HARPREET SINGH KOHLI vs Nelu Estate And Movers Pvt. Ltd.

THE above detailed complaint was filed in this Commission on 26.12.2000. Sh. Harpreet Singh Kohli and Smt. Swarnjeet Kaur Kohli are the partners of a partnership running in the name and style of M/s. Midland Overseas having its registered office at Mumbai. The Opposite Parties M/s. Neelu Estates & Movers Pvt. Ltd. -OP -1, Sh. Vijay Kumar Bhalla -OP -2, Smt. Indira Mendiratta -OP -3 (who was deleted vide order dated 07.11.2003), Smt. Pooja Bhalla -OP -4 and Smt. Nelu Bhalla, OP -5, transact the business of constructions and development of immovable property. It is averred that OPs -2 to 5 are the Directors of OP -1.

THE OPs were developing the property bearing C.T.S. Nos. 506, 507 & 508 (Part) at 95, Hill Road Bandra (West) Mumbai known as "Bhalla Complex". The opposite party informed them that the construction of Bhalla complex would be commenced and the possession of the flat would be handed over within a period of one year or thereabout. The Complainant booked a first floor flat admeasuring 951.61 sq.ft. in the said proposed Bhalla Complex. The total consideration for the said flat was Rs. 77,74,798/ -. The complainant paid a sum of Rs. 10,00,000/ - by way of Pay Order dated 31.07.1995 towards the part consideration. After receipt of that amount the OPs executed the following receipt Ex -C in favour of the complainants: - - "TYPED COPY OF THE RECEIPT

Received Rs. 10,00,000/ - (Rupees Ten Lakhs only), by way of Pay Order of Punjab & Sindh Bank I.B.D., Bombay from M/s. Midland Overseas against sale of 1st Floor, Flat at C.S.T. No. 506, 507 and 508 (Part) at 95, Hill Road, Bandra known as Bhalla Complex, measuring about 951.61 sq.ft. against the total price of Rs. 73,74,978 and detailed agreement will be for the balance payment with other terms and conditions shall be prepared and executed within 15 days as prepared by M/s. Vinod Mistry & Co. and approved by M/s. Billawala & Co. In case of any difference in terms and conditions or payment schedule, the amount will be refunded within 30 days on demand in writing from M/s. Midland Overseas.

For NELU ESTATES & MOVERS PVT. LTD.

Pay Order No. 136295

Dated 31 -07 -95

Sd/ -

(VIJAY BHALLA)

Director

30 -07 -95"

It is alleged that after acceptance of Rs. 10,00,000/ - the OPs did not take any further steps. Neither the agreement was executed after so many requests made to them nor did the construction start. Three years prior to the filing of this complaint, the complainants came to the conclusion that the OPs had no intention to construct the flats as promised. Thereafter, they gave notice on 02.02.1998, called upon the opposite parties to repay the part payment of Rs. 10,00,000/ - with interest @ 24% per annum. The opposite parties sent the reply dated 22.02.1998 through their advocate and sent another reply dated 23.02.1998. In the said correspondence, they wanted to see the documents referred to by the complainants. The complainants sent rejoinder notice dated 27.02.1998.

THE complainants received a letter dated 09.03.1998 from the OPs wherein they admitted the execution of the receipt dated 31.07.1995 issued by them at the time of accepting the part payment of Rs. 10,00,000/ -.

SUBSEQUENTLY , the complainants came to know that M/s. Midland Constructions (India) had some transaction with the OPs and a joint venture agreement was entered into by them with the OPs. Pursuant to the said Joint Venture, substantial amounts were paid by the said M/s. Midland Construction (India), which had also made correspondence with the opposite parties regarding the breach of the joint venture agreement and the refund of the amounts invested, etc. From the defence set up by the OP, it transpired that M/s. Midland Construction (India) is owned by Mr. O.S. Kohli, father of Mr. Harjeet Singh Kohli, the complainant. It is alleged that the opposite parties have been making attempts to correlate the above said business transactions of the complainants and other concerned through the various letters and correspondence. The complainants never got refund of Rs. 10,00,000/ -. Criminal cases have been filed against the opposite parties. The complainants are ready and willing to comply with the terms of the agreement to purchase the flat but still the opposite parties failed and neglected to perform their part of the contract. The complainants had booked that flat for residence. Under these circumstances, the present complaint was filed before this Commission with the following prayers. "a) The Opposite Parties be ordered and directed to pay the Complainants the sum of Rs. 10,00,000/ - towards the refund of the part payment made by the Complainants for booking the flat bearing C.T.S. Nos. 506, 507 & 508 (Part) at 95, Hill Road, Bandra (West), Mumbai -400 050, known as Bhalla Complex;

