Jakson Engineers Pvt. Ltd. vs Delhi Development Authority And ...
2003 Latest Caselaw 999 Del

JUDGMENT

Sanjay Kishan Kaul, J.

1. The respondent DDA held auction on 08.08.1985 for plots and the petitioner was the successful bidder for leasehold rights in respect of plot No. C - 149, Rewari Line Industrial Area, Phase - II, New Delhi for a sum of Rs. 19, 40, 000/- and deposited the earnest money of 25% at the fall of the hammer amounting to Rs. 4, 85, 000/- .

2. The bid made by the petitioner was confirmed vide letter dated 12.09.1985 and the demand was made for the balance amount of Rs. 14, 55, 011/- to be paid within one month from the date of issue of the letter.

3. The petitioner visited the site, but found that the plot was encroached upon and occupied. There were few huts on the plot where people were living and the plot was being used as a godown/factory for truck body building. The petitioner, thus, set out these facts in a letter dated 10.10.1985 addressed to the respondent DDA and requested for the plot to be vacated so as to enable the balance amount to be deposited. The petitioner has also filed photographs to show encroachments on the plot.

4. It may be noted at this stage that the factum of encroachments on the plot has not been disputed and, in fact, in the affidavit dated 27.11.2001 filed on behalf of the respondent DDA, it has been admitted that it was so informed to the petitioner on 10.10.1985.

5. The petitioner received a letter dated 14.05.1986 thereafter referring to the allotment letter and the requirement to deposit the balance amount within one month. The petitioner was asked to furnish third copy of the challan in support of the payment deposited by 11.10.1985 within 15 days of issuance of the letter, failing which the offer of allotment of the plot would be treated as cancelled and earnest money forfeited.

6. The petitioner addressed a letter dated 16.10.1986 to DDA setting out the facts and unauthorised encroachments on the plot as also the request was made by the petitioner to get the encroachments cleared so that the balance payment could be made. Along with the said letter, the petitioner enclosed photocopy of the pay order dated 08.10.1986 for the balance payment in favor of DDA and stated that the same shall be deposited on confirmation by DDA of the encroachments having been cleared. A copy of the pay order has also been placed on record. This was followed up by a telegram dated 20.10.1986 sent by the petitioner and a letter dated 19.12.1986. In the said letter, the petitioner mentioned the fact that they have been sanctioned loan from the bank and are losing interest on the loan amount sanctioned. The petitioner continued to make representations, but to no effect and there was no favorable response. On the other hand, the petitioner was issued a letter dated 05.05.1987 stating that the allotment made in favor of the petitioner had been cancelled and the earnest money forfeited. The petitioner replied to the said letter vide response letter dated 14.05.1987 objecting to the same. The petitioner has also referred to the fact that the records of DDA also show that instructions were issued for clearance of the plot as also the directions of the Vice-Chairman in this behalf.

7. It appears that thereafter action was taken to remove the encroachments and the petitioner immediately addressed a letter dated 09.06.1987 to DDA referring to the public hearing granted to the petitioner on 15.05.1987 and stating that since the plot had been cleared, the bid of the petitioner be restored and the petitioner be permitted to deposit the balance amount. Another current pay order prepared by the petitioner dated 10.06.1987 for the balance amount was also enclosed. This was followed up by another reminder dated 19.06.1997.

8. The petitioner received a letter dated 13.08.1987 from DDA stating that the case of the petitioner had been referred to the Government of India, Ministry of Urban Development vide office letter of DDA dated 17.07.1987 since the Nazul Rules did not permit DDA to accept delayed payment in case of auction plots and further action would be taken when the reply is received from the Government of India. The petitioner continued to communicate on the said issue by various letteRs. It may be noticed that along with the writ petition, the petitioner has also given illustrations for three other cases where such bids have been restored.

9. The DDA received a response from the Government of India dated 24.09.1987 in respect of the case of the petitioner stating that the case had been examined and it had not been found necessary for the Government of India to intervene in the case and that DDA should take action in the case as per policy and rules in force.

