Delhi District Court
M/S Mahagun (India) Pvt. Ltd vs Pranav Monga on 29 November, 2022
IN THE COURT OF DR. HARDEEP KAUR,
ADDITIONAL DISTRICT JUDGE-04, SOUTH DISTRICT,
SAKET COURTS, NEW DELHI.
(1)Suit No.:CS DJ 5847-2016
CNR No.:DLST-01-000075-2010
And
(2) Counter Claim No.6082/2016
CNR No.:DLST-01-000257/2013
M/s Mahagun (India) Pvt. Ltd.
Through Mr. S. C. Sharma
(Sr. Gen. Manager Commercial)
Authorized Signatory
Registered office at
C-215, Vivek Vihar,
Delhi. ...Plaintiff/
Respondent
Versus
Pranav Monga, Proprietor
M/s Shri Real Estate & Developer
The Great Eastern Centre,
70 Nehru Place,
New Delhi.
...Defendant/
Counter Claimant
Suit instituted on : 20.11.2010
Counter-Claim registered on : 01.08.2013
Arguments heard on : 10.11.2022
Judgment pronounced on : 29.11.2022
JUDGMENT
SUIT FOR RECOVERY OF Rs.13,85,713/- AND CS DJ 5847-2016 M/s Mahagun (India) Pvt. Ltd. Vs Pranav Monga Page No.1 of 27 Counter Claim No. 6082/2016 Pranav Monga Vs. M/s Mahagun (India) Pvt. Ltd. COUNTER-CLAIM FOR RECOVERY OF Rs.10,62,065/- ALONG WITH INTEREST OF Rs.4,30,816/-.
1. By this common judgment, this court shall dispose of the suit filed on behalf of plaintiff as well as counter claim filed on behalf of defendant.
2. The brief facts of the case are that plaintiff is an incorporated company into the business of Real Estate Development and Construction came to be constituted in the present form consequent to the scheme of amalgamation approved by the order passed by Hon'ble Delhi High Court in Company Petition No.133/2007 dated 10.09.2007 where M/s Mahagun Developers Limited, Mahagun Realtors Private Limited, Universal Advertising Private Limited, M/s ADR Home Decor Private Limited (hereinafter referred to transferor companies) got amalgamated into the plaintiff company. For all purposes rights, assets, liabilities etc. of the transferor companies referred hereinabove came to be transferred in favour of the plaintiff company. In the present suit, the reference to plaintiff is in context of M/s Mahagun Developers Limited, which entered into an agreement with defendant to provide leases for commercial spaces in Mahagun Metro Mall, Vaishali (hereinafter to "Mall"), which by way of amalgamation become part of plaintiff company. All contractual and legal rights of the transferor companies have come to the share of the plaintiff company.
3. The defendant represented himself to be a Real Estate CS DJ 5847-2016 M/s Mahagun (India) Pvt. Ltd. Vs Pranav Monga Page No.2 of 27 Counter Claim No. 6082/2016 Pranav Monga Vs. M/s Mahagun (India) Pvt. Ltd. Agent, approached M/s Mahagun Developers Limited to provide lessee for their Mall. For this service, the defendant was to be paid commission/brokerage equivalent to the rent / lease paid by the lessee to M/s Mahagun Developers Limited, which in view of the amalgamation shall be referred to as paid and for all purposes to be referred as plaintiff. The payment for the services referred herein is identified as brokerage/commission to be paid to defendant upon rendering complete services i.e. of putting lessee in possession and lessee to start paying rent/license fee to plaintiff. As such payment to defendant could have only been made upon rendition of the services but instead, defendant by fraudulent misrepresentation took commission on pro-rate on proportionate amount as paid by the prospective lessee in furtherance of the conditional amounts deposited with plaintiff to take the premises in Mall on lease/license basis. The payment so made did not culminate into the prospective lessees taking the commercial spaces of the plaintiff but instead they revoked the MOU/letter of Intent whereupon the security amounts as paid by the lessees had to be returned. Despite return of the security deposit by the plaintiff company to the respective lessees, the defendant continued to retain the pro-rata payment paid to him without rendering services for which he had been engaged. Even after repeated demands, defendant has refused to refund the amount paid to him .
4. The defendant enticed the officials of the plaintiff company by proposing three prospective corporate lessees for the commercial space in the Mall of the plaintiff. The defendant also CS DJ 5847-2016 M/s Mahagun (India) Pvt. Ltd. Vs Pranav Monga Page No.3 of 27 Counter Claim No. 6082/2016 Pranav Monga Vs. M/s Mahagun (India) Pvt. Ltd. assured the plaintiff company by making false promises that he would soon bring many other corporate clients for the commercial spaces in the Mall as he was a very well known Real Estate Agent, having number of corporate clients. The three corporate clients as proposed by his representation were M/s Aditya Films Limited (Satyam Multiplex) with whom defendant got executed three separate letters of intent/memorandum of understanding.
