Delhi District Court
Cs (Comm) No. 124/2 vs The Principal Officer on 20 October, 2022
In the Court of Shri Sanjiv Jain,
District Judge (Commercial Court)03, Patiala House Courts
New Delhi
CS (Comm) No. 124/21
S.B Arora
S/o Late Sh. Dharambir Arora
Prop. M/s Swaraj Enterprises
B-701, Statesman House,
Barakhamba Road,
New Delhi-110001
... Plaintiff
Versus
1.The Principal Officer DLF Home Developers Ltd, DLF Centre, Sansad Marg, New Delhi-110001
2. The Director General, Service Export Promotion Council, NCHF Building, 3rd Floor, 6A/6, Siri Fort Institutional Area August Kranti Marg, New Delhi-110049 ........ Defendants Date of institution : 22.03.2021 Date of reserving of judgment : 28.09.2022 Date of decision : 20.10.2022 JUDGME NT
1. This suit for recovery of a sum of Rs. 47,08,702/- along with interest has been filed by the plaintiff, SB Arora against the CS No. 124/21 SB Arora v/s DLF Home Developers & Ors Page No.1 of 17 defendants i.e. Principal Officer, DLF Home Developers Ltd and anr.
2. Briefly, the facts as stated in the plaint are that DLF Home Developers Ltd is a home developer company who appoints real estate agents for the sale of its properties/projects located in Delhi/NCR regions. The agents are paid their remuneration in consonance with the sale consideration of the properties for which they provide their services to defendant no.1. It is stated that plaintiff is in the business of real estate and is one of the representatives /channel partners of defendant no.1 for about two decades. It is stated that the defendant no. 1 had regularly issued brochures for advertisement of its projects where plaintiff was shown as its channel partner with regard to sale of residential/commercial properties and had issued authority letters in favour of the plaintiff to represent it for sale of its properties to the public at large including Government and Non Government Organizations. It is stated that the plaintiff used to negotiate sales of various properties with the organizations on behalf of defendant no.1 against which, he used to be paid service charges being percentage of the total sale consideration on the basis of standard terms.
3. It is alleged that on 06.10.2018, defendant no.2 got an advertisement published in the newspaper 'Hindustan Times' whereby they invited tender/offer for purchase of an office premises measuring approximately 5000 sq.ft. carpet area in an CS No. 124/21 SB Arora v/s DLF Home Developers & Ors Page No.2 of 17 approved commercial area in Central/South/East Delhi and Noida. Defendant no.1 on this advertisement vide authorization dated 11.10.2018, authorized the plaintiff to apply for tender by depositing a fee of Rs. 2000/- with defendant no.2 vide Demand Draft. It is stated that in 2006, plaintiff had negotiated similar transaction with the National Handicapped Finance and Development Corporation on behalf of defendant no.1 and provided services to defendant no.1 for sale of its commercial space at its project Prime Towers, Okhla at Okhla Phase-I, New Delhi against which, defendant no.1 had released brokerage amount of Rs. 64,17,575/- i.e. 4% of the total sale consideration which was inclusive of 15% service tax upon registration of the sale deed.
4. It is alleged that the plaintiff arranged various site visits for the official representatives of defendant no.2 during the period from December, 2018 to January, 2019 and also arranged various meetings and negotiations with the sales team of defendant no.1 in February, 2019. During the negotiation, he was informed by the defendant no.1 that the sale transactions would be done in the next financial year (commencing from April, 2019).
5. It is alleged that he was shocked to know that defendant no.2 purchased the mentioned office space i.e. property no. 417, 4 th Floor, DLF Prime Towers, Okhla, Phase I, New Delhi having an area 7339 sq. ft at Rs. 16040/- per sq.ft. thereby depriving remuneration to the plaintiff. It is stated that the sale consideration for the said commercial space was Rs. 11,77,17,560/- and as per CS No. 124/21 SB Arora v/s DLF Home Developers & Ors Page No.3 of 17 the terms/promise made by defendant no.1, he (plaintiff) was entitled to 4% of the sale consideration i.e. Rs. 47,08,072/-. It is stated that in the previous transactions, he was paid 4% of the total sales consideration.