10. The petitioner made a further representation and thereafter filed a petition under Section 20 of the Arbitration Act, 1940 before the Delhi High Court being Suit No. 312A/1989. The petition/suit filed by the petitioner was allowed vide Order dated 15.12.1995. The learned Judge noted the fact that even on 10.06.1987, the petitioner had paid the balance amount by way of demand draft, but the same was returned by DDA stating that it would take some time in accepting the balance payment. The DDA, however, filed an appeal against the same being FAO (OS) No. 92/1996. The said appeal was allowed vide Order dated 26.08.1996 on the ground that the arbitration clause could not have said to have come into operation in the absence of execution of the lease deed. The appellate order noted the fact of the petitioner tendering the balance amount on 10.06.1987, which was returned to the petitioner, as also the fact that the plot was again encroached upon by unauthorised persons. Though the Division Bench did not deem it appropriate to refer the matter to arbitration, it would be relevant to reproduce the observations of the Division Bench in the last paragraph of the judgment, which are as under :-

" 21. Before parting, we would like to observe that the present one is a hard case for the respondent. It appears to be not in dispute that the plot put to auction by the appellant-DDA was encroached upon by unauthorised persons. The appellant-DDA could not have been in a position to deliver vacant possession over the plot to the respondent even if it would have paid the balance amount in time. Presumably for this reason, the DDA was also gaining time and pursuing the Central Government to extend the time for payment of the balance amount to it so that the encroachment could be removed and vacant possession over the plot could be delivered to the respondent. The DDA did not succeed. It appears that the respondent is not to be blamed in the entire episode. It is a fit case where the DDA should avoid litigation and volunteer to allow a just relief to the respondent. "

11. In view of the aforesaid observations of the Division Bench, the petitioner commenced another set of communications to pursue the respondent DDA to take a favorable view, but vide letter dated 14.01.1997, the request was rejected stating that no relaxation could be made in the present case. The petitioner thereafter filed the present writ petition seeking quashing of the said letter dated 14.01.1997 and for a writ of mandamus directing the respondents to hand over the vacant physical possession of the plot on the petitioner depositing the balance amount.

12. At the stage of issuance of notice in the writ petition vide Order dated 18.02.1997, it was directed that the petitioner should deposit the balance amount of Rs. 14, 55, 011/- within a week with the respondents and subject to the deposit, the respondents were directed not to alienate, transfer or create any third-party interest in the plot in question. The petitioner in compliance of the said Order deposited the amount.

13. It may also be noted that in the proceedings of 07.01.1998, the plea of learned counsel for the petitioner was noted that DDA be directed to protect the property in question from encroachments and learned counsel for the respondent DDA stated that necessary steps would be taken. A specific direction was issued on the next date on 31.03.1998 for the respondent DDA to take steps to protect the property and vide Order dated 10.12.1999, it was directed that the said directions be complied with. The respondent DDA on 24.03.2000 stated that steps were being taken to get the plot in question free from all encroachments and on 16.11.2000, it was noted that DDA had deposited the amounts with Slum & J.J. Wing for relocation of jhuggi dwelleRs. The Slum & J.J. Wing was, thus, imp leaded as a party. It is thereafter these jhuggis were removed and a statement was made on 19.07.2001 by learned counsel for the Slum & J.J. Wing that possession of the plot had been handed over to DDA.

14. In the counter affidavit filed by the respondent DDA, it has been pleaded that no concluded contract had come into existence as the petitioner failed to deposit the balance 75% amount. It has been further stated that it was the bounden duty of the petitioner to have familiarised itself about the location and nature of the land and nothing more was required to be done by the respondent DDA. It is, thus, stated that the petitioner breached the terms and conditions of auction.

