Rishi Gagan Constructions (P) ... vs Delhi Development Authority
1987 Latest Caselaw 179 Del

JUDGMENT

Yogeshwar Dayal, J.

(1) This order will dispose of Civil Writ Petition Nos. 2833 and 2834 of 1986. Since the facts of both the petitions are identical facts of Cwp No. 2833/86 are taken.

(2) This petition is filed by M/s. Rishi Gagan Constructions (P) Ltd. and one of its Director Sh. Manmohan Singh for quashing an order dated 8th October, 1986 intimating the petitioner No. I that since they have failed to deposit the balance amount of premium in respect of the plot in dispute within the stipulated period, the bid has been cancelled and the amount of earnest money has been forfeited.

(3) This order was passed by Director (CL) of Delhi Development Authority, a statutory authority constituted under the Delhi Development Act, 1957, (hereinafter referred to as the 'Act'). Under Section 22 of the Act the Central Government has placed certain Nazul land at the disposal of the Delhi Development Authority constituted under the aforesaid Act and thereafter such Nazul lands have to be dealt with by the Dda according to Rules and directions given by the Central Government in this behalf. The Central Government has notified the Delhi Development Authority (Disposal of Developed Nazul land) Rules, 1981 (hereinafter called the 'Rules') and these rules provide for the manner of dealing with nazul land developed by or under the supervision of the DDA.

(4) The Dda advertised a scheme for development of Janakpuri District Centre in West Delhi and also for that purpose notified that certain plots of land on which multi-storeyed structures were to be permitted to be built were to be auctioned. The auction was to be held in accordance with the Rules. The terms and conditions of the auction as announced under the aforesaid Rules contemplated that the officer conducting the auction shall normally accept, subject to the confirmation by the Vice-Chairman, the highest bid offered at the fall of hammer at the auction and the person whose bid has been accepted shall pay as earnest money, a sum equivalent to 25% of his bid either in cash or by bank draft in favor of the Delhi Development Authority. It also provided that after the acceptance of the bid, the bidder w

(5) The plot in dispute, namely, plot No. 8, Block A-3, local shopping Centre, Janakpuri, New Delhi which was to be built upon subject to controls of Dda, was put to auction on 2nd April, 1986 on the aforesaid terms Petitioner No. I made a bid of Rs. 8,72,000 for the said plot and as per terms and conditions of the auction deposited a sum of Rs. 2,18,000 with respondent No. 1 by bank draft dated 2nd April, 1986 as earnest money being 25% of the total amount of bid. The petitioner No. I received on 2nd June, 1986 a letter No. F. 22 (12)/86-lmpl/Comml. purported to be dated 22nd May, 1986 from respondent No. 1 (DDA) whereby petitioner No. I was informed that their bid of Rs, 8,72,000 offered in the auction held on 2-4-1986 had been confirmed by the Vice-Chairman, Delhi Development Authority. Petitioner No. 1 was requested to deposit within 90 days from the date of issue of that letter a sum of Rs. 6,54,050 being the balance amount payable towards the premium of plot in question.

(6) Petitioner No. 1 deposited the aforesaid balance amount of Rs. 6,54,050 with respondent No. 1 on 21st August, 1986 Along with their covering letter dated 21st August, 1986. The petitioners had deposited this amount together with a sum ofRs. 4,48,300 being the balance amount in respect of premium for another Plot No. 7, Block A-3, Local shopping Centre, Janakpuri, New Delhi, auction for which was also held on 2nd April, 1986. Respondent No. I duly accepted the balance payment and issued receipt dated 21st August, 1986 for the same.

(7) It was thereafter the petitioners received the impugned order dated 8th October, 1986 from respondent No. 2 on behalf of respondent No. 1 wherein it has been mentioned that petitioner No. I had failed to deposit the balance amount of premium in respect of plot in question within the stipulated period and consequently the bid had been cancelled and amount of earnest money had been forfeited. The petitioners made a representation dated 17th October, 1986 to the Vice-Chairman of Delhi Development Authority bringing on record the complete facts. In addition the petitioners moved another representation dated 28th October, 1986 to the Chairman, Delhi Development Authority that they understood the communication to deposit ihe balance amount within 90 days to mean within 3 months. It was, therefore, mentioned that the payment was presumed to be within time and no extension of time for making the payment was sought. It was requested that the order of cancellation might be withdrawn and necessary extension of time be given in terms of Clause 2(viii)(a) of the Terms and Conditions of auction and regularise the bid.

