V.P.KAPOOR vs RAJ CHOPRA

SATYAWATI Dhawan is the owner of Plot No. 6, Jantar Mantar Road, New Delhi (hereinafter described ''the said property''). Satyawati entered into a contract on 4th September, 1979 with M/s. Competent Builders to build/develop the said property. The respondents Nos. 1 and 2, Raj Chopra and Narinder Anand, were the partners of the firm, Competent Builders. By virtue of the agreement and also the power of attorney the builders were empowered to sell space on ownership basis to the proposed multi-storeyed building which the builders were going to construct on the said premises. On 10th September, 1979, Competent Builders entered into an agreement with Ranjiv Malhotra, the complainant in Complaint Case No. 612 of 1991 for the allotment of a residential flat being flat No. 203 on the 2nd floor of the proposed multi-storeyed building. According to the letter of allotment Ranjiv Malhotra was to get a flat with a cover area of 1,700 sq. ft. The price fixed was Rs. 245/- per sq.-ft. Apparently, in the letter of allotment the area of the flat was worked out in terms of the covered area and not the super built area. The Competent Builders undertook to build the flats within two years from the date of sanction of the plan by the prescribed authority. According to the Competent Builders the plan was sanctioned sometime in 1981. A letter was sent by the Competent Builders to the prospective purchasers to that effect on 2.12.1981. Therefore, under the terms of the contract the flat should have been made available to the complainant by 2.12.1983.

UNFORTUNATELY , that did not happen. The grievance of the complainant is that 20% of the agreed amount i.e. Rs. 75,000/- was paid by Ranjiv Malhotra to the builders in terms of allotment. A further sum of Rs. 52,000/- was paid pursuant to the letter dated 2.12.1981 intimating the sanctioning of the plan by the Local Authority. The grievance of the complainant is that up to the date of filing of the complaint the builders had not even commenced construction and there was gross deficiency in service on their part. On 13th June, 1990, Satyawati, the owner of the said properties and the Competent Builders entered into a contract with Ansal Properties and Industries Limited (hereinafter described as ''Ansals''). In that agreement it was recorded that the Competent Builders and its partners Raj Chopra and Narinder Anand had abandoned the project. In that agreement it was recorded, inter alia, that: "The liability to refund the amounts collected from various flat buyers by Competent Builders as per Annexure-I shall be that of the owner. Competent Builders or its partners shall not be responsible for any liability towards the said allottees".

IT was further agreed that the Competent Builders and its partners will have no interest, right and lien in respect of the said property. The power of attorney executed in pursuance of the said agreement was treated as cancelled. It was also recorded that the Competent Builders had delivered back vacant possession of the said premises to the owner. It was further agreed : "A Group Housing Building at 6, Jantar Man tar Road shall be constructed by Ansals at their own cost and expense. The building shall be of first class specifications and shall be put up as permissible under the Master Plan/Zonal Plan/Building Bye-laws. As disclosed by the owner, the following sanctions/approvals have already been obtained: (i) Clearance under Sections 20/22 of the ULCR act vide Delhi Administration Letter No. F. 36(11)/ 541/77/L and B ULC/2070 dated 8.7.1985. (ii) Passing of building plans by NDMC in terms of Resolution No. 24 dated 25.11.1981 and revalidation of the same upto 24.11.1989 in terms of Resolution No. 29 dated 2.6.1989. Plans were released by NDMC in terms of letter dated 15.7.1988. Revalidation was communicated under letter No. 9456/CA/BP dated 10.6.1988.

