The main legal point established in the judgment is that the transaction between the parties was a loan agreement and not an agreement of sale.

ORDER

P.N. Kashalkar, Presiding Judicial Member - This is a complaint filed by the complainant Shri Vasudev Valecha. against M/s. National Building Corporation, a partnership firm along with partners Shri Devinder Ghai and Padmavati Ghai/O.P. Nos. 2 and 3. According to the complainant in the month of July 1986 opponents agreed to sell him a Flat No. 701 on the 7th Floor in the building known as Devaarti being constructed by opponents on F.P. No. 397, C.T.S. 764, T.P.S. Scheme No. III, Sitladevi Temple Road, Mahim, Mumbai. The said flat was to have two bedroom, hall and kitchen admeasuring about 1000 sq.ft.; (hereinafter referred to as suit flat). The complainant pleaded that the said suit flat was agreed to be sold orally by the opponents to him for total consideration of Rs. 5,76,375. The payment schedule agreed between the parties orally was as under:

(i) Earnest Money Deposit to be paid by the complainant to the opponents Rs. 20,000.

(ii) Rs. 25,625 to be paid by the complainant to the opponents on the casting of each slab upto the 17th slab (last slab) i.e. Rs. 25,625 x 17=Rs. 4,35,625.

(iii) To be paid one month after the casting of the seventeenth slab Rs. 25,625.

(iv) To be paid two months after the casting of the seventeenth slab Rs. 25,625.

(v) To be paid on obtaining the Occupation Certificate of the building by the opponents before 31.12.1988 Rs. 69,500. Total Rs. 5,76,375.

2. The complainant pleaded that O.Ps. expressly agreed that before payment of first instalment they would execute valid agreement of sale in respect of suit flat as per M.O.F.A. The complainant paid necessary earnest money deposit of Rs. 20,000 by cheque dated 16.7.1986 drawn on Canara Bank., Naigaon, Mumbai to the O.Ps. Even after making payment of earnest money, the O.Ps. failed or neglected to execute agreement of sale in his favour. But they had even given an attested typical floor plan of the said building marking out clearly therein the suit flat agreed to be sold to him. According to the complainant though two successive slabs were cast by the opponents, the opponents did not execute any agreement of sale for the suit flat as promised. Therefore, the complainant did not pay due instalments on the casting of first and second slab. The opponents by their letter dated 3.4.1987 called upon the complainant to make payment of first and second instalments amounting to Rs. 51,250 but no agreement of sale was executed. On 3.4.1987, the complainant approached opponents and asked them why they were not executing agreement for sale. He was orally assured that shortly they would execute agreement and that he can pay instalments thereafter. But instead of executing agreement, the O.Ps. sent reminder to the complainant on 18.4.1987 asking complainant to remit sum of Rs. 51,250 within three days. But in this reminder too there was no mention of agreement for sale. He then received another letter dated 25.4.1987 asking him to pay amount of Rs. 51,250 for the first and second instalment and yet another amount of Rs. 25,625 by way of third instalment. Again, there was no mention of executing agreement of sale in his favour. According to the complainant, since O.Ps. had not executed agreement of sale as per M.O.F.A., he wrote letter to the opponents dated 20.5.1987 calling upon them to execute necessary agreement for sale immediately. On the same day, the O.Ps. wrote him letter demanding him to pay sum of Rs. 76,875 within three days from the receipt of the notice. The complainant gave reply to the notice on 27.5.1987 and informed the opponents that they had no right to demand payment of instalments unless they executed agreement of sale in his favour. He again wrote letter to O.Ps. on 11.7.1987 putting on record terms and conditions of the oral agreement and calling them to execute agreement of sale for the said flat. The complainant however did not get reply nor O.Ps