5. The letter of intent/memorandum of understanding executed with M/s Satyam Multiplex was dated 07.12.2007(addendum dated 09.07.2008), MOU with M/s Infiniti Retail Limited was dated 07.08.2007 and MOU with M/s Aditya Birla Retail Limited was dated 28.02.2008. The terms of service having settled with defendant prior to the execution of the respective MOU's/LOI's a formal memorandum of understanding was executed with the defendant on 12.08.2007. The memorandum of understanding got executed with the defendant was to be the leasing agent for lease/sale of spaces in the Mall at the office of the defendant which was valid for a period of one year from its date of execution on the firm assurance of the defendant that they would result into assured leases/license and would generate income to the plaintiff.
6. The defendant did not await the finalization of the lease/license for the release of his payment for charges of services. But on misrepresentation claimed for release of pro- rate charges on the proportion of the total advance rent and CS DJ 5847-2016 M/s Mahagun (India) Pvt. Ltd. Vs Pranav Monga Page No.4 of 27 Counter Claim No. 6082/2016 Pranav Monga Vs. M/s Mahagun (India) Pvt. Ltd. security deposit as sought to be received from the proposed lessees. The officials of the plaintiff were fraudulently convinced by defendant of his tall claims of getting more prospective lessees for their Mall whereupon accepted the credibility of the defendant and also the misrepresentation of the defendant that the pro-rata payment for the brokerage services were as prevalent and in accordance with the business practice of real estate agents. Thus, as demanded the defendant without rendering his complete services by misrepresentation extracted pro-rata charges on the proportion of the advance rental and security deposit as made by the prospective lessee as part of their executory agreement. In good faith on account payment of Rs.13,38,852/- was made by plaintiff to defendant uptill 04.09.2008.
7. The services which the defendant was to render was in respect of getting lessee/licensee inducted in the commercial space of the Mall. It was to be initiated with the execution of the memorandum of understanding/letter of intent for commercial spaces in the Mall and culminating into leases/licenses. It is only thereafter that defendant was entitled to receive its charges towards commission/brokerage as based on one month rent paid by the three respective proposed lessees as detailed in para 4 of the plaint.
8. After receiving on account payment, defendant made no effort to assure that the proposed lessees would continue to honour their intent and execute the lease/license for the commercial space and also completely neglected and did not CS DJ 5847-2016 M/s Mahagun (India) Pvt. Ltd. Vs Pranav Monga Page No.5 of 27 Counter Claim No. 6082/2016 Pranav Monga Vs. M/s Mahagun (India) Pvt. Ltd. ensure follow up with the prospective three lessees leading to recession of their respective letter of intents by the prospective lessees before the commencement of the Mall. The defendant without rendering services unduly enriched itself by pocketing a sum of Rs.13,38,852/-. As no rental came to be paid by the prospective lessees instead defendant illegally collected amount towards part of the service charges without rendering any services and the plaintiff has been made to refund the amount collected from the prospective lessees. The recession of the LOI/MOU by the respective prospective lessee resulted in grave losses to the plaintiff.
9. The defendant was entitled to brokerage only upon the finalization of the leases, which was to be rendered which have not been affected and instead caused loss/damage to the plaintiff entered into respective letter of intents and made customized changes and did not negotiate with any other prospective lessee for the spaces, till the subsistence of the LOI's/MOU's.
10. The defendant was served with a notice of demand dated 30.08.2010 seeking refund of the amount of Rs.13,38,852/- alongwith interest @18% per annum. The defendant has replied the aforesaid notice through reply dated 04.09.2010 through its counsel admitting the receipt of payment but evading to refund the amount paid by plaintiff. The defendant having enriched itself from the amount is liable to compensate the plaintiff. Hence, the present suit has been filed by the plaintiff.
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11. Written statement cum / and counter claim was filed on behalf of defendant wherein the defendant disputed and denied the contents of plaint. It is stated in the written statement that it is the plaintiff who approached the defendant for selling/leasing of the spaces in their Mall. The defendant in order to execute the MOU worked to attract and invite good brands for buying / leasing the spaces. The understanding of paying on pro-rata basis was decided on performance of the plaintiff strictly as per the delivery commitment made to the prospective lessees who were introduced by the defendant. The defendant worked for more than two years to invest into the prospective lessees who are the brand names but it is due to the non-performance of the plaintiff that even after the execution of agreements, there was a fall out. The plaintiff has not come out clean by filing the present case and has concealed its non-performance for failing to provide commercial spaces within time to them. The defendant has received the legitimate dues strictly as per the pro-rata services for which he was engaged and also in accordance to the terms and conditions agreed upon. The plaintiff company was completely satisfied with the services of the defendant which resulted into the formal execution of the said memorandum of understanding. The agreement dated 12.08.2007 had been signed alongwith one Annexure-A on which the pro-rata payment of commission was agreed upon and accordingly the amount which was received was after the plaintiff was satisfied. All the payments were released on pro-rata basis. There is no misrepresentation as alleged.
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12. It is further stated that the defendant made all efforts prior to letter of intent and even after the execution of agreement but the performance of the plaintiff company appeared to be so hopeless that the said lessees withdrew from the said contracts. There is no undue enrichment by pocketing the alleged amount of Rs.13,38,852/-, in fact, in terms of the understanding pro-rata payments were received out of which the balance remains of an amount of Rs.10,62,065, which is liable to be paid by the plaintiff company. The defendant was not to receive the brokerage only upon finalization of the leases but on the basis of pro-rata work rendered.
