Ajay Kohli vs M/S Ansal Properties & Industries ...
2010 Latest Caselaw 1089 Del

*       IN THE HIGH COURT OF DELHI AT NEW DELHI


%                      Judgment Reserved on: 18.02.2010
                      Judgment Delivered on: 24.02.2010


+             CS(OS) No.2839/2000 & I.A. No.3046/2003



AJAY KOHLI                                              .....Plaintiff
         Through:           Mr. Harish Malhotra, Senior Advocate
                            with Mr. Rajinder Aggarwal, Advocate.


                            VERSUS

M/S ANSAL PROPERTIES & INDUSTRIES LTD.       ....Defendant
         Through: Mr. Rohit Kr. Aggarwal, Advocate.



CORAM:
HON'BLE MS. JUSTICE INDERMEET KAUR

     1. Whether the Reporters of local papers may be allowed to
        see the judgment?

     2. To be referred to the Reporter or not?

     3. Whether the judgment should be reported in the Digest?


INDERMEET KAUR, J.

1. Plaintiff Ajay Kohli, sole proprietor of M/s Swaran Kosh

has filed the present suit for recovery of Rs.58,07,688/- of which

Rs.39,19,200/- is the principal amount and the balance is the

interest claimed @ 18% per annum.

2. Plaintiff is a liaison and property consultant working under

the name and style of M/s Swaran Kosh. Defendant M/s Ansal

Properties & Industries Ltd. is a company incorporated under

the Companies Act. Amongst other business, defendant

company has also constructed the shopping complex known as

Ansal Plaza, Andrews Ganj, New Delhi.

3. Defendant for selling different spaces in the said complex

called upon the plaintiff to provide service for finding customers.

Agreed commission @ 2.5% was to be paid. Oral discussion

ensued between the parties.

4. Plaintiff negotiated a deal of 10,000 sq.ft. area with the

Jammu & Kashmir Bank Ltd.(hereinafter referred to as the

Bank) at Ansal Plaza Hudco Complex, Andrews Ganj, New Delhi

With his efforts he was able to conclude the deal for Rs.12

crores. The efforts of the plaintiff were recognized by the

defendant in their letter dated 3.10.1997. Deal was finalized in

December, 1997 itself, yet paper formalities were not

completed. On 19.12.1997 this was conveyed by a letter sent by

the defendant to the plaintiff appointing him as his agent for

future deals upto 31.12.1998.

5. On 24.1.1998 the sale agreement between the Bank and

the defendant was finalized which was through the efforts of

plaintiff. The deal was for Rs.12 corores on which 2.5%

commission payable to the plaintiff was Rs.30 lacs.

6. Negotiations for another additional space for 3,064 sq. ft

adjacent to this place were also finalized through the efforts of

the plaintiff and the Bank Ltd agreed to purchase this extra

space from the defendant for a total sum of Rs.3,67,68,000/-

which had culminated in the sale agreement dated 23.9.1998.

Commission @ 2.5% was payable on this deal as well.

7. The total commission to be payable to the plaintiff works

out to Rs.39,19,200/-. The defendant has failed to honour his

commitment and has not paid the aforestated amount due and

receivable by the plaintiff. Principal amount is Rs.39,19,200/-.

Interest @ 18% per annum on the aforestated amount is

Rs.18,88,488/-. Total amount of Rs.58,07,688/- is due and

payable by the defendant.

8. In the written statement, this position is refuted by the

defendant. It is not denied that a deal had taken place between

the Bank and the defendant for 10,000 sq. ft. area followed by

a further additional space sold by defendant to the Bank vide

aforestated sale agreements dated 24.1.1998 and 23.9.1998.

The sale figures of the two agreements i.e. the first sale

agreements for Rs.12 crores and the second sale agreement for

Rs.3,67,68,000/- are not in dispute.

9. Defence as set up by the defendant is that there was no

involvement of the plaintiff in these deals whatsoever; it was a

direct deal between the defendant and the Bank. No efforts

were made by the plaintiff. The deal was concluded on

08.12.1997 which was prior in time to the appointment of the

plaintiff as an agent of the defendant. Plaintiff had been

appointed as an agent of the defendant on 19.12.1997 when this

deal was already over. The plaintiff at all times represented that

he is an agent of the Bank. In these circumstances, the plaintiff

is not entitled to any amount from the defendant.

