Sunil Madnani vs Dda And Anr.
2004 Latest Caselaw 772 Del

JUDGMENT

Pradeep Nandrajog, J.

1. DDA conducted auction of a residential site being No.7, New Rajinder Nagar, New Delhi. The plot measures 121.50 Sq.Mtrs. Auction was held on 14.1.1992. Parents of the petitioner, Late Smt.Pushpa Madnani and Sh.Balram Madnani made a bid in the sum of Rs. 15,55,000/-. It was the highest bid. At the fall of hammer, 25% of the bid amount, being Rs. 3,88,750/- was deposited by them on 14.1.1992.

2. Bid being confirmed, on 15.1.1992, a demand for the balance sum of Rs. 11,66,295/- was raised. It included a sum of Rs. 45/- as documentation charges. The amount was to be paid by 14.3.1992. Payment was not deposited within the stipulated period. It is stated in the petition that reason for non-payment was the sudden sickness of Sh. Balram Madnani.

3. Smt.Pushpa Madnani claims to have submitted an application for extension of time on 25.3.1992. She claims to have deposited a sum of Rs. 25,000/-. She deposited another sum of Rs. 5,50,000/- on 31.7.1992. Thus, by 31.7.1992 a sum of Rs. 9,63,750/- stood deposited with the DDA.

4. Nothing transpired thereafter. Pushpa Madnani died on 2.6.1993 and Balram Madnani died on 13.6.1993.

5. Petitioner claims that due to some problems and business compulsions, he was living separately from his parents. He was not aware that his parents had submitted a bid for the plot in question and that the bid was confirmed, requiring them to pay the full bid amount.

6. On 10.1.1997, a letter was received by the petitioner, addressed to his parents enclosing therewith a cheque in the sum of Rs. 5,75,000/- from the DDA. It was indicated in the letter that the bid was cancelled and after deducting the earnest money, remaining amount was being returned. Petitioner made various representations for reconsideration and recall of the order cancelling the bid. When nothing fruitful happened, present petition was filed praying that the letter dated 10.1.1997 cancelling the bid be set aside and mandamus be issued to DDA to accept the balance payment from the petitioner.

7. Counter affidavit filed by the DDA states that petitioner's parents did not deposit the full amount as per the bid confirmation letter dated 15.1.1992. Accordingly, the bid was automatically cancelled. It is stated that under the terms of the auction, DDA, Vice-Chairman could extend the time for making payment provided such application is made at least 7 days prior to the last date of making payment. It is stated that no such application was ever made.

8. It is stated that Smt.Pushpa Madnani of her own will, deposited amounts as per her convenience without seeking any extension of time.

9. During the pendency of the present petition, petitioner sought redressel through Lok Adalat as well. Proceedings were taken up by the learned Presiding Judge of the Lok Adalat. On 16.1.2001, Sh.S.M. Aggarwal, retired Judge from the Higher Judicial Service, Delhi as the Presiding Officer of the Permanent Lok Adalat passed an order that the Lieutenant Governor, Delhi as Chairman of DDA should reconsider the matter.

10. Order dated 16.1.2001 passed by the Presiding Officer of the Lok Adalat notes that on 6.5.1992. DDA cancelled the bid on account of the non-payment of the bid amount. Smt.Pushpa Madnani requested to revoke the cancellation and sought time to pay the full amount. The learned Presiding Officer noted that as per a policy framed by the respondent as contained in the office order No. F.100(56)/86/Impl./CL/Pt dated 1.5.1991, restoration could be done on payment of penalty @ Rs. 60/- per Sq.Mtrs. if the application for restoration is received more than 60 days after cancellation but before the expiry of 90 days of the cancellation. The learned Presiding Officer accordingly noted that the bid cancellation letter was issued by the DDA on account of default in payment on 6.5.1992. Smt.Pushpa Madnani had sought revocation of the cancellation order on 3.8.1992. She had, thus, applied within 90 days period for having the bid cancellation being recalled.

11. Lieutenant Governor, Delhi to whom the file was placed, rejected the request for revocation of the bid cancellation order.

12. Mr. Sanjay Poddar, learned counsel for the petitioner urged that in view of the policy guidelines framed by the DDA duly noted by the Presiding Officer of the Lok Adalat, petitioner's parents were entitled to the revocation of the bid cancellation. Counsel contended that since restoration was sought before expiry of 90 days from the date of cancellation, it was the duty of DDA to restore the allotment by charging Rs. 60/- per Sq.Mtrs. as restoration charges.

13. Policy of the DDA pertaining to restoration which has been referred to by the learned Presiding Judge of the Lok Adalat reads as under:-

''Restoration Charges

Penalty for restoration of plots would be as follows:-

1. If the application is : Rs. 20 per Sq. Mtrs. made/received in

DDA within 30 days of the receipt of the cancellation notice

2. More than 30 days : Rs. 40 per Sq. Mtrs. but expiry of 60 days

3. More than 60 days : Rs. 60/-per Sq. Mtrs. but before expiry

of 90 days .

If the application is not made for restoration within a period of 90 days, the plot will be re-auctioned.''

