Shri Kuldeep Dahiya (‘Informant’) filed an Information under Section 19(1)(a) of the Act, alleging contravention of Sections 3 and 4 of the Act in an Investment Agreement dated June 12, 2018 entered into with seven Opposite Parties (‘OPs’) where the Informant invested INR 15 lakhs.^[1]

OP-6, Nucleus Premium Properties Pvt. Ltd. is a builder in Kerala, with OP-1 to OP-4 as its Directors. In 2016-17, OP-6 decided to enter into the hospitality sector by forming a Limited Liability Partnership firm (LLP) — “Way One Resorts LLP” (OP-5), of which OP-1 to OP-4 became the Designated Partners. To carry out the operations of OP-5, another LLP firm was set up — “Nucleus Hotels and Resorts LLP” (OP-7), and OP-1 to OP-4 became the Designated Partners. In a way, OP-5 to OP-7 constitute a single entity run by OP-1 to OP-4.

According to the Information, the OPs sought an investment from the Informant for shares of OP-5 promising returns such as (a) ownership of a Five-Star Category Resort for lifetime, i.e., 0.4% of the Company and undivided share equivalent approximately 1% (40.47 sq. mt. of land and 200 sq. ft. (8.5 sq. mt.) of the built-up area); (b) 100% appreciation of value within 3 years of operation; (c) monthly rental income; and (d) benefits of yearly 7-night free stay for lifetime. The Informant claimed that by December 15, 2018, he had paid the full amount of INR 15 lakhs.

The Informant claimed that the OPs delayed the completion of the project on several pretexts and eventually the Informant requested a surrender of his share and refund of money. Subsequently, one of the officials of the OPs contacted the Informant suggested an alternative to swap the Informant’s share to Tdew Resorts LLP (another already-running resort of the OPs) for INR 12 Lakhs for a return of INR 8,000/- to 14,000/- p.m. from November 2020 and payment of a difference of INR 3 Lakhs in three months after the execution of new agreement. The Informant wanted the proposal to be in writing; however, the OPs only committed to a monthly return of INR 5,000/- in writing. As per the Informant, multiple requests and legal notices were sent to the OPs for sale of his share and refund of money. However, no response was received from the OPs. Thus, the Informant neither received any monthly returns nor the refund of INR 15 Lakhs. Further, the Informant’s shares were not transferred to the other resort on equitable terms.

The Informant approached CCI seeking monetary compensation from the OPs, physical possession of conveyance deeds, and pending monthly arrears and monthly rent throughout the Informant’s life. The Informant also claimed interim relief seeking prohibition on the OPs from selling the property of OP-5, as it would cause irreparable loss to the Informant. CCI considered the case records and the allegations of the Informant and found that the Informant was not able to show how the Investment Agreement and Lease Agreement were anticompetitive. CCI observed that the Informant’s case did not reveal any competition issue and the allegations were purely individual consumer/ contractual in nature for which remedies lie elsewhere. Therefore, CCI decided to close the matter under Section 26(2) of the Act.

[1]  Mr. Kuldeep Dahiya v. Nishad N.P. and Ors., Case No. 23 of 2021, Order dated September 13, 2021.