Delhi District Court
M/S Rinku Sobti Fashions Pvt. Ltd vs (1) M/S Ajay Enterprises Pvt. Ltd on 13 May, 2014
IN THE COURT OF SH. NAVEEN ARORA
ADJ06: SOUTH DISTRICT: NEW DELHI
Suit No : 39/14
M/s Rinku Sobti Fashions Pvt. Ltd.
at 1249A/9, Kishangarh,
J.N.U. Road, Vasant Kunj,
New Delhi110070.
Through Sh. Ashok Gupta, and Digvijay Kumar,
Authorised Representative and Mrs. Gurpreet N.S. Sobti,
Managing Director . Plaintiff
VS
(1) M/s Ajay Enterprises Pvt. Ltd.,
at S1, American Plaza, International Trade Tower,
Nehru Place, New Delhi110019.
(2) Sh. Raman Kumar Sood
Managing Directors
M/s Ajay Enterprises Pvt. Ltd.
S1, American Plaza, International Trade Tower,
Nehru Place, New Delhi110019.
Also at: 19 Golf links,
New Delhi110003.
(3) Sh. Ajay Kumar Sood
Managing Director
M/s Ajay Enterprises Pvt. Ltd.
S1, American Plaza, International Trade Tower,
Nehru Place, New Delhi110019.
(4) Sh. Avneesh Sood
Whole time Director
M/s Ajay Enterprises Pvt. Ltd.
S1, American Plaza, International Trade Tower,
Nehru Place, New Delhi110019.
(5) Sh. Akshay Sood
Whole time Director
M/s Ajay Enterprises Pvt. Ltd.
1Of 14
S1, American Plaza, International Trade Tower,
Nehru Place, New Delhi110019.
(6) Sh. Jagdish Rai Sood
Director
M/s Ajay Enterprises Pvt. Ltd.
S1, American Plaza, International Trade Tower,
Nehru Place, New Delhi110019.
Date of Institution of suit : 03.07.2009
Date of hearing arguments : 12.05.2014
Date of Judgment : 13.05.2014
SUIT FOR RECOVERY OF RS. 19,20,000/ ALONGWITH PENDENTLITE INTEREST @
18% P.A. AND THE COST OF THE SUIT
JUDGMENT
1. As per the case of the plaintiff, the defendant no. 2 to 6 jointly and severally, prevailed upon the plaintiff to book the shop space in the Eros Metro Mall, Sector14, Dwarka, New Delhi being developed by the defendant no. 1. That influenced by the wide publicity made by the defendant no. 1 in the print media, the plaintiff through its Managing Director, Mrs. Gurpreet N.S. Sobti approached the defendant no. 1 and met the defendant no. 2 to 6, who represented and intimated her that the said project of the defendant no. 1 will be completed in stipulated time and in case the plaintiff is not interested in continuing the booking of the shop, then it can make a request for refund of the amount and the same shall be paid to the plaintiff alongwith interest @ 18% p.a as the defendant no. 1 is not short of the buyers of its property. The defendants no. 2 to 6 further prevailed upon, represented and assured the plaintiff that in case the refund of the amount deposited by the plaintiff is not made by the defendant no. 1, then they shall pay the same jointly or severally to the plaintiff and they are giving the guarantee of the payment of amount of the money deposited by the plaintiff for and on behalf of the defendant no. 1. The plaintiff demanded the copy of the Space Buyer Agreement proforma as mentioned 2Of 14 in the terms and conditions of the application form, from defendant no. 2 to 6. The plaintiff was told by the defendants that they will not given the copy of the same to the plaintiff and otherwise also, the same is not required when they are standing guarantors to pay the money to the plaintiff of the amount deposited by it with the defendant no. 1 towards the earnest money. The plaintiff was also informed that agreement to sell/ Space Buyers Agreement will be sent by the defendant no. 1 when the shop shall be ready for possession after obtaining the occupancy certificate from the concerned agency and on the failure of the signing of the agreement to sell/ Space Buyers Agreement by the plaintiff within 30 days from the date of receipt of the intimation notice sent by the defendant no. 1 to the plaintiff, the defendant shall be entitled for the forfeiting of the amount of the earnest money deposition by the plaintiff. The plaintiff booked two shops at first floor vide no. FF 14 (Suit property) and FF 15. Against shop no. FF 14 and FF 15, the plaintiff made payment through cheques. Details of the cheques are :
Date Cheque no. Amount Receipt no. Shop no.