10. Replication was filed reiterating the averments made in

the plaint while refuting the submissions and the defence as set

up by the defendant.

11. On the pleadings of the parties, the following issues were

framed:-

1. Whether the plaintiff negotiated as broker for an on

behalf of the defendant for the sale of 10,000 sq. ft.

area on the second floor of Ansal Plaza Complex with

the Jammu & Kashmir Bank Ltd.? OPP

2. Whether the deal of the defendant with the said

Jammu & Kashmir Bank Ltd., in respect of 10,000

sq. ft. area of the said Ansal Plaza Complex was

finalized for a total consideration of

Rs.12,00,00,000/- i.e. Rs.12,000/- per sq. ft. due to

the efforts of the plaintiff? OPP

3. Whether the plaintiff also rendered his services as

broker in respect of deal of 3064 sq. ft. additional

area adjacent to the place already sold to the Bank

due to the efforts of the plaintiff and the same was

finalized for a total sum of Rs.3,67,68,000/- due to

the efforts of the plaintiff? OPP

4. Whether the plaintiff is entitled to commission at the

agreed rate of 2.5 % on the aforesaid two sales? OPP

5. Whether the plaintiff is entitled to interest on the

due amount? If so, at what rate and for what period

? OPP

6. Whether the transaction, between the defendant

and Jammu & Kashmir Bank for transfer of 10,000

sq. ft. and 3,064 sq. ft of area in the Ansal Plaza

Complex concluded without the assistance of the

plaintiff? OPD

7. Relief.

12. The plaintiff Ajay Kohli in support of his case has

examined himself as PW-1. Defendant has produced three

witnesses in defence. DW-1 Mr. J.K.Srivastva, General Manager

(Legal) was admittedly not a part of the sale/purchase

department of the defendant company when this deal was

finalized. This deal was finalized at the time when Deepak

Khanna was the Assistant General Manager (Marketing) at the

relevant time; he has been examined as DW-2. Rajesh Saraf,

Senior General Manager of the Jammu and Kashmir Bank has

been examined as DW-3 to substantiate the defence set up by

the defendant that the deal was a direct deal between the

defendant and the Bank in which the plaintiff had no role to

play.

13. Arguments have been heard. Record has been perused.

Findings on the issues are as follows:-

14. ISSUE NOS.1 TO 4 & 6:

All the aforestated issues will be decided by a common

discussion as they overlap each other.

15. Case of the plaintiff is that he had negotiated a deal of

10,000 sq.ft. area on the second floor of the Ansal Plaza between

the Jammu & Kashmir Bank Ltd. and the defendant. This deal

had culminated in the sale agreement dated 24.1.1998

Ex.PW-1/5(D-1) which was for a sum of Rs.12 crores. The

further case of the plaintiff is that additional space was also

required by the Bank which due to the efforts of the plaintiff

culminated in the second agreement to sell dated 23.9.1998

Ex.PW-1/6 (D-2) for a sum of Rs.3,67,68,000/-. Further case of

the plaintiff is that he was entitled to 2.5% commission on the

said deal which had culminated through his efforts.

16. These factual averments are not in dispute. It is not in

dispute that the aforestated sale agreements had been entered

into between the defendant and the Bank for the aforestated

amounts. It is also not disputed that brokerage of 2.5% was to

be paid to the broker through whose efforts this deal had been

finalized.

17. Case as set up by the defendant is that the plaintiff is not

entitled to the brokerage as claimed by him i.e. a sum of

Rs.30,00,000/- for the first deal and a sum of Rs.9,19,200/- for

the second deals, these deals were direct deals between the

defendant and the Bank and this is prima facie borne out by the

evidence of his witnesses as also by his supporting documents.

18. Ex.PW-1/1 is a letter dated 3.10.1997 written by the

defendant through DW-2 his Assistant General Manager (Sales)

Deepak Khanna to the plaintiff; this is an admitted document.

