Back
High Court Of Delhi
AGGARWAL ASSOCIATES (PROMOTERS) LIMITED - Appellant
Versus
DELHI DEVELOPMENT AUTHORITY - Respondent
Civil 2388 of 1994
Decided On : 11/01/1997
AUCTION - FORFEITURE OF EARNEST MONEY - DDA AUCTION - CONDITIONS OF AUCTION - RIGHT TO FORFEIT EARNEST MONEY - INTERPRETATION OF TERMS AND CONDITIONS OF AUCTION.
Fact of the Case:
The petitioner participated in an auction conducted by the Delhi Development Authority (DDA) and was the successful bidder for a plot. The petitioner deposited 25% of the bid amount as earnest money. However, the petitioner did not pay the balance amount within the stipulated time. The DDA sent a demand notice to the petitioner, but the petitioner responded by raising concerns about the possession of the plot due to a dispute between the DDA and the Municipal Corporation of Delhi (MCD). The petitioner sought confirmation from the DDA that the plot was free from disputes and encumbrances before making the final payment. The DDA maintained that it was ready to hand over possession of the property and that the petitioner's failure to pay the balance amount was a breach of the auction conditions.
Finding of the Court:
The court held that the petitioner was not entitled to a refund of the earnest money and that the DDA was justified in forfeiting the amount. The court noted that the petitioner had not acted in accordance with the terms and conditions of the auction notice and that the DDA was always ready to hand over possession of the property.
Issues: 1. Whether the DDA was entitled to forfeit the earnest money deposited by the petitioner? 2. Whether the petitioner was justified in not paying the balance amount due to the dispute between the DDA and the MCD?
Ratio Decidendi: The court relied on the Supreme Court's decision in Delhi Development Authority v. Grishthapana Cooperative Group Housing Society Ltd., where it was held that the earnest money deposited by a successful bidder in an auction can be forfeited if the bidder fails to pay the balance amount within the stipulated time. The court also noted that the terms agreed between the parties have to be considered for considering the question of the right to forfeiture by one of the parties to the contract.
Final Decision: The court dismissed the petitioner's writ petition and held that the DDA was justified in forfeiting the earnest money.
( 1 ) THE petitioner took part in the auction held by the DDA on 31. 3. 1994 and it was the successful bidder for the entire C. S. C. Nand Nagri Block- B, Delhi plot measuring about 1268. 32 sq. mts. for Rs. 30 lakhs. As per the conditions of auction, he deposited Rs. 7. 50 lakhs, being the 25% of the bid money. After having deposited the 25% of the money, the petitioner did not pay the balance. On 4. 4. 1994 the petitioner wrote to the DDA for the removal of the tubewell in the middle of the plot and re-road the drains running to the center of the plot. "the DDA by letter dated 7. 4. 1994 called upon the petitioner to pay 75% of the bid amount being Rs. 22,50,050. 00 (Rs. 50. 00 was towards documentation charges ). On 13. 4. 1994 the petitioner wrote to the DDA in the following terms :
"we refer to your Bid Acceptance/ Demand Notice dated 7. 4. 94 regarding the plot auctioned by DDA at CSC, Pocket-B, Nand Nagri (G. T. B. Enclave ). According to the directions given by Delhi Development Authority, we visited the site and tried to erect our board at site. However, the MCD Horticulture Department objected, damaged and removed the board from the site. The M. C. D. says that the site in question has been handed over to the M. C. D. and as such D. D. A. has no authority to hand over the site/land/sell without their consent as it is M. C. D. property now. Kindly look into the matter and issue necessary instruction to the concerned department of M. C. D. "the petitioner on 13. 4. 1994 lodged a complaint with the SHO against MCD. On 15. 4. 1994 the petitioner sent a communication to the Horticulture Department, second respondent for the return of the material of the petitioner at site. On 16. 4. 1994 the petitioner sent a letter to the first respondent DDA in the following terms:
"this is in continuation of our letter of even number dated 13. 4. 94 (DDA Dy. No. 12066 dated 13. 4. 94 ). Subsequently, we discussed the matter personally with you in this regard. The CSC Site at Pocket-B, Nand Nagri (Guru Teg Bahadur Enclave) was auctioned in public on 31. 3. 94. Our bid for Rs. 30,00,000. 00 has been accepted by D. D. A. on deposit of 25% of the bid value i. e. Rs. 7,50,000. 00 vide your confirmed Demand Notice No. 790, File No. 15 (01)94/cl dated 7. 4. 94. The date for payment of final premium has been fixed by D. D. A. as on 22. 5. 94 i. e. 45 days from 7. 4. 94. However, the D. D. A. has not replied to our letter dated 13. 4. 94 as yet. As informed you earlier, on 11. 4. 94 evening we erected our board 20 x 10 at site on 18 high rails, publicising the project. To our surprise the next day morning i. e. 12. 4. 94 the board was removed. On inquiry we came to know that the Horticulture Department of M. C. D. has removed the board after damaging it, alongwith rails and other fittings. On inquiry we are told by the concerned staff that the site in question is handed over to MCD on 21. 4. 93. We made further inquiries from M. C. D. and D. D. A. Horticulture Department and as per record maintained at both the offices the plot which was auctioned by the D. D. A. as a CSC is handed over to M. C. D. on 21. 4. 93 and since then the whole area is maintained by the M. C. D. We are therefore, put to a loss by this act on the part of M. C. D. and D. D. A. and mental torture and sentimental value of our Company which the public has a great regards for our achievements as Promoters and Builder in this area has suffered a lot. The D. D. A. has fixed 22. 5. 94 for payment of final premium. The plot in question seems to be in dispute between M. C. D. and D. D. A. Therefore, before we make final payment to D. D. A. , we require a confirmation in writing that the plot in question is free from dispute, encumbrances and will be handed over to us peacefully without any hitch. As the D. D. A. is at fault which has put us in trouble therefore, the payment of the final premium would be made only after 45 days from the fresh confirmation. "on 18. 4.
AI
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