27.10.2007 183706 10,00,000/ 29503 FF 14
29504 FF 15
12.12.2007 183711 5,00,000/ 29502 FF 15
12.12.2007 183710 10,00,000/ 29505 FF 14
It is further submitted that booking of the aforesaid shops and the payment of Rs.25 lacs made by the plaintiff, when the plaintiff did not receive the agreement to sell/ space buyers agreement from the defendants as informed and intimated to it at the time of booking of the aforesaid shops, the plaintiff informed the defendants that it is not interested in the aforesaid two shops and further requested the defendants to cancel the booking of the abovesaid shops and requested them to refund the payment of Rs.25 lacs made by the plaintiff to the defendant no. 1 and in this regard, the plaintiff made the requests on various dates and also wrote the letters dated 03.11.2008, 12.11.2008 and 02.01.2009. It is further submitted that on receipt of these letters sent by the plaintiff, every time the plaintiff was represented and 3Of 14 assured by the defendant that it shall get the refund of Rs.25 lacs at the earliest but plaintiff never received the payment. It is further submitted that from the act and conduct of the defendants, it further appears that they are not interested in refunding the amount to the plaintiff and defendants are wrongfully withholding the legitimate amount due to the plaintiff. Had the plaintiff known that the defendants are playing fraud upon it and the defendants will not honour their words, the plaintiff would have never paid and parted with the sum of Rs.25 lacs. Thereafter plaintiff issued a legal notice dated 20.02.2009 and the same was sent on 21.02.2009 by speed post A.D. Card and UPC on the last known and correct supplied addresses of the defendants which was replied by defendant no.1 vide reply dated 03.03.2009 on false, frivolous and concocted grounds, hence this suit for recovery of Rs. 19,20,000/ alongwith pendentlite and future interest @ 18% p.a.
2. Suit was contested by the defendants by filing WS. It is submitted that plaintiff is wanted to recover Rs.12,75,750/ alongwith interest @ 18% p.a. without fulfilling its own contractual obligation and without paying the balance installments due and payable for the purchase of Shop No.FF15. It is further submitted that plaintiff approached the defendant vide application form dated 31.10.2007 for booking the said shop and the relevant time the prevailing rate in the said Mall was Res.27,500/ per sq. ft, however, as a special case the plaintiff was given a discount and the rate agreed was Rs.24,552/ per sq. ft and approximate super area of the said shop was 710 sq. ft, therefore the price agreed for the said shop was Rs.1,95,25,000/ and above mentioned amount was to be paid by the plaintiff as per the payment schedule agreed between the parties but the plaintiff after having paid the initial amount failed to pay the remaining installments. It is further submitted that entire dispute between the parties pertains to the noncompliance of the terms and conditions of an application form for the purchase of shop in question and as per the terms and conditions, if the provisional booking is cancelled by the plaintiff then the earnest money i.e. 20% of the total amount shall be forfeited by the defendant and it is nowhere stipulated in the said application form that the earnest money would be 4Of 14 returned to the plaintiff with interest. On the contrary it is clearly stated in the application form that the earnest money would be forfeited by the defendant if any of the terms and conditions are not complied with. This forfeiture of earnest money on cancellation of the provisional booking is governed by Clause 6 of the application form and thus defendants are entitled to forfeit the earnest money i.e. 20% of the total consideration which comes to Rs.39,05,000/ which is much more than the advance money paid. It is submitted that payment schedule was agreed between the parties as per which the payments were to be made by the plaintiff which was not complied by the plaintiff. It is submitted that in the absence of signing any space buyer agreement the plaintiff is bound to fulfill their contractual obligation as per application form dated 31.10.2007.
