The Delhi High Court has determined that the petitioner was entitled to receive a commission as per the Memorandum of Understanding. Hon'ble Ms. Justice Mukta Gupta carefully examined the terms of the Memorandum of Understanding and concluded that the petitioner should receive a commission of 5% based on the total sale consideration.
Brief Facts of the Case:
The Petitioners had a business of finding properties for clients. The Petitioner entered into a Memorandum of Understanding (hereinafter referred to as “MoU”) with M/s. Hind Terminals Pvt. Ltd (hereinafter referred to as “HTPL”). The MoU stated that HTPL would purchase 80 acres of land in Faridabad, Haryana for an Inland Container Depot (hereinafter referred to as “ICD”) project.
The Petitioner assisted in the execution of various agreements to sell the land between HTPL and different landowners. According to the Petitioner, Clause 10 of the MoU stated that respondents would pay him a 5% service charge, commission, or brokerage fee based on the total sale consideration. When Respondents instructed that no more lands were to be acquired, the Petitioner issued an invoice as the final settlement of brokerage charges.
Hence, the petition has been filed before the High Court, requesting a decree against HTPL for a sum of Rs. 2 Crores, including future and pendente lite interest calculated at a rate of 12% per annum from the date the suit was filed.
Contentions of the Petitioner:
It was argued that the suit filed by the Respondents was an attempt by the company to delay the legally recoverable amount owed to the petitioner. Further, it was claimed that the suit was time-barred since the damages claimed, being non-liquidated in nature, fell under the law of torts, which has a limitation period of one year from the contended date of damages.
Contentions of the Respondents:
It was argued that it was the Petitioner who owed them a significant amount of money, not the other way around. It was claimed that the Petitioner did not fulfil the terms of the MoU or the specific requirements of the Respondents. As a result, despite acquiring large portions of land, the Respondents were unable to meet the requirements for the ICD project.
Furthermore, Respondents filed a cross-suit seeking against the Petitioner.
Observations of the Court:
The Court analysed Article 72 of the Limitation Act, 1963 which dealt with the period of limitation for filing a suit related to tort. It was held that the Respondents’ suit was not time-barred, and the plea of the Petitioner of limitation was rejected.
The High Court decided in favour of the Petitioner, ruling that the Petitioner was entitled to commission as per the MoU and that the rRspondents were not entitled to damages. As per clause 10 of the MoU, the Petitioner was to receive a 5% commission on the total sale consideration. Since the land was acquired at a higher rate than initially specified, it was determined that the commission payable to the Petitioner should be calculated based on a rate of 5% for land purchased within the agreed-upon price range and a rate of 5% of the fixed land rate computed at ₹30 Lakhs per acre for land purchased at a higher rate.
The decision of the Court:
The Delhi High Court allowed the petition and held that the total amount payable by the Respondents was determined to be ₹1,29,44,501/-. Accordingly, the petition was disposed of.
Case Title: Sh. Sudhir Sood v M/S. Hind Terminals Pvt. Ltd.
Case No.: Commercial Civil Suit 227 of 2017
Coram: Hon'ble Ms. Justice Mukta Gupta
Advocates for Petitioner: Advs. Mr. Rajiv K. Garg, Mr. Rajeev Kapoor, Mr. Ashish Garg, Mr. Shivam Bharara, Mr. Shiven Banga, Advs.
Advocates for Respondents: : Advs. Mr. Neel Kumar Mishra, Mr. D.S. Mishra, Mr.Jatin Zaveri, Advs.
Read Judgement @LatestLaws.com
Picture Source :
