OMAXE LIMITED Vs. VIKAS MALHOTRA

JUDGEMENT

(1.) Admitted case of the parties before the learned Arbitrator was that under a letter of allotment dated February 20, 2007 Omaxe allotted space No.01 and 02 on the ground floor to Vikas Malhotra and Vishal Malhotra indicating that its approximate super area would be 141.60 sq.meters. An addendum of even date recorded the terms of the allotment. The units to be allotted were in a building under construction named by Omaxe "Wedding Mall Agra'.

(2.) As we would be noting hereinafter, the contract between the parties was more in the nature of an investment made by the Malhotras with a guarantee of a fixed return. 95% sale price fixed was paid immediately and remaining 5% had to be pad when possession was offered. As per clause 26 of the Addendum the construction had to be completed within 30 months, which date would be July 20, 2009. Under the same clause Omaxe had to obtain a certificate of occupation and only thereafter offer possession of the two units. Under the same clause Omaxe agreed to pay Rs. 10/- per sq.ft. per month of the super area if there was delay in offering possession. Under clause 1 Omaxe were to pay a monthly return of Rs. 1,04,406/- till possession of the unit was handed over. The said clause also enjoyed upon Omaxe to lease the unit to a third party before offering the same. Under clause 2 the liability of Omaxe would cease on offering possession of the two units duly leased.

(3.) The agreement is typical of advertisement which we see in the newspapers. Builders offering commercial space at assured returns. Small units are offered to investors. The larger space is leased to multi-nationals. Most of the sale price is received by the builders at the time of the agreement. A monthly return till construction is completed is assured. The builder gets the capital without any hassles. The investor gets a good return. But neither is without a security cover other than the appreciation in the value of the property. The future market is uncertain both as regards rentals and the market value of the property. The end result is bound to be litigation.