2006 (11) TMI 329 - SC - Companies Law

Jurisdiction of the Monopolies and Restrictive Trade Practices Commission - whether it was a sheer breach of contract or deficiency in service? Whether appellant herein can be given possession of the flat on his clearing of the dues? Held that - The total amount payable in respect of the flat is a sum of Rs. 17, 27, 612. DLF has agreed to deduct a sum of Rs. 93, 745 which was agreed to be paid by way of compensation. The total amount payable therefore would be Rs. 16, 33, 867. The amount has been calculated on the premise that the registration would be done in the name of appellant s wife and/or daughter on the rate of stamp duty and charges payable in case of family allottee. Furthermore clarify that appellant upon getting possession of the said flat shall be treated by DLF at par with all others similarly situated. Appellant may pay the aforementioned amount of Rs. 16, 33, 867 within eight weeks from date whereupon respondent shall execute and/or register the requisite documents in favour of the wife of appellant. We are passing this order on broad consensus arrived at by the parties as also in exercise of our jurisdiction under article 142 of the Constitution of India.

Issues Involved:
1. Jurisdiction of the Monopolies and Restrictive Trade Practices Commission (the Commission).
2. Allegations of unfair trade practices and restrictive trade practices.
3. Entitlement to refund and forfeiture of earnest money.
4. Compensation for delay and damages.

Detailed Analysis:

1. Jurisdiction of the Commission:
The primary issue in these appeals was the extent of jurisdiction of the Commission. The Commission's jurisdiction was questioned by the appellant on the grounds that the case did not involve unfair trade practices or restrictive trade practices but was merely a breach of contract. The Supreme Court emphasized that the Commission's power to award compensation is restricted to cases where loss or damage is caused as a result of monopolistic or restrictive or unfair trade practices. It has no jurisdiction where damage is claimed for mere breach of contract.

2. Allegations of Unfair Trade Practices and Restrictive Trade Practices:
The Commission found that the appellant was guilty of unfair and restrictive trade practices, causing immense damage to the respondent. The Commission held that the gross delay in refunding the amount requested by the respondent was without any just and bona fide reason, which constituted an unfair trade practice within the meaning of section 36A and a restrictive trade practice within the meaning of section 2(o) of the Act. The Supreme Court, however, noted that the Commission must determine jurisdictional facts and that an application under section 12B of the Act would not lie where a complaint is confined to a breach of contract.

3. Entitlement to Refund and Forfeiture of Earnest Money:
In Civil Appeal No. 26795 of 2004, the respondent entered into an agreement with DLF for purchasing a flat and paid earnest money. The respondent failed to make subsequent payments and requested a refund. The Commission directed the appellant to refund the entire amount with interest. The Supreme Court held that the appellant was entitled to deduct the amount of earnest money, distinguishing between security and earnest money. The Court cited precedents, stating that earnest money is forfeited when the transaction falls through due to the fault of the vendee. The Supreme Court directed DLF to pay a sum of Rs. 37 lakhs to the respondent, exercising its discretionary jurisdiction under article 142 of the Constitution of India.

4. Compensation for Delay and Damages:
In Civil Appeal No. 7960 of 2004, the appellant sought refund of the amount deposited for an apartment along with interest due to delay in possession and additional charges demanded by DLF. The Commission awarded interest at the rate of 12% per annum. The Supreme Court noted that the Commission had no jurisdiction to grant relief in this case as it involved breach of contract rather than unfair trade practices. The Court facilitated a settlement where the appellant could get possession of the flat by clearing the dues, and DLF agreed to deduct a sum of Rs. 93,745 as compensation. The total amount payable was Rs. 16,33,867, and the registration would be done in the name of the appellant's wife and/or daughter.

Conclusion:
The Supreme Court concluded that the Commission had no jurisdiction in cases of mere breach of contract. It directed specific reliefs in both appeals, emphasizing that such orders were not to be treated as precedents. The appeals were disposed of accordingly, with directions for payments and settlements as detailed above.

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