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Rajiv Kaicker v/s Max Worth Orchards (India) Ltd.

    Compensation Application No. 177 of 1999

    Decided On, 14 February 2001

    At, Monopolies and Restrictive Trade Practices Commission New Delhi

    By, MEMBER

    For the Applicant: Meenu, Advocate. For the Respondent: None.

Judgment Text

Moksh Mahajan, Member

1. The applicant Shri Rajiv Kaicker has made an and Restrictive Trade Practices Act, 1969 (in short the Act) before the Commission. It is alleged therein that for unfair trade practices adopted and indulged in by M/s. Max Worth Orchards (India) Limited within the meaning of Section 36B(a) read with Sections 36A and 36D of the Act, the party should be directed to cease and desist from following the said practices. For loss and damages suffered on account of such trade practices, it may be allowed compensation in the form of refund of Rs. 35,000/- as deposited along with interest @ 18% per annum from the date of deposit. It has also prayed for a sum of Rs. 2.00 lakhs for harassment and mental agony suffered by it along with cost of litigation.

2. Briefly stated, the facts as gathered from records are that the applicant applied for 0.25 acre of land in Max Kakrala Project launched by the Company M/s. Max Worth Orchards (India) Limited (hereinafter referred to as respondent). By the scheme launched in December, 1995, the respondent represented to the public that by making investment in Max Kakrala (Mango) Orchards Scheme one could get a return in three years. As per terms and conditions listed in the agreement, the land would be transferred in the applicant’s name within 180 days from the date of payment. The orchards were to be developed in 9 months’ time. Lured by the aforesaid scheme, the applicant paid Rs. 35,000/- by issuing 12 cheques, which were duly acknowledged by the respondent. In November 1996, however, the applicant came across an article in Economic Times reflecting the financial crisis faced by the respondent Company. The applicant approached the respondent, who in turn through its Project Progress Report informed that registration of orchards in 17.75 acres has been completed. However, on an enquiry made, the respondent neither furnished any information nor could be contacted as the office was found to be closed. As no progress was found to be made in the project, the applicant terminated the agreement vide legal notice dated 18.1.1999 issued to the respondent invoking Clause 26 of the agreement entered into with the respondent. As the representation made turned out to be a false one, it approached the Commission for compensation, as stated above.

3. A notice to the Compensation Application sent to the respondent was not replied to by and on behalf of the respondent. The respondent was, therefore, set ex parte vide order dated 10.2.2000. The applicant on its part filed its own affidavit along with other documentary evidence in support of the compensation claimed. The ex parte arguments were heard on behalf of the applicant.

4. At the outset it may be mentioned that as the application of the applicant remained uncontested the specific issues have not been framed. The pleadings on the other hand clearly show that on facts, the applicant has charged the respondent with adoption of and indulgence in unfair trade practice within the meaning of Section 36A of the Act and has claimed compensation for loss or damage suffered as a result thereof. We would, therefore, address ourselves to these issues as can be culled out from the proceedings.

5. On careful consideration of the submissions as made on behalf of the applicant, it appears that applicant has paid a sum of Rs. 35,000/- as evidenced by the receipts enclosed. Going by the pictorial representation of land under cultivation, the growing crops, the statement of experts like Dr. G. Rangaswamy and setting up of chains of retail stores for marketing agriculture products in a brochure, any reasonable person can form a belief that what is stated is true. Whether the representation has turned out to be true is a matter of record. It appears that the development of the land and plantation has not been done within the stipulated period. There is also no information in regard to the insurance of the crops as promised. Rather from the correspondence exchanged between the parties the respondents have admitted that returns on the investments were likely to be delayed. Even the sale deed has not been registered. While we are aware that in an operation on a scale as undertaken by the respondent there can occur some delay, the same has to be reasonable and in consonance with the representation made regarding the timeframe for completion of the project. Despite its own agreement that on termination, the orchard’s owner would be entitled to refund of deposits in view of Clauses 25 and 26 of the same, the refund has not been paid till date. The conduct of the has not been paid till date. The conduct of the respondent in not defending the allegations as levelled against it shows that the respondent has no intention of fulfilling its promise as made in the brochure. The misrepresentation made on the part of the respondent is clearly covered under the provisions of Section 36A of the Act. This practice is prejudicial to the interest of consumer as well as against the public interest. The investor has been deprived of the returns on his investments as made about 4 years back. For the loss/damage as suffered, the applicant is entitled to compensation. The respondent is directed to refund the amounts as deposited along with the interest @ 18% per annum from the dates of payments till the date of refund. This is in consonance with the rate of interest awarded in similar cases involving same cause of action. An amount of Rs. 5,000/- is also awarded

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as litigation expenses. As regards prayer for Rs. 2.00 lakhs towards mental torture and harassment, in view of the decision of the Hon’ble Supreme Court in case of Ghaziabad Development Authority v. Union of India & Anr., reported in II (2000) CPJ 1 (SC)=IV (2000) SLT 654=JT (7) SC 256, the same is not allowed. The respondent is further directed to cease and desist for carrying on such unfair trade practices. The respondent shall give effect to this order within six weeks from the date of receipt of the order and file an affidavit of compliance within four weeks thereafter. C.A. disposed of.