13. In counter claim filed on behalf of defendant, the defendant has claimed the balance amount of Rs.10,62,065/- after deducting Rs.36,600/- as an advance paid by the plaintiff since the defendant duly completed the work assigned to him till the execution of the Letter of Intent/Memorandum of Agreed Terms within the scope of the work as mentioned in Clause 4(a) of the Original Memorandum of Understanding dated 12.08.2009. The defendant received the amount of Rs.13,38,852/- as the consultancy fee on pro-rata basis. However, due to non- performance of the plaintiff, the rest of the deal with Aditya Birla Retail Ltd., Infinite Retail Ltd. and Satyam Cineplex could not be completed. Plaintiff was responsible for the construction and possession of the Malls in question. The defendant was not responsible for completion of the project but it did enough to successfully complete the letter of intent as well as memorandum of agreed terms between the parties, hence it is wrong on the part CS DJ 5847-2016 M/s Mahagun (India) Pvt. Ltd. Vs Pranav Monga Page No.8 of 27 Counter Claim No. 6082/2016 Pranav Monga Vs. M/s Mahagun (India) Pvt. Ltd. of the plaintiff to withhold the payments which are due and liable to be received till the execution of memorandum of agreed terms of the agreement entered between the plaintiff and the defendant.
14. The defendant was paid an amount of Rs.13,38,852/-. The statement of account contains the amount due and payable under the column 'Brokerage due is as under:
PAYMENT STAGE BROKERAG AMOUNT BALANCE RECEIVED E RECEIVED DUE IN RS. & ACCOUNT DUE IN RS. IN RS. FOR MOU 2,75,000.00 2,75,000.00 NIL INFINITI EXECUTION RETAIL LTD. FOR ADITYA LOI 5,49,332.00 5,49,332.00 NIL BIRLA RETAIL LIMITED FOR ADITYA MOAT 10,98,665.00 36,600.00 (AS 10,62,065.00 BIRLA ADVANCE) RETAIL LIMITED FOR MOU 4,77,920.00 4,77,920.00 NIL SATYAM EXECUTION CINEPLEXE S INTEREST 4,61,998.00 @18% FROM 04.09.2008 TILL 28.02.2011 ALONGWIT H PENDENTE LITE AND FUTURE INTEREST
The cause of action arose in favour of the defendant and against CS DJ 5847-2016 M/s Mahagun (India) Pvt. Ltd. Vs Pranav Monga Page No.9 of 27 Counter Claim No. 6082/2016 Pranav Monga Vs. M/s Mahagun (India) Pvt. Ltd. the plaintiff on 04.09.2008 when a cheque no.322730 drawn on HDFC Bank Vaishali amounting to Rs.4,11,887/- was issued and balance payment for the work executed for memorandum of agreed terms for Aditya Birla Retail Ltd. and is still continuing till the balance is received alongwith interest @18% per annum. Hence, the present counter-claim.
15. In the replication /written statement to the counter claim, the plaintiff has denied the contents of the written Statement as well as counter claim filed on behalf of defendant. Plaintiff has reiterated & reaffirmed the contents of the plaint. The plaintiff has taken preliminary objection in the written statement to the counter claim filed on behalf of defendant that the defendant has no right to sue to recover Rs.10,62,065/- after deducting Rs.36,600/- as alleged to be the advance paid by the plaintiff company for no cause. The defendant having failed to perform the work assigned and instead resulted in causing loss of rental, carrying out modification and alteration, such other pecuniary and non-pecuniary damages etc. does not permit the defendant to file the false and frivolous claim as counter blast. No cause of action in favour of the defendant and against the plaintiff company to institute a false counter claim and as such liable to be rejected under Order VII Rule 11 CPC. The defendant's claim is false, sham and bogus and in order to escape from refunding the money of the plaintiff company, defendant has put counter pressure by this false counter claim which has not been preceded by any notice of demand seeking recovery from the plaintiff or CS DJ 5847-2016 M/s Mahagun (India) Pvt. Ltd. Vs Pranav Monga Page No.10 of 27 Counter Claim No. 6082/2016 Pranav Monga Vs. M/s Mahagun (India) Pvt. Ltd. any other claim. In para-wise reply on merits, all the averments made in the counter claim have been denied.
16. In replication to the written statement to the counter claim filed on behalf of defendant. Defendant has reiterated the contents of his counter claim and denied the averments made in the written statement by plaintiff.
17. From the pleadings of the parties, the following issues were framed on 01.08.2013 in suit of plaintiff by the Ld. Predecessor of this court:
1. Whether the plaintiff has no cause of action? OPD
2. Whether the plaintiff is entitled to decree of Rs.13,85,713/-? OPP
3. Whether the plaintiff is entitled to interest, if so, for what period and at what rate? OPP
4. Whether the defendant breached the terms of MOU dated 12.08.2007 executed between the plaintiff and defendant?OPP (this issue was re- framed on 24.03.2018)
5. Relief.
18. In the counter claim from the pleadings of the parties, the following issues were framed on 01.08.2013 by the Ld. Predecessor of this court:
1. Whether the counter claimant is entitled to decree of Rs.15,24,063/- as claimed from institution of the suit till recovery? OPP
2. Whether the counter claimant is entitled to interest, if so, for what period and at what rate? OPP
3. Relief.
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19. It is pertinent to mention that vide order dated 24.03.2018, it is ordered that for the purpose of convenience and saving precious time of this Court, both the suits are ordered to be consolidated for the purpose of evidence.
