R.K. Saxena vs Delhi Development Authority
2000 Latest Caselaw 256 Del

ORDER

Dr. M.K. Sharma, J.

1. The present writ petition is directed against the communication dated 1.7.1999 issued by the Respondent/Authority canceling the bid of the petitioner in respect of Plot No. 109, Site-I, Shankar Road, Delhi-110007 on the ground of non-payment of premium within the stipulated period. By the aforesaid communication the petitioner was further informed that the earnest money deposited by the petitioner had also been forfeited and the petitioner was informed that the cheque towards refund of premium after deducting the forfeited money would be sent to him.

2. Subsequent to an advertisement issued by the Respondent/Authority an auction sale was held by the Delhi evelopment Authority in respect of a two side open plot being Plot No. 109, Site-I , Shankar Road, Delhi measuring about 83.12 Sq. Mts. Terms and Conditions of the aforesaid sale by auction have been placed on record. One of the aforesaid Conditions was that the successful bidder would have to pay a sum equivalent to 25% of his bid amount either in cash or by Bank Draft in favour of the Delhi Development Authority at the fall of the hammer and the balance 75% amount shall have to be paid within 60 days from the date of the issue of Demand Letter. A proviso is added to the aforesaid condition laying down that the Delhi Development Authority may extend the last date of payment when the ViceChairman of the Delhi Development Authority is satisfied that sufficient reasons exists for doing so, upto the maximum period of 180 days, subject to payment of interest on the balance amount @ 18 % per annum where the delay is 30 days or less and 25% per annum for a period exceeding 30 days. It is also a condition therein that in case the payment is not received within the stipulated period communicated in the demand letter, the auction bid shall automatically stand cancelled and 25% earnest money would stand forfeited without any notice.

3. On 28.11.1995 auction for sale of the aforesaid plot was held by the Delhi Development Authority and in the said auction the petitioner was the highest bidder and his bid at Rs. 28,18,000/-was accepted by the respondent. On the very same day the petitioner paid 25% of the bid amount which is equivalent to Rs. 6,54,500/- in accordance with terms and conditions of the auction sale. The demand letter was issued to the petitioner by a letter dated 3.1.1996 in terms of which the balance 75% namely Rs. 19,63,545/- was required to be paid by the petitioner in accordance with the terms and conditions of the auction sale within 60 days of the letter i.e. by 2.3.1996. The petitioner, however, requested for extension of time for payment of the balance amount by his letter dated 19.2.1996 on which date the petitioner deposited another installment of Rs. 5,50,000/- leaving a balance of Rs. 14,13,545/- . The request of the petitioner for extension of time for payment was considered by the respondent and by communication dated 29.3.1996 the petitioner was informed that his request for extension of time in making the payment of the remaining amount had been acceded to subject to payment of interest at 18% per annum. By the said letter the petitioner was also informed that all the terms and conditions for auction would remain the same. However, the petitioner failed to make payment of the balance amount payable by him within the extended time but again prayed for extension of time to deposit the balance by his letter dated 2.7.1996. By letter dated 8.8.1996 the respondent granted an extension of time for 180 days beyond the due date i.e. 29.8.1996 for making payment of the balance premium, subject to payment of interest @ 25% per annum. The petitioner was also informed that the terms and conditions of auction sale would remain the same. The aforesaid two intimations extending the time has been placed on record as ANNUXURES-5 & 6 to the counter affidavit filed by the respondent. Even within the aforesaid extended period no payment was made and by his letter dated 2.9.1996 the petitioner again sought for extension of time for making payment of the balance amount. It transpires from record that thereafter petitioner paid certain amounts and according to the petitioner the entire amount stands paid. The Vice-Chairman of the Delhi Development Authority, however, canceled the bid of the petitioner by applying the terms and conditions of the auction sale and directed refund of the balance deposited by the petitioner and a communication in that regard was sent to the petitioner which is challenged in the present writ petition.

4. Counsel for the petitioner submitted that since the entire amount as demanded by the respondent stood paid by the petitioner prior to the cancellation of the bid and the said amount having been accepted and appropriated by the respondent auction cancelling the bid was unwarranted and illegal and is, therefore, liable to be set aside. In support of the contention the counsel for the petitioner relied upon the decision of this court in Reliable Laboratories (P) Ltd. & Anr., Vs. Delhi Development Authority and Another . It was also submitted that the entire payment was accepted by the respondent/authority and they also appropriated the said amount and they were silent over the issue for a period of 2-1/2 years and, therefore, the subsequent cancellation of the bid is liable to be set aside and quashed. On the other hand, counsel appearing for the respondent submitted that the action for cancellation of the bid was resorted to by the respondent in accordance with the terms and conditions of the auction sale and, therefore, no grievance could be made as against the aforesaid action taken by the respondent in canceling the bid. It is also submitted that the terms and conditions of the auction sale do not permit any extension of period beyond extended period of 180 days and the deposits made by the respondent unilaterally were not pursuant to any demand by the respondent and, therefore, no liability could be fastened on Delhi Development Authority for such deposits. In support of the submissions the learned counsel relied upon a Division Bench decision of this court in M/s. Behare Brothers Vs. Delhi Development Authority and Another . It was also submitted that the judgment relied upon by the petitioner Reliable Laboratories (P) Ltd. & Anr. (supra) has no application to the facts and circumstances of the case.