15. The respondent DDA has pleaded that the question of obligation of the respondent to hand over possession of the plot would be arising only if the balance 75% of the amount had been deposited and the petitioner could not avoid or refuse to pay the balance 75% amount on the ground of encroachment of the plot, which amounted to a unilateral breach of obligation. It is, thus, stated that the petitioner should have deposited the balance amount and thereafter asked the respondent to hand over the plot to the petitioner in discharge of its obligations and in case the respondent had been unable to hand over possession of the plot, the amount could have been refunded and the petitioner could also have claimed damages and other reliefs as permissible in law. It has been further stated that the matter in issue is of 1985 and the same cannot be agitated after a period of 12 years.

16. A great emphasis has been laid in the counter affidavit on the fact that the petitioner as a purchaser should have been known the position of the land and reliance has been placed on the principle of `purchaser beware'. The auction is stated to be an invitation to offer and the respondent accepted the offer and, thus, the contract could have come into existence only after the payment is made. The forfeiture of the earnest money is also justified.

17. The additional affidavit filed by the respondent DDA dated 08.09.1998 shows that the plot was encroached upon by about 45 - 47 jhuggis along with two shops and a small temple. In the affidavit, it is stated that these jhuggi dwellers were entitled to alternative sites and, thus, could not be removed. A further additional affidavit was filed on 27.11.2001 in pursuance to the Orders passed on 19.07.2001 explaining as to under what circumstances, the possession of the plot had not been handed over to the petitioner. This affidavit makes interesting reading. It is stated in the affidavit that the plot in question was put to auction on 08.08.1985 on `as is where is basis' and it was not mentioned in the terms and conditions of auction that the plot was a vacant plot. The auction purchaser is stated to have been informed by DDA about encroachment of the plot by slum dwellers on 10.10.1985. It has been stated that DDA cleared the encroachments over the plot on two occasions, but the auction purchaser did not deposit the amount. Reference has been made to the communication of DDA with the Union of India and it is stated that the Ministry refused to extend the time. The matter was administratively taken up by DDA for consideration again on the issue of condensation of delay vide letter dated 17.10.2001 and the Ministry informed the decision of the Government to condone the delay of payment of balance 75% premium subject to payment of interest and other charges as per rules. It was, thus, stated that DDA was prepared to hand over possession of the plot subject to the payment in terms and conditions set out in the letter of the Government of India dated 23.11.2001 and that the petitioner was liable to pay the following amounts :-

"i. Restoration charges @ Rs. 200/- per Sq. Mtr. Rs. 2,02,064/-

ii. Interest charge on balance Premium up to 24.02.1997 Rs. 41,21,169/-

iii. Amount spent on removal of encroachment    Rs. 15,90,000/-
             ------------------
     Total   Rs. 59,13,233/-
             =================="
 

18. The petitioner thereafter amended the writ petition seeking quashing of the letter dated 23.11.2001.
 

19. Learned counsel for the petitioner contended that in view of the subsequent developments, the real question to be considered by this Court was whether the conditions imposed by the subsequent communication dated 23.11.2001 can be said to be reasonable, fair and just. 
 

20. Learned counsel submitted that the present proceedings are suitable to decide the matter in controversy and has referred to judgment of the Supreme Court in The D.F.O. South Kheri and Ors. v. Ram Sanehi Singh, where it was held that a writ petition would be maintainable against a public authority invested with statutory powers even if the right to relief arises out of the alleged breach of contract. Learned counsel for the same proposition has also referred to judgment the Division Bench of this Court in P.N. Verma and Ors. v. Union of India and Ors., AIR 1985 DELHI 417.

21. Learned counsel contended that the petitioner cannot be burdened with the liability to pay for removal of encroachments since it was the duty of DDA to keep its land free from encroachments. The land was encroached upon at the time when the petitioner had to deposit the balance amount and even thereafter directions had to be issued by this Court to clear the land in question. It was, thus, contended that there was no legal or contractual obligation on the part of the petitioner to pay for removal of encroachment.

