Anuradha Sharma vs MESSRS KAILASH NATH AND ASSOCIATES

THE complainant, Mrs. Anuradha Sharma has approached this Commission under Section 36B(a) of MRTP Act, 1969 (the Act for brief) charging the respondent with adoption of and indulgence in unfair trade practices within the meaning of Section 36A thereof. It has been stated by her in the complaint that in response to an advertisement in the Newspapers inviting applications for booking flats in the "Group Housing Scheme" known as "DCM" Green Acres" at DCM Complex, Kishan Ganj-Bara Hindu Rao, Delhi, she booked a residential flat measuring 1,100 sq. ft. @ 950/- per sq. ft. and paid Rs. 75,000/- as advance and in lieu thereof, the respondent issued a receipt dated 8th May, 1989. It has been further stated by her that the advance payment was to be subsequently transferred to the Flat Booking Account and no further payments were to be made till the agreement to sell was signed between the parties. However, as there was a dispute between DCM Ltd. and its employees, the development of the property and construction of residential flats could not take place.

IT has been complained that despite the dispute, the respondent sent a letter dated 15.4.1990 asking her to pay a sum of Rs. l,15,000/-being 20% of the cost of the residential flat within 30 days failing which the booking would be cancelled. Later by another letter dated 26.12.1991, the respondent again asked for payment of Rs. 1,15,000/- stating that the Municipal Corporation of Delhi had released the lay out plans and also warning that in case the payment was not made, interest @ 2% per month would be charged. The complainant thereupon brought to the notice of the respondent through her letter of 17.8.1995 that although no construction activity at the site had taken place, progress of the project may be intimated and also a copy of the agreement to sell may be sent to her. Since there was no response from the respondent, she again wrote a letter dated 22.4.1996 repeating her request. The respondent again vide letter dated 18.5.1996 made a demand for Rs. 1,15,000/- and also for interest on that amount. The grievance of the complainant is that vide her letter of 10.6.1996 she sent two cheques of Rs. 54,000/- and Rs. 61,000/- drawn on Bank of India and UCO Bank respectively as there was a threat of cancellation of the booking by the respondent. It has been further complained that the respondent also demanded interest amounting to Rs. 1,67,900/- and gave threat of cancellation of the booking if the interest amount was not paid and in order to avoid cancellation of the booking, she paid the interest amount by two cheques for Rs. 87,900/- and Rs. 80,000/- drawn on Bank of India and UCO Bank respectively. It has been complained that the respondent is indulging in unfair trade practices within the meaning of 36A of the Act by luring the complainant into booking the flat, by giving threats of cancellation, by not encashing the cheques and by demanding interest @ 24% per annum on delayed payments whereas it is itself giving interest only @ 12% per annum in the event of withdrawal of the advance deposit, paid at the time of booking.

An application for interim relief under Section 12A of the Act was also filed by the complainant and after considering the same, an order was passed by the Commission on 5.8.1996 restraining the respondent from cancelling the booking. The respondent has filed an application under Section 12A(2) of the Act for vacation of the injunction order of 5.8.1996.

A Notice of Enquiry was issued on 26.9.1996 and issues were also framed both in the UTPE Enquiry as well as in the Compensation Application filed under Section 12B of the Act. We have heard both the learned Senior Advocate for the respondent as well as the Advocate for the applicant/complainant on the respondent''s application for vacation of injunction. It has been stated on behalf of the respondent that the booking of the flat was a provisional booking only and the fact that it was so can be gathered from the letter dated 8.5.1989 written by the respondent to the complainant while confirming the provisional booking, coupled with the fact that the rate was tentative and the area approximate. It has been further stated that it had been clarified at that time that permission for the development and construction of the Group Housing Scheme had been applied for and the complainant was free to withdraw the advance deposit of Rs. 75,000/- alongwith interest @ 12% per annum at any time before the demolition of the existing structures in the DCM Complex and without interest any time thereafter. It has also been stated that the respondent''s letter of 8.5.1989 and subsequent correspondence also clearly mentioned that it was a provisional booking and that advance deposit of Rs. 75,000/- would be transferred to the Flat Booking Account on execution of an agreement to sell and as such an agreement was not executed the essential ingredients of a firm agreement to sell were not there in the present case and consequently, no vested right had accrued to the complainant. It was emphasised as the booking was provisional, no vested right in the flat devolved on the complainant and the agreement to sell was to be concluded only after the necessary permission and approvals had been obtained and the respondent was in a position to start the construction work. It was argued that since the agreement to sell was contingent upon necessary permission and approvals which were not forthcoming, such an agreement could not have been concluded.

