GURBAKSH SINGH MALHOTRA vs TECHNOLOGY PARKS LTD.

THIS is a common order in respect of the main enquiry covered by UTPE No. 168/90 and the compensation application covered by CA 267/96.

SHRI Gurbaksh Singh Malhotra (complainant hereafter) has moved this Commission with two applications, one under Section 36B(a) and the other under Section 12B of the MRTP Act, 1969 praying for the initiation of an enquiry into certain unfair trade practices on the part of Technology Parks Ltd. (respondent 1 hereafter) and its Managing Director SHRI Shaukat Rai Malhotra (respondent 2 hereafter) and praying for compensation for the loss and damaged suffered by him as a consequence of the alleged unfair trade practices. Respondent 1 is a Company incorporated under the Companies Act, 1956 and is engaged in the business of colonisation and selling of plots after development. It issued various advertisements in the newspapers offering residential, commercial and industrial plots with facilities like software development centre, RD center, Industrial Tool Room, corporate retreat center, Hotel, School etc. It represented that it would provide all these facilities and develop an integrated complex called the "Park City". The applicant induced by the advertisements booked a plot measuring 538.20 sq. yards. Plot No. 68 on the NOIDA, Dadri Road, Ghaziabad District in the "Park City" project. The respondents in their communications to the complainant represented that they had the certificate from the Collector, Ghaziabad for change of user of land from "agricultural" to "residential, commercial or industrial" purpose and had obtained from the U.P. Government approval for developing 200 acres of land for the "Park City" project. The complainant was told that he should make payment of 40% of the total price at the time of booking, with the balance being payable in 36 equally monthly instalments. The complainant made payment of Rs. 1,13,022/- out of the total price of Rs.1,61,460/- constituting about 70% of the same. The last payment was made in June, 1990. The complainant has alleged that till date there has been no development of the land. The complainant made repeated requests to the respondents on the state of affairs but there has been total silence from the latter. The complainant after visiting the site found that the land was "lying barren". He came to know of a Public Notice issued by the District Magistrate of Ghaziabad warning the public from entering into any sale or purchase agreement in the "Park City" area. The respondents have been falsely representing that they have the approval of Government of Uttar Pradesh and Collector, Ghaziabad, contrary to the truth. The respondents are neither the owners nor are they in possession of the land in question for development. The respondents have, therefore, indulged in the unfair trade practices of misrepresenting to the public and in particular to the complainant visiting him with loss and damage. He has prayed for the institution of an enquiry for unfair trade practices. In his compensation application, he has sought compensation by way of the refund of Rs. 1,13,022/- alongwith the interest and also damages for the loss incurred by him.

The respondents furnished their reply to the main complaint application as well as the compensation application. A Notice of Enquiry (NOE) was issued on 13th November, 1991 by the Commission calling upon the respondents to put in their appearance and defend themselves against the charges. The reply of the respondents in brief is summarised herein below;

PRELIMINARY Objections 1. The trade practice relates to sale and purchase of immovable properties and, therefore, does not fall within the mischief of Section 36A of the Act. The NOE is "invalid, illegal, without jurisdiction". 2. The impugned advertisements were issued in 1988 and the notice warning the public was issued by the District Magistrate, Ghaziabad in 1989. The public notice of the District Magistrate, Ghaziabad was challenged by the respondents and the matter was agitated by the respondents in a writ petition in the High Court of Judicature, Allahabad. There was no misrepresentation on their part. 3. The complainant was aware of the stay order granted by the High Court of Judicature, Allahabad against the Government of Uttar Pradesh but he had concealed and suppressed this fact and moved the Commission with unclean hands. The High Court of Judicature, Allahabad directed that the Government of Uttar Pradesh should appoint a Monitoring Committee to oversee the development of the project of the respondents. The High Court finally disposed of the writ petition allowing the development of the project in conformity with the decisions taken by the Monitoring Committee. In the circumstances, the respondents have not indulged in any unfair trade practice. 4. Respondent 1 signed a deed of compromise with the Greater NOIDA Industrial Development Authority on 9th January, 1992. In terms of the said compromise deed, the respondent Company has been permitted to continue construction of the centres listed therein. Thus there was no unfair trade practice on the part of the respondents. 5. The existence of unfair trade practices is a condition precedent for the issuance of NOE. Here such an existence has not been established.

Reply on Merits 6. No inducement or false representation was made by the respondents to the public at large and to the complainant in particular.