20. In support of its evidence, the plaintiff examined two witnesses.
21. PW-1, Sh. S. C. Sharma, Vice President of plaintiff has tendered his evidence by way of affidavit Ex.PW1/A. He has relied upon following documents:
1. Resolution dated 20.10.2010 as Ex.PW1/1;
2. Copy of order dated 10.09.2007 of Hon'ble High Court in Com. Petition No.133/2007 as Ex.PW1/2 (Colly);
3. Memorandum of understanding dated 12.08.2007 as Ex.PW1/3;
4. LOI executed with M/s Satyam Multiplex dated 07.12.2007 with addendum dated 09.07.2008 as Ex.P1.
5. MOU alongwith terms sheet with M/s Infiniti Retail Ltd. dated 07.-08.2007 as Ex.P2 and P3;
6. MOU with M/s Aditya Birla Retail Ltd. dated 28.02.2008 as Ex.P4.
7. E-mail correspondence alongwith certificate under Section 65-B of Evidence Act is Ex.PW1/4 (Colly);
8. Statement of account given by defendant showing payment of Rs.13,38,852/- as Ex.PW1/5.
22. PW-2 Sh. Rajeev Shrivastava has tendered his evidence by way of affidavit Ex.PW2/A. He has relied upon the document i.e. MOU dated 12.08.2007, which is already exhibited as Ex.PW1/3.
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23. No other witness has been examined by the plaintiff and PE was closed vide order dated 02.07.2016.
24. In his defence, the defendant examined two witnesses.
25. DW-1, Sh. Shree Ram Pranav Monga tendered his evidence by way of affidavit Ex.DW1/A and reiterated and reaffirmed the contents of the written statement in his evidence by way of affidavit. He has relied upon following documents admitted by the plaintiff:
1. Ex.D-1 (colly) computer printout of e-mails sent by plaintiff to Satyam Cineplex dated 13.11.2008 and the defendant and e- mails sent by plaintiff to Satyam Cineplex and the defendant dated 18.12.2008, supported by Certificate under Section 65B of the Indian Evidence Act.
2. Ex.D-2 e-mail sent by defendant to plaintiff dated 13.05.2009.
3. Ex.D-3 e-mail sent by plaintiff to Satyam Cineplex and defendant dated 02.06.2009 .
4. Ex.D-4 (colly) e-mails sent by plaintiff to defendant dated 02.06.2009.
5. Ex.D-5 e-mail sent by Satyam Cineplex to the plaintiff and defendant dated 02.06.2009.
6. Ex.D-6 e-mail sent by plaintiff to Satyam Cineplex and defendant dated 04.06.2009.
7. Ex.D-7 e-mail sent by plaintiff to Satyam Cineplex and defendant dated 08.06.2009.
8. Ex.D-8 e-mail sent by plaintiff to defendant dated 12.08.2009.
9. Ex.D-9 e-mail sent by plaintiff to defendant dated 12.09.2007.
10. Ex.D-10 (colly) e-mails dated 11.02.2009, 06.03.2009, 22.07.2009, 03.03.2007.
11. Ex.D-11 (colly) e-mails dated 04.07.2007 and 09.07.2007.
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12. Ex.D-12 e-mail sent by plaintiff to Infiniti Retail and the defendant dated 24.07.2007.
13. Ex.D-13 Attachment in e-mail dated 11.08.2008.
14. Ex.D-14 e-mail sent by Infiniti Retail to the plaintiff and defendant dated 26.04.2010.
15. Ex.D-15 Certificate under Section 65B of the Indian Evidence Act.
DW1 has also relied upon following documents (denied by plaintiff):
16. Ex.DW1/1 Original Statement of Account of Shree Real Estates and Developers (objected to mode of proof as not supported by Certificate under Section 65B of the Indian Evidence Act).
17. Ex.DW1/2 Original Reply of the defendant dated 14.09.2010 to the said Legal Notice 30.08.2010 sent by plaintiff to defendant.