22. As regards the issue of charging of restoration charges, the plea raised by learned counsel for the petitioner was that the very cancellation was contrary to law and no liability could have arisen for restoration charges. It has been stated that there was not even a show-cause notice issued before the cancellation. Learned counsel in this behalf relied upon the judgment of learned Single of this Court in Surender Nath v. Delhi Development Authority & Anr., .

23. The claim of DDA for interest has been resisted on the ground that the petitioner was not at fault and the liability to pay interest would arise only in case of any fault of the petitioner. It has further been contended that there was no mention in the brochure about any cloud on the title or possession of the land being auctioned nor was it stipulated therein that the plot was being auctioned on `as is where is basis' .

24. In this behalf, learned counsel has referred to the provisions of Section 51 of The Indian Contract Act, 1872 ( hereinafter to be referred to as, `the said Act' ), which is as under :-

" 51. Promisor not bound to perform, unless reciprocal promiseready and willing to perform. - When a contract consists of reciprocal promises to be simultaneously performed, no promisor need perform his promise unless the promiseis ready and willing to perform his reciprocal promise. "

25. Learned counsel has, thus, contended that the petitioner cannot be asked to perform his promise when the respondent DDA is not ready and willing to perform the reciprocal promise. It is, thus, stated that the respondent DDA was not even in a position to hand over possession of the plot in question to the petitioner and it can be no defense that the petitioner should have paid and later on filed a suit for recovery of money and damages, if the respondent could not hand over possession of the plot.

26. Learned counsel has referred to judgment of the Supreme Court in Bihar State Housing Board and Ors. v. Lalit Ram, , which was a case of allotment of flat where the initial amount was paid, but there was failure to pay the balance amount and monthly Installments as per agreement. Balance was paid in lump sum as per directions of the Court and the issue was about the claim of interest on the balance amount. The Supreme Court declined the request for interest on the ground that construction of the flat was not complete and possession not given. The allottee therein had been intimating to the Board time and again to make the flat residentiable by putting up the fittings and fixtures as it remains only in a skeleton form.

27. It has been stated by learned counsel for the petitioner that the respondent DDA has been enjoying money since 1997 without any benefit to the petitioner. Learned counsel also referred to the fact that the balance amount was tendered twice - once when a copy of the pay order was enclosed with the letter dated 16.10.1986 and again on 10.06.1987.

28. Learned counsel also referred to the examples of three cases where encroachments were removed after 10 to 12 years and demand was accepted without interest. It has, thus, been submitted that in the present case it is even open to the Court to mould the relief appropriately by taking cognizance of the subsequent events as held by the Supreme Court in Rajesh D. Darbar and Ors. v. Narasingrao Krishnaji Kulkarni and Ors., 2003 VI AD (S. C. ) 243.

29. Learned counsel for respondents No. 1 and 2 DDA, on the other hand, contended that the writ petition filed by the petitioner is not maintainable under Article 226 of the Constitution of India as the petitioner is effectively seeking specific performance of contract. Learned counsel referred to judgment of the Supreme Court in Divisional Forest Officer v. Bishwanath Tea Co. Ltd., where observations were made that ordinarily, where a breach of contract is complained of, a party complaining of such breach may sue for specific performance of the contract, if contract is capable of being specifically performed, or the party may sue for damages and the High Court in its extraordinary jurisdiction would not entertain a petition either for specific performance of contract or for recovering damages.

