NEERU MISRA vs MARUDHAR SERVICES LTD.

THE applicant/complainant, Mrs. Neeru Misra (hereinafter referred to as applicant) has filed a compensation application under Section 12B read with Section 36A, 36A(i), (ii), (iv) and (vi) of the Monopolies and Restrictive Trade Practices Act, 1969 alleging indulgence in unfair trade practices by the respondent M/s. Marudhar Services Ltd., 4, Community Centre, East of Kailash, New Delhi and its Chairman Shri Ashok Mehta (hereinafter referred to as R-1 and R-2) and claiming compensation for the loss suffered. Briefly, the facts of the case are listed in the following paragraphs.

THE applicant allured by fascinating and high profile advertisements, i.e. ''money grows on tree'' enquired about the truthfulness of the advertisements from the respondents. THE applicant applied for one unit in "Swati Investment Plan" by making payment of Rs. 1,000/- vide Application No. 31518 towards the booking amount. THE respondents vide their letter dated 5.8.1986 informed the applicant about the project and enclosed a copy of ''Procedure for Documentation and Registration''. THE applicant further deposited an amount of Rs. 10,000/- on 30.8.1986 as asked for by the respondent. THE respondent issued Receipt No. 649 dated 5.9.1986 for the same which is on record of the case. The respondent vide their letter dated 7.10.1986 informed the applicant that Unit No. N-III in Rishabh Park with option B has been allotted to him and intimated that the investor shall get Rs. 50,000/- and a plot of one acre at the end of six years. The applicant deposited the balance amount of Rs. 24,000/- and the respondents acknowledged the receipt of this amount vide their letter dated 18.11.1986 and informed the applicant that he will shortly hear from their documentation/legal department about the completion of documents.

The respondent on rationalisation of allotment allotted UnitB-I in the same park to the applicant vide their letter No. 8.1.1987 and the applicant returned back the agreement and power of attorney duly completed as asked for by the respondent vide its letter dated 17.1.1987. The respondent informed the applicant that she has become eligible for interest on account of delay on the part of the respondent in finalisation of the registration of its documents and paid interest for the months of February, 1987; March, 1987; April, 1987 and June, 1987.

THE applicant was informed vide respondent''s letter dated 19.8.1987 that on account of deceit and fraud of one of its agents, the land has been shifted to Atwa Village (Palwal) and if the respondent do not hear from the applicant by 10.9.1987, it would be considered acceptance by the applicant. In continuation of their letter, the respondent informed the applicant that her count down of the six years period has commence with effect from 1.10.1987. As there was no response from the respondent for quite some time, the applicant visited the respondent''s office in the beginning of 1991 and was given to understand that an amount of Rs. 1,800/- is to be paid for watch and water charges, which was paid by the applicant vide her letter dated 25.1.1991. The applicant also paid an amount of Rs. 2,500/- towards development charges as required by the respondent. In all, the applicant deposited an amount of Rs. 39,300/- towards the scheme in question.

THE respondent vide their letter dated 27.9.1991 sent the original registration paper of the unit situated at ''Atwa Plantation Area'' to which the applicant protested that she should be given a plot of land in Rishabh area only alongwith Rs. 50,000/- as promised and if the respondent fails to honour its promises, she will be constrained to approach legal authority for relief but all in vain. Left with no other alternative, the applicant approached this Commission vide her compensation application alleging that the respondent falsely represented the services are of particular standard, quality or grade and represented that the services have uses or benefits which such services do not have and thus made false or misleading representation concerning the usefulness. All these acts tantamount to indulgence of the respondent in unfair trade practices within the ambit of Section 36A(1)(i), (ii), (iv) and (vi) of the MRTP Act. In response to the notice issued by the Commission, the respondent filed its reply raising preliminary objections challenging the jurisdiction of the Commission to entertain such application and since the applicant has executed an affidavit before taking over physical possession of the land, she cannot now back out.

ACCORDING to the respondent, shifting of location of land in question from an area near Sohna to an area New Palwal was well within the area envisaged in the scheme, which included area in Sohna, Gurgaon, Ballabgarh, Faridabad and Palwal. The respondent has to shift from Sohna to Palwal because the land at Sohna went into litigation and secondly Tata Energy Research Institute gave an opinion that the land at Sohna is unfit for Eucalyptus plantations. The applicant accepted the new site.

THE respondent submitted in its reply that the scheme commenced smoothly but unfortunately during 1988 unprecedented floods destroyed the entire plantation. Clause 15 of the agreement with the applicant clearly says that the respondent Company was not liable for its incapacity to perform the agreement on account of flood, fire, civil war or any other acts of God etc. Even clause of the Indian Contract Act under the doctrine of "Act of God" absolved the respondent Company for its liability to perform its obligation. The respondent Company replanted Eucalyptus plantation. It offered one acre of land with 1000 Eucalyptus trees and registered a sale deed. The applicant has taken possession of the land with 1000 trees. Hence it had not indulged in any unfair trade practice as alleged by the applicant.

