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IN THE HIGH COURT OF DELHI
Subramonium Prasad, J.
Surjeet Dhall - Appellant
Versus
Delhi Development Authority - Respondent
W.P.(C) 8295 of 2022
Decided On : 31-05-2022




Bidders in a tender process must adhere to the terms and conditions outlined in the auction documents; failure to comply justifies cancellation of bids and forfeiture of earnest money.

Headnote:(A) Constitution of India - Article 226 - Cancellation of bid by authority and forfeiture of earnest money - Petitioner’s bid for property accepted, followed by default in payment of balance premium and multiple requests for extensions denied - Authority acted within rights and per established terms of e-auction rules, leading to cancellation of bid and forfeiture of EMD. (Paras 1, 10, 11)

(B) Judicial Review in Tender Processes - It is established that bidders have no right beyond fair evaluation; acceptance of tender terms prevents subsequent challenges - Due process followed in granting extensions invalidates claims of arbitrariness. (Paras 12, 13)

Facts of the case:
Petitioner participated in an e-auction for a property, was declared a successful bidder but failed to remit the remaining premium within the stipulated time, resulting in cancellation of the bid and forfeiture of substantial earnest money.

Findings of Court:
The cancellation of the bid and forfeiture of earnest money by the Respondent/DDA were justified, as the terms of the e-auction document were adhered to, and the Petitioner was granted extensions.

Issues: Whether the Respondent/DDA’s cancellation of the Petitioner’s bid was arbitrary and if the subsequent forfeiture of EMD was justifiable given the request for extensions.

Ratio Decidendi: The court affirmed that the cancellation was warranted as per e-auction conditions and that the Petitioner could not demand further extensions of time as a matter of right after accepting the terms.

Result: Writ petition dismissed.

Table of Content
1. petitioner seeks relief for forfeited emd. (Para 1 , 2)
2. petitioner argues against dda's cancellation. (Para 3 , 4)
3. court reviews dda's adherence to auction terms. (Para 5 , 6 , 7 , 9 , 10)
4. bidders accept auction terms, cannot contest later. (Para 11 , 12)
5. court dismisses petition; no further extension granted. (Para 13 , 14)

JUDGMENT

Subramonium Prasad, J. The instant writ petition under Article 226 of the Constitution of India has been filed by the Petitioner with the following prayers:

    "a) Set aside the order of the Respondent dated 27.12.2019 wherein the bid of the Petitioner has been cancelled and Rs.1,69,60,750/- paid by the Petitioner as EMD has been forfeited;

    b) Direct the Respondent to refund the entire Earnest Money Amount deposited by the Petitioner along with interest @ 15% per annum.

    c) In alternative direct the Respondent to allot an alternate plot of the same size and in the same area in which the Petitioner had been declared as a successful bidder in the e-auction and while doing so, the entire amount already paid by Petitioner in 2019, along with the interest accrued thereon, may be adjusted against the premium of the alternate Plot to be allotted;

    d) Pass any other order and further orders as this Hon'ble Court may deem fit and proper in the facts and circumstances of the present case"

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

i. It is stated that the Petitioner/bidder participated in an e-auction conducted by the Respondent/DDA on 14.01.2019 in respect of Plot No. 109, Block No. T-1, admeasuring 399 Sq. Meter in Mangolpuri Industrial Area Phase I, Delhi (hereinafter referred to as, "the property in question") for Rs.6,78,43,000/-. It is stated that the Petitioner paid 5% of the total amount of the property in question, i.e. Rs.33,92,150/-, as Earnest Money Deposit (hereinafter referred to as `EMD').

ii. The bid of the Petitioner was accepted on 22.01.2019 and the Petitioner was declared a successful bidder of the property in question. In accordance with the terms of the e-auction notice, the Petitioner/bidder paid the remaining 20% of the premium amount, i.e. Rs.1,35,68,600/- to the Respondent/DDA.

iii. It is stated that on 06.03.2019 a Demand-cum-Allotment letter was issued to the Petitioner/bidder by the Respondent/DDA wherein the Petitioner/bidder was asked to deposit the balance 75% of the premium amount, i.e. Rs.5,08,82,250/-, within 90 days from the receipt of the said Demand-cum-Allotment letter.

iv. It is stated that on 23.05.2019, the Petitioner/bidder gave a representation to the Respondent/DDA seeking extension of time for depositing the balance 75% of the premium amount. On 03.06.2019, the stipulated time for depositing the balance 75% of the premium amount expired. It is further stated that after 14 days of the expiry of stipulated time, i.e. on 17.06.2019, the request of the Petitioner/bidder was accepted by DDA, and the Petitioner/bidder was granted the first extension of time for a period of 90 days, i.e. till 01.09.2019, subject to the Petitioner/bidder paying applicable interest on the balance amount as mentioned in the e-auction document.

v. Material on record discloses that vide a letter dated 14.08.2019, the Petitioner/bidder sought a further extension for 90 days for depositing the balance 75% of the premium amount. It is stated that on 18.10.2019, the request of the Petitioner/bidder was accepted by DDA and the Petitioner/bidder was granted extension of time for a period of 90 days, i.e. till 30.11.2019, subject to the Petitioner/bidder paying applicable interest as mentioned in the e-auction document on the balance amount.

vi. It is stated that on 03.11.2019 the Petitioner/bidder wrote another letter to the Respondent/DDA requesting them to further extend the time for 90 days for depositing the balance 75% of the premium amount. It is stated that vide letter dated 27.12.2019 the request of the Petitioner/bidder for further extens

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