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ALLAHABAD HIGH COURT
Sudhir Agarwal and Brijesh Kumar
Srivastava-II, JJ.
New Okhla Industrial Development
Authority —Appellant
versus
M/s. Marwan Hotels Pvt. Ltd. —Respondent
First Appeal No.1016 of 2002
Decided on 14.9.2015
For the Appellant:Anurag Khanna, Jafar Nayyar and Ramendra Pratap Singh, Advocates
For the Respondent:K.K. Shangloo, Rakesh Misra, S. Shekhar, Sudhir Kr. Srivastava, Sudhir Kumar and V.K. Singh, Advocates
Headnote:(a) Estoppel – Auction sale confirmed after receiving 25% of consideration amont with stipulation to pay balance 75% within 90 days – Plaintiff failing to pay even after reminders – Resisting the demand by defendant on ground that slum was not cleared before payment of balance amount, as assured – Also raising issue of not completing other infrastructure facilities – Plaintiff participating in auction without any reservation or condition – Aucton sale terms not providing any such condition – Non payment of complete bid money by plaintiff cannot be justified on any ground which was not a condition at the time of auction. (Para 19, 33)
First Appeal No. 150 of 1998; (1990) 1 SCC 731: AIR 1900 SC 699; AIR 2010 SC (Supp) 291 – Relied upon
(b) Contract – Aucgion sale – Defendant-appellant making all acts as per terms and conditions of auction viz. isuinh allotment letter, accepting the bid, acknowledging receipt of 25% bid amount and requiring plaintiff to deposit balance amount – Plaintiff making some complaint about encroachment by slum dwellers after receipt of allotment letter – Cannot be a relevant circumstance to justify non-paynment of balance amount. (Para 25, 26, 29)
(c) Administration of justice – Judicial propriety – Court below decreeing plaintiff’s suit relying on Commissioner’s report that some hutments existed around and on the plot – The report being of three years after allotment, could not be relied upon for taking the view that encroachments existed at the time of allotment. (Para 28, 30)
(d) Administration of justice – Judicial propriety – During pendency of suit filed by plaintiff his allotment cancelled with forfeiture of 25% of consideration amount already deposited – Plaintiff amding the planit but not the relief for declaration of letter dated 07.04.1993 as illegal or bad – Plaintiff also not making any prayer for refund of amount, already forfeited, by authorities concerned – In absence of any such amendement, court below could not have granted consequential relief. (Para 38)
(e) Specific Relief act, 1963 – Sections 38 and 41 – Plaintiff already committing breach of terms and conditions by not depositing 75% amount – Agreement automatically stands cancelled in terms of section 38 as soon as a breach is committed – Thus the agreement becoming unenforceable, in junction cannot be granted in view of section 41. (Para 41, 42)
(f) Administration of justice – Judicial propriety – Plaintiff not challenging letter of cancellation of allotment or forfeiture of amount already deposited – The letter already taking effect – It would continue and shall have all its consequences. (Para 44)
Result: Appewal allowed.
Sudhir Agarwal J.—Heard Sri Ramendra Pratap Singh, Advocate for appellant and Sri S. Shekhar, Advocate for respondent.
2. This is a defendant’s appeal under Section 96 of the Code of Civil Procedure (hereinafter referred to as the “CPC”), which has arisen from the judgment dated 29.08.2002 and decree dated 05.09.2002 passed by Sri Rajbhan Singh, VIth Additional Civil Judge (Senior Division), Ghaziabad in Original Suit No. 321 of 1992, whereby the court below has decreed suit and made a declaration that defendant-appellant is not entitled to recover 75% of auction money and interest thereon from plaintiff-respondent until it perform and complete the following works:
(Matter in other language)
“A. The community facility shown in the layout plan be not changed into commercial centre.
(Matter in other language)
B. The commercial centre be not fully developed.
(Matter in other language)
C. Till the time the unauthorised encroachment at the plot and in its vicinity is not removed.
(Matter in other language)
D. Communication facilities like telephone, telex and post office facility be not provided by the defendant.”
(English translation by the Court)
3. It has also directed defendant-appellant to restore plaintiff’s allotment and to not forfeit 25% of money deposited by plaintiff.
4. The plaintiff-respondent, M/s Marwan Hotels Private Limited, a Company registered under the Companies Act,1961 having its registered office at 17-Defence Colony, New Delhi, instituted Original Suit No. 321 of 1992 in the Court of Civil Judge, Ghaziabad pleading that defendant-appellant, i.e., New Okhla Industrial Development Authority (hereinafter referred to as the “NOIDA”) published an advertisement in daily newspaper “Hindustan Times” on 11.01.1989 offering plot No. C-18, Sector-4, Noida Complex on lease for the purpose of construction of a Restaurant and Hotel in accordance with parameters set up by Ministry of Tourism. The plot is situated on the main road, in the heart of fully developed commercial center, Sector-4, and there existed facilities of Telephone, Telex, Post Office, Banking etc. The plaintiff made highest bid for Rs. 40,75,000/- (at the rate of Rs. 4075/- per square meter). As per the terms and condition of auction, it deposited 25% i.e., Rs. 10,20,000/- at the time of auction. The remaining 75% of amount was to be deposited by plaintiff-respondent by 27.04.1989. The defendant had assured plaintiff that before payment of 75% amount, it will remove all slum dwellers from the site and shall also provide various facilities as per offer. The plaintiff sent letters dated 04.02.1989 and 20.02.1989 requesting defendant to comply with their assurance but in vain. In March, 1989, plaintiff received a lay out plan showing that instead of commercial, concerned area was declared as community center. The plaintiff sent letter dated 12.04.1989 requesting defendant to correct lay out plan, remove slum dwellers and develop area into commercial center but received no reply. Several reminders were also sent, i.e., dated 04.02.1989, 20.02.1989, 12.04.1989, 26.05.1989, 01.06.1989, 25.02.1991, 23.05.1991, 15.08.1991 and 28.12.1991. Instead of taking any action as per its assurance, defendant served a letter dated 24.02.1992 upon plaintiff demanding Rs. 30,55,000/- as balance auction money alongwith interest. Defendant was not entitled to demand interest since it has not observed its own part of obligation and on the contrary plaintiff has suffered due to their inaction. The defendant, however, informed plaintiff that either it should pay balance amount alongwith interest else 25% amount already deposited shall be forfeited and recovery certificate shall be issued to recover amount mentioned in letter dated 24.02.1992.
5. At this stage, plaintiff vide plaint dated 26.03.1992 instituted suit for declaration that defendant is not entitled to demand 75% of amount as well as interest thereon until it carry out change in lay out plan making conce