The applicant filed her rejoinder reiterating her stand taken in the complaint application. On completion of the pleadings, following issues were framed : (1) Whether the respondents have indulged in the unfair trade practices alleged in the Compensation Application ? (2) Whether the applicant has suffered any loss or damage as consequent of the alleged unfair trade practices ? (3) Relief ?

MS. Neeru Misra, the applicant filed her affidavit in evidence and was cross-examined by the Advocate for the respondent. On behalf of the respondent, affidavit of Shri Ashok Mehta, Chairman of the respondent Company was filed and he was partly cross-examined by the applicant''s Advocate. The defence of the respondent was struck of on account of non-appearance its witness. Since the respondent was not represented on the date fixed for final arguments, we heard the ex parte arguments advanced by Dr. V.K. Aggarwal, Advocate for the applicant.

WE have carefully gone through the material placed on record. WE find that the case of the applicant is that the respondent Company made false promises of alloting land, growing eucalyptus trees and ensuring a handsome return to the applicants and failed to honour its commitments. It is an admitted fact that the respondent Company allotted unit N-III in Rishabh Park to the applicant and then it changed to B-I in the same area and then to Atwa Plantation Area. In its defence, the respondent has stated in its reply that change in area was beyond its control but have failed to adduce any evidence to support their version. The Commission has held in the case of Compensation Application Nos. 1354/88 and 1359/88 that : "Earlier a regular enquiry was instituted against the respondent on the ground that it has indulged in an unfair trade practice by making false promises in the advertisement issued by it inviting the public to invest money in their scheme for developing Marudhar farm. In the UTP Enquiry No. 109/86 entitled Director (I&R) v. M/s. Marudhar Services Ltd., this Commission vide order dated 14th August, 1986 observed that the respondent has indulged in the unfair trade practice and should desist from continuing with this practice. In fact in those proceedings the respondent has moved an application under Section 36D(2) of the said Act wherein the allegations similar to those made in the compensation applications had been accepted. Para (14) of that applicattion reads as under : ''That in view of the fact that the trade practice flowing from the impugned advertisement attracts the provisions of Section 36A of the MRTP Act and are unfair trade practices, the respondent hereby undertakes in unequivocal, unambiguous and in categorical manner that in its future advertisement/brochure and other publicity materials and representations, it shall not represent in a manner as has been restrained by the Hon''ble MRTPC.'' On the basis of this application, the respondent was directed to desist from the unfair trade practice and was also required to pay a sum of Rs. 10,000/- by way of costs to the DG. It was also observed in the way of costs to the DG. It was also observed in the said order that in the event of any investor filing an application for compensation under Section 12B of the Act, the dropping of further proceedings in the enquiry shall not prejudice the claim of such applicant. In the light of these observations, some orders have already been passed against the respondent allowing reasonable amount of compensation to those investors who suffered as a result of the said unfair trade."

In view of the aforesaid findings of the Commission, we need not consider afresh the question that the respondent has indulged in the unfair trade practice by making certain false promises to the investors for alloting land and growing Eucalyptus trees thereon for the benefit of the investors by multiplying their money manifold under the said scheme. Accordingly Issue Nos. 1 and 2 are decided in favour of the applicant and against the respondent.

THE Commission in various similar cases pertaining to Marudhar Services, i.e. C.A. No. 176/91, C.A. No. 52/89, C.A. Nos. 121/95, 122/95 etc. has allowed interest @ 18% per annum.

IN view of the foregoing, we hold that the respondent has indulged in unfair trade practices which attract the provisions of Section 36A(1) of the Act and the applicant is entitled to relief since she has suffered monetary losses on account of indulgence in such unfair trade practices by the respondent. Accordingly, we direct the respondent to refund the amount of Rs. 39,300/- deposited by her alongwith interest @ 18% p.a. from the dates of depositing various amounts till the same is refunded to her. The applicant in her compensation application has also prayed for compensation towards loss on account of non-deployment of the invested amount, mental agony and cost of case. We are not in favour of awarding huge compensation on account of these counts since we have allowed interest @ 18% p.a. from the dates of deposit of various amounts. However, we award compensation towards mental agony = Rs. 5,000/-, and cost of litigation = Rs. 5,000/-. The respondent is directed to comply with this order within 6 weeks from the date of receipt of this order and to file an affidavit of compliance within 2 weeks thereafter. C.A. disposed of.