (India) Private Limited v. Raghachand Associates, the Court concluded that the onus of proving appellants’ exclusion from the ambit of “consumer” was on the respondent, but it failed to discharge the same.
The respondent failed to produce any cogent material showing nexus between the appellants’ purchase of the unit and profit generating activity, the Court said.
Accordingly, deeming a decision on merits necessary, the Court set aside the NCDRC order and restored the matter for fresh consideration.
Observations & Decision
- The Commission dismissed the complainant’s complaint, citing lack of jurisdiction. The Commission also found that the complainant did not fall within the definition of a consumer under the Act. It was observed that there was no consumer-service provider relationship between the complainant and the opposite party. Therefore, no allegation of deficiency in service could be maintained against the opposite party.
- The Commission observed that the complainant’s claim was based on an unregistered Agreement of Sale and a General Power of Attorney, which could not legally transfer ownership rights.
- It further observed that tax receipts and electricity bills only indicated possession and were not proof of title.
- The Commission noted that disputes relating to ownership and declaration of title fall within the jurisdiction of a Civil Court and cannot be decided by a Consumer Commission. The Commission held that the dispute was purely civil in nature and involved questions relating to title and contractual rights
- Further, the Commission observed that the Bangalore Development Authority (BDA) had demolished the building and taken possession of the property. Therefore, any person claiming compensation in relation to the acquisition proceedings ought to seek relief directly against the BDA.
Since there was no consumer-service provider relationship and the Consumer Commission lacked jurisdiction to decide civil property disputes, the complaint was dismissed.
By Dr Prem Lata
