NIRMAL KUMAR JAIN vs MAXWORTH ORCHARDS (INDIA) LTD.

THIS complaint has been filed by Dr. Nirmal Kumar Jain and Smt. Abha Jain. The complainants Dr. Nirmal Kumar Jain and Smt. Abha Jain entered into an agreement with the opposite parties pertaining to orchards scheme whereby the opposite parties had agreed to carry out various operations relating to development of orchards and, therefore, the scheduled property was to be handed over in favour of the orchard owner within a stipulated time. Under the agreement the rights of the orchards owner to terminate the agreement in accordance with the procedures was laid down in Clause 26 of the agreement. The complainants paid to the opposite parties the following amounts vide different cheques numbers on different dates, the details of which are given in Schedule below : Name of investor and particulars Customer Code Amount deposited in Rs. 1.Dr. N.K. Jain Max Narainpur II NLK 60007 September, 1995 63,650.00 2.Dr. N.K. Jain Max Satrikh NLK 70028 August, 1996 75,050.00 3.Mrs. Abha Jain Max Satrikh NLK 70029 August, 1996 75,050.00 4.Mrs. Abha Jain Max Sohana NLK 70061 December, 1996 85,025.00 5.Dr. N.K. Jain Max Sohana NLK 70062 December, 1996 85,025.00 3,83,800.00

THE complainant thus deposited a sum of Rs. 3,83,800/- with the opposite parties out of which a refund of only Rs. 10,000/- was made. THE opposite parties did not develop the orchards and hand over the orchards to the complainant as stipulated in the agreement entered into between the complainants and the opposite parties and, therefore, in terms of the agreement wanted the refund of the amount. THE opposite parties failed to refund the entire amount alongwith interest by 31.7.1998 as per their promise. A legal notice was also served on the opposite parties but no response was received. THE complainants have, therefore, filed this complaint before this Commission. THE complainants have claimed the principal amount deposited by them on different dates alongwith interest, besides compensation for mental agony and physical harassment. THE principal amount claimed is Rs. 3,73,800/- alongwith loss of interest which comes to Rs. 1,54,849/-, for mental agony Rs. 50,000/- for each complainant has been demanded which comes to Rs. 1,00,000/-, for physical harrassment an amount of Rs. 25,000/- has been claimed, and for legal expenses an amount of Rs. 20,000/- has also been claimed. In support of the allegations contained in the complaint, the complainants have filed 3 affidavits alongwith the concerned documents.

Notices were issued to the opposite parties for filing written statement by 11.10.1999 but the opposite parties did not show appearance. Registered covers have not been returned unserved. Hence the service of the notice is presumed. An affidavit was also filed on behalf of the complainant showing that the registered letters were sent to the opposite parties as indicated about the case and date fixed, but none appeared on the side of the opposite parties. Hence the case proceeded ex-parte against the opposite parties.

A perusal of the records goes to show that Maxworth Orchards (India) Limited is a Public Limited Company incorporated under the provisions of Companies Act, 1956 having its registered office in Anna Salai, Madras. The Company is engaged in the business of developing and maintaining orchards at various places. The Company organises land of one acre, half acre and one fourth acre to the prospective buyers and undertakes the development of that land into orchards with fruits and nut bearing trees by rendering various services. These details are available in the agreement which the Company enters into orchards owners. The orchards owners pays the entire consideration to Maxworth Orchards (India) Limited including the cost of land, execution of registration of sale deed etc. and within 180 days of the realisation of the entire consideration and cost of maintenance as indicated in the Schedule of the agreement. In addition to this scheme, there is another scheme for payment by instalment. Clause 26 of the agreement entered into between the two parties provides that in case the Company commits a breach by not keeping the Schedule properly conveyed in favour of the orchards owner, the orchards owner shall be entitled to terminate this agreement, in which event Maxworth shall refund the amount paid by the orchards owner together with the interest at the rate mentioned in the Schedule attached to the agreement from the date of such investment. The Schedule of the agreement shows that the following investments were made by the complainants with Maxworth Orchards (India) Limited : (1) Dr. Nirmal Kumar Jain paid a sum of Rs. 75,050/- for orchards in Village Tikri Ghat in Barabanki District . (2) Rs. 63,650/- for orchards in Narainpur in District Badaun, U.P. (3) Rs. 75,050/- in Satrikh, District Barabanki, U.P. (4) Rs. 85,025/- for orchards in Lakhimpur Kheri in Sohana. (5) Rs. 85,025/- for orchards in Sohana, Lakhimpur Kheri.