30. Learned counsel further contended that the obligation of DDA to deliver possession of the plot arises only on the bidder making full payment offered by the bidder and the petitioner having failed to pay the full amount is not entitled to a decree of specific performance and, thus, for a writ of mandamus. In this behalf, learned counsel referred to clause 5 of the terms and conditions of auction. At this stage, it would be useful to re-produce some of the relevant terms and conditions, which are as follows :-

" 2. BIDDING AT AUCTION AND SUBMISSION OF APPLICATIONS :

. . . . . . . . . . . .

vi) The sizes of the plots announced by the D.D.A. being only approximately, the bidder whose bids are accepted shall have to accept variation up to 15 either way in the area of the plot for which the bid has been offered subject of course to payment or refund, as the case may be, of the amount of premium for such varied area at the auction rate. The auction rate per sq. m. for this purpose shall be calculated by dividing the amount of the premium offered as highest bid by the area of the plot announced.

vii) After the confirmation of the bid, the bidder will be informed of such confirmation in writing and the bidder shall within one month thereof pay to the Delhi Development Authority the balance amount of the bid in cash or by Bank Draft or by cheque guaranteed by a scheduled bank as `Good for payment' for three months in favor of the Delhi Development Authority. The extension of time will be allowed, 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).

viii) A person who fails to pay the balance amount of his bid to the Authority within one month of confirmation of the bid or within such period as may have been specified otherwise in accordance with the Delhi Development Authority (Disposal of Developed Nazul Land) Rules, 1981 shall forfeit the earnest money and it shall be competent for the Vice Chairman to re-auction the plot.

. . . . . . . . . . . .

3. EXECUTION OF LEASE DEED, PAYMENT OF GROUND RENT AND OTHER MAIN CONDITIONS OF LEASE.

iv) Every allottee shall be liable to pay in addition to the premium payable ground rent for holding nazul land allotted to him under the said Rules, at the said rate of rupee one per annum per plot for the first five years from the date of allotment and thereafter it shall be payable at the rate of two an half per cent of the premium originally payable.

5. DELIVERY OF POSSESSION OF PLOTS.

After the acceptance of the bid and payment of full amount of premium offered by the bidder, the possession of the plot will be handed over and lease deed executed. "

It is, thus, contended that the obligation to delivery possession under clause 5 would arise only on full premium being paid.

31. Learned counsel for the respondents submitted that a person guilty of anticipatory breach is not entitled to seek the equitable relief for specific performance. Since the petitioner had committed anticipatory breach of contract, the petitioner would not be entitled to a decree of specific performance and cannot invoke the writ jurisdiction of this Court. Learned counsel in this behalf referred to judgment of the Supreme Court in Jawahar Lal Wadhwa & Anr. v. Haripada Chakroberty, in view of the observations made in the said judgment to the effect that where a party to contract commits an anticipatory breach of the contract, the other party to the contract may treat the breach as putting an end to the contract and sue for damages, but in that event he cannot ask for specific performance. The other option open to the other party, namely, the aggrieved party is that he may choose to keep the contract alive till the time for performance and claim specific performance but, in that event, he cannot claim specific performance of the contract unless he shows his readiness and willingness to perform the contract. It is, thus, contended that the petitioner has no option to sue for specific performance of the contract.

32. Learned counsel for the DDA has also referred to the provisions of Section 38 of the said Act, which is as under :-

" 38. Effect of refusal to accept offer of performance. - Where a promisor has made an offer of performance to the promise, and the offer has not been accepted, the promisor is not responsible for non-performance, nor does he thereby lose his right under the contract.

Every such offer must fulfill the following conditions :-

(1) it must be unconditional;

(2) it must be made at a proper time and place, and under such circumstances that the person by whom it is made may have a reasonable opportunity of ascertaining that the person by whom it is made is able and willing there and then to do the whole of what he is bound b his promise to do;

(3) If the offer is an offer to deliver anything to the promisee, the promisemust have a reasonable opportunity of seeing that the thing offered is the thing which the promisor is bound by his promise to deliver.

An offer to one of several joint promises has the same legal consequences as an offer to all of them. "

Learned counsel has submitted that the aforesaid Section has to be read with the provisions of Section 19 of the Specific Relief Act, 1963 specifying as to against whom specific performance of contract can be enforced.

