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SUPREME COURT OF INDIA
SANJIV KHANNA, S.V.N. BHATTI, JJ.
Jammu Development Authority - Appellant
Versus
S. Paramjeet Singh & Anr. - Respondents
Civil Appeal No. 6741 of 2023 (arising out of SLP(C) No. 4050 of 2023) With Civil Appeal No. 6742 of 2023 (arising out of SLP(C) No. 9019 of 2023)
Decided On : 13-10-2023
Payment defaults by the winning bidder in a public auction for a property. Cancellation of allotment and conduct of fresh auction. Refund of earnest money and payment with interest. Balance of equities.
Fact of the Case:
The Jammu Development Authority (JDA) appeals against a judgment by the High Court of Jammu & Kashmir and Ladakh. The respondent, S. Paramjeet Singh, participated in a public auction and won the bid for a property. The JDA issued a letter of intent requiring him to pay 50% of the premium within 30 days and the remaining 50% within 60 days. Singh paid the first installment but failed to pay the balance. The JDA sent multiple letters requesting payment, but Singh did not respond. The JDA cancelled the allotment and conducted a fresh auction, where Vivek Mahajan placed the highest bid. However, the High Court allowed Singh's writ petition and dismissed the JDA's appeal, stating that the allotment in favor of Singh should be upheld. The JDA argues that Singh's defaults are evident and his allotment should be cancelled. The JDA also points out that Mahajan has not paid the full amount and suggests re-auctioning the property. The court orders that Mahajan be refunded his earnest money with interest and directs the refund of Singh's payment minus the earnest money with interest. The impugned judgment is set aside and the appeal is allowed.
Finding of the Court:
The court analyzes the facts of the case, including the payment defaults by Singh and the conduct of the JDA. The court finds that Singh's defaults are apparent and do not require further explanation. The court also considers the conduct of Mahajan and the time lapse since the original auction. The court balances the equities and orders the refund of Mahajan's earnest money with interest and the refund of Singh's payment minus the earnest money with interest.
Ratio Decidendi: The court sets aside the impugned judgment and allows the appeal. The court orders the cancellation of Singh's allotment, the refund of Mahajan's earnest money with interest, and the refund of Singh's payment minus the earnest money with interest.
Result: The appeal is allowed and disposed of in accordance with the court's orders. Pending applications, if any, are also disposed of.
ORDER :
Civil Appeal @ SLP(C) No. 4050/2023
1. Leave granted.
2. This appeal by the Jammu Development Authority,1[For short, “JDA”.] takes exception to the judgment dated 02.12.2022 passed by the High Court of Jammu & Kashmir and Ladakh at Jammu.
3. Respondent no. 1 - S. Paramjeet Singh had participated in a public auction held on 12.04.1999. His bid of Rs.8,30,000/-(Rupees eight lakhs thirty thousand only) for purchase of plot no. 244, Sector 1/Sector 1A, Trikuta Nagar Housing Colony, Jammu,2[For short, “Subject Property”.], was accepted. By letter of intent dated 26.05.1999, the JDA had called upon respondent no. 1 - S. Paramjeet Singh to deposit 50% of the premium within 30 days from the date of issue of the letter of intent, and the balance 50% within 60 days thereafter. In case of default beyond six months, interest at the rate of 18% per annum would be charged. Further, on failure, the allotment shall be cancelled, and the earnest money and the first installment shall stand forfeited.
4. Respondent no. 1 - S. Paramjeet Singh deposited 50% of the premium of Rs.4,15,000/-(Rupees four lakhs fifteen thousand only) within 30 days after issue of the letter of intent dated 26.05.1999. He did not pay the balance 50% of the premium.
5. It is the case of the appellant – JDA that a number of letters were written to Respondent no. 1 - S. Paramjeet Singh to pay the second installment/balance payment, to which Respondent no. 1 - S. Paramjeet Singh did not respond. Respondent no. 1 - S. Paramjeet Singh denies having received these letters/communications. We have, however, one letter written by Respondent no. 1 - S. Paramjeet Singh, dated 23.05.2001, which refers to the communication dated 02.05.2001,3[Letter No. JDA/T.N. 244/114 dated 02.05.2001.], wherein he was asked to make the balance payment of 50% of the premium.
6. Balance 50% of the premium amount was not deposited till 2010.Earlier JDA had cancelled the allotment. Accordingly, the appellant – JDA issued an advertisement on 09.12.2010 for a fresh auction, which was published/advertised on 11.12.2010 in newspapers. Immediately thereupon, Respondent no. 1 - S. Paramjeet Singh filed Original Writ Petition (OWP) no. 1483/2010 before the High Court in December 2010.
7. The appellant – JDA had conducted the fresh auction and had received a bid of Rs.38,00,000/-(Rupees thirty eight lakhs only) from respondent no. 2 – Vivek Mahajan.
8. In view of the aforesaid facts, we fail to understand how Original Writ Petition (OWP) no. 1483/2010 was allowed and LPA No. 58/2022 filed by the JDA was dismissed, with the observation that the allotment in favour of Respondent no. 1 - S. Paramjeet Singh survives and should be acted upon. The defaults and failure to pay the consideration on the part of Respondent no. 1 - S. Paramjeet Singh are apparent and do not even warrant elucidation.
9. Original Writ Petition (OWP) no. 1483/2010 preferred by S. Paramjeet Singh should have been dismissed.
10. It is pointed out to us that respondent no. 2 – Vivek Mahajan had deposited an earnest money of Rs.2,71,000/-(Rupees two lakhs seventy one thousand only). The balance money has not been paid. We are also of the opinion that given the time lapse, the plot should be re-auctioned.
11. To balance out the equities, we direct that respondent no. 2 – Vivek Mahajan will be refunded Rs.2,71,000/-(Rupees two lakhs seventy one thousand only) along with simple interest at the rate of 15% per annum.
12. Earnest money paid by the respondent no. 1 - S. Parmjeet Singh will be forfeited and will not be refunded. Rs.4,15,000/-(Rupees four lakhs fifteen thousand only), less the earnest money deposited by Respondent no. 1 - S. Paramjeet Singh, will be refunded to him with simple interest at the rate of 8% per annum with effect from 01.01.2001.
13. The impugned judgment is set aside and the appeal is allowed and disposed of in the above terms.
14. Pending application(s), if any, shall stand disposed of.
Civil Appeal @ SLP(C) No. 9019 of 2023
Lea
AI
Cancellation of allotment due to payment defaults by the winning bidder in a public auction.
The principle of natural justice, which requires affording a reasonable opportunity to present one's case, was central to the court's decision.
The court affirmed that failure to comply with payment terms in a contract justifies forfeiture of earnest money, and a claim for refund is not valid under such circumstances.
The cancellation of allotment was justified due to the petitioner's failure to comply with payment terms, emphasizing the importance of adhering to auction conditions and public interest.
The court upheld the legality of forfeiting auction deposits due to non-payment, affirming that the auction terms did not require a hearing prior to cancellation.
The court held that no hearing is required prior to cancellation of allotment when auction terms do not provide for it, and the allotment can be cancelled for non-payment.
The court upheld the provisions of the Jaipur Development Authority Act, 1982, and the applicable interest rates under the Raj. Improvement Trust (Disposal of Urban Land) Rules, 1974, in determining ....
Concept of doctrine of principles of natural justice-Audi Alteram Partem and its application in judicial, quasi judicial and administrative system is not new. It no doubt is a procedural requirement,....
The main legal point established in the judgment is the importance of strict compliance with auction terms and conditions, balanced with the consideration of communications and extensions provided by....
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