THUS a total amount of Rs. 3,83,800/- was spent by the complainants Dr. N.K. Jain and Smt. Abha Jain for the orchards mentioned above and the amount was handed over to Maxworth Orchards (India) Limited, the opposite party. As per terms of the agreement, the orchards were not developed and the titles of which were not conveyed to the complainants. Since the Company, the opposite party, did not fulfil the requirement of the agreement, the complainants terminated the agreement on 28th August, 1997. The opposite party was required to refund the investment alongwith interest. The complainants, therefore, wrote to the Chief Executive Officer, Maxworth Orchards (India) Limited, Noida alongwith a copy to its Head Office at Chennai. Consequently a refund of Rs. 10,000/- was made by the opposite party to the complainants on 27.11.1997 as part-payment of the refund. Again the complainant wrote on 20th October, 1997 to the Company that he is willing to co-operate with the Company but then there should be no going back from the promise of paying the refund alongwith interest within nine months from the date of cancellation and the payment in instalment should start from November, 1997. This was in response to the letter of the opposite party dated October 8, 1997. In the records there is a letter written by the Chairman of the Company, Maxworth Orchards (India) Ltd. the opposite party, to all investors in which it has been stated that commercial horticulture is being practiced for the first time in this country by the opposite party. It holds great promise for the socio-economic development of India besides being a highly profitable investment opportunity for the customers. Maxworth Orchards has 16,000 acres of land in various stages of development, but the critical success factor of the concept is land acquisition, and the Company under-estimated the complexity of land acquisition process and, therefore, the Company was facing the problems of land acquisition and irrigation etc. The letter also states that the Company is trying its best to refund the entire amount with interest, but the process is taking time. This was because of the liquidity crunch the Company is facing for the past few months, but it was promised in the letter that the payment would be made alongwith interest in nine months from the date of cancellation. The above letter of the Chairman of the opposite party shows that they could not honour the terms of the agreement and there has been a breach of the agreement. The complainant was, therefore, justified in terminating the contract as the entire consideration was paid to the opposite party for which no service was rendered at all and the Company simply slipped away with the money of the complainants. The opposite party''s letter dated 24.2.1998 apologising to the complainant for the inordinate delay in refunding the amount and the letter promises to pay the amount alongwith interest in nine months which was planned for the month of July, 1999. This promise was also violated and the opposite party never made the payment. Since the opposite party had admitted as would be evident from the correspondence placed on record supported by affidavit of the complainants, we consider that opposite parties have been highly deficient in rendering the service to the complainants for which a huge consideration was obtained by opposite parties and the opposite parties themselves violated the terms of the agreement.

WE have carefully gone through the draft agreement entered into between the two parties. Clause 30 of the agreement at page 25 of this file is in regard to the jurisdiction. It states that in respect of all matters, disputes or differences between the parties pursuant to or under or in respect of this agreement, only the Civil Court at Madras city, District Forum and/or the State Commission established under the Consumer Protection Act, 1986 constituted at Madras city shall have jurisdiction, to the exclusion of all other Courts, Consumer Fora. In this case we find that the Maxworth Orchards (India) Limited, the opposite party has been operating all over India and the business were spread to almost all the States including Uttar Pradesh. The branch of the opposite party was also operating at the relevant time in Vikas Khand, Gomti Nagar, Lucknow and in Sector 18 of Noida, Uttar Pradesh. Section 2(i)/(aa) of the Consumer Protection Act defines branch office as under : "(i) any establishment described as a branch by the opposite party; or (ii) any establishment carrying on either the same or substantially the same activity as that carried on by the head office of the establishment."

IN this case the consideration was paid for the property against which the opposite party were doing business and rendering service in the Districts of Badaun, Barabanki and Lakhimpur Kheri in Uttar Pradesh and the branch offices were in Lucknow and at Noida which facts have been fully supported by the documents filed on affidavit by the complainants. IN this connection a comprehensive advertisement brought out by the Securities and Exchange Board of INdia dated March 31, 2000 has been brought to our notice. The said Notification clearly states that the Companies who have not registered themselves with the SEBI and who are liable to refund the amount of investment, and do not make refund to the investors, these companies are also liable to criminal/civil action. At Sl. No. 327 Maxworth Orchards (INdia) Limited, Chennai has been earmarked in the SEBI Notification as discussed above. In Sytico Textiles Private Limited v. Economic Transport Corporation, I (1991) CPJ 40 (NC), it has been held that the mere fact that the default on deficiency may also amount to a breach of contract under the general law, still it will not in any way affect the jurisdiction of the Forum set up under the Consumer Protection Act.

In view of this Clause 30 of the agreement which provides for jurisdiction at Madras is arbitrary and since branch offices were in Lucknow and Noida and the business in which the opposite parties were engaged was spread in various Districts of Uttar Pradesh, we hold that the jurisdiction lies in Lucknow also.

IN view of the above discussion, the complaint is liable to be allowed. The complainants are entitled to the refund of the principal amount of Rs. 3,73,800/- alongwith interest at the rate of 18% per annum from the date of deposit till the date of payment. The complainants are also entitled to a compensation of Rs. 25,000/- each for the mental agony and the loss of business for the complainants. IN addition the complainants are also entitled to get Rs. 10,000/- as cost of the proceedings. ORDER The complaint is decreed in favour of the complainants Dr. Nirmal Kumar Jain and Smt. Abha Jain. The opposite party, M/s. Maxworth Orchards (INdia) Limited, Chennai shall pay to the complainants a sum of Rs. 3,73,800/- alongwith 18% per annum interest from the date of deposit till the date of payment within a period of six weeks from the date of this order. This opposite party shall also pay a sum of Rs. 25,000/- each to the complainants as compensation and Rs. 10,000/- as cost of the proceedings within a period of six weeks from the date of this order failing which 18% per annum interest shall also be payable on the above amount. Let compliance be made within six weeks from the date of this order. Let copy as per rules be made available to the parties. Complaint allowed.