6. It is alleged that defendant no.1 and defendant no.2 connived together and got the sale deed registered in the name of defendant no.2 without giving any prior information to the plaintiff, depriving the plaintiff from the service charges which was agreed upon. Defendant no.1 also neglected his mails. Although the plaintiff raised the invoices for the same and served defendant no.1 with a legal notice dated 18.06.2020 but it neither responded to the legal notice nor made the payment. It is stated that plaintiff is entitled to service charges of Rs. 47,08,702/- and interest @8% on the service charges amounting to Rs. 3,76,000/-, total amounting to Rs. 50,84,702/-. Further, defendant no.1 is liable to deposit GST @ 18% on Rs. 50,84,702/- with the government amounted to Rs. 9,15,246/-.
7. It is pertinent to mention that initially the suit was filed under Order XXXVII CPC but during the proceedings, it was requested to be proceeded as an ordinary suit for recovery vide order dated 04.08.2021.
8. Pursuant to service of summons of the suit, defendant no.1 and defendant no.2 filed their written statements. It is stated by defendant no.1 that defendant no.1 had developed a project under the name and style of 'prime Towers' at Okhla Phase I, New Delhi.
CS No. 124/21 SB Arora v/s DLF Home Developers & Ors Page No.4 of 17 Defendant no.2, being desirous of having office space in and around Central Delhi and South Delhi, in the mid of 2019, had approached the defendant no.1. The members of a committee formed by defendant no.2 visited the available sites. They on 19.11.2019, visited the site of DLF Prime Towers, F-79 and F-80, Okhla Phase-I, New Delhi with the real estate agents namely, Alok Batra and Rakesh Juneja, proprietors of M/s Aakar Properties and Investment. Its official Tarun Mehta arranged the visit/tour of the project. He also informed the real estate agent Alok Batra about the price/area vide mail dated 19.11.2019 and held discussions. On 11.12.2019, the members with Tarun Mehta again visited the site and thereafter, defendant no.2 showed its inclination to purchase an office space bearing DPT417 measuring 7339 sq.ft in the project DLF Prime Towers, Okhla. Thereafter, final price, terms and conditions were shared and discussed directly by defendant no.1 and defendant no.2 officials and office space was booked on 30.01.2020 by the defendant no.2 directly with defendant no.1. However, during the execution of transactions, the channel partners of defendant no.1 namely Alok Batra and Rakesh Juneja were involved. The entire due diligence process took about two months. It is alleged that during the entire process, since the mid of 2019 till the closure of transaction/final signing of documents, plaintiff was never involved in any manner. It was for the first time, on 01.06.2020, plaintiff tried to contact defendant no.1 and raised a frivolous invoice for Rs. 55,56,268.83 which was followed with a legal notice.
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9. It is stated that earlier in October, 2018, defendant no.2 had floated an advertisement for purchase of an office space admeasuring 5000 sq.ft carpet area for which last date of submissions of bid was 15.10.2018 and as per Clause 2, the bid offer was valid for six months from the date of opening of tender. For that bid, defendant no.1 had authorized the plaintiff to apply for the tender but it did not give the plaintiff an exclusive right to represent on behalf of defendant no.1. It is stated that the bid had different options of properties/office space and Unit No. DPT 417 was not mentioned in the bid. Option no.1 included Unit No. DPT 219C, DPT 220, Option no.2 included, DPT 430 and Option no. 3 included DPT 515 B, DPT 516 and DPT 517. The committee of defendant no.2 had rejected the bid submitted by the defendant no.1 including the price list. Defendant no.1 denied the averments made in the plaint and stated that after the said bid was rejected by defendant no.2, there was no involvement and/or authorization on the part of the plaintiff from defendant no.1 of any nature whatsoever.