33. Learned counsel has further contended that the order for performance of a contract where reciprocal promises have been provided for is contained in Section 52 of the said Act, which is reads thus :-

" 52. Order of performance of reciprocal promises. - Where the order in which reciprocal promises are to be performed is expressly fixed by the contract, they shall be performed in that order; and when the order is not expressly fixed by the contract, they shall be performed in that order which the nature of transaction requires. "

It is, thus, contended that the petitioner failed to perform his part of the contract and obligation of the respondent arose only thereafter.

34. Learned counsel for respondents No. 1 and 2 DDA has further contended that there is no accrued right in favor of the petitioner, which would have arisen only on the payment being made by the petitioner and the stage for possession never arose. Learned counsel has submitted that DDA having cancelled the bid on 05.05.1987, a suit for specific performance should have been filed within a period of 3 years of the same under Article 54 of the Limitation Act and, thus, under the present proceedings, the claim of the petitioner is even otherwise time barred. Learned counsel has also contended that the plot was to be sold on `as it where is basis' and the petitioner should have been aware of what he was purchasing.

35. At conclusion of the submissions, a query was put to learned counsel for the petitioner whereas the petitioner would be willing to pay some interest in view of the fact that the money had remained with the petitioner. Learned counsel for the petitioner on instructions stated that though it was not fault of the petitioner, the petitioner would have no objection, if the Court, while considering the issue of moulding the relief, imposes any reasonable interest on the petitioner, but taking into consideration the fact that there was no default on account of the petitioner and that the petitioner had even deposited the balance amount in pursuance to directions of this Court in the year 1997.

36. I have considered the submissions advanced by learned counsel for the parties, which are quite elaborate as noticed above.

37. The first aspect to be considered arises from the rights and obligations of the parties. There is no doubt that the petitioner was obliged to deposit the balance 75% of the amount within the time stipulated. There was, however, also a corresponding obligation on DDA to hand over possession of the plot thereafter. This is apparent from clause 5 of the terms and conditions of auction. It is also not disputed that the plot in question was encroached upon and DDA had taken no steps to remove the encroachments prior to the auction or even till the stage where the letter for balance amount was sent to the petitioner. The petitioner subsequently informed DDA on 10.10.1985 about the same. In fact, in the affidavit dated 27.11.2001, it has been stated that the auction purchaser was informed by DDA about encroachments on the said date. This would show that DDA was not in a position to perform its corresponding obligation to hand over possession of the plot in question.

38. The aforesaid affidavit as well as the counter affidavit filed by DDA also show that not only was the DDA not in a position to hand over possession of the plot, but also took the surprising stand that there was not even an obligation to clear the encroachments. Thus, DDA had no intention to hand over a vacant physical possession of the plot in question. The plea, in fact, raised is that the same was on `as is where is basis' and that the petitioner should have verified the position at site.

39. It is not disputed that none of the terms and conditions of auction specified that the plot in question was encroached upon or that the auction purchaser was to purchase the plot along with the encroachments. That such a plea should be raised by a public authority to say the least is shocking. The DDA is seeking to wash its hands of the obligation to hand over a clear plot to the petitioner. The DDA was, in fact, duty bound to protect the public land before auction and it failed in its duties to do so. The land is after all developed with public funds and the DDA cannot be absolved of its responsibility to have protected the plot. The DDA, in fact, permitted the plot to be encroached upon and then, when it has been unable to remove the encroachments, has taken a plea in the counter affidavit that the plot was sold on `as is where is basis'. In this behalf, condition 2(vi) of the terms and conditions of auction be referred to, which provided that size of the plot could vary uptil 15% either way and the prospective purchaser would have to pay the differential. Thus, where variation was likely to occur from the specifications or conditions of the plot, it was subsequently provided for in the terms and conditions.