18. Ex.DW1/3(colly) e-mails dated 02.08.2007, 07.09.2007, 10.09.2007, 14.09.2007, 22.11.2007, 06.12.2007 and 30.11.2007.
19. Ex.DW1/4 e-mail sent by defendant to plaintiff dated 22.04.2009.
20. Ex.DW1/5 e-mail sent by Satyam Cineplex to the plaintiff and defendant to plaintiff dated 14.05.2009.
21. Ex.DW1/6 e-mail sent by defendant to plaintiff dated 02.06.2009.
22. Ex.DW1/7 e-mail sent by defendant to Satyam Cineplex and plaintiff dated 05.06.2009.
23. Ex.DW1/8 two e-mails sent by plaintiff to Satyam (colly) Cineplex and defendant dated 02.06.2009 and 03.06.2009.
24. Ex.DW1/9 e-mail sent by Satyam Cineplex to defendant and plaintiff dated 21.07.2009.
25. Ex.DW1/10 e-mails dated 23.07.2007, 31.07.2007, (colly) 10.08.2007, 15.08.2007 and 17.08.2007.
26. Ex.DW1/11 Three e-mails dated 25.03.2009 and (colly) one e-mail dated 08.03.2008.
27. Ex.DW1/12 E-mails dated 02.05.2007, 04.06.2007, (colly) 26.12.2008 and 02.07.2007.
28. Ex.DW1/13 E-mails dated 15.08.2007, 21.08.2007 (colly) and 30.12.2008.
29. Ex.DW1/14 E-mails dated 30.12.2008 and (colly) 02.03.2009.
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DW1 has also relied upon documents tendered by the plaintiff which are already Ex.PW1/3, Ex.P1 to Ex.P4, Ex.P8 and Ex.P9.
26. Defendant / counter claimant has examined himself as DW-2 . He has reiterated and reaffirmed the contents of the written statement and counter-claim in his evidence by way of affidavit. He has tendered his evidence by way of affidavit Ex.DW2/A. He has relied upon following documents:
1. Ex.DW1/1 Original Statement of Account of Shree Real Estate & Developers (which is already exhibited in the statement of DW1).
2. Ex.DW1/2 Original Reply of the defendant dated 14.09.2010 to the Legal Notice dated 30.08.2010 sent by plaintiff to the defendant (which is already exhibited in the statement of DW1).
27. No other witness has been examined on behalf of defendant /counter claimant and DE was closed vide order dated 02.07.2019.
28. Plaintiff has relied upon the judgment of the Hon'ble Supreme Court of India titled as "Satyaprata Ghose Vs. Mugneeram Bangur & Co. and Anr., 1954 SCR 310: AIR 1954 SC 44 " and another judgement of Hon'ble High Court of Delhi titled as "Sh. K. J. Arora, Proprietor M/S Arora & Associates Vs. M/S Cama Automobiles Pvt. Ltd., 2010(2) AD (Delhi) 392".
29. Defendant has relied upon the judgment of Hon'ble High CS DJ 5847-2016 M/s Mahagun (India) Pvt. Ltd. Vs Pranav Monga Page No.15 of 27 Counter Claim No. 6082/2016 Pranav Monga Vs. M/s Mahagun (India) Pvt. Ltd. Court of Andhra Pradesh titled as "N. V. Ramanaiah and Ors.
Vs. State of Andhra Pradesh and Ors., MANU/AP/0103/1988" and another judgment of Hon'ble Supreme Court of India titled as "Abdulla Ahmed Vs. Animendra Kissen Mitter, 1950 AIR 15" .
30. This court has heard the arguments addressed by the parties and perused the record carefully.
31. Issues wise findings in suit of plaintiff are as under:
ISSUE No.1:
Burden to prove this issue was on the defendant. Defendant has not taken any preliminary objection regarding cause of action. Therefore, no evidence has been led on behalf of defendant to prove this issue. Even, during arguments, Ld. Counsel for defendant admitted that there is no objection regarding cause of action has taken by the defendant in his written statement. Therefore, this issue is decided in favour of plaintiff and against the defendant.
ISSUES No.2 & 3:
These issues are interconnected, hence, taken together. Burden to prove these issues was on the plaintiff. Sh. S. C. Sharma, Vice President of plaintiff company examined himself as PW1 and he tendered his evidence by way of affidavit Ex.PW1/A. He deposed in his evidence by way of affidavit Ex.PW1/A that defendant approached plaintiff company and represent himself to be a reputed real estate agent working in the CS DJ 5847-2016 M/s Mahagun (India) Pvt. Ltd. Vs Pranav Monga Page No.16 of 27 Counter Claim No. 6082/2016 Pranav Monga Vs. M/s Mahagun (India) Pvt. Ltd. name and style of M/s. Shree Real Estate and Developers. Defendant proposed that he had numbers of reputed companies who are in retail business and he could recommend them as lessee for subject mall to be paid/ brokerage equivalent to one month rent paid by the proposed lessee or brand. It was thus purely on maturity of rental that defendant was to be paid its remuneration. Terms were drawn out in the form of Memorandum of Understanding dated 12.08.2017 Ex.PW1/3. He further deposed that from the very beginning as he had come in contact with the plaintiff company, defendant had been fraudulently misrepresenting and enticing to receive more remuneration then it was entitled for. It made plaintiff company agree to pay brokerage equivalent to one month rent where as per market practice brokerage was limited to 15 days rent as he misrepresented that it would provide more lessee and his services although expensive but it would materialize into a deal and would bring the best of retailing brands to the Mall.
Record shows that para no.4, 5, 7, 8 & 9 of evidence by way of affidavit Ex.PW1/A of PW1 are beyond pleadings. It is settled principle of law that evidence which is led beyond pleadings is liable to be ignored. Hence, same cannot be taken into consideration while appreciating evidence led by the parties.
It is admitted fact that LoI executed with M/s Satyam Multiplex was dated 07.12.2007 with addendum dated 09.07.2008 Ex.P1, MoU along with terms sheet with M/s Infinity Retail Limited was dated 07.08.2007 Ex.P2 & P3 and MoU with M/s. Aditya Birla Retail Limited dated 28.02.2008 Ex.P4.