DW-2 Deepak Khanna has admitted that he had sent this

communication dated 3.10.1997. This letter reads as follows: -

"October 03, 1997

Mr. Ajay Kohli J-4, Kailash Colony New Delhi - 110048

Dear Sir,

This has reference to our discussions and your letter dated 31.10.1997 regarding marketing efforts towards sale of approximate 10,000 sq. ft. offices area to J & K Bank Ltd. We are pleased to learn that you are vigorously following up with your client and likely to finalize the deal in near future. We confirm that commission as per the company policy shall be payable to you on finalization of the deal. Please note that this offer is valid till 31.12.1997. Thanking you, Yours sincerely For ANSAL PROPERTIES & INDUSTRIES LTD.

(DEEPAK KHANNA) ASSISTANT GENERAL MANAGER(SALES)"

19. After making a reference to the discussion relating to sale

of 10,000 sq.ft. of office area to the Bank the defendant has

through this communication confirmed and recognized that it

was through vigorous and persistent efforts of the plaintiff

which had led to the negotiations of deal of 10,000 sq. ft. office

area between the defendant and the Bank and with these

continuous efforts the deal was likely to culminate in the near

future.

20. Ex.PW-1/2 is a letter dated 18.12.1997 addressed by the

plaintiff to the defendant. It reads as follows: -

       "The Manager                                     18.12.1997
       Ansal Properties of Industries Ltd.
       116, Kasturba Gandhi Marg
       New Delhi

Sub:- Marketing Consultancy for Ansal Plaza Andrews Gang, New Delhi

This is in reference to your letter dated 3rd October, 1997 regarding appointing us as marketing consultants towards sale of approximately 10,000 sq. ft. office area to Jammu and Kashmir Bank Ltd.

We have successfully been able to sell 10,000 sq. ft. area of Ansal Plaza to the above mentioned Bank subject to completion to all formalities and legal documentation. We wish to congratulate your esteemed organization on signing the consent documents. Do let us know if any further assistance is required.

Further we wish to be appointed as your authorized marketing agent/brokers to market Ansal properties in new future to Jammu & Kashmir Bank and other renowned clients. Kindly find enclosed the application form for the same.

Looking forward to long terms joint association together.

Thanking you Yours sincerely, (Ajay Kohli) AUTHORISED SIGNATORY"

21. This communication makes reference to the earlier letter

dated 3.10.1997 Ex.PW-1/1. It further states that the deal of

10,000 sq. ft. of the office area has been successfully completed

although formalities and the legal documentation is yet to take

place; plaintiff has congratulated the defendant for the said

purpose; further this letter states that the plaintiff wishes to be

appointed as a marketing agent/broker for Ansal Plaza in the

future. This letter has an endorsement of receipt; it has been

received on 19.12.1997 in the office of the defendant. Along

with this letter the agent's profile Ex.PW-1/3 has been

appended.

22. DW-1 J.K. Srivastva, General Manager (Legal) of

defendant has on oath deposed that the plaintiff had approached

the defendant for appointment as an agent vide his application

dated 18.12.1997 which was received by the defendant on

19.12.1997. This is the same letter and thus Ex.PW-1/2

containing the plaintiff's profile Ex.PW-1/3 stands admitted by

DW-1.

23. Ex.PW-1/4 is a letter dated 19.12.1997 written by the

defendant through DW-2 Deepak Khanna to the plaintiff. This

communication makes reference to discussions between the

parties; vide this communication the plaintiff had been directed

to collect his allotment letter as appointment as an agent of the

defendant on the terms and conditions contained therein which

arrangement was to continue up to 31.12.1998 and to be

reviewed thereafter. This document is admitted.

24. The aforenoted documents clearly depict and decipher

that prior to 3.10.1997 there were oral discussions between the

plaintiff and DW-2 i.e. the Assistant General Manager (Sales) of

the defendant company with regard to the marketing efforts of

the plaintiff for 10,000 sq. ft. of office area to be sold to the

Bank. Ex.PW-1/1 has categorically recited that vigorous efforts

had been made by the plaintiff which were likely to lead to the

finalization of the deal. It further recites that commission will

be payable on the finalization of the deal as per the company

policy. It is not in dispute that the company policy is that on

such like sale transactions relating to a sale of land in Ansal

Plaza commission payable would be 2.5%. This has been

admitted by DW-2 Deepak Khanna on oath; he has admitted that

the company has been paying commission @ 2.5% of the sale

value for sale transactions at Ansal Plaza.