LEARNED Senior Advocate for the respondent relied on the order of 11.9.1984 of the High Court of Delhi passed on 11.9.19864 in Suit No. 619/83 titled Shri Janak Raj Seth v. Kailash Nath and Associates, stating that in the above order of the High Court of Delhi, provisional booking accepted by the same respondent for another project had been interpreted and it had been held that no concluded contract had come into being between the parties and the prayer for an injunction was not granted. He also cited another judgment of the Hon''ble Supreme Court in the case of DDA v. P.K. Jain, JT 1994 (6) SC 292, to the effect that right to a flat arises only on communication of the letter of allotment to the intending purchaser. In conclusion, it was argued that as the booking was provisional, and as the applicant/complainant had not acquired a right to the flat, the provisions of Sections 36A, 36B(a) and 36D of the Act were not attracted and the order of the Commission passed on 5.8.1996 restraining the respondent from cancelling the booking may be revoked and recalled. Learned Advocate for the complainant however, has stated that the complainant had applied for a residential flat in response to a newspaper advertisement and also deposited the amount of Rs. 75,000/- as advance and subsequently had also paid through cheques the total amount of Rs. 1,15,000/- as also interest amount of Rs. 1,67,900/- as demanded by the respondent. It has also been pointed out that the complainant had booked a residential flat measuring 1,100 sq. ft. @ Rs. 950/- per sq. ft. and as both the area as well as the rate were specified and there was an agreement to sell, the booking could not be construed to be provisional even though the word ''provisional'' had been used in the correspondence. He has further added that a prima facie case of the adoption of and indulgence in unfair trade practices by the respondent within the meaning of Sections 36A, 36B(a) and 36D of the Act had been made out and a notice of enquiry charging the respondent accordingly had also been issued and interim relief had also been granted as prayed for by the complainant and, therefore, there are no grounds for recalling the order of injunction passed on 5.8.1996. The facts of the cases decided by the Hon''ble High Court of Delhi and the Hon''ble Supreme Court have to be looked at carefully in come to a conclusion whether these orders which order to are otherwise binding on the Commission are on all fours and applicable in this case. The facts of the case before the Hon''ble Supreme Court are distinguishable, insofar as there are many more applicants than the flats and after the applications are invited from the intending purchasers, draw of lots is conducted for selection of allottees to whom allotment letters are issued. It is in this context and on these facts that it has been held that right to a flat would arise only on communication of the letter of allotment. This process of selection by draw of lots is made known to the intending purchasers and they understand that they would be allotted flats only if they are lucky in the draw of lots. While in the case of flats offered by DDA, applications are invited and allotments are made only on the basis of draw of lots, in this case no such understanding was given to the applicant/ complainant whose application for booking of a residential flat and advance deposit was accepted and subsequently she was asked to pay an amount of Rs. 1,15,000/- being 20% of the tentative cost of the flat worked out at the rate of Rs. 950/- per sq. ft. She was also asked to pay interest on that amount @ 24% per annum on account of delay on her part in making the payment. At any rate, the area and rate have been specified and all along the applicant/complainant was in correspondence with the respondent and was hoping to conclude the agreement to sell and, therefore, paid through cheques both the amount towards cost of the flat as well as the interest @ 24% for the period of delay. Thus, far all practical purposes there was an agreement and, therefore, in the present case the booking can''t be construed to be provisional on the analogy of DDA bookings as in the case of DDA flats, it is not certain whether the applicant applying for a flat will be successful in the draw of lots and whether an allotment will actually be made in his favour and it is only after the selection process is complete that allotments are made and the successful applicants are issued the allotment letters. In this case, the booking has been made by the applicant/ complainant who is an intending purchaser and it is not the respondent''s case that the booking was to be confirmed and allotment made after a selection process was gone through. The complainant in this case had, in good faith, booked the residential flat and had also paid the advance as she was required to do and if for certain reasons, the project was delayed, she could not be denied a flat except by adoption of and indulgence in unfair trade practices.

IN that view of the matter, since the facts are distinguishable in the two cases, the ruling of the Hon''ble Supreme Court does not appear to be on all fours and applicable in this case. As regards the order of the Hon''ble High Court of. Delhi, it may be pointed out that the complaint was not about unfair trade practices under Sections 36A, 36B(a) and 36D of the Act. While it is not disputed that the word "provisional booking" has been used in the correspondence by the respondent, it appears that there was an understanding that the applicant/complainant was an intending purchaser of the flat in question and the respondent through newspaper advertisement and correspondence gave rise to the expectation to the applicant/complainant that it would offer the flat for sale. IN other words, agreement to sell was implicit in the booking of the flat and acceptance of payment of advance deposit and later in the correspondence containing demand for further payments including interest on the delayed payments.

THE word "agreement" has been defined in Section 2(a) of the Act and "includes any arrangement or understanding whether or not it is intended that such agreement shall be enforceable (apart from any provision of this Act) by legal proceedings." In S.M. Dugar''s commentary, it has been explained that the definition covers not only an agreement as understood in the conventional sense under the Indian Contract Act but any arrangement or understanding between two or more parties. An agreement not enforceable in a legal proceeding is also covered by the definition. THE word arrangement suggests a common course of conduct or behaviour involving some sort of communication or exchange of views between the parties, each of whom is led to expect that the other will act in a certain way. In this case, as pointed out above, the applicant/complainant had the expectation that she would be sold a flat of 1,100 sq. ft. in the Group Housing Complex, "DCM Green Acres" being promoted and developed by the respondent. Thus there was an agreement or understanding between the applicant /complainant and the respondent and both the area, the rate and location were specified. Thus, the plea of the respondent that there is no concluded agreement appears to be far-fetched and is not tenable. In that view of the matter, the application under Section 12A.(2) deserves to be and is hereby rejected and the order passed by the Commission on 5.8.1996 restraining the respondent from cancelling the booking of flat by the applicant/ complainant is confirmed and shall remain in force till the conclusion of the enquiry. Application dismissed.