ALL remaining sanctions shall be pursued by Ansals at their own costs. "All the areas in the proposed building to be raised by Ansals including basements, parking spaces and all open areas shall be shared between the owner and the Ansals in the ratio of 35% (Thirty-five per cent) for the owner and 65% (Sixty-five per cent) for Ansals. The area to be allotted to the owner is in consideration of the transfer of the proportionate rights in the land, obligations undertaken and benefits to be received and rights conferred on Ansals under this agreement by the owners. Similarly, the allocation of areas in favour of Ansals is in consideration for the raising of the proposed building at their own cost and expenses, payment of various amounts and other obligations- undertaken by Ansals under this agreement. On the basis of plans already passed, the following flats are allocated to the owner towards her 35% share of areas in the presently contemplated building of seven floors. The rest of the flats are allocated to Ansals. Apart from the 35% of the building area, Ansals agreed to make various payments from various accounts to the owners. On behalf of the complainant it has been argued that the builders had entered into an agreement with Satyawati to construct flats on the said premises. Due to various reasons the builders could not start the project. This delay led to various meetings between the flat buyers and the builders, when it was decided to hand over the project to Ansals together with all the assets and liabilities. On behalf of the Ansals it has been argued that the project could not be completed by Competent Builders for various reasons. Before, construction of the building clearances from various authorities like the Urban Land Ceiling etc., had to be obtained. All these took time. These factors were beyond the control of the builders. The project was thereafter abandoned. Though Ansals have taken up the project, it has not stepped into the shoes of the Competent Builders. The case of the complainant is that the abandoned project has been taken over by the Ansals. The Ansals had failed to deliver the flats according to the agreement. Not only the complainant, Ranjiv Malhotra but also other flat buyers were involved in this case. In fact, another complaint has been filed by V.P. Kapoor (Complaint Case No. 533 of 1996) where the complainant has claimed that he had entered into an agreement with the Competent Builder on 9.6.1981 for allotment of residential flat measuring a covered area of 1150 sq. ft. Flat No. 508 was allotted to him and the price fixed was Rs. 275/- per sq. ft. V.P. Kapoor paid 20% of the total cost i.e. Rs. 63,250/- on 11.6.1981 at the time of booking and he paid a further sum of 10% of the total cost i.e. Rs. 31,625/- on 31.1.1982 when he received intimation from the builders that the plans had been sanctioned by the Local Authorities. Moreover, the builders had charged Kapoor a sum of Rs. 77,050 / - as land development charges on 11.6.1981, alongwith the 1st instalment. A good deal of argument has been advanced on the scope and effect of Clause 13(a)(b)(c) of the Tripartite Agreement which is as under : 13(a) Further Ansals also agree to pay to the owner a sum not exceeding Rs. 43,,32,627''/- refundable by the owner to the allottees as per Annexure-I hereto, but trys would be limited to what is actually refunded to the allottees. Ansals have agreed to the request of the owner to make refunds to the allottees directly on behalf of the owner. (b) In case the owner has agreed to allot any areas/flats out of the owner''s allocation under the agreement with Competent Builders, the owner shall be liable to deal with such allottees. (c) Ansals shall be free to allot or to sell the flats falling to their allocation to any one they like or to retain the same, and if they so choose, shall be free and entitled to settle any terms afresh in their discretion with any one or more of the allottees who had already booked the flats".

The argument advanced on behalf of the Ansals is that this tripartite agreement clearly shows that Ansals had no privity of contract with the allottees of the flats. The owner of the said premises had to refund various sums of money to the allottees. The Ansals as part of consideration of the tripartite agreement agreed to pay Satyawati a sum not exceeding Rs. 43,32,627/- for this purpose. It was clearly recorded in the agreement that this sum was refundable by the owner to the allottees. Moreover, the liability to pay was limited only to the sum that was actually refunded to the allottees. The Ansals agreed with the request of the owner to refund the amount to the allottees on behalf of the owner. The second part of the agreement provided that the owner could allot any area of the said premises out of the owner''s allocation under the agreement with the Competent Builders. The third part of the agreement provided that the Ansals will be free to allot or to sell the flats falling to their allocations to any one they liked or retain the same and the Ansals were free to sell the flats to the original allottees on fresh terms.