10. In the written statement filed by defendant no.2, it admitted that on 06.10.2018, it had released an advertisement in the newspaper for purchase of an office premises giving the detailed terms and conditions which clearly envisaged that it was not dealing through brokers and no brokerage was payable by defendant no.2. It is stated that defendant no.1, who was the owner of the premises had authorized the plaintiff to apply to defendant no.2 and thus was the agent/face of defendant no.1 and defendant CS No. 124/21 SB Arora v/s DLF Home Developers & Ors Page No.6 of 17 no.2 was not the privy to the said arrangement. It is stated that defendant no.2 had received three proposals in the prescribed format including proposal from defendant no.1 through plaintiff. The financial bid dated 11.10.2018 submitted by defendant no.1 in respect of property DLF Prime Towers, Plot no. 79 and 80, Pocket F, Okhla Phase 1 had three options i.e. Option no.1- Unit No. DPT 219C, DPT 220, Option no.2- DPT 430 and Option no. 3- DPT 515 B, DPT 516 and DPT 517. Thereafter, a meeting was held on 04.02.2019 where the proposals were discussed but the property could not be finalized. It is stated that it was clearly mentioned in the bid documents that purchase/decision on bids is the sole discretion of defendant no.2 based on its requirement. It is stated that none of properties as shortlisted by plaintiff in his bid was selected or confirmed/purchased by defendant no.2. Further, the plaintiff as AR of defendant no.1 in the bid document had undertaken that he will not pursue any legal case against defendant no.2 in the event, the bid/offer is not accepted.
11. It is stated that in December, 2019, a fresh initiative was taken by defendant no.2 and it purchased the premises/property bearing no. DPT 417, DLF Prime Towers, Plot no. 79 and 80, Pocket F, Okhla Phase I, New Delhi and plaintiff had no role in identifying/shortlisting/facilitating the purchase of the said property and thus, defendant no.2 is not liable to pay any commission to the plaintiff. It is stated that defendant no.2 purchased the property from defendant no.1 and paid the full consideration amount and there is no liability of defendant no.2 of CS No. 124/21 SB Arora v/s DLF Home Developers & Ors Page No.7 of 17 whatsoever nature towards the plaintiff. It denied the averments made in the plaint and its liability to pay any amount to the plaintiff stating that it had no privity of contract with the plaintiff.
12. The plaintiff filed the replication to the written statements filed by the defendant no.1 and 2 wherein he denied the averments made in the written statement and stated that defendant no.2 is a government organization and it cannot purchase the property without floating the tender which infact was floated. He had paid the tender fee of Rs. 2000/- by draft, arranged the site tour and meeting with the officials of defendant no.1. Defendant no. 2 cannot purchase a property of its own and it was required to follow due process of law. It is stated that the aforesaid property was purchased only through tender floated by defendant no.2. He denied that Alok Batra and Rakesh Juneja were the channel partners for carrying out transaction.
13. From the pleadings of the parties, following issues were framed vide order dated 13.12.2021.
1. Whether the plaintiff is entitled to the recovery of a sum of Rs. 50,84,702/- as prayed for? OPP.
2. Whether the plaintiff is entitled to the interest, if so, at what rate and for what period? OPP.
3. Whether the defendants are liable to deposit the GST on the amount of Rs. 50,84,702/- at the rate of 18% with the Government Treasury? OPP.
4. Whether the suit is bad for non-joinder DLF Home Developers? OPD-1.
5. Whether the defendant no.2 has any privy to the arrangement between the plaintiff and defendant no.1? OPD-2.
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6. Relief.
14. To substantiate its case, plaintiff examined himself as PW-1. He tendered his affidavit in evidence Ex.PW-1/Aand placed on record the documents i.e. brochure Ex.PW-1/1, advertisement in the newspaper MarkPW-1/2, authorization in his favour by defendant no.1 ExPW-1/4, Draft dated 11.10.2018 Ex.PW-1/5, mails Ex.PW-1/6 (colly) along with certificate under Section 65 B of the Evidence Act Ex.PW-1/6A, invoice raised by him Ex.PW- 1/7, correspondences between him and defendant no.2 Ex.PW-1/8 (colly), PW-1/9 and bill raised for the services Ex.PW-1/10. He also proved the notice Ex.PW-1/11 which was sent through post vide postal receipt Ex.PW-1/12 and pre-institution mediation report Ex.PW-1/13.
