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1998 Supreme(Del) 503
High Court Of Delhi
ASIAN HOTELS LIMITED - Appellant
Versus
DELHI DEVELOPMENT AUTHORITY - Respondent
Decided On : 07/17/1998
Headnote:Housing - Unearned Increase — Liability to pay — Bid for purchase of plot made by the promoter on behalf of the company under incorporation — No transfer involved in the transaction — The company is not liable to pay unearned increase.
Held:
It is clear that a promoter of the company participated in the auction and earnest money was paid on behalf of a proposed company and the defendant accepted the payments on me 7th of January, 1981 and the 16th of January, 1981 from the plaintiff, company, after its incorporation on the 13th of November, 1980. A promoter of a company offered to purchase the leasehold interest and the payment was made and that was accepted by the defendant and acceptance of the sum of Rs.4.36 crores is very significant in this case. It is only thereafter that the defendant wanted the plaintiff to produce the Memorandum and Articles of Association and after perusing the same came to the conclusion that there was a transfer. The defendant had completely misunderstood the legal position without appreciating the concept involved in the transaction which had originated on the 9th of September, 1980 from the promoter of a company up to the payment of money in January, 1981, nearly two months after the in corporation of the company and had also chosen to apply Clause 3(2)(f) in the terms and conditions. I have no hesitation, having regard to the well settled principles, that there was no transfer involved and the demand for unearned increase was wholly unjustified in law. Consequently I hold that the plaintiff shall be entitled to the payment claimed in the suit.
( 1 ) THE plaintiff has filed the suit for recovery of sum of Rs. 11,97,100. 00 with interest thereon. Before I refer to the pleadings, I feel it necessary to notice the facts culminating in the filing of the suit.
( 2 ) THE Delhi Development Authority had put up the plot of land measuring 20,000 square metres in Bhikaji Cama Place, District Centre, Rama Krishna Puram, New Delhi for auction. The booklet issued by the DDA, mentioning the terms and conditions of the auction, is marked as Ex. D-1. The terms and conditions of the auction in the form of booklet is also filed by the plaintiff and is marked as Ex. P-13. The auction was held on the 9th of September, 1980. Shri C. L. Jhunjhnuwala participated in the auction on behalf of the plaintiff company which was under process of incorporation. On behalf of the plaintiff, the highest bid was made by Mr. C. L. Jhunjhnuwala for Rs. 4. 36 crores. On the same date, on behalf of the proposed company, a sum of Rs. 1. 09 crores was paid towards earnest money. The receipt issued by the DDA is marked as Ex. D-3. A bid form was issued by the DDA. That is marked as Ex. D-2. It is mentioned therein that Shri C. L. Jhunjhunuwala was a promoter of the proposed private limited company. The names of the directors are mentioned in the form, for information of the DDA and the names are as under:-
1. Shri Chaman Lal Gupta 2. Shri Radhey Sham Saraf 3. Shri Harish Sharma 4. Shri Brajesh Batra 5. Shri C. L. Jhunjhnuwala 6. Shri L. N. Jhunjhnuwala 7. Shri Kishan Lal Mittal 8. Shri S. C. Jhunjhnuwala
( 3 ) ON the 10th of September, 1980, the DDA issued the letter of acceptance, Ex. P-1 or Ex. D-4, in the following terms:-
"to, Shri C. L. Jhunjhnuwala, (Promoter of a proposed Pvt. Ltd. Co.) 7a, Rajpur Road, Delhi. Sub: Auction of Hotel Plot measuring 20,000 sq. mtrs. in Bhikaji Kama Place, District Centre, R. K. Puram Delhi. Sir, I am directed to inform you that the bid of Rs. 4,36,00,000. 00 (Rupees four crores and thirty six lacs only) offered by you in the auction held on 9. 9. 1980 in respect of Hotel Plot mentioned above has been accepted by the Authority. 2. You are now requested to deposited within 90 days from the date of issue of this letter, a sum of Rs. 3,27,00,000. 00 (Rupees three crores and twenty seven lacs only) as detailed below through Demand Draft in favour of Delhi Development Authority. i) Total premium of the : 4,36,00,000. 00 plot. ii)Earnest money already: 1,09,00,000. 00 deposited vide receipt No. 4998 dated 9-9-80 iii) Balance amount to : 3,27,00,000. 00 be paid. (Rupees three crores and twenty seven lacs only) 3. Please note that part payment will not be accepted and if the amount demanded above is not paid within the prescribed period, it will be treated as breach of condition No. 1i (G) of the terms and conditions of auction and the earnest money deposited by you will be forfeited as provided under condition No. 1i (4) of the said terms and conditions. 4. You are also requested to send the terms and conditions of auction duly typed and signed on Rs. 2. 00 non-judicial stamp paper. The said terms and conditions be please also sent alongwith the Draft. If the terms and conditions duly signed on non-judicial stamp paper are not received alongwith the Demand Draft, the Draft will not be got encashed and interest @ 16% per annum will be levied against you for the period till the said terms and conditions duly typed and signed on the non-judicial stamp paper are submitted by you. Please note that interest chargeable on this account would be for the full fortnight or month, as the case may be, and not for a fraction thereof. 5. I may also inform you that besides the above amount, another amount calculated as per the terms and conditions of auction on account of yearly rent payable in advance will be required to be paid by you at the time of execution of the lease deed. The cost of stamping and registration of the lease deed and the Corporation Duty on transfer of immo
