ORDER
N.C. Gupta, Member
1. This order will dispose of the aforesaid three compensation applications where the respondents are the same and the claims of the different applicants emanate from the set of circumstances which are common to all these matters. By consent of the parties, the evidence recorded in C. A. No. 1571 of 1988 is being read for deciding all these matters.
2. The facts may be briefly stated. Respondent No. 1 is a limited company and Shri V. K. Mago is its managing director. The same Shri Mago is the sole proprietor of the business concern-respondent No, 2. The common
cause of grievance in all the three applications is that the two respondents issued advertisements for marketing of “property shares” in apartments/ cottages at various places and in particular in the Mussoorie hills representing that the said shares would appreciate by almost 10% every year and may fetch an income to a maximum of 22% and also that the same were freely and easily transferable/saleable through a net work provided by the respondents. The applicant in C.A. No. 1571 of 1988 invested a total sum of Rs. 14,500 acting on the representation that he was entitled to a one-week stay every year in the apartment put up by the respondents at Mussoorie. It is alleged in the application that the applicant invested the amount on the basis of allurement given in the advertisement that he will obtain a return of 22% per annum but all those claims proved to be false ; that such misleading advertisements amount to an unfair trade practice and, therefore, he made, a claim for compensation as per particulars placed below :
3. Similarly the applicants in C. A. No. 1357 of 1988, acting on the representation, as aforesaid, applied for the “property shares”, two in the name of the applicant and four in the name of his daughter who is applicant No. 2 and they made a total payment of Rs. 79,000 to the respondent. These applicants have filed claims for Rs. 1,41,000 on the basis of allegations that the representations made in the advertisements were incorrect and they have suffered loss by reason of the unfair trade practice indulged in by the respondents.
4. During the pendency of the above two applications, C. A. No. 64 of 1990 was also filed on the basis of the same allegations raising a claim for compensation stating that he had invested a sum of Rs, 21,500 for the purchase of “property shares” marketed by the respondents.
5. All these applications were contested on behalf of the respondents on the same grounds. The contention of the respondent has been that the Commission has no jurisdiction in the matter because the dispute relates to immovable property and it has been so held by a single member Bench of the Commission earlier, that in fact there is no unfair trade practice
involved in the matter ; that as per the terms of the agreements entered into by the prospective purchasers of ”property shares” they were only entitled to the return of their investment alone ; that the claim by way of alleged profit on the investment and by way of interest on the principal amount is not legally sustainable ; that the averments made in the impugned advertisements were not false and misleading and in terms thereof the respondents had also offered to return the amounts of investment made to such investors who wished to have refund without any further obligations on the respondents. In the rejoinder filed on behalf of the applicant, it was pleaded that the respondents are estopped from raising the question of jurisdiction of the Commission since they have submitted to this jurisdiction and had earlier given a solemn undertaking not to indulge in the aforesaid unfair trade practice in UTPE No. 147 of 1987.
6. On the basis of the aforesaid pleas, the following two preliminary issues were framed on February 1, 1989, in C.A. No. 1571 of 1988 :
(1) Has this Commission no jurisdiction to entertain and decide the present application under Section 12B of the Monopolies and Restrictive Trade Practices Act ?
(2) If issue No. 1 is decided in favour of the respondents are they estopped from raising the plea subject-matter of issue No. 1 for the reasons stated in the rejoinder ?
7. The Commission by a detailed order dated July 18, 1989, has decided issue No. 1 against the respondents and treated issue No. 2 as having become redundant in view of the findings on issue No. 1. After the said order was passed, the applicant prayed for a decree in the sum of Rs. 14,500 as an interim relief on the ground that the respondents had offered to refund the said amount. The Commission, vide its order dated April 10, 1990, framed the following issue in this behalf :
Whether the petitioner is entitled to a decree in terms of Order 12, Rule 6 of the Civil Procedure Code, on the basis of the admission made by the respondent ?
