MOTI LAL JAIN vs Marudhar Services Pvt Ltd

THIS Order will dispose of Appeal Nos. 178,309 and 316 of 1993 against the common order dated 29.3.93 of the Delhi State Commission, since the issues involved are common in all these appeals. Briefly the facts are that attracted by an advertisement made by M/s. Marudhar Services Pvt. Ltd., a number of people joined a scheme known as ''Marudhar Farms - The Swati Investment Plan''. M/s. Marudhar Services Pvt. Ltd., a Public Limited Company and Shri Ashok Mehta, Chairman of the said Company are respondent Nos. 1 and 2 respectively in this appeal. Apart from the advertisement in a number of newspapers, the promoters of the scheme also issued brochures titled ''Money grows on trees'' offering eight options to such investors who deposit a sum of Rs. 30,000/ - as a participant in the scheme. These options offered returns in the form of cash or cash plus land or cash plus trees or land plus trees depending upon the period for which a participant opts ranging between 6 to 12 years. It was also stated that the scheme provided for the allotment of 4,840 sq. yards of land to a person applying for one unit under the scheme and further that the said plot of land would be developed by the promoters at their expense. The development of the plot included approach roads, water and electricity connections etc. for which the investors were required to pay Rs. 5,000/ -. The main attraction of this scheme was a cotinuing return from the eucalyptus trees which were to be planted by the promoters of the scheme, apart from a permanent asset in the form of a plot or return in the form of a multiple of the amount deposited. The scheme was floated sometime in 1986 and thereafter a number of people applied to join in it and made their deposits with the promoters of the scheme. The promoters had also published in August, 1986 a citation in the newspapers, under the directions of the M.R.T.P., stating that they have acquired 1,000 acres of land at Sohna for the purpose of this scheme. It was envisaged that for the first phase 1,000 units of the Marudhar Farms will be located near Sohna in Gurgaon, Haryana which is only 42 kms. from Delhi on the National Highway No. 8 and is one of the most popular tourist resorts in Haryana by virtue or its scenic beauty and the famous Hot Water Sulphur Springs. Other locations in the same vicinity include Bhallabh Garh, Faridabad and Palwal. What added to the attraction of the scheme was the statement that the concerned area in Sohna falls within an obvious scope of Greater Delhi and the National Capital Region. The promoter of the scheme, Mr. Ashok Mehta, was described in the advertisement as a finance wizard, philanthropist at heart, a man with unusual concern for environment, with zeal and initiative to each out into areas where no one ever ventured.

THE promoters allotted units to the depositors in Risabh Park in Marudhar Farms at Sohna in October, 1986. However, in August, 1987 the participants in the scheme were informed by the Marudhar Services Ltd. that the plantation site has been changed from Sohna to another area, namely, Atwa, near Palwal because of some problems in regard to allotment of land at Sohna. In this letter dated 19th August, 1987 sent to all investors the Management of the Marudhar Services took a unilateral decision in regard to the change of the site from Sohna in Gurgaon to Atwa in Palwal and indicated some changes in regard to the countdown period of the scheme ''the Swati Investment Plan''. This letter concluded by stating that ''this letter should be taken to have amended the concerned clause of the agreement where applicable. It may also be mentioned here that modalities in connection with plantation have already commenced at our new plantation site''. A year later, on 6th September, 1988 a society formed by some investors wrote about the quality of land and development at the changed site and withdrew their consent to participate in the scheme vide their letter dated 6th September, 1988. Thereafter, some of the investoi. agreed to the change in site. However, it appears that the consent to changed site by some of the investors was with a view to saving, whatever they could, on their investment, as would be evident from the language of their letters. One of the investors Shri G.K. Gupta, while giving his consent to the change of site to Atwa clearly stated ''this I am doing, as I have no other alternative left with me''. From 19th March, 1987 till 1991 there has been correspondence between promoters of the scheme and the investors; but in April, 1991 when some of the investors went to see the site, they found that there was no development around and there were no trees either, excepting a few saplings of eucalyptus plantation recently put. Frustrated by the manner in which the site was changed and thereafter the quality of land and plantation, they sent a notice to the respondents in April, 1992 withdrawing from the scheme as they found that it was nowhere near the promises made and the expectations raised by the advertisement published in the newspapers and the brochure issued in 1986 when the deposits were made with the promoters. Thereafter a complaint was filed with the Delhi State Commission praying that the respondents be directed to refund the amount with interest and Rs. 2,00,000/ - as compensation. The State Commission considered the complaint and gave their decision on the issue as to whether they could seek relief from the Commission on the ground of breach of agreement after having agreed for transfer of the scheme from Sohna to Atwa on the ground that fraud had been played upon them. Saying that the question of fraud etc. in a transaction of this nature will require a fuller examination of evidence and documents etc. the better course for the complainants would be to file a civil suit as it was not possible for the State Commission to go into the question of fraud in summary proceedings. Therefore, they dismissed the complaint.

WE have gone through the records of this case and heard the learned Counsel for the appellants as well as the respondents. A fact which emerges from the perusal of the record is that none of the complainants has so far been given possession of the land. The contention of the respondents is that they are willing to give possession of the land units alongwith trees at Atwa, but the complainants are not willing to take it. It is quite clear that the land at Atwa is not of the same quality as at Sohna near Gurgaon, both on the grounds of location as well as its value. Moreover, the expectation of having a recurring income from the plantation of eucalyptus trees has turned into frustration. It does not stand to commonsense and reason that the investors would not accept a piece of land of the same size for which they had opted alongwith the trees which may provide much more than the amount they had initially deposited. It is true that in their complaint, the complainants have used the word fraud at one place in respect of the breach of agreement. However, just because the word fraud is mentioned as one of the grounds of the complaint, it should not be thrown overboard without taking into account the totality of the circumstances of the case.

AS has been mentioned earlier, two facts are quite clear : that the site was changed unilaterally by the promoters and the investors were left with no option but to agree to this change to salvage their investment. Secondly, even on the changed site the main attraction for the investors was the promise, as in the advertisement and in the brochure, that the land will be fully developed with eucalyptus trees thereon. This too has not materialised. There could be some weighty reasons as to why the investors are not accepting the land when the land prices generally are in an upward trend overtime. Obviously this land is not of the quality or developed suitably so as to satisfy the investors in relation to promises made to them. Nor, it appears, the plantation is of a nature and extent that could give the promised income. We are, therefore of the view that the promoters of the scheme have failed to render the service they promised and expected of them. In this view of things, it will not be correct to dismiss the complaint only because they have used the word fraud for a breach of agreement. We are satisfied that the promoters have failed to render the promised service and hence accept this appeal and set aside the orders of the Delhi State Commission. We direct that the respondent Nos. 1 and 2 to return the deposits made by the investors with 15% interest per annum from 1st June, 1992 within a period of three months from the date of the receipt of this Order. Delay beyond this date will carry an interest at the rate of 18% per annum till the date of final payment. We have taken the date 1st June, 1992 as the cut off point because it was on this date that the complainants filed a complaint before the Delhi State Commission and also as earlier they perhaps were expecting something to happen even on the changed site of land. After a careful consideration of the facts in this case we see no reason for the award of any compensation to the investors besides the interest as indicated. The appeals are allowed to the extent indicated above. No orders as to costs. Appeals allowed.