25. DW-2 has also admitted that he had first met the plaintiff

in August/September 1997 in his office; plaintiff Mr.Ajay Kohli

had represented himself to be a property broker/real estate

consultant; he had met him regarding the proposal for office

area in Ansal Plaza for the Jammu and Kashmir Bank; he has

further admitted that he was responsible for the sale and

lease/renting of the commercial properties of the company and

in that capacity he was interacting, dealing and concluding such

deals for which as per the policy of the company commission

was payable.

26. Defence of the defendant is that the deal stood completed

on 8.12.1997. Attention has been drawn to his documentary

evidence proved through testimony of his third witness DW-3,

who is the Senior General Manager of the Jammu & Kashmir

Bank. DW-3 has on oath deposed that this was a direct deal

between the defendant and the Jammu and Kashmir Bank as per

the record of the bank. He has deposed that an advertisement

has been effected on 15.9.1997 in the Times of India for

requirement of space for the Zonal Office. Ex.DW-3/1 is a letter

dated 18.9.1997 addressed by the executive marketing manager

of the defendant to the Jammu & Kashmir Bank Ltd. Attention

has been drawn to this communication which makes reference

to the office space area required by the Jammu & Kashmir Bank.

Vide this communication dated 18.9.1997 the representatives of

the Jammu & Kashmir Bank Ltd. had been invited to visit Ansal

Plaza and to see the progress development there. DW-3/3 is

another communication dated 28.11.1997 addressed by the

defendant to the General Manager of the Bank. This makes

reference to the purchase of 10,000 sq. ft. space by the Bank in

Ansal Plaza; request has been made by the defendant to enhance

the price from Rs.12,000/- per sq. ft. to Rs.13,000/- per sq. ft.

Ex.DW-3/5 is another letter dated 08.12.1997. This makes

reference to an earlier communication dated 4.12.1997 between

the parties. Defendant by this letter has agreed to sell 10,000

sq. ft. of space at Ansal Plaza to the Bank @ Rs.12,000/- sq. ft.

and certain documents as per the request of the Bank had been

forwarded to it. Ex.DW-3/6 is yet another letter of the Bank

stating that no broker has been engaged by them for the

purchase of the premises of an area of 13064 sq.ft. at Ansal

Plaza Complex.

27. It is submitted that in neither of these communications

there is any reference of plaintiff or of any efforts made by him;

it was a direct one to one deal between the defendant and the

Bank. These documents have been relied upon by the defendant

to ward off its liability.

28. DW-1 was admittedly not working in the department of

sale and purchase of properties of the defendant company. He

was in the Legal Department. In his cross-examination, he has

admitted that there is a separate department for sale and

purchase of the immovable properties and Mr. Deepak Khanna

was looking after the said department; to the various questions

put to him he has given evasive replies; not knowing the facts of

the case as not working in the concerned department of the

company. Admittedly, the person examining this deal was DW-2.

29. DW-2 has on oath admitted that the plaintiff had met him

in September 1997 stating that he was engaged in the business

of sale, purchase and letting out real estate and he was an

agent/broker of the Bank. DW-2 has reiterated the stand of the

defendant that the deal between the defendant company and

Bank was a direct deal and not through the plaintiff.

30. In his cross-examination DW-2 has stated that the

Chairman of the Bank visited Ansal Plaza to see the development

progress in July 1997 and after seeing the site they had finalized

this deal. This is a false averment of DW-2 as is apparent from

the document of the defendant himself. Ex.DW-3/1 is a letter

dated 18.9.1997 inviting the Bank to make a first appraisal of

the development at Ansal Plaza. This communication is dated

18.9.1997; as such averment of DW-2 on oath that Chairman of

the Bank had visited the site in July 1997 is prima facie

incorrect. The fact that this version is false is further fortified

by the next admission of DW-2 who has stated that an

advertisement in the Times of India given by the Bank

requesting for space was made sometime in April and May 1997.

DW-3 has stated to the contrary. On oath he has stated that an

advertisement for requirement of office space for the Zonal

Office was given in the Times of India by the Bank on 15.9.1997.