b) The Opposite Parties be ordered and directed to pay the Complainants the sum of Rs. 12,30,000/ - towards the interest calculated at the rate of 24% per annum on the said sum of Rs. 10,00,000/ - from 31 -7 -1995 till the date of filing the present complainant and the Opposite Parties be ordered and directed to pay the interest at the said rate or at such other rate as this Hon''ble Forum may deem fit and proper from the date of filing the complaint till payment and/or realization;

c) The Opposite Parties be ordered and directed to pay the Complainants the sum of Rs. 5,00,000/ - for the mental agony and inconvenience suffered by them on account of the defect in the service of the Opposite Party

d) The Opposite Parties be ordered and directed to pay the costs of this complaint to the Complainants.

e) Such other and further reliefs as the nature and circumstances of the case may require be granted."

THE complainants moved an application for amendment. This Commission allowed the amendment application vide order dated 18.05.2012. Aggrieved by that order, special leave petition was filed before the Hon''ble Supreme Court. The Supreme Court was pleased to hold: "Since the original petition is pending adjudication, we do not consider it proper to interfere with the impugned order and feel that ends of justice will be met by giving liberty to the appellants to challenge the same if the final order of the National Commission is against them.

With the above observation, the appeal is dismissed. It is made clear that the appellants shall be entitled to contest the amended complaint of the respondents on all legally permitted grounds".

IN the amended application, the complainants prayed for more relief. It was averred that the OPs be directed to complete the construction on the premises in dispute and delivery of possession of a flat on the first floor be given and made further following prayers: "(x) It is, therefore, prayed that the opposite parties be directed to complete the construction on Plot No. CTS No. 506, 507 and 508 (Part) at 95, Hill Road, Bandra (West), Mumbai -50 at Bhalla Complex and deliver the possession of a flat on the first floor of the said flat admeasuring 951.61 sq. ft. in the said proposed Bhalla Complex to the complainant."

The OPs have listed the following defences in their written version. It is contended that the complainants are not the consumers. The agreement of sale was never executed by the complainants. The opposite parties have referred to an authority reported in Oriental Trading Corp. v. State of J & K reported in . The case is barred by time. The complainants are guilty of suppression of facts from this Commission as the complainant No. 1 is the son of complainant No. 2. The complainant No. 2 is the wife of Shri O S. Kohli. Shri O.S. Kohli carries on business in the name and style of M/s. Midland Constructions (India). The complainant No. 1 is the General Manager and looks after the business of the said M/s. Midland Constructions (India). Shri O.S. Kohli also looks after the business of M/s. Midland Overseas on behalf of the complainant. The construction work on the above said property was to be raised by the opposite party No. 1 with basement and ground plus three storeys. The said construction was to be further developed by putting up additional four storeys by purchase of TDR and making the said structure into basement and ground plus seven storeys. The property in dispute was mortgaged to Vijay Bank, Mumbai, about April, 1995, a sum of over Rs. 1.50 crore was due to the said Vijaya Bank at the foot of and under the said mortgage. The Vijaya Bank had agreed to release the title deeds of the said property from mortgage and to settle their dues for lesser amount, provided their dues were paid to them on or before 31.07.1995. The said property along with incomplete construction work thereon was then of the value of Rs. 4.50 lacs and estimated cost of further construction work on the said property was Rs. 1.25 crores.

THE OPs entered into a joint venture agreement dated 10.5.1995 executed between the OP 1 and the Shri O.S. Kohli as the sole proprietor of M/s. Midland Construction (India), the said O.S. Kohli agreed to contribute 50% of the value of the said property and of the said further construction cost and agreed to collaborate with opposite party No. 1. It was also agreed that he would receive 50% of the net profits. Consequently, this is not a case of consumer service providers relationship. Neither there is any sale of any immovable property.