It is further submitted that after the payment of initial amount of Rs.25 lacs against booking of both the shops, the defendants have been requesting the plaintiff to make payment of the remaining installments as per schedule vide letter dated 03.11.2008,12.11.2008 and 02.01.2009 but instead of making payment, plaintiff requested to cancel the said space and demanded refund of Rs.25 lacs. On the above mentioned ground, defendants prayed for dismissal of the suit.
3. Plaintiff filed replication to the WS of defendants stating that application form dated 01.11.2007 which is being relied upon by the defendants is a false and fabricated document. It is submitted that plaintiff never authorized M/s Estate Investment Solution to sign the application form dated 01.11.2007 for and on its behalf. It was submitted that the letter mentioned by the defendant vide which remaining installments were allegedly demanded i.e. letter dated 03.11.2008, 12.11.2008 and 02.01.2009 are the letters of plaintiff and not of defendants. Plaintiff denied all contents of WS and reaffirmed all the averment of the plaint as correct.
4. Admissiondenial of documents was carried out wherein both the parties admitted certain documents i.e. EX.P1 to EX.P 13 and EX.D1 to D3.
5. On the basis of pleadings, following eight issues were framed. From the pleadings of parties following issues were framed on 08.12.2010 : 5Of 14 (1)Whether the plaintiff's suit is based on misrepresentation of facts, if so, its consequences? OPD (2)Whether the suit is without cause of action? OPD (3)Whether the plaintiff is entitled for decree of Rs. 19,20,000/ against the defendant? OPP (4)Whether the plaintiff is entitled for interest @ 18% p.a, if so, for what period? OPP (5)Relief.
6. In Plaintiff's evidence, plaintiff examined PW1 Ms. Gurpreet N.S. Sobti, who filed her affidavit in her examinationinchief who reiterated the contents of the plaint in her affidavit verbatim and relied upon the following documents: Sl. NO. Documents Exhibits Inference
1. Certificate of Incorporation of the PW1/1 undisputed plaintiff 2 Copy of the Board Resolution of the PW1/2 Undisputed defendant 3 Copy of the Board Resolution of the PW1/3 undisputed plaintiff 4 Copy of Form 20B of the defendant no. 1 PW1/4 undisputed 5 Copy of application form filed by the P3 Admitted by plaintiff PW1/5 defendant. It does not bears signature of applicant any where.
6 Original receipt no. 29503, issued P4 Admitted document against cheque no. 183706 for Rs.5 lacs PW1/6 7 Original receipt no. 29505, issued P5 Admitted document against cheque no. 183710 for Rs.10 lacs PW1/7 8 Letter dated 03.11.2008 sent by plaintiff P6 Admitted document for cancellation of the booking of the PW1/8 shop 9 Letter dated 12.11.2008 sent by plaintiff P7 Admitted document for cancellation of booking and refund PW1/9 of earnest money 6Of 14 10 Letter dated 02.01.2009 sent by plaintiff P8 Admitted document for refund PW1/10 11 Legal notice dt. 20.02.2009 of plaintiff P9 Admitted document PW1/11 12 Speed post receipts (13) vide which P10 Admitted document legal notice was sent PW1/12 (colly) 13 UPC receipt (5) P11 Admitted document PW1/13 14 Acknowledgment cards (12) P12 Admitted document PW1/14 15 Reply dated 03.03.2009 to the of legal P13 Admitted document notice of plaintiff sent by defendant PW1/15
7. During his cross examination he remained stick to his stand and stated that as per project was late he demanded his money back.