31. DW-2 has been specifically queried about the letter dated

18.12.1997 submitted by the plaintiff to the defendant along

with his profile Ex.PW-1/3. To both the queries he had again

given evasive and non-committal answers stating that he does

not know if the plaintiff had addressed any such letter dated

18.12.1997 along with the profile of the plaintiff. This version of

DW-2 is again incorrect as DW-1 in his examination-in-chief has

admitted that the plaintiff had approached the defendant vide

his application dated 18.12.1997 received by the defendant on

19.12.1997 for appointment as an agent. DW-2 was well aware

of this fact yet deliberately on oath he has not answered these

specific queries; he has made every effort to conceal facts and

not bring out the true picture; he is playing hide and seek with

the court.

32. This has been fortified by the admitted letter dated

19.12.1997 issued by DW-2 himself to the plaintiff appointing

him as his agent. This appointment is obviously a corollary and a

consequence of the profile which the plaintiff had sent of himself

along with his letter Ex.PW-1/2 requesting for his appointment

as an agent. DW-2 is not a truthful witness.

33. Plaintiff has on oath reiterated this deal for 10,000 sq. ft of

was finalized in December 1997 yet paper formalities had to

take time. PW-1 at the request of the defendant had sent the

formal application for appointment as an agent which he had

sent vide his letter dated 18.12.1997 and received by the

defendant on 19.12.1997. Ex.PW-1/4 is the letter of the

defendant dated 19.12.1997 appointing the plaintiff as his agent

for future works. PW-1 has further deposed that at the time

when this agreement was finalized, negotiations started for

another additional space of 3,064 sq. ft adjacent to this place

which materialized and was sold to the Bank vide agreement

dated 23.9.1998 which was through the efforts of the plaintiff.

No cross-examination has been effected of this witness on this

score at all; even otherwise, as per the case of the defendant

also, plaintiff had been appointed as agent of the defendant on

19.12.1997. In his further cross-examination, PW-1 has detailed

the time place and location where for the first time he had met

DW-2 Mr.Deepak Khanna General Manager (Marketing) of the

defendant.

34. Emphasis has been made by the defendant to his

submission that the plaintiff was an agent of the Bank and this is

clear from Ex.PW-1/1 where the defendant has referred to the

Bank as "your client"; the plaintiff thus being an agent and the

broker of the defendant. This version is again distorted by the

document of the defendant himself. Ex.DW-3/6 clearly states

that the Bank had not engaged any broker for his office space of

13,064 sq. ft. purchased by them. DW-3 in his cross-

examination has also stated that as per the RBI guidelines the

bank cannot appoint any broker. Further cross-examination of

DW-3 has reflected that the plaintiff is aware of the entire

constitution of the Bank i.e. with that part of their team who

were negotiating the purchase of this office space at Ansal Plaza

on behalf of the Bank. Names of Shamas Farooq, Faizali,

Tafazal Hussain, Abdul Majid Mir and Mr.Ajit Singh have been

highlighted to show that the plaintiff was in every manner

connected with the deal and the negotiations which were going

on between the defendant and the Bank.

35. Ex.PW-1/5(D-1) and Ex.PW-1/6(D-2) are the two

agreements dated 24.1.1998 and 23.9.1998 respectively. The

first deal was for the sale of 10,000 sq. ft. office space in Ansal

Plaza and the second deal was for the sale of additional office

space of 3,064 sq. ft.. The first deal had been struck for Rs.12

crores and the second deal was struck for Rs.3,67,68,000/-;

Ex.D-1 has been signed by Mr.Tafazal Hussain and Ex.D-2 has

been signed by Mr.Ajit Singh on behalf of the defendant

company.

36. Admittedly DW-2 has first met the plaintiff in August 1997.

On 15.9.1997 an advertisement has been effected in the Times

of India by the Bank requesting for office area for their Zonal

Office. Ex.DW-3/A dated 18.9.1997 exchanged between the

defendant and the Bank was the offer of the Bank in this

advertisement. Ex.PW-1/1 dated 3.10.1997 recognized the

vigorous efforts of the plaintiff in the maturation of this deal of

10,000 sq. ft. of space to be sold by the defendant to the Bank.