THE OPs have mentioned the terms and conditions of the said venture, which too, our mind has got no relevance in this case. That is a separate transaction. The parties are also different. It is alleged that Shri O.S. Kohli failed to pay to opposite party No. 1 Rs. 1 crore and execute the Joint Venture Agreement. It is explained that the delay took place because of inaction, negligence and passivity on the part of Shri O.S. Kohli. Shri O.S. Kohli had informed opposite party No. 1 that due to unforeseen circumstances, the payment under joint venture agreement was delayed and he was making efforts to make the payment within a month or so. The Vijaya Bank refused to extend the time. It is contended that Shri O.S. Kohli was asked to make the payment immediately so that liability to Vijay Bank could be cleared before 31.03.1995. Thereafter Shri O.S. Kohli procured a pay order dated 31.07.1995 of the Punjab and Sind Bank for Rs. 10 lakhs. Shri O.S. Kohli had coerced the complainant and therefore, they executed receipt dated 31.07.1995 at the dictates of Shri O.S. Kohli. Ultimately, Shri O.S. Kohli waddled out of his commitments to pay the balance amount of Rs. 65 lacs under the joint venture before 20.6.1995 or thereafter, as assured. He committed various breaches of the joint venture agreement. The OP 1 had cleared the mortgage liability due to Vijay Bank from its own resources and got the property freed from the mortgage.

SH . O.S. Kohli had already borrowed several crores of rupees from Punjab and Sind Bank. The Bank refused to lend him any more money. Vide Economics Times dated 01.06.1998, Sh. O.S. Kohli and the complainant had defrauded the said Bank in the sum of Rs. 5.00 crores. In January 1996, the Joint Venture Agreement was cancelled. The matter was settled fully and finally. In the said settlement, OP -1 had further offered that they were still ready to sell one flat to M/s. Midland Overseas for the price of Rs. 73,74,987/ - as per receipt dated 31.07.1995 provided by M/s. Midland Overseas, accept the terms and conditions in the draft letter submitted before it. The complainant failed to accept that offer. All the other allegations have been denied. Submissions and Findings:

WE have heard the counsel for the parties and perused their written synopses. The key argument urged by the counsel for the OPs is that the present complaint is barred by limitation. It is contended that the receipt was executed on 30th July 1998. The agreement was to be executed within 15 days, but the same was not executed within 15 days. Consequently, the cause of action for filing the complaint arose on 15.08.1995. For the first time, on 02.08.1998, the complainant served a legal notice upon the opposite parties. The copy of which was produced as Ex. G. The complainants filed the complaint, on 16.09.2000, almost after 5 years from the date of cause of action and almost two a half years from the date of service of legal notice. It is explained that the complaint has been filed beyond the period of limitation of two years. The amended complaint contained a new relief i.e. after the expiry of 10 -12 years. Consequently, all the reliefs are barred by time. It was also pointed out that the Hon''ble Supreme Court vide the above said order has kept this point open, which is to be decided at the time of final arguments. Instead of touching the heart of the problem, the counsel for the OPs just skirted it. It must be borne in mind that uptill now the possession has not been given to the complainants. This is a settled Law that the complainants have got continuous cause of action till the possession is given and the sale deed is executed. The claim made in the amended complaint is also not barred by time because that is also the continuous cause of action which can be raised at any time before the handing over of the possession or execution of conveyance deed/sale deed. The law laid down in "Lata Construction & Ors. v. Dr. Rameshchandra Ramniklal Shah and Anr. [AIR 1999 SC 380]" and "Meerut Development Authority v. Mukesh Kumar Gupta, IV (2012) CPJ 12 (SC)", neatly dovetails with this view point.

WE have come across two latest pronouncements of Law. In case of "Bhagyalaxmi Constn. v. Monoranjan Basak & Ors., Civil Appeal No. 28910 of 2013, wherein the order passed by this Commission that "until or unless sale deed is executed, the cause of action continues", was upheld by the apex court. In another case rendered by this Bench, in the case of "Raghava Estates Ltd. v. Vishnupuram Colony Welfare Association" in Revision Petition No. 3097 of 2012 decided on 04.09.2012, took the similar view. The Special Leave to Appeal (Civil) No. 35805 of 2012, was dismissed in limine by the Hon''ble Supreme Court.