(8) It was also stated that the petitioners were ready and willing to pay any interest charges that might be levied. The representation was submitted firstly to the Chairman, Delhi Development Authority i.e. the Lieutenant- Governor of Delhi who after looking into the matter directed his P.A. to make an endorsement on the same to the effect that the request seems to be genuine and the same may be considered favorably by the Director (CL) DDA.

(9) Thereafter the petitioners were informed by respondents that the petitioners representation vide letter dated 17th October, 1986 addressed io the Vice-Chairman, Delhi Development Authority bad been considered and rejected. No decision on the petitioners' representation dated 28th October, 1986 to the Chairman, Dda has been conveyed to the petitioners.

(10) The respondent filed a counter-affidavit wherein the averments of the petitioners made in para 9 of the writ petition to the effect that he had received a letter dated 22-5-1986 from respondent No. 1 on 2-6-86 informing petitioner No. 1 that offer made by the petitioner for Rs. 8,72,000 in the auction held on 2-4-1986 has been confirmed by the Vice-Chairman, were not specifically denied. Para 6 of the counter-affidavit of Ms. Janak Juneja, Secretary, Delhi Development Authority, simply stated : "THAT the said letter dated 22-5-1986 was sent by Registered A/D Post and the Writ Petitioner having not deposited the balance amount within 90 days from the date of the issue of the letter dated 22-5-1986 the bid was cancelled and a communication to that effect was sent to the Writ Petitioner on 8th October, 1986 bearing No. F 22 (14)/86/CL and the earnest money was forfeited".

(11) For facility of reference we may again reproduce Term No. 2(vii) dealing with the question of acceptance/confirmation of the bid announced at the time of auction, which is as under : "AFTER the acceptance of the bid, the bidder will be informed of such acceptance in writing and the bidder shall, within 90 days thereof pay to the Delhi Development Authority, the balance amount of the bid in cash or by bank draft in favor of the DDA. If the bid is not accepted, the earnest money will be refunded to the bidder without any interest unless it may have been forfeited under para 2(viii) below."

(12) The question involved is the meaning of this term. It is obvious that if we compute the period of 90 days from the date of issue of the letter, the deposit was out of time. But if we compute 90 days from the day the petitioner was communicated the acceptance, the deposit of the balance amount was within time.

(13) It may be noticed that before the bidding at the auction could result into a contract, the bid was required to be accepted/confirmed. The confirmation was required from the Vice Chairman, Delhi Development Authority. It is true that in the communication dated 22nd May, 1986, the petitioners were required to deposit within 90 days the balance of the bid amount from the date of issue of the letter. But in the terms and conditions announced at the time of auction and reproduced earlier as Clause 2(vii) the acceptance of the bid, had to be informed in writing and the bidder was required to pay the balance amount within 90 days thereof. If one looks at the aforesaid term "acceptance of the bid in writing" it contemplates its being conveyed to the person who had made the bid. The conveyance of the acceptance in writing was only on 2nd June, 1986. The deposit for the balance consideration had been made on 21st August, 1986. It was thus within 90 days of the communication in writing of the acceptance.

(14) On behalf of the Delhi Development Authority, attention of this Court was invited to the provisions of Rule 29 of the Delhi Development Authority (Disposal of Developed Nazul land) Rules, 1981. It may be mentioned that these Rules have been framed by the Central Government providing for the manner of dealing with Nazul land developed by or under the control and supervision of the Delhi Development Authority in exercise of the powers conferred by Clause (j) of Sub-section (2) of Section 56 read with Sub-section (3) of Section 22 of the Delhi Development Act, 1957 (61 of 1957). Chapter Iii of these Rules provides allotment of land by auction and the Rules in this behalf are Rules 26 to 32. The procedure for auction is provided in Rule 27 which is as under: "27. Procedure for auction-The Authority shall publish before-hand in newspapers of different languages having wide circulation, a public notice of not less than thirty days, giving the following details of the plots to be allotted by auction : (a) number of plots, (b) size of plots, (c) area and zone of plots, (d) time, date and place wherefrom the terms and conditions of auction and other details, including the terms and conditions required to be fulfillled and fees payable for participation in the auction can be had by the intending purchasers, (e) the time, date and place of auction, and (f) such other details as the Authority may consider proper."

(15) Conduct of auction is provided in Rule 28 which is as under : "28. Conduct of auction- (1) The auction shall be conducted by an officer appointed by the Vice-Chairman in this behalf."