5. In the light of the aforesaid submission of the counsel appearing for the parties, I have perused the records placed before me as also the decisions referred to and relied upon by the counsel appearing for the parties.

6. In Reliable Laboratories (P) Ltd. & Anr., it was held by the Single Bench of this court that where time for payment of bid was extended in previous cases, the D.D.A. cannot cancel the bid when it has accepted the balance amount from another bidder, though paid belatedly. In the said case it was held by this court that there was no valid explanation coming from the respondent as to why the balance amount was accepted from the petitioners and the bid was canceled.

7. In M/s. Behere Brothers (supra) it was held by a Division Bench of this court that the word 'shall' in Rule 29 of the Delhi Development Authority (Disposal of Developed Nazul Land) Rules, 1981 and the provisions of forfeiture of earnest money as a consequence of non-payment of the balance amount accompanied by use of work 'shall' in Rule 32 also makes the provision mandatory. It was further held that the petitioner tried to invoke power of the respondent to extend the time which it did not and therefore, the prayers made by the petiioners was wholly meaningless. In the aforesaid Division Bench decision of this court reference was also made to the decision in M/s. Reliable Laboratories Case (supra) and after considering the ratio laid down therein the Division Bench proceeded to held as is overhead hereinabove.

8. It is also necessary to refer to Rule 29 of the Delhi Development Authority (Disposal of Developed Nazul Land) Rules, 1981. The said rule, inter alia, also deals with the provisions for allotment by auction which is governed by Chapter 3 of the Rules. Rule 29 is also included in the said Chapter 3, which is as follows:-

"29. Sale to the highest bidder-The officer conducting the auction shall normally accept, subject to confirmation by the ViceChairman, 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 of 25 per cent of his bid and he shall pay the balance amount to the Authority within fifteen ays 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.

"Provided that Vice Chairman may extend the date of payment where he is satisfied that sufficient reason exists for doing so, upto a maximum of 180 days subject to payment of interest on the balance amount at the rate of 18% per annum where the delay is thirty days or less and 25% per annum for a period exceeding 30 days."

Rule 32 lays down the provisions for forfeiture of earnest money where it is stated that a person who fails to pay the balance amount of the bid within the period provided in Rule 29 shall forfeit the earnest money and it would be competent for the Vice-Chairman to re-auction the plot. The aforesaid provision of Rule 29 and Rule 32 have been held to be mandatory.

10. When the fact of the present case are scrutinised in the backdrop of the aforesaid legal position as settled by this Court it would be found that the petitioner was granted extension of time for making payment of the balance amount payable by the petitioner twice. The extension was granted by the respondent for a total period of 180 days after levying interest @ 25% per annum. The aforesaid extension for payment for a period extending to 180 days was the period to which extension could be granted in terms and conditions of the auction sale and also in terms of Rule 29 of the Rules.

The petitioner admittedly paid the balance amount which was payable by him beyond the extended period of time i.e. 180 days. Such payments when however, tendered by the petitioner unilaterally without any demand notice being served on the petitioner allowing him such opportunity or benefit cannot be accepted as a valid tender.

11. In my considered opinion, therefore, the ratio of the decision laid down by the Division Bench of this Court in M/s. Behere Brothers (supra) squarely applies to the facts and circumstances of this case. No extension of time could have been granted by respondents for making payment of the balance amount beyond 180 days in terms of Rule 29 of the Rules and Clause II of the Terms and Conditions of the Auction sale. The respondents, there-fore, acted legally and within its jurisdiction in cancelling the bid of the petitioner and directing the refund of the balance amount. The forfei-ture of the earnest money is also in accordance with the provisions of Rule 32 of the Rules as also Clause II of the Terms and Conditions of Auction sale. The petitioner could not have deposited the balance amount beyond the period of 180 days that also unilaterally and without any demand being issued to him for permitting it to deposit the amount beyond 180 days and, therefore, the said deposit cannot be taken as a legal tender. Such deposits made by the petitioner unilaterally and without obtaining permission from the responsible officer of the Delhi Development Authority and without issuance of any demand notice cannot be considered as a valid and legal tender of money in accordance with law and, therefore, the said amount shall be refunded to the petitioner in accordance with law.

12. In view of the aforesaid facts and circumstances of the case, I do not find any merit in this writ petition and the same is dismissed.