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In para 10 of evidence by way of affidavit Ex.PW1/A, PW1 deposed that defendant as per terms and conditions of the MoU entered with it was only entitled to its brokerage provided the plaintiff company receives rent from which it was to make payment for brokerage for providing lessees. But since defendant collected an amount of Rs.13,38,852/- in terms of the three proposed lessees who rescinded their MoUs/LoIs, it became clear that there was no likelihood of execution of Lease which as now evident was the fact known to the defendant thereby it had collected pro-rata amount without awaiting finalization of Lease with them. He further deposed that defendant having not provided any services unduly enriched himself by receiving on account pro-rata brokerage charges by misrepresentation and was demanded to refund back to the plaintiff company. He further deposed that defendant was orally demanded to refund amount collected by defendant as detailed above but he refused and thus was served with notice of demand dated 30.08.2010 seeking refund of Rs.13,38,852/-. He further deposed that defendant would have been entitled its brokerage or commission only when upon rendering services a Lease Agreement was executed by the three proposed lessees produced by defendant after they had paid rent, as brokerage is based and equivalent to one month rent. He further deposed that counter-claimant seeking recovery of Rs.10,62,065/- as balance amount is contrary to the conduct of defendant who fail to perform the work assigned to it but instead received amount on fraudulent misrepresentation and when demanded refund the same has refused to do.
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During cross-examination PW1 admitted that defendant approached him for getting the Mall for leasing to various brands and defendant personally proposed that he had number of reputed companies. PW1 during his cross-examination evasively replied that he does not recollect whether there is any other document signed between the parties other than the Agreement/MoU dated 12.08.2007. He admitted that Sh. Rajeev Srivastava had done the background check about the defendant before signing the agreement but there is no document on record, but Sh. Rajeev Srivastava had informed the plaintiff company about the background and reputation of defendant and report of background check of defendant was good that is why Agreement was entered with the defendant on 12.08.2007. Further, he admitted that commission/ brokerage was to be paid to the defendant as per MoU dated 12.08.2007 and defendant had introduced three clients to the plaintiff company namely M/s. Aditya Birla Retail Ltd., M/s. Infinity Retail India Ltd. & Superior Films Ltd. Satyam Multiplex and between these three clients and plaintiff company, independent Letters of Intent were signed. PW1 further admitted that since the delivery of Mall was getting delayed and they could not do the operation on time that is why money was refunded to these three clients. PW1 deposed that it is written in the Letter of Intent as to when the possession of building was to be given to these three brands and he admitted that as far as M/s. Infinity is concerned plaintiff company had a litigation and arbitration Award has come in their favour as far as Satyam Complex is concerned arbitration is going on. PW1 CS DJ 5847-2016 M/s Mahagun (India) Pvt. Ltd. Vs Pranav Monga Page No.19 of 27 Counter Claim No. 6082/2016 Pranav Monga Vs. M/s Mahagun (India) Pvt. Ltd. deposed that procedure of payment to a party dealing with the company is, the concerned department recommends release of payment and same is made. In answer to the question regarding similar procedure was adopted while releasing the payment in favour of defendant of Rs.13,38,852/-, PW1 replied that request for release of making pro-rata payment was made by the defendant and the payment was made on such request. He admitted that no documents have been placed on record to show that advance payment was made to defendant.
Plaintiff examined PW2 Sh. Rajeev Srivastava, General Manager-Mall Operations of the plaintiff company and he tendered his evidence by way of affidavit Ex.PW2/A. He deposed that as per the terms and conditions set out in the Memorandum of Understanding it is been set out that "leasing agent will be paid consultancy charges equivalent to ONE MONTH RENT PAID by the brand". However in the present case the transaction for which the defendant was engaged, did not materialize into leases but instead the MoU's/ Letter of Intents executed with the prospective lessees were revoked/ terminated while the defendant illegally withheld the part payment made to them. Plaintiff company was thus induced by fraudulent misrepresentation and false promises of the defendant no.1 came to know that the modus of the defendant has been the same for many others. The plaintiff have been entrapped and entices to take the defendant services which have never been fruitful. The conduct of the defendant who has never bothered to render services to completing the transaction after receiving pro-rata CS DJ 5847-2016 M/s Mahagun (India) Pvt. Ltd. Vs Pranav Monga Page No.20 of 27 Counter Claim No. 6082/2016 Pranav Monga Vs. M/s Mahagun (India) Pvt. Ltd. payment goes to prove his incompetence and malafide. On the basis of fraudulent misrepresentation plaintiff company was being misguided and having pocketed the part payment and did not render any services. As the proposed lessees/ clients rescinded all the MoU/ Letter of Intent, the security deposit as made to the plaintiff company was refunded to the prospective lessees. The plaintiff company has not received any services from defendant on the basis of which any of the prospective lessees to have become lessee. Defendant is not entitled to any brokerage and liable to refund amount illegally received by the defendant. The said prospective lessee unilaterally terminated the MoU on 11.08.2008 on compelling business reasons. When the defendant was appraised of this fact, he refused to take away any initiative as he knew that the prospective lessee is not keen to taken the subject premises. Hence the question of the defendant receiving any emoluments on the said account did not arise. There is no justification of the defendant to keep back the part payment made by the plaintiff to it, when it has not rendered any services. The malafide of the plaintiff is evident from the fact that he did not suggest of recommending any prospective lessee after, he collected charges demanded by him.
