Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2008 Supreme(Del) 424

IN THE HIGH COURT OF DELHI
Sanjiv Khanna, J.
Appellants: Chhanga Lal and Ors.
Vs.
Respondent: M.C.D.
W.P.(C) Nos. 7967, 8142, 8167, 8181, 8506, 8616 and 9093/2007 and 69, 1040, 1045, 1046, 1074, 1085, 1086, 1142, 1188, 1189, 1294, 1405, 1590 and 1593/2008
Decided On: 08.04.2008

Advocates Appeared:
For Appellant/Petitioner/Plaintiff:Pankaj Kumar, Adv. in W.P.(C) Nos. 1590 and 1593/2008, Sugriv Dubey, Adv. in W.P.(C) Nos. 7967, 8167, 8181 and 8616/2007, S.K. Sinha, Parvinder Kaur Malhotra and Ritika Gupta, Advs. in W.P. (C) Nos. 1040, 1045, 1046, 1074, 1085, 1086, 1142, 1188, 1189 and 1405/2008 and D.K. Sharma, Adv. in W.P.(C) 9093/2007, Prabhat Ranjan, Adv. in W.P.(C) Nos. 8142 and 8506/2007 and Ajit Prasad, Adv. in W.P.(C) 1294/2008, Shiv Kumar Sharma, Adv. For Respondents/Defendant:Madhu Tewatia and Sidhi Arora, Advs. in WP(C) Nos. 7967, 8142, 8616 and 8167/2007, Mansi Gupta, Adv. in WP(C) Nos. 1074, 1294 and 1593/2008, Sumita Kapil, Standing Counsel and G.P. Dwivedi, Adv. in WP(C) No. 1590/2008, Smita Shankar and G.P. Dwivedi, Advs. in WP(C) No. 1189/2008, Sanjeev Sabharwal, Adv. in WP(C) Nos. 9093/2007 and 1189, 1040 and 1405/2008 and Anoop Bagai, Adv. for respondent No. 1 in WP(C) No. 8181/07, S.S. Sahu, Adv. for Sonia Sharma, Adv. for G.N.C.T. in WP(C) No. 1294/2008, Mukesh Gupta, Adv. in WP(C) No. 1085/2008, Sanjay Goel, Adv. in WP(C) No. 1045/2008, Rajeev Sharma, Adv. for respondent No. 2 in WP(C) No. 8506/2007, S.P. Sharma and Shishir Singh, Advs. for respondent No. 2 in WP(C) No. 8142/2007, P.L. Gautam, Adv. in WP(C) No. 1142/2008, Ajay Arora, Adv. in WP (C) No. 1040/2008, Sanjeev Sabharwal, Adv. for respondent No. 2 in WP(C) Nos. 1046, 1074, 1142, 1085, 1086, 1188 and 1198/2008 and Smita Shankar, Adv. for respondent No. 1 in WP(C) No. 1188 and 1198/08 and V. Babu Joseph, Adv. for UOI and Suparna Srivastava, Adv. for MCD

The judgment establishes the legal principle that in cases of fraudulent misrepresentation, the innocent party can rescind the contract and claim damages. It also highlights the right to restitution under the Contract Act.

Headnote:
Stray Cattle - Allotment of Dairy Plots - Sections 2(g)-2(i), 19, 19A, 64 of the Contract Act, 1872 - The judgment discusses the fraudulent allotment of dairy plots, misrepresentation by the applicants, and the entitlement to refund of the amount deposited by them towards the purchase of the plot. The court examines the legal principles of voidable contracts, misrepresentation, and the right to restitution under the Contract Act, and concludes that the applicants are entitled to a refund of the balance amount deposited by them.
Fact of the Case:

The Municipal Corporation of Delhi (MCD) prepared a re-settlement scheme for shifting unauthorized dairies to Ghogha on the outskirts of Delhi. Public notices were issued inviting applications for allotment of dairy plots. Allegations of fraudulent allotment of plots led the court to reconstitute the Monitoring Committee. The court found that the petitioners did not meet the eligibility criteria and had made misrepresentations in their applications.
Finding of the Court:

The court found that the petitioners did not meet the eligibility criteria and had made misrepresentations in their applications. The court concluded that the applicants are entitled to a refund of the balance amount deposited by them towards the purchase of the plot.
Issues: Misrepresentation by the applicants, entitlement to refund of the amount deposited by them towards the purchase of the plot.
Ratio Decidendi: The court applied the legal principles of voidable contracts, misrepresentation, and the right to restitution under the Contract Act, and concluded that the applicants are entitled to a refund of the balance amount deposited by them.
Final Decision: The court directed the MCD to refund the balance amount to the petitioners within a period of 6 weeks from the date of the order by crossed cheques. In case the MCD does not make payment within 6 weeks from the date of the order, it shall be liable to pay interest from the date of the order till payment at the rate of 10% per annum.