8. After hearing counsel for the parties, the Commission, vide order dated June 14, 1990, passed a judgment on admission under the provision of Order 12, Rule 6 of the Civil Procedure Code, and a decree in the sum of Rs. 14,500 in favour of the applicant against the respondent. It was further ordered therein that the applicant is entitled to interest at 12% from the date of the order till the realisation of the amount. After the said decree was passed the applicant persisted in claiming further relief in a
sum of Rs. 8,283. The Commission then framed the following issue on August 24, 1990 :
Whether the petitioner has suffered any loss and damage as a result of unfair trade practices indulged in by the respondents and if so to what amount of compensation he is entitled to ?
9. In support of this issue. Shri G.S. Misra, the applicant himself appeared in the witness box as AW-1 and on the other hand Shri A.K. Sood, the marketing manager of the respondent-company was examined as RW-1. Shri Misra in his statement has stated that he had spent a sum of Rs. 5,000 in litigation before this Commission and the Supreme Court where the respondent had filed a special leave petition which was subsequently withdrawn. He further states that he would have got at least double the amount in five years had he invested the same amount somewhere else–like in Kisan Vikas Patra and. therefore, he is entitled to the amount of compensation in the sum of Rs. 22,784. In the cross examination he admits that he had never gone and stayed in the apartment at Mussoorie in respect of which he has made the investment. He further admits that he never made any effort to rent out that property. Shri A.K. Sood (RW-1) is the marketing manager working with both the respondents. He has broadly given the particulars of the scheme under which the “property shares” were marketed by the respondent. He has stated that this applicant never visited the resort at Mussoorie but was only interested in getting back the amount invested by him ; that in fact some of the applicants were instigated by one Captain S. K. Lamba who was originally a member in the scheme floated by the respondents who made unreasonable demand on them and in order to maintain their goodwill the respondents agreed to refund the amount paid by the ex-members if they were not satisfied with the scheme. This offer had actually been made by the respondents in all these proceedings. The witness has also produced the letter issued by the said ex-Captain S. K. Lamba instigating the various persons who had invested money in the respondent’s scheme advising them to take a concerted action against the respondents. The general letter issued by the said Shri Lamba was received by one Mrs. Meena Agarwal, a member in the respondent’s scheme who passed on that letter to the respondent and the same is exhibit RW-1/1. The witness further states that under the impugned scheme the purchasers of “time-shares” are only entitled to stay in and enjoy the facility of the resort for a week in a year but they are not entitled to any rent or any compensation if they do not choose to avail of that opportunity as offered under the scheme. The respondent had also
evolved a plan whereunder the owners of “time-shares” could execute a lease deed in case they did not want to avail the facility themselves and any person entering into such lease agreement was entitled to the agreed lease amount. A copy of the lease deed pro forma is exhibit RW-1/2. The witness goes on to state that the applicants in these proceedings did not choose to avail of these facilities by signing the lease deed either. In the detailed cross-examination of the witness, there is nothing to suggest that the statement earlier made by the witness is, in any way, false or untrustworthy. He has consistently maintained that in every case where any such member in their scheme showed his dissatisfaction, he was given the refund of the original amount and there had been no problem with any investor in this behalf.
10. In the light of the above evidence, we have heard learned counsel for the parties. Learned counsel for the respondent has urged that in fact there was no unfair trade practice on the part of the respondent in any of these matters and that the respondents have been very fair in refunding the various amounts invested by the persons who joined the scheme floated by the respondent in case they were not satisfied with the provisions thereof. It has been further pleaded that the UTP Enquiry No. 362 of 1987, started by Shri S.K. Lamba and others on more or less similar allegations had been dropped, vide the Commission’s order dated November 3, 1987. The copy of the order has been placed on record in these proceedings. The enquiry was dropped with the following observations :
“As at present made out, the charge is simply vague and lacking in particulars, with the result it is not possible to call upon the respondents to answer it nor would it be feasible for the respondents to meet it. As a result of the discussion as above, no action is possible on this complaint and it is hereby dismissed. The injunction application as such has to meet the same end and it is ordered accordingly.”