40. The willingness of the petitioner to pay the balance amount is apparent from the letter of the petitioner dated 10.10.1985 itself wherein it was stated that the petitioner would deposit the amount, the moment encroachments were removed. It is a fallacious plea raised by the respondent DDA that the petitioner should have deposited the amount first and on failure of DDA to hand over possession of the said plot, the amount could be refunded back and the petitioner would have the option to even recover damages. This amounts to saying that DDA not being in a position to hand over vacant physical possession of the plot and, thus, going to commit breach of the contract, wanted the petitioner first to comply with its obligations and block its money knowing fully well that DDA was going to commit breach of its side of the obligations and then be left to remedy of the civil proceedings to recover its amounts and damages. The petitioner even with the letter dated 16.10.1986 had enclosed a copy of the pay order (not a cheque) saying that the funds were ready, but that the plot should be cleared. Not only this, even subsequently vide letter dated 09.06.1987 and in the public hearing on 10.06.1987, the cheque was handed over, but the same was returned to the petitioner on the ground that it would take time to remove the encroachments. Thus, the willingness of the petitioner to comply with the obligation to pay the balance amount is not in doubt, but the petitioner was naturally insisting on DDA being in a position to hand over vacant physical possession of the plot to the petitioner.

41. The reference by learned counsel for the respondent DDA to the provisions of Section 38 of the said Act would not be of much use because they deal with the issue of refusal to accept the offer of performance. In the present case, it was an invitation to offer. The petitioner made a bid, which was accepted by DDA. The only obligation, which remained to be performed by both the parties, was for the petitioner to make payment and for DDA to hand over possession of the plot.

42. The first illustration to Section 51 of the said Act itself would show that where delivery on payment was not possible, there would be no obligation to pay for the same. This is the position in the present case.

43. The reference by learned counsel for the respondent DDA to judgments of the Supreme Court would not be of much assistance since the Supreme Court even in Divisional Forest Officer's case (supra) had said that the civil suit would be the appropriate remedy `ordinarily'. This is not an ordinary situation where a public authority is asking the auction purchaser to pay the amount in respect of plot of which it is not in a position to hand over possession because of the encroachments on the same.

44. The Supreme Court has held that the Court in exercise of its jurisdiction under Article 226 of the Constitution of India is not devoid of powers to do justice in such a case and, in fact, in view of subsequent facts, the relief can also be appropriately moulded and subsequent events can be taken note of [ Rajesh D. Darbar's case (supra) ].

45. Even in such cases where the matters are of contract and where auction has taken place of land vesting with DDA, which has to be dealt with in terms of the Delhi Development Authority (Disposal of Developed Nazul Land) Rules, 1981, this Court is not debarred from exercising its powers under Article 226 of the Constitution of India, as held by the Supreme Court in The D.F.O. South Kheri's case (supra). It may also be noticed that DDA is under an obligation to keep the land free from encroachments under clause 5 of the terms and conditions of auction.

46. The petitioner has also raised the plea of discrimination and in this behalf learned counsel for the respondent DDA was asked to examine the cases referred to by learned counsel for the petitioner and submit a synopsis of the cases. One such case was of M/s. Skipper Tour Pvt. Ltd., where the bidder failed to make payment within time and even Installments were given of premium. A closer example is of M/s. Time Properties & Promoters dealing with plot No. 5, Community Centre, Wazirpur Industrial Area. The bidder deposited 25% of the amount at the fall of the hammer, but did not deposit the balance amount since the plot was encroached upon and possession was not capable of being handed over. The petitioner was not burdened with interest in terms of a decision of the Ministry of Urban Development communicated vide letter dated 06.11.1992 in respect of a demand letter issued on 24.03.1983 and, thus, a fresh demand letter without interest was issued to the petitioner and possession was handed over in 1993. The facts of this case are, thus, almost similar, if not identical to the present case, where no interest has been charged for a period of almost 10 years even though the bidder did not deposit the balance amount for the same reason, which was on account of failure of the DDA to be able to hand over the plot in question.

