2013 Supreme(Raj) 1497
RAJASTHAN HIGH COURT AT JAIPUR BENCH
Dinesh Mishra, Narendra Kumar Jain-II, JJ.
RIICO Ltd. and another - Appellant
Versus
Goyal Handicrafts Pvt. Ltd. - Respondent
D.B. Civil Special Appeal (W) No. 31 of 2013.
Decided On : 10-07-2013
Advocates:
For the Appellant:Amit Kuri, Advocate.
For the Respondent:Akhil Simlote, Advocate.
The main legal point established in the judgment is that the period for payment in a contract cannot begin to run earlier than the date of receipt of the communication by the addressee, and the principles of fair play and reasonableness govern the formation of contracts.
Headnote:
Industrial Plot Allotment Dispute - Industrial Allotment - [Section 11 of the Specific Relief Act, 1963, Section 73 of the Indian Contract Act, 1872] - The court discussed the provisions of Section 11 of the Specific Relief Act, 1963, and Section 73 of the Indian Contract Act, 1872, to determine the reasonableness of the time period for making further payment towards allotment. The court emphasized the principles of fair play and reasonableness in contract formation and concluded that the communication of a proposal is complete only when it comes to the knowledge of the person to whom it is made, and the period for payment cannot begin to run earlier than the date of receipt of the communication by the addressee. The court found that the appellant's requirement for payment within 7 days from the date of dispatch of the letter was unreasonable and unjustified, and the writ-petitioner had acted bona fide and with promptitude.
Fact of the Case:
The writ-petitioner participated in a limited bidding for an industrial plot, made the required payments, and was asked to make further payment within 7 days of the dispatch of a letter. The writ-petitioner claimed to have made the payment within a reasonable time from the date of receipt of the letter, but the appellant canceled the allotment, leading to a legal dispute.
Finding of the Court:
The court found that the appellant's requirement for payment within 7 days from the date of dispatch of the letter was unreasonable and unjustified. The court concluded that the writ-petitioner had acted bona fide and with promptitude, and the cancellation of allotment by the appellant was not reasonable.
Issues: The main issue was whether the requirement for payment within 7 days from the date of dispatch of the letter was reasonable and whether the writ-petitioner had acted in a bona fide manner.
Ratio Decidendi: The court held that the period for payment cannot begin to run earlier than the date of receipt of the communication by the addressee. The court emphasized the principles of fair play and reasonableness in contract formation and found the appellant's requirement for payment within 7 days from the date of dispatch of the letter to be unreasonable.
Final Decision: The court dismissed the appeal and upheld the order of the learned Single Judge, finding no substance in the appellant's arguments.
JUDGMENT
1. - This intra-court appeal is directed against the order dated 30.11.2012 whereby, the learned Single Judge of this Court has allowed the writ petition (CWP No. 3888/2009) filed on the grievance of the respondent (the respondent herein) against cancellation of the allotment of an industrial plot in the Industrial Area at Niwai on the alleged ground of the petitioners failure to make requisite payment within time. The learned Single Judge found the so called delay being not attributable to the writ petitioner; and the respondents being rather unreasonable in their stand.
2. Put in a nutshell, the relevant background aspects of the matter are o that in response to an advertisement inviting applications for allotment of industrial land at Niwai, the writ-petitioner Company made an application and was permitted to participate in the limited bidding with the requirement of depositing Rs. 60,000/- as earnest money and further requirement of depositing 10% of the payable amount immediately at the time of allotment. 5 The writ-petitioner participated in the bidding held on 26.05.2008; and an industrial plot bearing number D-261 ad-measuring 5,000 sq. mtrs. came to be allotted to it after acceptance of its offer at Rs. 640/- per sq. mtr. The writ- Petitioner had deposited a sum of Rs. 60,000/- towards earnest: and made payment of the requisite amount of Rs. 3,00,000/- by way of demand draft dated 26.05.2008.
3. Thereafter, under a communication bearing number 484 dated 11.06.2008 (Annex.5), the Senior Regional Manager of the appellant RIICO at Sawai Madhopur proceeded to call upon the writ-petitioner to make payment of further an amount of Rs. 4,72,000/- within 7 days of the 'date of dispatch of the letter.
4. The case of the writ-petitioner had been that the aforesaid communication was received on 17.06.2008 and in compliance thereof, the demand draft (Annex.6) was obtained on 19.06.2008, which was offered on 20.06.2008 to the said Senior Regional Manager, who asked the same to be sent with a covering letter and hence, the same was sent with a letter on 21.06.2008. The grievance of the writ- petitioner had been that despite itself having taken all timely steps, and being ready and willing, to make payment without delay, the officers of the RIICO declined to accept the offered payment and on the other hand, issued the communication dated 20.06.2008 (Annex.8) purportedly withdrawing the letter dated 11.06.2008 with forfeiture of the deposited amount of Rs. 3,60,000/-. The writ- petitioner submitted that the representations and requests made for consideration of its case were also declined by RIICO in a wholly unjustified manner and on untenable grounds.
5. The appellant RIICO submitted in opposition that the demand notice issued to the writ-petitioner was definitely served upon it prior to 17.06.2008 because the acknowledgment received back at Sawai Madhopur carried the stamp of Sawai Madhopur Post Office dated 17.06.2008. It was submitted that admittedly, the authorised representative of the writ-petitioner was out of country on 17.06.2008 and thus, the payment was not made within time; and the writ-petitioner sent the demand draft dated 19.06.2008 for a sum of Rs. 4,72,000/- only on 21.06.2008 whereas the allotment had already been canceled on 20.06.2008.
6. The learned Single Judge of this Court found untenable the stand of the RIICO and observed that the writ-petitioner had acted bona fide and with promptitude. The learned Single Judge also found unjustified the proposition of the appellant RIICO in asking the writ-petitioner to deposit the amount within 7 days of the 'date of dispatch of the letter and observed that the deposit having been made by the writ-petitioner within reasonable time from the date of receipt of the letter, the same ought to be taken as true compliance. The learned Single Judge proceeded to allow the writ petition, inter alia, with the following observations :
"The fact that the draft was prepared on the
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