IN order to succeed, in their case of deficiency in service, the complainant will have to prove that the respondents were obliged to render some service to the complainant and there was some deficiency in service and the complainant must come with clean hands and there must not be any suppression of fact. On behalf of the complainant it has not been stated whether the contract with the Competent Builders was registered or not. The Competent Builders merely promised to make delivery of a flat after the building plan was sanctioned and the building was constructed. This agreement does not create any interest in the land in favour of the allottees. The only thing that is not disputed is that some money was paid to the Competent Builder for construction and allotment of flats by the Competent Builders and the Competent Builders had failed to carry out their contractual obligation.

THE case against the Ansals is made on the basis that the Ansals had stepped into the shoes of Competent Builders and all their rights and obligations were taken up by the Ansals. But, important facts have been suppressed in the complaint. These facts have been recorded in the case: Capt. Sanjeev Sethi v. Union of India and Ors., C.W. No. 21 of 1991 decided on 4.12.1991 47 (1992) DLT 144 (DB). In that case the dispute was between Capt. Sanjeev Sethi, the brother of one of the original allottees from Competent Builders and Union of India. The following facts were recorded in that judgment: 1. There were various disputes between flat buyers and Competent Builders as a result of which a meeting of the flat buyers was called by Competent Builders who sought to increase the price of the flats. The flat buyers agreed to pay a further sum of Rs. 450/- per sq. ft. The result was that the total rate agreed to be paid by the buyers was Rs. 700/- per sq. ft. 2. An Association called Dhawan Building Association of Buyers/ Allottees of Flats was also formed in the year 1989. 3. Disputes arose between the partners of Competent Builders. As a result of which a suit for dissolution of partnership, being Suit No. 80/90 was filed in Delhi High Court by one partner against the other. The Association of the Buyers/Allottees of Flats made an application for intervention and sought for appointment of a Receiver/ Administrator so as to carry out the construction of the building at 6, Jantar Mantar Road, New Delhi. 4. During the pendency of this suit, the aforesaid tripartite agreement dated 13th June, 1990 was arrived at. The effect of the agreement was summarised by a Division Bench of the Delhi High Court in the following words. "During the pendency of this suit a compromise was arrived at. This resulted in a tripartite agreement dated 13th June, 1990. Parties to this agreement were Smt. Satyawati Dhawan, M/s. Competent Builders and M/s. Ansal Properties and Industries Ltd. (respondent No. 4 (hereinafter referred to as Ansals). By this agreement Ansals stepped into the shoes of Competent Builders and undertook to complete the project. M/s. Competent Builders walked out of the project by receiving Rs. 1.20 crores from the owner. The agreement further postulated the allotment of 35% of the built up area in favour of the owner. With regard to the buyers, like the petitioner, Clause l(d) provided that the liability to refund the amount collected from various flat buyers by Competent Builders was to be that of the owner Smt. Satyawati Dhawan. Competent Builders agreed to keep the owner indemnified against any loss or damages other than loss or damages which may be suffered by the owner as a result of allotment of flats to the various allottees. The result of this was that the liability to pay the allottees was taken over by the owner".

ANOTHER important factor to be noted was that in the tripartite agreement itself it was recorded that market price of the flats as on the date when the tripartite agreement was signed was Rs. 1,500/- per sq. ft. The owner agreed to transfer an area of 8,000 sq. ft. in favour of Ansals at this rate.

ANOTHER important fact which has been suppressed in the complaint that on 25th July, 1990, a written document being Memorandum of Understanding was entered into by and between the Association of Flat Buyers/Allottees and the Ansals. This Memorandum of Understanding, inter alia, stated that Ansals would honour all the agreements which had been entered into between the Competent Builders and the buyers but the basic price payable by the flat buyers shall be Rs. 850/- per sq. ft. of super built area. It was further provided that the amounts already paid by the flat buyers to Competent Builders shall be adjusted even though Ansals had not received these amounts from the Competent Builders. If any flat buyer did not want to retain the entitlement of the flat, Ansals were to refund money alongwith interest. Clause 10 of the Memorandum of Understanding was to be following effect: "That after fresh continuation allotment letters had been signed with majority of the flat buyers the application filed by the said Association in the said Suit No. 80 of 1990 shall be withdrawn by the Association."