On being cross examined, he stated that there are other channel partners also who are associated with defendant no.1. There were lot of options of different areas available in the tender Ex.PW-1/4 as per which, he was authorized to apply for tender on behalf of defendant no.1. He admitted that property no. DPT 417 is not mentioned in the document Ex.PW-1/1 and its area is 7339 sq.ft. He also admitted that defendant no.2 was not liable to pay any brokerage for the project.
15. To rebut the claim of the plaintiff, defendants examined DW-1 Munish Soni, General Manager (Sales) of defendant no.1. He tendered his affidavit in evidence Ex.DW-1/A and proved the mail dated 19.11.2019 Ex.DW-1/1, mail dated 11.12.2019 Ex.DW-1/2, CS No. 124/21 SB Arora v/s DLF Home Developers & Ors Page No.9 of 17 mail dated 12.12.2019 sent by defendant no.2 to the real estate agent acknowledging the mail dated 11.12.2019 Ex.DW-1/3 and certificate under Section 65B of the Evidence Act Ex.DW-1/4. He stated that defendant no.1 had not issued any letter authorizing any other person to negotiate the deal in question and there is no letter on record whereby the authorization of the plaintiff was cancelled. He stated that vide mails Ex.DW-1/1 to Ex.DW-1/3, Alok Batra and Rakesh Juneja were authorized to negotiate the deal and they had carried out the separate transaction and the tender in question was not materialized.
16. Defendant no.2 examined DW-2 Sudhir Kumar Saxena, its Deputy Director, Finance and Administration. He proved his authority Ex.DW-2/1 in his favour and stated on the lines of the written statement. He admitted that defendant no.2 was set up by the government and it follows the Rules of Ministry of Commerce and Industry. He stated that for purchase of an office, they invite the quotations and sometimes, looking into the urgency, they make direct purchases. He stated that they did not purchase the property against tender Ex.PW-1/3. However, there is no document showing that the tender was rejected. He stated that property was not purchased through the plaintiff and it was purchased from defendant no.1. He stated that property offered by the plaintiff was different from what they had purchased.
17. I have heard ld. Counsel Sh. Surender Chugh for the plaintiff, Sh. Arjit Benjamin for defendant no.1 and Sh. Sunder Mishra for defendant no.2.
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18. Ld. Counsel for the plaintiff contended that the plaintiff was the real estate agent for the defendant no.1 who had appointed him for the sale of its properties/projects located in Delhi/NCR regions. He used to be paid remuneration in consonance with the sale consideration of the properties in respect of which, he used to provide services. He was the representative/channel partner of defendant no.1 for about 20 years. Ld. Counsel stated that on 06.10.2018, defendant no.2 had invited tender/offer for purchase of an office premises in an approved commercial area. Defendant no.1 had authorized the plaintiff to apply for the tender who on its instructions, deposited a fee of Rs. 2000/- with defendant no.2 and authorization dated 11.10.2018 and arranged various site visits for them but defendant no.2 did not take any action. It later, without inviting fresh tender/bid or cancelling the previous tender, negotiated with defendant no.1 and purchased the property in the same complex. Ld. Counsel stated that plaintiff had arranged the visits for defendant no.2 and got the property identified but the defendant no.1 instead, did not pay brokerage/remuneration @4% which it was liable to pay since the deal was negotiated and finalized through him.
