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2003 Supreme(Del) 193
High Court Of Delhi
RAJENDER JAIN - Appellant
Versus
DELHI DEVELOPMENT AUTHORITY - Respondent
Civil Writ 2408 of 1987
Decided On : 02/24/2003
Harish Malhotra, NILIMA TRIPATHI
The main legal point established is that the advertisement for selling space before payment constituted a breach of the auction terms, justifying the cancellation of the bid. However, the forfeiture of earnest money was not justified as the petitioners had not failed to make the payment within the stipulated period.
Headnote:
advertisement - cancellation of successful bid - Delhi Development Authority Act, 1957, Section 57 - The court discussed the terms and conditions of auction, the advertisement for selling space, and the cancellation of the bid. It highlighted the interpretation of the auction terms, the rights of the successful bidders, and the authority's power to cancel bids for violation of terms and conditions.
Fact of the Case:
The petitioners' successful bid for plots in an auction was cancelled due to an advertisement for selling space, which was deemed a violation of the terms and conditions of allotment.
Finding of the Court:
The court found that the advertisement for selling space before the payment of the balance amount was a breach of the terms and conditions of the auction. It also ruled that the cancellation of the bid was justified, but the forfeiture of earnest money was not justified.
Issues: The issues included the validity of the advertisement, the authority's power to cancel bids, and the forfeiture of earnest money.
Ratio Decidendi: The court held that the advertisement for selling space before payment was a breach of terms and conditions, justifying the cancellation of the bid. However, it ruled that the forfeiture of earnest money was not justified as the petitioners had not failed to make the payment within the stipulated period.
Final Decision: The court allowed the writ petitions, directing the refund of the earnest money forfeited by the respondent and granting interest to the petitioners.
( 1 ) THESE two writ petitions are filed by the aggrieved petitioners whose successful bid for plots in the Transport Nagar, Rohtak Road in the auction held on 4. 5. 1987 has been cancelled on the ground that they had advertised for selling space and had thus violated the terms and conditions of allotment.
( 2 ) CWP No. 2408/87 is in respect of plot No. 116 while CWP No. 2431/1987 is in respect of plots No. 113, 118, 119, 120, 125, 126 and 127. The factual matrix is more or less common since the auction was held on the same day of 4. 5. 1987 and the petitioners were the successful bidders and deposited 25% of the amount on the fall of the hammer. On 19. 5. 1987 the formal acceptance was communicated to the petitioners and demand was raised for balance 75% of the amount to be deposited within 90 days of the communication of the acceptance (i. e. , on or before 10. 8. 1987 ).
( 3 ) AN advertisement appeared in the newspaper in the following terms :-
ORIGINAL BOOKING opens TODAY
WITH Attractive Special Discount only for Two Days
FROM 9. 30 A. M.-5. 00 P. M. FOR
RAJENDRAS AUTO COMPLEX rohtak ROAD, TRANSPORT CENTRE
NEAR Punjabi Bagh
INVESTMENT 50,000/- - 10,00,000/-
INITIAL 10%. Balance in 23 instalments
GUARANTEED APPRECIATION
CONTACT with cheque and Rs. 2,000/- cash at rajendras
N-52a, Connaught Place, New Delhi
PHONES: 3313355, 3314411, 3312925
( 4 ) VARIOUS complaints were apparently received by the respondents about this mode of advertisement and booking sought.
( 5 ) A show cause notice was issued on 11. 6. 1987 in the following terms:
"show CAUSE NOTICE whereas you are the bidder/allottee of plot No. 116 measuring 464. 5 sq. mts. At Transport Centre Rohtak Road, Delhi. AND WHEREAS the said plot of land has been permitted to be used as Godown/warehouse and the floor space to be constructed thereon, is not saleable under th terms and conditions of the auction. AND WHEREAS it has been noticed that you are selling parting with the floor space which is contrary to the said terms and conditions of the auction. You are, therefore, called upon to show cause within 15 days from the date of issue of this notice as to why the bid/allotment of the said plot of land may not be cancelled for violation of the terms and conditions of auction and earnest money forfeited. "
( 6 ) THE petitioners replied to the same in the following terms :-
1)THAT we are astonished to receive your Show Cause Notice, since the allegations contained in the said Notice is absolutely baseless and false.
2)THAT we have neither cold/transferred/assigned or otherwise parted with the possession of whole or any part of the plot before or after the erection of the building.
3)THAT it is absolutely wrong that we are selling any part of the floor space to any person whatsoever.
4)THAT we are only trying to reserve the floor space, on rent basis or licence basis, which is definitely allowed as per the terms and conditions of the auction.
WE hope that the above reply satisfies your all queries and therefore, we request you to please withdraw your Show Cause Notice immediately under intimation to us.
HOWEVER, should you have any further query, we shall be pleased to reply the same. If we do not receive any of your communication within a week of the date of receipt of this letter, we shall consider that our replies have satisfied you and the show Cause Notice is treated to be cancelled. "
( 7 ) THE allotment was thereafter cancelled in terms of letter dated 6. 7. 1987 in CW 2408/1987 and dated 22/23. 7. 87 in CW 2431/87, the contents of which are common to the following effect:-
"whereas you are the bidder/allotee of Plot No. 116 measuring 464. 5 sq. mtrs. at Transport Centre Rohtak Road, New Delhi.
AND WHEREAS the said plot of land has been permitted to be used as Godowns/warehouse and the floor space to be constructed thereon, is not saleable under the terms and conditions of auction.
AND WHEREAS you are not entitled to sell/transfer, assign or otherwise part with the p