After this Memorandum of Understanding was signed, fresh letters of allotment were issued on 10th October, 1990 by Ansals to various buyers. Allotment letters were issued in a standard format by Ansals to all the buyers to which a supplement was added to the following effect: "The attached letter of allotment stands modified to the extent of the following paragraphs in respect of the previous buyers of flats. According to the supplement 30% of Rs. 850/- per sq. ft'', was to be paid in two instalments. The first instalment was to be paid on or before 15th October, 1990 and the second instalment on or before 30th November, 1990."

ALL these material facts have been suppressed in the complaint. It has also not been disclosed why the petitioners did not agree to accept this offer from Ansals. The complainants have not also specifically stated that they were not members of the Association which intervened in the Dissolution Suit of Partnership in Suit No. 80 of 1990 at Delhi High court.

IT is also of significance to note that even in the acquisition case under Section 269UD(1) under the Income Tax Act, the Association of buyers and allottees intervened and was represented by its President, H.D. Shourie. The facts recorded in the judgment of the Delhi High Court were not brought to the notice of the State Commission which heard the case. The State Commission has recorded that the Ansals had stated that if the buyers did not like to retain his entitlement to the flat, the amount paid by him/her prior to the execution of letter of allotment would be refunded alongwith interest calculated @ 30% p.a. The complainant did not accept either of the two offers. They did not agree to purchase the flats at the rate of Rs. 850/- per sq. ft. nor did they agree to refund of money paid by him alongwith interest @ 40% p.a.

IN the context of these facts and the conduct of the complainant, it is very difficult to hold that there was any deficiency of service on the part of the Ansals. The State Commission held that the complainant had no case against the Ansals in respect of these flats except for the refund of the principal amount which Ansals agreed to refund though they had not received any amount from the complainants. The State Commission had directed Ansals to pay a sum of Rs. 1,27,000/- to the complainant-Ranjiv Malhotra, a sum of Rs. 94,375 /- to V.P. Kapoor in Case No. C-30/91. The amount was to have been paid to the complainants within a period of one month of the receipt of the copy of that order failing which the amounts would carry interest from the date of the order at the rate of 18% p.a. till payment.

THE complainants for reasons best known to them opted out of the scheme evolved by the Ansals. A large number of other allottees had accepted the offer. It is also on record that the price of the flats charged by the Ansals at the rate of Rs. 850/- per sq. ft. was way below the prevailing market rate. The complainant did not also accept refund of money with interest. In the tripartite agreement the liability to refund the money developed upon the owner of the property. Ansals undertook to pay a total sum of Rs. 43,32,627/- to the owner in order to pay off the allottees. The liability of the Ansals was limited to what was actually refunded to the allottees. The State Commission has considered all aspects of the matter specially the conduct of the complainant and the suppression of material facts by the complainants. We are of the view that a party which suppresses facts from the Court does not deserve to get any relief and the appeals deserve to be dismissed. However, we find that the State Commission directed the respondent to refund Rs. 1,27,000/- and Rs. 94,375/- without any interest to the complainants. Since Ansals were agreeable to pay interest on the said amounts which offer was not accepted by the complainants leading to the present litigation we feel that it would be equitable to award some interest. We, therefore, direct the opposite party No. 3, M/s. Ansal Properties and Industries Ltd. to pay Ranjiv Malhotra a sum of Rs. 1,27,000/- with interest at the rate of 12% p.a. from 14.1.1991, i.e. the date of complaint, till the date of payment.

SIMILARLY , in the Appeal No. 533 of 1996 we direct the Ansals to pay V.P. Kapoor a sum of Rs. 94,375/- with interest at the rate of 12% from the date of the complaint i.e. 8.2.1991 till the date of payment.

BOTH the first Appeals Nos. 533 of 1996 and 534 of 1996 are finally disposed of as above.