THE second submission made by learned counsel for the OPs was that M/s. Midland Overseas, the complainants and M/s. Midland Construction (India) are the same entities operating under different names. Shri Harpreet Singh Kohli, opposite party No. 1, in his original evidence, has stated that M/s. Midland Construction India (MCI) is a proprietary concern of Mr. Onkar Singh Kohli (father of complainant) and that the complainant No. 1 does not have any proprietary or pecuniary interest in M/s. Midland Construction (India). The attention of the Commission was invited towards letter, Ex. 3 on the letter head of M/s. Midland Construction (India) and duly signed by complainant No. 1 in his capacity as the General Manager of M/s. Midland Construction (India). The letter further mentions that in terms of Joint Venture Agreement, the consideration payment was delayed and the same would be made latest, by 30.09.1995, so that opposite party could honour its commitment with Vijaya Bank. It was argued that it stands established beyond doubt that the complainant No. 1 was well aware of the entire transaction and that the control and functioning of M/s. Midland Construction (India) is with him. We are unable to locate some substance in these arguments. It must be borne in mind that M/s. Midland Construction (India) and M/s. Midland Overseas are two different entities. Both the entities cannot be mixed with each other. It is quite possible that Harpreet Singh may be working as General Manager of the other firm yet he is discharging his duties under his father in M/s. Midland Construction (India) in another capacity. We are to find out who is the real consumer in this case?. The above said agreement/receipt was entered by and on behalf of M/s. Midland Overseas. By no stretch of imagination, it can be mingled with M/s. Midland Construction (India). This is indeed a case of two separate transactions between two separate entities. Consequently, this argument has to be eschewed out of consideration.

THE next submission made by learned counsel for the opposite parties was that the complainant is not a consumer. The attention of the Commission was invited towards joint venture agreement, which was executed between the opposite party No. 1 and M/s. Midland Construction (India) for carrying out development on a plot of land owned by the opposite party. This is the same land on which the property in dispute was to be constructed. According to the terms of joint venture agreement, capital and profits were to be shared equally by both the parties and all the managerial decisions were to be taken mutually. This was a proper commercial agreement in order to earn commercial profits from the sale of flats. The joint venture agreement was kept under the hat. It was not disclosed and was not produced before this Commission by the complainant.

IN order to buttress his argument, the petitioner has also cited celebrated authority reported in Fakir Chand Gulati v. Uppal Agencies Pvt. Ltd. & Anr. : (2008) 10 SCC 345 wherein it was held that a true joint venture agreement is an agreement where both the landowner and Builder have a say or control in the construction, participate in the management of the Joint Venture and also have a share in the profit/loss of the venture. In such a case, the co -adventurers in the JV cannot be said to be consumers. Attempts were made to obfuscate the real issue with extraneous explanation. As a matter of fact, the opposite parties partakes more of illusions than in reality in assuming that M/s. Midland Overseas and M/s. Midland Construction (India) is the same entity. There is a marked difference between the two. It is stated that Harpreet Singh Kohli and his mother, Smt. Swaranjeet Kaur Kohli are the partners of M/s. Midland Overseas. In para 11 of the complaint they have stated that the complainants had booked the said flat for their residence and the construction thereof was to be completed within a period of one year. The purpose of M/s. Midland Construction (India) and the opposite party No. 1 vide joint venture agreement may be commercial but there lies no rub if a family member or a General Manager of another company purchases a house for his residence. By no stretch of imagination, it can be said to be for commercial purpose. A buyer cannot be equated with a seller. Both have different purposes. Parallels cannot be drawn between the facts of this case and the above cited authority. The argument urged by learned counsel for the opposite parties is lame of strength and therefore, we pin no value with it.

IT was further argued that receipt dated 30.7.1995 was executed between the opposite party No. 1 and M/s. Midland Overseas Limited. However, the present complaint has been filed by Shri Harpreet Singh Kohli and Smt. Swaranjeet Kaur, in their individual capacity. There is no averment that the complaint is filed by M/s. Midland Overseas through its partners.

THIS is only a technical mistake, which too, carries no value in the eyes of law. The title of the complaint specifically, clearly and unequivocally mentions that the case was filed by Shri Harjeet Singh Kohli and Smt. Swaranjeet Kaur Kohli, both carrying on business in partnership, under the name and style of M/s. Midland Overseas. The mention of the name of the complainants prior to the name of partnership firm does not cause any dent on the complainants'' case. It was next submitted that the OPs had written a letter dated 8.1.1996, Ex. 6 but the OPs received no response from the complainants. This letter was written to M/s. Midland Construction (India). This letter is crucial and its following paras 3 to 7 are reproduced here, as under: "3. We may further record that thereafter you have discussed in length about your letter lt 25.7.1995 and it was finally decided and agreed between your company and us that the aforesaid Joint Venture Agreement dated 10.05.95 should be treated as Null & Void terminated with effect from 08.01.1996 as per the settlement arrived between us, for Rs. 100 Lakh. This is the Full and Final settlement. Amount is to be paid by us.

Further as mutually settled and agreed between us under the Joint Venture Agreement you have agreed to accept a sum of Rs. 1.00 Lakh from us, for which we are enclosing our cheque from the A/c of Vijay Bhalla vide Cheque No. 401594 dated 08.01.1996 drawn on State Bank of Patiala, Bombay for which you are requested to sign the accompanying voucher in token thereof confirming your acceptance.