PW2 in answer to the question how plaintiff company can say that defendant entrapped and enticed the plaintiff company he replied that defendant enticed by his conduct. He further replied that he is not aware whether plaintiff company had filed anything on record regarding this. He further deposed that an amount of Rs.13,38,852/- was paid to the defendant in good faith CS DJ 5847-2016 M/s Mahagun (India) Pvt. Ltd. Vs Pranav Monga Page No.21 of 27 Counter Claim No. 6082/2016 Pranav Monga Vs. M/s Mahagun (India) Pvt. Ltd. and as on account. In reply to question by the Ld. Counsel for defendant whether plaintiff company do any due diligence about the defendant firm prior to entering into agreement. He replied in negative. This shows that no document have filed on record which shows that an amount of Rs.13,38,852/- paid to the defendant was conditional payment.
No evidence has been led on behalf of the plaintiff company that defendant by fraudulent misrepresentation took commission on pro-rata on proportionate amount as paid by the prospective lessee in furtherance of the conditional amounts deposited with plaintiff company to take the premises in Mall on lease/ licence basis. Further, no evidence has led on behalf of plaintiff that defendant enticed the officials of plaintiff company by proposing three prospective corporate lessees for the commercial space in the Mall of the plaintiff. Therefore, plaintiff company has failed to prove issue no.2 & 3. Hence, these issues are decided against the plaintiff.
ISSUE No.4:
Burden to prove this issue was on plaintiff. No evidence has been led on behalf of the plaintiff company to prove this issue. Hence, this issue is decided against the plaintiff.
RELIEF:
As issue no.2, 3 & 4 are decided against the plaintiff, hence, plaintiff is not entitled for relief claimed in the plaint. Therefore, suit of plaintiff stands dismissed.
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No order as to cost.
Decree sheet be prepared accordingly.
32. Issues wise findings on counter-claim are as under:
ISSUES No.1 & 2:
Issue No.1 & 2 are interconnected, hence, taken together. Burden to prove these issues was on the counter-claimant. Counter-claimant examined himself as DW2 and tendered his evidence by way of affidavit Ex.DW2/A and examined his son Shriram Pranav Monga as DW1, who tendered his evidence by way of affidavit Ex.DW1/A. DW2 deposed in his evidence by way of affidavit that he is sole proprietor of Shree Real Estate and Developers in whose name payment of Rs.13,38,852/- was received as consultancy fee on pro-rata basis for the services rendered by the counter-claimant as per the MoU dated
12.08.2007 and he is entitled to a balance amount of Rs.10,62,065/- after deducting Rs.36,600/- as an advance paid by the plaintiff since he duly completed the work assigned to him till the execution of Letter of Intent/ Memorandum of Agreed Terms within the scope of work as mentioned in Clause 4(a) of MoU dated 12.08.2007. He further deposed that he has performed his part of obligations as per the agreed terms in MoU by introducing client to the plaintiff. He further deposed that as per terms and conditions in the MoU, the commission of the property shall be paid to him in three different stages and that to only after completion of each stage. He further deposed that plaintiff had cleared part of amount only after completion of work. And due to CS DJ 5847-2016 M/s Mahagun (India) Pvt. Ltd. Vs Pranav Monga Page No.23 of 27 Counter Claim No. 6082/2016 Pranav Monga Vs. M/s Mahagun (India) Pvt. Ltd. non-performance of the plaintiff the rest of the deal with Aditya Birla Retail Ltd., Infinity Retail & Satyam Cineplex could not be completed and there was no fraud or misrepresentation as alleged by the plaintiff. He further deposed that parties entered into Letter of Intent/ MoU only because of his efforts. Because of failure on the part of the plaintiff as it was unable to get the premises good to occupy as per agreed terms stipulated in the MoU/LoI. He further deposed that he has performed his obligations as per the MoU dated 12.08.2007 and has received the amount in lieu of services rendered in terms of said MoU. The construction of Mall was in initial stage when the plaintiff contacted him. He further deposed that it is the plaintiff who was responsible for timely construction of the Mall for the purpose of delivering occupiable/ usable commercial space to respective clients and plaintiff failed to complete the obligations and said parties were constrained to withdraw their Letter of Intent and Memorandum of Agreed Terms. He further deposed that as per the MoU dated 12.08.2007 he was responsible only for procuring clients and facilitate the signing of Letter of Intent or Memorandum of Agreed Terms and on the other hand plaintiff was responsible for completion of Mall and timely delivery of commercial space to the clients. He further deposed that it is wrong on the part of the plaintiff to withhold the payment that is due to the counter-claimant in terms of MoU dated 12.08.2007.