11. In view of the above, we are convinced that no unfair trade practice as such, on the part of the respondent, has been established. It is because there is nothing to show that the respondents either made false promises or else the promises made by the respondents are not kept up. As stated by Shri A.K. Sood (RW-1), the scheme evolved by the respondent did not pick up and the response to this scheme was not as good as expected and, therefore, the scheme had to be dropped. The respondents, however, in all fairness agreed to refund the investment made by the buyers and investors in the scheme if they wanted to opt out. It is for this reason that similar offers were extended to all the applicants before us and the
Commission passed judgment on admission in favour of the applicants for refund of the actual amount as paid by them plus interest at 12% per annum from the date of the judgment till the date of realisation. It is on record that the applicants in both C.A. Nos. 1571 of 1988 and 1351 of 1988 have obtained refund of the money along with the interest allowed by the Commission. In the other C.A. No. 1357 also, the Commission passed the order on June 14, 1990, allowing a decree for Rs. 79,000 along with interest at 12% per annum on the said amount till the date of realisation in favour of the applicants and the said amount has actually been paid to the applicants. In fact in that C.A., the applicant has moved an application for execution which was disposed of, vide order dated April 30, 1991, and the decree passed therein stands fully satisfied.
12. C.A. No. 64 of 1990, was subsequently filed praying for refund of Rs. 21,500 invested by the applicant and further compensation on the same allegations, as discussed above. The respondent has contested the claim on the same grounds as already discussed with reference to the earlier applications. While admitting the deposit of a sum of Rs. 21,500 by way of investment in the scheme offered by the respondents, the existence of any unfair trade practice on the part of the respondent has been denied. The following issue was framed :
Whether the petitioner has suffered loss and damages as a result of unfair trade practices alleged to have been committed by the respondents and if so what amount of compensation the petitioner is entitled to ?
13. The oral evidence adduced on behalf of the respondent consists of the statement of Shri A.K. Sood and his detailed statement recorded in the earlier two enquiries was adopted as the statement for this purpose also. The applicant in his oral testimony has reiterated the facts as mentioned in the application. We need not reiterate the legal consideration as discussed above with reference to the first two applications. It has already been held that the respondent cannot be held liable for indulging in any unfair trade practice. So the question of any compensation arising as a result of unfair trade practice does not arise. However, since the respondents in the earlier matters had made an unequivocal statement that they had offered to refund the amount invested by purchasers of “property shares” under the scheme floated by the respondents, the applicant should also be entitled to the refund of the amount as allowed in the two other cases. It is so even if in the present case there is no definite concession made by the respondents for refund of the amount.
However, acting on the offer made by the respondents in the earlier two cases and the statement of Shri A.K. Sood, marketing manager of the respondent in his statement on oath as referred to above, we hold that the applicant should be entitled to refund of the amount deposited by him and interest at 12% thereon from the date of the deposit till the date of filing compensation application, i.e., January 24, 1990. As per the averments made in the application, a sum of Rs. 21,500 was deposited by the applicant on June 24, 1986. The applicant is entitled to interest at 12% on the deposit during the period between June 24, 1986, till January 24, 1990, only. We are inclined to allow this interest not as a matter of legal right but as a matter of grace since the same has been allowed in the other two cases. The issue is accordingly decided.
14. In the net result, the applicant is entitled to a sum of Rs. 21,500 plus interest thereon at 12% during the period between June 24, 1986, and January 24, 1990. This amount should be paid to the applicant within four weeks from today failing which the respondent shall have to pay further interest at the same rate on the total amount from the date of the decree till the date of payment.
15. The other two applications shall stand dismissed. There shall be no order as to costs. Announced.