You have further informed us that you are facing serious financial crisis as you are required to repay a large amount to Punjab & Sind Bank also and that the said Bank is pressing you for the said payment, it was also discussed in the meeting that due to financial difficulties faced by you several cheques issued by you in our favour were dishonoured and return unpaid.

It is further agreed between us that the part payments made by you to us under the Joint Venture Agreement dated 10.05.1995 shall be forfeited by us as you could not fulfil your part of the contract and obligation under the Joint Venture Agreement dated 10.5.1995 which resulted in huge financial losses to our Company.

In the meantime, we are even at this stage are ready to sell the flat to your sister concern M/s. Midland Overseas, and sell the same, in the said building at the same special concessional price as per our sale letter dated 31.07.1995 for which we are forwarding our separate letter containing the terms and conditions to your Sister concern M/s. Midland Overseas."

THE attention of the Commission was also invited towards the terms of settlement. As per the terms of settlement arrived at between the so called parties, a sum of Rs. 1 lakh was to be paid as token money. The complainants have got that encashed, which was sent in the name of M/s. Midland Construction (India). The Opposite parties also argued that in the complaint, it was wrongly stated that the complainants became aware of the joint venture agreement subsequent to the letter dated 09.03.1998. However, contrary to this, the complainant No. 1 himself signed a letter dated 27.7.1997 on behalf of M/s. Midland Construction (India) referring to the terms of joint venture agreement. It is contended that the complainants had made a vain attempt to suppress the factum of joint venture.

ALL these arguments were stated for their outright rejection. To top it all, the acceptance of Rs. 10,00,000/ - without taking further development, is itself, a deficiency in service. In a case reported in Samarath Asst. Eng. & Builders & Ors. v. Ramesh Ramachandra Lokhande, Revision Petition No. 4728 of 2012 decided by this Bench, on 10.9.2013, we gave the following findings: "First of all, it is not understood why the agreement was not executed at or about the execution of receipt of Rs. 25,000/ -. In Belaire Owners Association v. DLF Ltd. & Ors, Case No. 19/2010, vide supplementary order dated 03.01.2013, the Competition Commission of India, held: 1 The terms of the agreement to be entered into with the allottee were never shown to the allottee at the time of booking of the apartment. These terms and conditions of the agreement were prepared and framed by the company unilaterally without consulting the buyer. Once the company had already received considerable amount from the applicants/buyers, this agreement was forced upon the allottees and the allottee had no option but to sign the agreement, as otherwise the agreement provided for heavy penalties and deduction from the money already deposited by the allottees with the company, which itself was an abuse of dominance. The appropriate procedure would have been that a copy of the agreement which DLF proposed to enter with the allottee should have been made available to the applicants at the time of inviting applications. In this case, the receipt was issued on 19.11.2009. The petitioner kept quiet till 18.07.2010. Out of blue, he sent the notice dated 18.07.2010, which is reproduced as follows."

Secondly, the receipt Ex. CC is crucial and a documentary evidence in this case. The argument that the complainant did not approach the OP to get the agreement executed is bereft of merits. After taking Rs. 10 lakhs, the opposite parties kept quiet for the reasons best known to them. It must be reiterated that both the entities are separate. The opposite parties admit in no uncertain terms that both the firms are sister concerns. Any act done by Shri Harpreet Singh Kohli for M/s. Midland Construction (India) does not bind him for the other transaction. The complainants have been asking them to return the money or to put in possession of the flat, time and again, but their requests fell on deaf ears. It is thus clear that the OPs raised a number of objections merely for the sake of cavil.

ALTHOUGH , it is not possible to handover the flat in favour of the complainants because their father/husband is also involved in the construction work of that property, the Joint Venture Agreement clearly goes to show that the construction cannot be done for a long time. However, that is a matter, inter se between the parties of Joint Venture Agreement. The complainants have nothing to do with that. At the same time, the opposite parties cannot wriggle out of the liability of accepting Rs. 10 lakhs, for doing nothing. They cannot be allowed to grab the said amount, for nothing.

UNDER the circumstances, prevailing here, we refrain from ordering the possession of the flat, but on the contrary, we direct the opposite parties to pay a sum of Rs. 10.00 lakhs, with interest @ 9% per annum, from the date of payment i.e. 31.07.1995, till its realisation. There shall be no order as to costs.