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IN THE HIGH COURT OF DELHI
Subramonium Prasad, J.
Veena Garg - Appellant
Versus
Delhi Development Authority - Respondent
W.P.(C) 6297 of 2020 & CM Appls. 22390 of 2020, 20540 of 2021 & 20541 of 2021
Decided On : 19-04-2022




Bidders must adhere to tender conditions, and failure to comply results in forfeiture of earnest money, as upheld by relevant clauses in the contract.

Headnote:(A) Delhi Development Authority Act - Clauses regarding Earnest Money Deposit, E-Auction Terms.

(B) Legal principles regarding forfeiture of earnest money established; bidders cannot deviate from tender conditions.

(C) The court asserted that not depositing required premium within stipulated time leads to forfeiture.

Facts of the case:
The petitioner bid for industrial property, deposited 5% EMD, failed to deposit 20% of bid premium due to illness, and sought extension and refund of EMD.

Findings of Court:
Demand for the 20% premium was consistent with tender requirements, and the forfeiture of EMD was lawful under terms.

Issues: Whether the request for an extension of the deposit period was justified and if the DDA's actions were arbitrary.

Ratio Decidendi: Bidder's obligations under tender are binding; the DDA's refusal to extend payment timeline did not violate constitutional principles nor was it arbitrary.

Result: Writ petition dismissed.

Table of Content
1. conditions for refund of emd based on tender terms. (Para 2 , 7 , 12)
2. timeliness of deposit obligations in auction bidding. (Para 4 , 5 , 10)
3. arguments regarding the petitioner's health and responsibility. (Para 6 , 9)
4. contractual obligations prevent deviation in tender process. (Para 8 , 11 , 13)
5. dismissal of the writ petition due to lack of merit. (Para 14)

JUDGMENT

Subramonium Prasad, J. This writ petition has been filed seeking the following prayers:

    "a) Allow the Present petition;

    b) Direct DDA to refund the amount illegally retained by them to the Petitioner along with interest of 18% p.a. from the date of deposit"

2. The facts, in brief, leading to the instant petition are as follows:

i. It is stated that on 09.03.2019, the Respondent/DDA had issued notice that e-auction of industrial property on `as is where is basis' would be conducted. The application for e-auction was made available from 01.04.2019 and the last date for submission of the mandatory documents, along with Earnest Money Deposit (EMD) was 21.04.2019.

ii. The Petitioner herein sought to bid for sub-unit No.128, plot No. B-351, Mangolpuri Industrial Area Phase-1, and consequently, she submitted her online application on 16.04.2019, along with EMD of Rs.10,51,259/- (5% of the reserve price).

iii. The Petitioner received an e-mail dated 27.04.2019 informing that her bid stood the highest, subject to acceptance of the bid by Department/Corporation. Thereafter, another e-mail dated 01.06.2019 was received by the petitioner with the subject `Letter of Intent'. The award value was stated to be Rs.3,21,24,000/-.

iv. As per the Tender Document for E-Auction (2018-19), the Petitioner was expected to deposit 20% of the bid premium and the difference of 5% reserve price at second stage within 7 days from issuance of the Letter of Intent after acceptance of the bid by the competent authority.

v. It is stated that on account of ill health, the Petitioner failed to deposit 20% of the bid premium as was required. Accordingly, the Petitioner sent a letter dated 10.06.2019 to the Deputy Director (Industrial), DDA, stating that she had only received information about her bid being accepted on the night of 07.06.2019. It is stated that since the petitioner had been hospitalised, she was unable to deposit the requisite amount. The petitioner accordingly sought for an extension of 15 days to deposit the balance amount. In response to this letter dated 10.06.2019, the Deputy Director (Industrial) vide letter dated 01.07.2019 rejected the Petitioner's request for grant of extension for a period of 15 days.

vi. It is stated that the Petitioner has sought for a refund of the 5% EMD that had been deposited by her during the first stage. A legal notice dated 21.09.2019 has also been sent to the Respondent. However, the Petitioner is yet to receive any response with regard to the refund of the EMD. vii. Aggrieved by the same, the Petitioner has approached this Court by way of the instant writ petition.

3. Heard Mr. Akash Nagar, learned counsel for the Petitioner, Mr. R. K. Dhawan, learned Standing Counsel for the DDA and perused the material on record.

4. Mr. Akash Nagar, learned Counsel for the Petitioner, contends that the Petitioner only came to know that she was the highest bidder on 07.06.2021, with the Letter of Intent having been issued to her on 01.06.2021 demanding a payment of 20% of the bid premium which was to be paid within 7 days of the issuance of the said Letter.

5. Learned Counsel for the Petitioner states that the Petitioner was ill from 02.06.2019 and had been advised to take bed rest. He contends that she had been admitted in the emergency ward of Satyawadi Raja Harish Chandra Hospital, Narela, Delhi and, therefore, she was precluded from making the payment because of reasons beyond her control. He states that she had written a letter on 10.06.2019

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