47. Insofar as the plea of limitation and delay and laches raised by learned counsel for the respondent is concerned, it has to be noticed that the petitioner has been pursuing its rights from day one. The petitioner initially filed proceedings for reference of dispute to arbitration, which went in appeal. The time period spent in Court in prosecuting these proceedings has, thus, to be excluded. Not only this, the petitioner made a representation in view of the observations of the Division Bench in appeal, but the same was also rejected, where after the present writ petition has been filed. I, thus, see no force in this plea of learned counsel for the respondent.

48. I have considered it appropriate to deal with the aforesaid submissions in view of the elaborate arguments, even though in view of the subsequent decision taken by the concerned authorities vide letter dated 23.11.2001, what is to be really examined is whether the respondent authorities were right in cancelling the allotment of the petitioner on the terms and conditions as set out in the affidavit dated 27.11.2001.

49. The first charge in question, to my mind which is almost absurd, is the cost of removal of encroachments. How can the petitioner be burdened with this cost of removal of encroachments? The DDA was required to protect its land, however, it failed to do so; DDA auctioned the plot with encroachments; DDA was, thus, not capable of delivering possession to the petitioner; yet DDA demands amount spent for removal of encroachments from the petitioner. The said demand is totally illegal and without any basis and certainly the petitioner cannot be burdened with this amount.

50. The second amount relates to restoration charges. As noticed above, there was no occasion to cancel the allotment of the petitioner or forfeit the amount, once the DDA was not in a position to hand over possession of the plot in question. If the cancellation could not have been done, there is no question of restoration. Interestingly, DDA had never taken a stand at that stage that since it was incapable of handing over possession, it was refunding the earnest money. The earnest money was appropriated and forfeited and a spacious plea was sought to be advanced that the petitioner ought to have known about the encroachments. The DDA cannot be permitted to say that there was no specific term and condition to hand over vacant possession of the plot. Such a condition has to be presumed unless to the contrary. I fail to appreciate how even such a plea could be advanced by a public authority like DDA.

51. The last issue would be the claim of interest. The petitioner deposited 25% of the amount and has been made to run from pillar to post because of the fault of the respondent DDA. It has been deprived of the enjoyment of the plot for all these years. Even while holding that the arbitration proceedings cannot be an appropriate remedy, the Division Bench of this Court observed that the present case is a hard case and that DDA could not have been in a position to deliver the vacant possession of the plot to the petitioner and the DDA was apparently gaining time to pursue the matter with the Central Government to extend the time for payment so that the encroachment could be removed, but the DDA did not succeed. It was held that apparently the petitioner could not be blamed in the entire episode and DDA should avoid the litigation and volunteer to allow a just relief to the petitioner. The DDA failed to adhere to the advice of the Division Bench. Thus, there can be no question of the demand of interest as made by DDA.

52. The only further issue arises on account of the fact that the amount did remain with the petitioner, though it was as a consequence of the failure of DDA to hand over the plot. Learned counsel for the petitioner fairly stated that the petitioner has no objection to some reasonable interest to be paid and this concession appears to be on account of the fact that there was escalation in the price of land during the time and the petitioner is willing make certain payments taking into consideration the benefit, which would arise from escalation of the price of land, even though the petitioner has suffered over this period of time.

53. Taking into consideration all the aforesaid facts and circumstances of the case, I consider it appropriate that the petitioner should pay interest @ 6% per annum from the due date till 24.02.1997 when the amount was deposited by the petitioner with DDA. This is also keeping in view the fact that the petitioner has not even been able to enjoy the plot for the last six years even after deposit of the balance amount.

54. A Writ of Mandamus is, thus, issued quashing the demand made in pursuance to the letter dated 23.11.2001 and a Writ of Mandamus is also issued directing the respondent DDA to make the demand as aforesaid of interest @ 6% per annum within a maximum period of 1 month from today and on the petitioner depositing the said amount and executing necessary documents, possession of the plot in question be handed over to the petitioner within two weeks thereafter. The lease deed in respect of the plot in question be also executed within a maximum period of 3 months from today.

55. The writ petition is allowed in the aforesaid terms with costs of Rs. 5, 000/-.