8. In Defendent's evidence, defendant examined DW1 Sh. Awaish Akhter, who filed his affidavit in his examinationinchief who reiterated the contents of the plaint in his affidavit verbatim and relied upon the following documents: Sl. NO. Documents Exhibits Inference
1. Certificate Copy of the Board DW1/A Undisputed Resolution dated 03.03.2012 2 Photographs of Eros Metro Mall DW1/B Deexhibited by the showing completion of the court during cross construction. examination of DW1 3 Copy of application form dated DW1/C In this application 01.11.2007 form the second page of the application form is duly filled and signed by one Sh. Deven Khullar on behalf of applicant. Some discount have been offered and the terms and conditions were also signed by said Deven Khullar for 7Of 14 applicant on 31.10.2007 4 Copy of application form dated DW1/D Same document as of 01.11.2007 this DW1/C but the writing Original application form was document and content on it i.e. proved as EX. DW1/CC was not on the first page lower tendered in portion is different the which shows that first statement of page was changed or DW1 the writing was made on photocopy of the document and not on the original whose photocopy was taken 5 Copies of three cheques issued by DW1/E Undisputed.
the plaintiff in favour of Defendant
no. 1 company
6 Copy Letter dated 01.11.2007 sent by DW1/F This document was
Deven Khullar of Estate Investment denied by the plaintiff
Solution to Defendant no. 1 during Admission
company denial of document
and original of this
letter was not filed on
record and hence
cannot be relied upon
in evidence.
7 Copy of letter dated 17.12.2007 sent DW1/G This document was
by Deven Khullar to Defendant no. 1 denied by the plaintiff
company during Admission
denial of document
and original of this
letter was not filed on
record and hence
cannot be relied upon
in evidence.
8 Copies of draft agreement dt. DW1/H Unsigned agreement.
24.01.2008 for space no. FF14 with Not relevant
schedule of payment
9 Copies of draft agreement dt. DW1/I Unsigned agreement.
24.01.2008 for space no. FF15 with Not relevant
8Of 14
schedule of payment
10 Copies of letter dated 12.11.2208 D2 & D3 Same document relied
and 02.01.2009 sent by plaintiff to DW1/J upon by the plaintiff as
defendant to cancellation and (colly) P7 and P8 and PW1/9
refund of money & PW1/10
9. During his cross examination, he stated that there is no original of EX.DW1/C as the noting made on it are done with pencil which are erased when senior officer finalized the same. He stated that defendant has not filed any document showing the allotment of the plot in its name by DDA but he filed the occupancy certificate dated 19.09.2011. He stated that he cannot say whether lay out plan was sanctioned on 10.06.2009. He admitted that application form does not bears the signature of plaintiff. He admitted that there is no authority letter in favour of Deven Khullar from the plaintiff. He admitted that they were not having any plan sanctioned by the DDA till 01.11.2007. He admitted that copy of agreement EX.H was never sent to the plaintiff, though he Volunteered that it was supplied to the broker Deven Khullar who was acting on behalf of plaintiff. He admitted that they have not placed on record any reply to the letter dated 03.11.2008, 12.11.2008 and 02.01.2009 vide which the booking was cancelled and refund was sought for. He also admitted that no reminder letters are placed on record to show that defendant company ever demanded remaining installments from the plaintiff. He also admitted that there is no receipt of providing the copy of agreement to the plaintiff on record.