In his cross-examination DW2 admitted that he was agreed to work at minimum one month of rent as maximum amount of brokerage to provide each of the prospective tenant. He further CS DJ 5847-2016 M/s Mahagun (India) Pvt. Ltd. Vs Pranav Monga Page No.24 of 27 Counter Claim No. 6082/2016 Pranav Monga Vs. M/s Mahagun (India) Pvt. Ltd. admitted that he was entitled for remuneration out of the rent received by the plaintiff from its prospective tenants.
Perusal of record shows that in the MoU dated 12.08.2007 Ex.PW1/3 there is no clause which shows that the commission of the property shall be paid to counter-claimant in three different stages and that to only after completion of each stage. Rather, clause 2 of MoU dated 12.08.2007 provides that Leasing agent will be paid Consultancy Charges Equivelent to ONE MONTH RENT PAID by brand and it is admitted fact that Lease Deeds have not been executed between the plaintiff and prospective lessees i.e. M/s. Aditya Birla Retail Ltd., M/s. Infinity Retail India Ltd. & Superior Films Ltd. Satyam Multiplex. DW1 has also admitted in his cross-examination that he made an e-mail Ex.DW1/14 to prospective tenants that plaintiff cannot be blamed for rescinding the MoU.
This Court has relied upon the judgment of Hon'ble High Court of Delhi "Sh. K. J. Arora, Proprietor M/S Arora & Associates Vs. M/s Cama Automobiles Pvt. Ltd., 2010(2) AD (Delhi) 392" whereby it is held that:
43. As already held supra this Court has concluded that there was no contract between the parties and the document dated 16.12.1993 Ex.P-5 was not a memorandum of understanding, memorandum of understanding was yet to be signed between the lessor and the lesse; this document was only at the stage of a proposal. The judgments relied upon by learned counsel for the plaintiff are all distinct on their own facts and do not apply to the factual matrix of this case. All the said three cases related to a loan transaction between a borrower and the lender where in all cases there was a written document/exchange of communication executed between the parties recognising the services of the plaintiff therein i.e. agent/broker who had introduced the borrower and the lender with one another and concluded CS DJ 5847-2016 M/s Mahagun (India) Pvt. Ltd. Vs Pranav Monga Page No.25 of 27 Counter Claim No. 6082/2016 Pranav Monga Vs. M/s Mahagun (India) Pvt. Ltd.
their transaction. As rightly pointed by learned counsel for the defendant in a transaction between a borrower and the lender there could be a single/ sole agent; not so in the case where a property has to be leased out and where proposals are offered both to the lessor and to the lessee by several brokers/ commission agents. It is only on the finalisation of the deal with anyone of the said brokers/commission agents that the said person becomes entitled to his finder's fee/commission. There is no doubt to the proposition that the finder's fee/commission becomes payable to the broker once it is recognised that it was through his effective services that the transaction had concluded.
44. This is not so in the instant case, the deal had fallen through in this case primarily for the reason that the plaintiff was unable to supply the requisite documents to the American Express Bank as has been admitted by defendant no.1 in his cross-examination. In K.C. Mehta's case (supra) it has been held that a broker in order to be entitled to his commission must prove either that the transaction has been completed or that the non-completion was not due to default on the part of the principal.
45. In AIR 1950 SCR 30 Abdula Ahmed Vs. Animendra Kissen Mitter, Hon'ble Supreme Court, on the facts of the said case had held that the plaintiff was entitled to the commission as the sale in that case was in fact concluded by him, entitling him to earn his commission. Relying upon the decision of the House of Lords in Luxor (East Bourne) Ltd. vs. Cooper, Hon'ble Supreme Court had with approval noted-
"The ground of decision in the Luzor's case was that where commission was made payable on the completion of the transaction, the agent's right to commission was "a purely contingent right" and arose only when the purchase materialized. As Lord Simon put it" The agent is promised a reward in return for an event and the event has not happened,
46. These observations of the Supreme Court reinforce the finding of this Court that it is only when the transaction materializes or is finally concluded with the efforts and intervention of the commission agent that he becomes entitled to the commission.
In view of aforesaid discussion as well as in the light of the aforesaid judgments, counter-claimant has failed to prove CS DJ 5847-2016 M/s Mahagun (India) Pvt. Ltd. Vs Pranav Monga Page No.26 of 27 Counter Claim No. 6082/2016 Pranav Monga Vs. M/s Mahagun (India) Pvt. Ltd. aforesaid issues. Therefore, these issues are decided against the counter-claimant.
RELIEF:
As issue no.1 & 2 are decided against the counter- claimant, hence, counter-claimant is not entitled for relief claimed in the counter-claimant. Therefore, counter-claim stands dismissed.
No order as to cost.
Decree sheet be prepared accordingly. Reader of this Court is directed to place signed copy of this judgment in the counter-claim file.
Both files be consigned to the Record Room after due compliance.Digitally signed
Typed to the dictation directly, DR by DR
HARDEEP
corrected and pronounced in the HARDEEP KAUR
open Court on 29.11.2022. KAUR Date:
2022.11.29
16:11:42 +0530
(Dr. Hardeep Kaur)
Additional District Judge-04
South District, Saket Courts, New Delhi.
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Counter Claim No. 6082/2016 Pranav Monga Vs. M/s Mahagun (India) Pvt. Ltd.