19. Ld. Counsel for the defendant no.1 per contra argued that in the present deal, there was no privity of contract between the plaintiff and defendant no.1 nor the defendant no.1 had authorized to struck deal for defendant no.1 with defendant no.2. The tender floated by defendant no.2 had a validity of 6 months which expired as no deal could materialize during that period. Ld. CS No. 124/21 SB Arora v/s DLF Home Developers & Ors Page No.11 of 17 Counsel stated that this deal was in respect of a different property, so, there was no question of payment of brokerage to the plaintiff as he was not the sole appointee/agent of the defendant no.1. Ld. Counsel drew the attention of the court to the written statement filed by defendant no.2 stating that defendant no.2 did not deal with the plaintiff in respect of property in question.
20. Ld. Counsel for defendant no.2 argued on the lines of defendant no.1 and contended that there was no relation between defendant no.2 and the plaintiff nor the property in question was purchased through the plaintiff. Even otherwise, in respect of the present deal, defendant no.2 was not liable to pay any remuneration/commission to the plaintiff.
21. I have given my thoughtful consideration to the rival contentions and perused the evidence and the documents on record. My findings on the issues are as follows.
Issue no.-1- Whether the plaintiff is entitled to the recovery of a sum of Rs. 50,84,702/- as prayed for? OPP.
22. Onus to prove this issue was on the plaintiff. It is true that defendant no.1 had developed a project i.e. Prime Towers at Okhla Phase-1, New Delhi and authorized the plaintiff to apply for the tender floated by defendant no.2 in October, 2018 for purchase of an office space admeasuring 5000 sq.ft carpet area. It is also true that the plaintiff pursuant thereto, filled the tender and deposited CS No. 124/21 SB Arora v/s DLF Home Developers & Ors Page No.12 of 17 Rs. 2000/- with the defendant bank and showed the properties of defendant no.1, arranged site visits for the officials of defendant no.2 during period from December, 2018 to January, 2019 but no deal could be struck. There were three options given to the defendant no.2 i.e. option no.1 Unit No. DPT 219C, DPT 220, Option no.2 DPT 430 and Option no. 3 DPT 515 B, DPT 516 and DPT 517 but defendant no.2 rejected all the options including the price list. The documents show that this tender was valid for a period of six months. It is thus clear that the deal through the plaintiff could not struck. It is also not in dispute that purchase/decision on the bid was at the sole discretion of defendant no.2 based on its requirement.
23. Record shows that in December, 2019, defendant no.2 made fresh initiative and purchased the property bearing no. DPT 417, DLF Prime Towers, Plot no. 79 and 80, Pocket F, Okhla Phase-1, New Delhi. In that deal, the plaintiff had no role as to identifying/shortlisting/facilitating the purchase of the property. Record shows that in that deal, channel partners of defendant no.1 were Alok Batra and Rakesh Juneja who had participated in the due diligence process. Even the area which defendant no.2 purchased, measures 7339 sq.ft. It is true that the property was purchased in the same tower but it was altogether a different property which was offered by the plaintiff.
24. As regards the contention that the defendant no.2 could purchase the property only through auction or tender and not CS No. 124/21 SB Arora v/s DLF Home Developers & Ors Page No.13 of 17 through direct negotiation, it was for the defendant no.2 to see and for this, it cannot be said that for the said deal, the plaintiff would be entitled to charge brokerage/remuneration/commission. I find force in the contention of ld. Counsel for defendant no.1 that it was not the plaintiff only who was the real estate agent for the sale of its properties/projects. There were other real estate agents also through whom, it used to struck the deal. PW-1 has also accepted this fact and stated that except him, there were other channel partners who were associated with defendant no.1. The documents on record show that the deal was struck in respect of a different property than what was showed by the plaintiff. Since the deal could not mature through the plaintiff, so, he is not entitled to brokerage/remuneration for the same. Plaintiff has also admitted that defendant no.2 was not liable to pay any brokerage in respect of the said deal. DW-1 has categorically denied having authorized the plaintiff to struck the deal in respect of the property in question with defendant no.2 on behalf of defendant no.1. He has stated that mails in this respect were exchanged between defendant no.2 and Alok Batra and Rakesh Juneja Ex.DW-1/1 to Ex.DW-1/3. As per the notice inviting offer Ex.PW-1/3, the offer was valid for a period of six months from the date of opening. Since in the present case, no deal could be struck within the said period, so it lapsed with the passage of time.