BECAUSE of the Public Notice issued by the District Magistrate, Ghaziabad, the development of the project was "disrupted". When the matter was carried to the High Court of Judicature, Allahabad, it allowed the development on the land in respect of the project in question subject to conformity with the decisions of the Monitoring Committee. The development was accelerated after the judgment of the High Court. The Uttar Pradesh State Industrial Development Corporation in its letter dated 16th May, 1992 gave a No Objection Certificate to the respondent Company stating that it was not going to acquire any land in the project area. The allegations in the complaint petition "are frivolous and misconceived". The reply given to the NOE by the respondent was adopted as their reply to the compensation application. An additional defence taken by the respondents is that the remedy for the complainant lies with the Civil Court and not with the Commission. After the pleadings were completed, the following issues were framed; UTPE No. 168/90 1. Whether the enquiry is not maintainable for the reasons set out in the respondent''s reply as preliminary objections ? 2. Whether the respondent is or has been indulging in the unfair trade practices mentioned in the Notice of Enquiry ? 3. If the answer to the aforesaid issue is in the affirmative whether the Notice of Enquiry is prejudicial to public interest ?

CA 267/96 1. Whether the respondent has indulged in the unfair trade practices as alleged in the NOE? 2. Whether the said restrictive trade practices are prejudicial to public interest ? 3. Whether the applicant has suffered any loss due to the above ? 4. Compensation as claimed, if any ? 7. We gave a hearing to Shri Gurbaksh Singh Malhotra, complainant. As the respondents absented themselves after 5th November, 1997, the proceedings continued ex parte against them. 8. The first issue on maintainability need not detain us as the preliminary objections taken by the respondents in their reply are not legal in nature. They are essentially predicated on facts, in respect of which, evidence alone can be the basis on which they can be believed or disbelieved. However, one argument which has some legal overtones is that the trade practices relate to sale and purchase of immovable property and thus will not fall within the mischief of Section 36A of the Act relating to unfair trade practices. This is not correct as Section 2(r) of theAct defines "services" which include real estate services. The explanation to the said section is very categorical in this regard. The first issue is, therefore, decided in the negative against the respondents. The second issue in the main enquiry is the same as the first issue in the compensation application. 9. This particular issue relating to the project "Park City" against the same respondent Company is covered by a series of decisions of the Commission, wherein it has been held that the respondent Company has indulged in the unfair trade practices of misrepresentation and of not honouring its assurances and promises to the members of the public and to the allottees of plots in the "Park City" project. For instance, the Commission''s decisions in the matter of Shri Naresh Bhardwaj v. Technology Parks Ltd., C.A. No. 131/93 dated 7th January, 1994, in the matter of Shri Vinod Kumar Lugani v. Technology Parks Ltd. & Anr., C.A. No. 201 /93 dated February, 1994, in the matter of Shri Vinod Kumar Sharma & Anr v. Tehnology Parks Ltd. & two Ors., C.A. No. 2053/89 dated 8th May, 1992, and in the matter of Shri Krishan Chand Chawla v. Technology Parks Ltd., C.A. No. 193/95 dated 2nd December, 1997, refer in support.

IN view of the decisions of the Commission already pronounced, there is no need to traverse the same facts and discussions in the instant case. The second issue in the UTPE 168/90 and the first issue in CA No. 267/96 are decided in the affirmative against the respondents. The respondents have indulged in the unfair trade practices alleged in the NOE and the compensation application.

THE third issue in the main enquiry is whether the alleged unfair trade practices are prejudicial to public interest. This is issue No. 2 in the CA case. THEre is no doubt at all that the unfair trade practices indulged in by the respondents have been prejudicial to public interest as has been held in the decisions of this Commission referred to above. Not only the complainant but also a large number of similar allottees have been visited with loss and damage. THEre has been considerable injury to public interest as a consequence. This issue is answered in the affirmative against the respondents. This leaves us with the third issue in the compensation matter as to whether the complainant has suffered any loss due to the unfair trade practices. We have already noted in the preceding paragraph that not only the complainant but also a number of similar allottees have suffered loss and damage as a consequence of the unfair trade practices indulged in by the respondent. The issue is, therefore, answered in the affirmative against the respondents.

In so far as compensation is concerned the complainant is entitled to the refund of Rs. 1,13,022/- which is the amount deposited by the complainant with the respondent Company in the aggregate. He is also entitled to interest at 18% per annum from 1st July, 1990, upto the date of payment as the last of the payments by the complainant was in June, 1990. He is also entitled to cost of Rs. 2,000/-. The respondent Company shall pay the aforesaid amounts within six weeks from the date of this order and file an affidavit in compliance within the same time frame.

IN so far as the main complaint is concerned, the respondents shall discontinue the unfair trade practices mentioned above and desist from indulging in the same in future. The respondents shall file an affidavit in compliance within six weeks from the date of this order. Complaint disposed of. _____________