This letter also recited that the deal is likely to be completed in

the near future. On 18.12.1997 Ex.PW-1/2 the plaintiff sent his

profile along with his letter requesting for his appointment as an

agent for future deals. This letter has clear reference to the

letter dated 3.10.1997 regarding the sale of 10,000 sq. ft. office

area to the Bank; it further categorically congratulated the

defendant on the successful completion of this deal. These

documents makes it amply clear that it was at the request of the

defendant that the plaintiff had sent Ex.PW-1/2 appending his

agent profile Ex.PW-1/3 for his appointment as an agent of the

defendant for future deals; he had already successfully

completed the deal of 10,000 sq. ft office space to the Bank. In

terms thereof the appointment letter was given to the plaintiff

on 19.12.1997 itself vide Ex.PW-1/4. Deal for 10,000 sq. ft. of

space had been completed in early December 1997. This is

evident from Ex.DW-3/5 dated 8.12.1997 which is a

communication exchanged between the defendant and the

General Manager of the Bank. Mere fact that the name of the

plaintiff does not find mention therein or his efforts has not been

recognized in this letter do not make out a defence for the

defendant to shrug off his liability. Defendant had already

recognized the efforts of the plaintiff in the completion of this

sale agreement. DW-2 knew the plaintiff only in his capacity as

an agent/broker. He could not have been an agent of the Bank

as there was a prohibition under the RBI guidelines for a broker

to be appointed by the bank. The second deal of additional

space of 3,064 sq.ft. was negotiated thereafter; i.e. after

19.12.1997, after the plaintiff had become the agent of the

defendant. This is clear from Ex.PW-1/2 dated 18.12.1997

wherein the plaintiff has congratulated the defendant on the

successful completion of the deal of 10,000 sq.ft. area only.

37. Admittedly, apart from the plaintiff there is no other

broker in this deal; it is also not the case of the defendant that

the he had paid brokerage to some other person. Defence of the

defendant that this was a direct deal is a false defence. DW-2

has not come to the court with clean hands. He is a primary

witness of the defendant. DW-3 has also established that the

bank as per RBI guidelines was not permitted to engage the

service of a broker. Replies of DW-3 are also evasive; he was

not even in a position to identify the members of the team

constituted by the Bank to negotiate this deal with the

defendant; yet the plaintiff knew all their names. This also

reinforces the belief of the court that it was through the efforts

of the plaintiff that the deal between the defendant and the Bank

finally got struck. Agreed rate of commission was 2.5% on such

like transactions; DW-2 has admitted this. DW-1 is of no help;

he was in the Legal Department and not in the know-how of this

deal. Defendant has failed to establish that this was a direct deal

between the defendant and Bank. Plaintiff having finalized the

deal between the defendant and the Bank he was rightfully

entitled to his admitted rate of commission i.e. 2.5% of the sale.

Commission payable on the said two transactions at 2.5% would

be Rs.30 lacs and Rs.9,19,200/- respectively. Right of the

plaintiff to claim this amount is clearly established.

38. In AIR 1928 Bombay 270 Vasanji Moolji vs. Karsondas

Tejpal, it had been held that the job of a broker is to find a party

who is willing to advance the money to the borrower; once he

had put it in the borrower's power to obtain the loan, he had

done all that which his appointment necessitated thus entitling

him to his commission.

39. Issue nos.1 to 4 & 6 are decided in favour of the plaintiff

and against the defendant.

40. ISSUE NO.5:

Plaintiff has claimed interest of Rs.18,88,488/- on the

principal sum of Rs.39,19,200/- @ 18% per annum calculated

from one month after the date of the conclusion of the deal to

the date of the filing of the suit. On oath, it is reiterated that the

commission has to be released to the plaintiff immediately after

the conclusion of the deal or at the most within one month but

the defendant has failed to release this amount to the plaintiff.

41. In State of J & K vs. Dev Dutt Pandit (1999) 7 SCC 339 it

had been held that under Section 34 of the Code of Civil

Procedure interest at a higher rate than 6% can be awarded

where the liability in relation to the sum so ajudged had arisen

out of a commercial transaction.

42. This being a commercial transaction, the plaintiff is

entitled to interest at the aforestated rate; he is, thus, entitled to

the aforestated interest amount of Rs.18,88,488/-.

43. RELIEF:

Suit of the plaintiff is decreed in his favour and against the

defendant in the sum of Rs.58,07,688/- with future interest @

12% per annum to be paid from the date of the decree till

realization. Cost is also awarded in favour of the plaintiff.

Decree sheet be drawn. All the pending applications are also

disposed of. File be consigned to record rood.

(INDERMEET KAUR) JUDGE February 24, 2010 nandan