25. Admittedly in the present case, plaintiff had raised the invoice and sent legal notice when defendant no.1 did not pay brokerage/commission but since the deal was not struck through CS No. 124/21 SB Arora v/s DLF Home Developers & Ors Page No.14 of 17 the plaintiff, so, defendant was right in not paying brokerage/commission to the plaintiff in respect of deal struck between defendant no.1 and defendant no.2 of the property bearing no. DPT 417, DLF Prime Towers, Plot no. 79 and 80, Pocket F, Okhla Phase-1, New Delhi.
26. I am of the view that plaintiff is not entitled to recovery of the sum as claimed.
Issue no.1 is accordingly decided against the plaintiff and in favour of defendants.
Issue no. 2- Whether the plaintiff is entitled to the interest, if so, at what rate and for what period? OPP.
27. Since vide finding on issue no.1, it has been held that plaintiff is not entitled to recovery of any sum, so, he is not entitled to interest.
Issue no.2 is accordingly decided against the plaintiff and in favour of defendants.
Issue no. 3- Whether the defendants are liable to deposit the GST on the amount of Rs. 50,84,702/- at the rate of 18% with the Government Treasury? OPP.
28. Since vide finding on issue no.1, it has been held that plaintiff is not entitled to recovery of any sum, so, there is no question of defendants depositing GST on the amount of Rs. 50,84,702/-.
Issue no.3 is accordingly decided against the plaintiff and in CS No. 124/21 SB Arora v/s DLF Home Developers & Ors Page No.15 of 17 favour of defendants.
Issue no.4- Whether the suit is bad for non-joinder DLF Home Developers? OPD-1.
29. In the present case, as apparent from the memo of parties, DLF Home Developers Ltd has been impleaded as defendant no.1 through its Principal Officer, so, it can be said that the suit is bad for non joinder of DLF Home Developers Ltd. It was the Principal Officer who was representing the DLF Home Developers Ltd.
Issue no.4 is accordingly decided against the defendant no.1 and in favour of plaintiff.
Issue no.5- Whether the defendant no.2 has any privy to the arrangement between the plaintiff and defendant no.1? OPD-
30. From the documents available on record, it is seen that when the defendant no.2 had invited bid/tender/offer, defendant no.1 had authorized the plaintiff to apply for the bid and for that purpose, plaintiff had deposited a draft of Rs. 2000/- with defendant no.2. He had arranged various visits for the officials of defendant no.2 on behalf of defendant no.1 for finalization of the deal. However, the deal could not be struck. This shows that defendant no.2 was privy to the arrangement between plaintiff and defendant no.1 in respect of the bid/tender advertized by defendant no.2.
31. Since in the present case, the deal through tender could not struck and validity period lapsed and the fresh deal between the CS No. 124/21 SB Arora v/s DLF Home Developers & Ors Page No.16 of 17 defendant no.1 and defendant no.2 struck in respect of different premises not through the plaintiff, so, for the said deal, defendant no.2 was not privy to the arrangement between plaintiff and defendant no.1 which fact has also been admitted by plaintiff that there was no privity of contract between plaintiff and defendant no.2. I am of the view that defendant no.2 was not liable to pay any brokerage to the plaintiff in respect of the deal struck qua the property no. DPT 417, DLF Prime Towers, Plot no. 79 and 80, Pocket F, Okhla Phase-1, New Delhi.
Issue no.5 is disposed of accordingly.
Issue no.6- Relief
32. In view of my findings on issue no.1 to issue no.5, the suit of the plaintiff is dismissed with no orders as to cost.
33. Decree sheet be prepared accordingly. File be consigned to record room.
Announced in open court (Sanjiv Jain)
today i.e. 20th October, 2022 District Judge
(Commercial Court)-03
New Delhi
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