10. I have heard the arguments and have perused the record. My issuewise findings are as follows: (1)Whether the plaintiff's suit is based on misrepresentation of facts, if so, its consequences? OPD (2)Whether the suit is without cause of action? OPD (3)Whether the plaintiff is entitled for decree of Rs. 19,20,000/ against the defendant? OPP 9Of 14
11. Issue No.1 to 3 are inter connected to each other, hence are being decided together. It is an admitted position as of now that it was Mr. Gurpreet N.S. Sobti who had booked the shop in question and Deven Khullar was not the applicant in his personal capacity. The entire defence of the defendant revolves around only one document i.e. the application form. It is pertinent to mention here that when the copy of the application form, relied upon by the plaintiff was put to the defendant during admissiondenial of document, it was admitted by the defendant as EX.P3 which is an unsigned document, and no objection was mentioned at that stage stating that it was signed by one Deven Khullar. As per plaintiff he had no connection with Deven Khullar and they themselves approached the defendant for the deal. Though as per the defendant, the plaintiff approached through their broker Sh. Deven Khullar who was interacting with defendant's representative and he signed the application form as well as the terms and conditions attached to it. Even if it is believed for the sake of arguments that Sh. Deven Khullar was interacting on behalf of plaintiff even then I am of the opinion that defendant was duty bound to obtain a specific authority letter from the plaintiff saying that Sh. Deven Khullar is authorized to sign the terms and conditions attached to the application form.
12. As per the own case of the defendant the defendant was very much aware that Sh. Deven Khullar was a broker and not a relative or employee of the applicant.
13. It is well settled law that agent's authority may be express or implied. The authority can be set to be an express authority if it is given by word, spoken or written. And an authority is said to be implied when it is to be inferred from the circumstance of the case; and things spoken or written, or the ordinary course of dealing may be accounted the circumstances of the case( Section 186 & 187 of Indian Contract Act).
14. It is an admitted position that plaintiff never ever gave any express authority by their words, spoken or written in favour of Sh. Deven Khullar, so the 10Of 14 agency in the present case can only be implied. Then in that case it is required to be inferred from the circumstances of the case. In order to prove this relationship between the plaintiff and Sh. Deven Khullar. The defendant has relied upon one copy of the letter dated 01.11.2007 EX.F allegedly sent by said Deven Khullar of Estate Investment Solution to Defendant No.1 company wherein he is discussing about discount and saying that it was promised that broker will get the discount of 6.5% on the discounted sale price offered to the purchaser and his client would confirm the booking only if price of Rs.24,550/ per sq. ft. is mentioned on the booking form and he has to pass him 4% of his commission, meaning thereby, that the def.no.1 was very much aware even before signing of the application form that Sh. Deven Khullar is a property dealer who himself is earning his commission in the deal in question, so, he cannot be taken as an agent of plaintiff. Once Sh. Deven Khullar himself calling the plaintiff as his client and he himself is not claiming to be an agent of plaintiff, then it is not explained by the defendant that how they took Sh. Deven Khullar as plaintiff's agent. In my opinion, there was no material with the defendant no.1 company to assume that Sh. Deven Khullar was an agent of plaintiff and he is authorized to sign the agreement on behalf of plaintiff.
15. If we peruse the provision of Section 188 of Indian Contract Act which is reproduced as follows : Section 188 Extent of agent's authority An agent is having an authority to do an act has authority to do every lawful things which is necessary in order to do such acts.
An agent having an authority to carry on a business, has authority to do every lawful things necessary for the purpose, or usually done in the course, of conducting such business.
16. From the letters placed on record i.e EX.F & EX.G by the defendants (though they are not legally admissible in evidence as original were not produced 11Of 14 and they are disputed documents. But still they can be used against the defendants, though not against the plaintiff as they have been relied upon by the defendant). It is clear that Sh. Deven Khullar even if he was involved in the deal for the plaintiff, he was acting as a property dealer only and not as an agent and there was nothing to show that he has been authorized to sign the agreement on behalf of plaintiff. The defendant has failed to explain that how they inferred that Sh.Deven Khullar is authorized to sign in place of applicant/ plaintiff. It might be case that Sh. Deven Khullar after charging his commission from the defendant did not inform the plaintiff that he has signed the application form on their behalf. It is pertinent to mention here that no authority was ever seemingly be given to Sh. Deven Khullar from the letter relied upon by the defendants to purchase the property on behalf of plaintiff and to sign as an applicant. His role on the face of it even as per the case of the defendant was only of a property agent. Hence the defendants committed a wrong by allegedly getting the application form signed from Sh. Deven Khullar as he was having no such authority to do so.