(16) Rule 29 provides for sale to the highest bidder, which reads as under: "29. Sale to the highest bidder-The officer conducting the auction shall normally accept, subject to confirmation by the Vice- Chairman, the highest bid offered at the fall of the hammer at the auction and the person whose bid had been accepted shall pay as earnest money, a sum equivalent to 25 per cent of his bid and he shall pay the balance amount to the Authority within fifteen days of acceptance of the bid or within such period as the Vice-Chairman may specify in the public notice under Rule 27 or in another public notice."

(17) It may be noticed that under Rule 29, the balance of the amount payable to the Delhi Development Authority is required to be made within fifteen days of the acceptance of the bid or within such period as the Vice- Chairman may specify in the public notice under Rule 27 or in another public notice. In this light, one has to appreciate the period which the Vice- Chairman specify in the public notice issued while prescribing the procedure for auction or another public notice. In the terms and conditions of allotment, the relevant clause in this behalf is Clause 2(vii) which has been reproduced earlier. Here the period of 15 days is enlarged to 90 days and the amount has to be paid within 90 days of the information of acceptance in writing to the bidder. Whether we look at Rule 29 or Clause 2(vii) of the Terms and Conditions announced before auction, the amount has to be deposited within 90 days of acceptance. Acceptance will be complete only when it is communicated to the person whose offer is being accepted or whose bid is being accepted. Since the communication of the acceptance in the present case was only on 2nd June, 1986, the deposit made in the present case is within 90 days of Clause 2(vii) of the Terms and Conditions. Even under Rule 29 of the aforesaid Rules, the balance amount is required to be paid within the particular period of the acceptance of the bid. Here again the period will start when the acceptance of the bid is communicated to the bidder.

(18) It was pointed out on behalf of the Delhi Development Authority that in the communication of the acceptance of bid dated 22nd May, 1986, the bidder had been requested to deposit within 90 days from the date of issue of this letter and the deposit was beyond time as communicated in this letter. It will be noticed that this request may be within the meaning of Rule 29 of the aforesaid Rules because Rule 29 contemplates balance amount to be paid to the Authority within 15 days of acceptance of the bid or within such period as the Vice-Chairman may specify in the public notice under Rule 27. In the present case in the public notice, the period specified was made different from the one specified in Rule 29 and is given as per Clause 2(vii) of the Terms and Conditions of auction. In view of the terms and conditions of auction, the bidder was required to be informed of such acceptance in writing and the bidder was required to pay within 90 days thereof the balance amount of the bid. The Vice-Chairman in the public notice of the Terms and Conditions of allotment had changed the period as contemplated by Rule 29. But the starting point for computing the period of 90 days was on the date of communication of acceptance in writing as specified by the Vice-Chairman in the public notice under Rule 27 or in another public notice. However, in public notice or in the terms and conditions announced at the time of auction the period was changed from 15 days to 90 days of the acceptance of the bid in writing.

(19) A somewhat similar question arose before the Supreme Court in the case of Raja Harish Chandra Raj Singh v. The Deputy Land Acquisition Officer and another, where the Supreme Court was concerned with the meaning of the expression. "The date of the Collector's award" as occurring in proviso (b) to Section 18(2) of the Land Acquisition Act, 1894. The Supreme Court while interpreting the words, "The date of the Collector's award" held, "WHERE the rights of a person are affected by any order and limitation is prescribed for the enforcement of the remedy by the person aggrieved against the said order by reference to the making of the said order, the making of the order must mean either actual or constructive communication of the said order to the party concerned. So the knowledge of the party affected by the award made by the Collector under Section 12 of the Land Acquisition Act, 1894, either actual or constructive is an essential requirement of fairplay and natural justice. Therefore, the expression, "the date of the award" used in proviso (b) to Section 18(2) of the Act must mean the date when the award is either communicated to the party or is known by him either actually or constructively. It will be unreasonable to construe the words from the date of the Collector's award used in the proviso to Section 18 in a literal or mechanical way."

(20) This decision is really based on the principle of fairplay. On a parity of reasoning, the date of communication of order under Rule 25 or Rule 29 must be the date of actual or constructive knowledge of the order of confirmation by the Vice-Chairman. In this case it will mean that date of receipt of communication by the petitioner. Thus the deposit made by the petitioner was within time.

(21) For the aforesaid reasons, we find impossible to sustain the impugned order dated 8th October, 1986 passed on behalf of the respondents in relation to both the plots in dispute and the same is thus liable to be quashed and is hereby quashed. The respondents are accordingly directed to issue the necessary lease in relation to both the plots in dispute in favor of petitioner No. 1 in accordance with law. Petitioners will also be entitled to costs which are assessed at Rs. 1100, one set of fee for the counsel as there was common counsel in both the cases.

--- *** ---