JUDGMENT

Sanjiv Khanna, J.

1. Menace of stray cattle in Delhi has resulted in a series of directions being issued by this Court in WP(C) No. 3791/2000 titled as "Common Cause v. Union of India". Municipal Corporation of Delhi (hereinafter referred to as MCD for short) prepared a re-settlement scheme for shifting of unauthorized dairies to Ghogha on the outskirts of Delhi. Approximately 180 acres of land has been earmarked and allotted to MCD to develop a colony on self-financing basis. Allotment of dairy plots was to be made on first come first serve basis as per circular No. 539/Dir./VS./2006 dated 1/8/2006 issued by MCD. Public notices were thereafter issued inviting applications for allotment of dairy plots. The relevant public notice taken on by MCD reads as under:

Honble Delhi High court has issued directions in writ petition No. 3791/2000 Common Cause v. Union of India and Ors. that all the unauthorized dairies run in the Urban area of Delhi be got closed. In compliance the Government has taken the decision to relocate in developed area in Ghogha the unauthorized dairies. There is permission to carry on dairy activities in this area in the master plan as also this area can be approached conveniently through road.

All the dairy owners are thereforee informed by this notice that the Delhi Municipal Corporation is going to start development in Ghogha a dairy colony and is also inviting applications from the dairy owners operating within the city area for booking of plot which is as follows:

1. 60 sq.mtr. plot for fairy with five cattles.

2. 96 sq.mts. plot for dairy with eight cattles.

The rate/price of the developed plot would be Rs. 2500/- per sq.mts. The rate/price of the plot is inclusive of development charges i.e. of civil work, road, sewerage, electricity, water, gardening and cleaning. It does not include the expenses required for putting of the shed for the cattle. The said expense will have to be borne by the owner of the plot.

The owner of the cattles according to the requirements can book plot in the office of the Veterinary Office of the concerned zone. The price of the plot will have to be deposited only after acceptance of the booking by the department. Thereafter date for deposit of the amount will be notified.

Those persons who will not book the plot, they will have to close down their dairies immediately otherwise will have to suffer consequences. Plot can be booked by 20th September, 2004.

/- Rakesh Mehta

Commissioner

Delhi Municipal Corporation.

2. The form prescribed by MCD in column 4 required the applicant to state the place where the dairy was being presently run and column 5 required the applicant to give details of number of cattles and the size of the plot for which application was being made i.e. 60 sq.mts. or 96 sq.mts. The applicant was also required to verify the application form by declaring that the information furnished by him was true and correct to his knowledge and nothing was concealed and in case any information given in the form was found to be incorrect, the applicant would be responsible for the same and would face legal consequences.

3. 5857 applications were received for booking of as many as 8344 dairy plots out of which 2569 applications were for plots measuring 60 sq.mts., while the remaining 5775 applications were for plots measuring 96 sq.mts. Thereafter by public notices published in news papers on 13.10.2004, the applicants were required to deposit 50% of the developed cost of the plot i.e. Rs. 1250/- per sq. mts. The balance amount was payable after layout plan, roads and drains were constructed. The last date of payment of Rs. 1250/- per sq. Mts. was extended up to 31.1.2005.

4. Said applications were examined and thereafter in the month of May and August, 2005 allotment letters were issued by MCD. The allotment letter stated as under:

This is to certify that the aforesaid plot(s) is/are allotted in the Ghogha

Dairy Colony for the purposes of running the dairy activities

Click Here to Read the rest of this document

2008 Supreme(Del) 424

IN THE HIGH COURT OF DELHI Sanjiv Khanna, J. Appellants: Chhanga Lal and Ors.Vs.Respondent: M.C.D.W.P.(C) Nos. 7967, 8142, 8167, 8181, 8506, 8616 and 9093/2007 and 69, 1040, 1045, 1046, 1074, 1085, 1086, 1142, 1188, 1189, 1294, 1405, 1590 and 1593/2008 Decided On: 08.04.2008

The judgment establishes the legal principle that in cases of fraudulent misrepresentation, the innocent party can rescind the contract and claim damages. It also highlights the right to restitution under the Contract Act.

Cases Referred (8)

IN THE HIGH COURT OF DELHI
Sanjiv Khanna, J.
Appellants: Chhanga Lal and Ors.
Vs.
Respondent: M.C.D.
W.P.(C) Nos. 7967, 8142, 8167, 8181, 8506, 8616 and 9093/2007 and 69, 1040, 1045, 1046, 1074, 1085, 1086, 1142, 1188, 1189, 1294, 1405, 1590 and 1593/2008
Decided On: 08.04.2008