17. It is pertinent to mention here that defendant No.1 is a reputed builder and it is the duty of the builder to ensure that their deals with the customers are executed properly and on acceptance of money from the client, the builder is duty bound to do proper documentation so that their customers do not suffer. It is a well known fact, that when these kind of projects are launched in the market, the property agents play a vital role, in getting the deal struck between the builders and the customers, and they most of the times keep the customers in dark as the customers are not told the exact discounts offered by the builders because the builders offers discounts to these agents to get bulk booking from them, who then contact the retail customers by giving them less discounts keeping their margins in between and it is the agent who sells the ultimate product to the customers on behalf of builders. And in these transactions,normally the customers never get the correct picture and here the role of builders come to tell the customers that on what exact price (after giving commission to the agent) the product would be made available to 12Of 14 the customers and on what terms and conditions and builder is duly bound to do so.
18. If we see the facts of the case, from the own documents of the defendants it is clear that till 01.11.2007 the deal was not finalized on behalf of plaintiff and discounts and commissions were being discussed with said Sh. Deven Khullar and on 17.12.2007 the cheques of Rs.15 lacs was forwarded in addition to earlier Rs.10 lacs, so, how it can be said that deal was finalized between plaintiff and defendants on the terms and conditions of application form which was never signed by the plaintiff admittedly. There is nothing on record which shows that after this the plaintiff was ever communicated any terms and conditions by defendant no.1 company. In my opinion, Def.No.1 was duty bound to obtain the signature of the plaintiff on the application form to bind him on those terms and conditions in which the defendant no.1 failed and there is a default on part of Def. No.1 even if their entire case is believed on merits.
19. If we see the case of the plaintiff , it is an admitted case that plaintiff never signed any terms and conditions or agreement, so the question of being bound by the terms and conditions of such application form or agreement does not arise and defendant cannot forfeit the earnest money paid by the plaintiff. It is pertinent to mention here that defendant has not placed on record anything that after receiving earnest money, they ever wrote any letter to the plaintiff demanding any installments or informing that on what terms and conditions earnest money has been accepted, in the absence of which no ground is made out for forfeiture of the earnest money by the defendants. It is pertinent to mention here that if a builders after receiving money to the tune of Rs.25 lacs from the customers makes no communication for one year and does not informed him about the progress of the project, in these circumstances, customers is left with no option but to seeks his money back. Hence the above mentioned issue no.1 to 3 are decided in favour of plaintiff and against the defendant No.1 only as defendant No.2 to 6 cannot be made personal liable for the liability of defendant no.1 company and except oral allegations there is nothing on record to show that defendant No.2 to 6 can be made liable.
13Of 14
20. ISSUE NO.4 : Whether the plaintiff is entitled for interest @ 18% p.a, if so, for what period? OPP The burden of proving this issue was upon the plaintiff. Nothing was brought on record to show that in case of cancellation of booking the defendant was liable to pay interest @ 18% p.a. to the plaintiff. Hence in the absence of any evidence, the judicial notice is to be taken in view of the facts and circumstances of the case. It is an admitted position that deal between the parties is of the year 2007 and having regard to the market condition it has been noticed that during last 12 years, the prices of property in Delhi has increased manifold. In these circumstance, I am of the opinion that ends of justice would meet if interest @15% p.a. is granted to the plaintiff on decreetal amount from the date of filing of the suit till its realization.
21. RELIEF.
In view of decisions of above mentioned issues, suit of the plaintiff is decreed for the sum of Rs.19,20,000/ with interest @15% p.a. on decreetal amount from the date of filing of the suit till its realization against Defendant No.1 only. Costs of the suit is also awarded in favour of plaintiff. Decree sheet be prepared accordingly. File be consigned to Record Room.
Announced in Open Court (NAVEEN ARORA)
on 13th day of May, 2014 ADJ06: South: Saket
New Delhi
14Of 14