VIKAS PODDAR vs Ghaziabad Development Authority

THE applicant has filed this application under Section 12B of the Monopolies and Restrictive Trade Practices Act, 1969 (the MRTP Act in short) for grant of compensation amounting to Rs. 26,420/- with interest @ 18% per annum for the loss suffered by him due to the unfair trade practices adopted by the respondents. He has also claimed an amount of Rs. 15,000/- for incurring additional expenditure and an amount of Rs. 20,000/- as compensation for harassment and mental agony.

TO briefly state the background of this case, the Ghaziabad Development Authority (hereinafter referred to as ''respondent No. 1'') launched a residential scheme called "The Indira Puram Priyadarshini Enclave (Plots) Scheme" in February, 1992. Respondent No. 1 entered into an arrangement with the Bank of Baroda (hereinafter referred to as ''respondent No. 2'') under which the registration money payable by the applicants was to be deposited in the specified branches of respondent No. 2. Under the aforesaid arrangement, the refund of registration money to the unsuccessful applicants was also to be taken care of by these branches of the Bank. The applicant''s case is that he applied for a plot under the aforesaid scheme and deposited the registration amount of Rs. 26,420/- on 25.2.1992 in the Patna branch of respondent No. 2 vide receipt No. 1113. It has been stated that as per Clause 9.00 of the brochure, respondent No. 2 was required to refund the registration amount to the unsuccessful applicants directly, one month after the draw. The applicant''s grievance is that he was neither informed about the date of draw nor the results of draw were published in the newspapers, nor was the date of draw indicated in the brochure of the scheme. When the applicant did not hear from either of the respondents for a very long time, he wrote to respondent No. 2 on 1.6.1995 to seek refund of the registration amount along with interest. This was followed up by several reminders including a legal notice and personal visits to the offices of the respondents. The applicant also sent the original challan receipt to respondent No. 2. More than three years passed in waiting, yet the refund did not come forth. It has been alleged that the failure on the part of the respondents to refund the registration money in violation of terms and conditions given in the brochure, is tantamount to unfair trade practices within the meaning of Section 36A of the MRTP Act, as a consequence of which, the applicant suffered a big loss and harassment.

Respondent No. 1 has stated in its reply that the applicant was found unsuccessful in the draw held on 20.2.1993. As per the terms and conditions given in the brochure, he was to collect the refund of the registration money one month after the draw, directly from respondent No. 2. It is further stated that respondent No. 1 was not, in any way, involved in it and, therefore, the question of any unfair trade practice on its part does not arise. It is further contended that respondent No. 1 was not supposed to inform each and every registrant individually, regarding the date and place of draw. The respondent No. 1 has, in short, taken the stand that it was not at all responsible for non-refund of the registration amount to the applicant.

IN its reply, respondent No. 2 has admitted that the applicant had deposited a sum of Rs. 26,420/- in its branch at Patna for allotment of a plot. While denying other averments made in the compensation application, respondent No. 2 has taken the plea that it was not required to render any services directly to the applicant and, therefore, the question of any unfair trade practices on its part, does not arise. After the pleadings were complete, the following issues were framed on 20.9.1999 : (i) Whether the respondents have been or are indulging in the unfair or restrictive trade practices as alleged in the compensation application ? (ii) Whether the applicant has suffered any loss or damage due to the above and whether the applicant is entitled for any compensation ? (iii) Relief ? While the proceedings were in progress, respondent No. 1 offered to refund the registration amount of Rs. 26,420/- through a Cheque drawn on Vijaya Bank in the name of the applicant, Shri Vikas Poddar, Patna. The applicant accepted the aforesaid payment on 23.12.1999 without any prejudice to his contentions regarding the interest claimed on the aforesaid amount.

BOTH the parties filed their respective affidavits of evidence and list of reliance. Arguments were finally heard on 20.2.2001. In their replies, both the respondents have neatly absolved themselves from the responsibility of refunding the registration amount to the applicant. If this is accepted as true, the question arises : Who is responsible for refund ? There is no denying the fact that the registration amount wherever deposited, was finally credited to the account of respondent No. 1. It has been stated by respondent No. 1 that in the draw held on 20.2.1993, the applicant was found unsuccessful. Under the terms and conditions given in the brochure which are binding on both the parties, the registration amount has to be refunded to the unsuccessful applicants in the manner given in the brochure. The registration amount of the unsuccessful applicants can neither be forfeited, nor can it be held in suspense. It has to be refunded with or without interest, depending on the facts and circumstances of each case. Since this residential scheme was launched by respondent No. 1 and the registration amount was credited to its account, it was primarily the responsibility of respondent No. 1 to ensure refund of the said amount. Respondent No. 2 was merely an agent of respondent No. 1. The defence taken by respondent No. 1 is that the applicant had deposited the registration money in the Patna branch of respondent No. 2 whereas in terms of Clause 3.41 read with Clause 5 of the brochure, the money was to be deposited only in the specified branches of the Bank and that the Patna branch is not one of them. This plea is nothing but technical hair-splitting to avoid responsibility. The fact that the Patna Branch had given a receipt to the applicant and the amount got credited to the account of respondent No. 1, shows that this was merely an internal arrangement of the Bank of Baroda and the applicant, therefore, cannot be made to suffer for it. Hence, the refund of the registration amount was squarely the responsibility of respondent No. 1. It is a tell-tale example of negligence on the part of respondent No. 1 to have withheld the refund for so long and to have paid it only after the instant case was instituted against it. Failure on the part of respondent No. 1 is a deviation from the terms and conditions given in the brochure, amounting to unfair trade practice within the meaning of Section 36A of the MRTP Act.

THE issue of refund then gets narrowed down to the interest at which the refund has to be paid. Clause 9.10 provides for refund of deposit without any interest, if the period of deposit is less than a year. However, Clause 9.20 stipulates that if the period of deposit exceeds one year, interest @ 5% shall be payable for the entire period of deposit. In the instant case, the registration amount was refunded to the applicant on 23.12.1999 i.e. after a lapse of over seven years. .

SINCE the period of deposit exceeds one year, prima facie, the applicant becomes entitled to the payment of interest also, Under the terms and conditions given in the brochure, the interest payable to the applicant would have been @ 5% per annum under normal circumstances. But since the delay in the instant case is abnormal and is due to the negligence of the respondents, in my considered view, interest @ 12% per annum will meet the ends of justice. In the light of the aforesaid discussion, the compensation claim of the applicant is accepted. Since the registration amount of Rs. 26,420/- had already been paid to the applicant, respondent No. 1 is directed to pay interest on the aforesaid amount @ 12% per annum within six weeks from the date of deposit till the date of refund. Respondent No. 1 is also directed to file an affidavit of compliance within two weeks thereafter. C.A. disposed of.