14. Record of the DDA which was produced has been perused by me. At the outset, it may be noted that averment in the writ petition (Para 5) that Smt.Pushpa Madnani while depositing Rs. 25,000/- on 25.3.1992 made a request for extension of time is incorrect. Record of the DDA would reveal that on 25.3.1992 she wrote the following letter:-

To,

Dy. Director (OSD),

Delhi Development Authority,

Vikas Sadan,

New Delhi.

Sub: Residential plot No. 7 at New Rajinder Nagar.

File No.- S-15(16)/92/OSB/56 dated 15.1.1992.''

Sir,

With due respect, I am submitting my challan form receipt in the State Bank of India, R.K. Puram, New Delhi. One copy of challan form No. 35903 is enclosed herewith for your further recovery action.

Thanking you,

Dated: 25.3.1992

Yours faithfully,

Sd/-

(Pushpa Madnani)''

15. Letter aforesaid does not even whisper that Pushpa Madnani was seeking any extension of time.

16. Record would reveal that on 6.5.1992, letter No. S/15(16)92-OSB/483 was addressed to Smt.Pushpa Madnani under the signatures of Sh.O.P. Verma, Joint Director (OSB), DDA. Vide said letter, following was communicated to the petitioner:-

''Smt.Pushpa Madnani

w/o Sh.Balram and

Sh. Balram s/o Hund Raj,

526 Double Storey,

New Rajinder Nagar,

New Delhi

Sub: Cancellation of Bid in respect of plot No. 07, Site No. 21, New Rajinder Ngr.

Dear Madam/Sir,

Reference your letter dated 25.3.1992. I am directed to inform you that the bid of the aforesaid plot has been cancelled as you have failed to deposit the 75% balance premium within the prescribed period as demanded vide this office letter of even No. dated 15.1.1992 under Clause II(8) of the terms and conditions of action and the earnest money stands forfeited.

You may claim refund of part payment made by you.

Yours faithfully,

Sd/-

(O.P. VERMA)

JOINT DIRECtor(OSB)''

17. Vide letter dated 31.7.1992 Pushpa Madnani sought time to pay. On 6.8.1992, Pushpa Madnani wrote a letter to the Joint Director (OSB), which was received in the office of the DDA by hand on 7.8.1992. In the said letter she wrote as under:-

''To

The Joint Director (OSB),

Delhi Development Authority,

Vikas Sadan,

INA, New Delhi.

Sub: Flat No. 07, Site No. 21, New Rajinder Nagar. File No. F/15(16) 92- OSB

Sir,

With reference to your letter dated 6.5.1992, it is stated that due to financial problems, we could not make the detailed demand as demanded vide your letter dated 15.1.1992. We are, now, in a position to make the payment. We would, therefore, request you to kindly revoke the cancellation order. We are willing to pay penalties and interest, if any.

Thanking you,

Yours faithfully,

Sd/-

Pushpa Madnani)''

18. On 8th August, 1992, Smt.Pushpa Madnani addressed a letter to the Vice Chairman, DDA pointing out that time be granted to make the necessary payments.

19. Taking cognizance of the request made by Pushpa Madnani as contained in the letter dated 6.8.1992 received by DDA on 7.8.1992 and the letter received by the Vice Chairman on 8.8.1992, matter was processed. On 23.9.1992, following note was put up by Sh. Ashok Gupta, UDC-OSB.

''In this case bid of plot No. 7 site No. 21, New Rajender Nagar was cancelled by the then Commissioner (Lands) vide his order dated 21.4.92 on page 5/n ante. The ex-auction purchasers through their letter dated 31.7.92 received in the office on 3rd August 92 have stated that the remaining payment could not be made within time due to financial constraints. It has been stated that they are now in a position to make the payment and, therefore, requested for revocation of the cancellation orders. In this context, it is submitted that the auction purchasers through demand notice dated 15.1.92 were requested to make the payment of Rs. 11,66,295/- by 14.3.92. The Auction purchasers through letter dated 25.3.92 submitted the 3rd copy of challan No. 35903 indicating the payment of Rs. 25,000/- into the State Bank of India on 17.3.92. The Auction Purchasers did not especially requested for extension of time for making the payment of balance premium and as such in terms of clause II(8) of the terms and conditions on auction, the office processed the case for cancellation of bid as the payment was not made within the prescribed period. The cancellation of the bid was communicated to the ex-auction purchasers through office letter dated 6.5.92 (page 16/C).

It is pertinent to submit her that in case the ex-auction purchasers had requested for grant of extension of time for making the payment of balance premium, then the same would have been granted to them subject to payment of interest at the rate of 18% or 25% per annum as the case may be as the office has granted extension of time in similar cases where the request for extension of time were received.

The case is as such being submitted for restoration of bid subject to payment of interest at the rate of 25% per annum as the delay is beyond 30 days and restoration charges at the rate of Rs. 60/- per Sq.meter in terms of guidelines circulated by Commissioner (Lands) vide No. F.100(56)/86/Impl./CL/Pt dated 1.5.91 as the request for restoration is made/received in DDA before expiry of 90 days from the date of issue of cancellation notice.''

20. A perusal of the note by Sh. Ashok Gupta would reveal that he pointed out to the authorities concerned that as per circular dated 1.5.1991 being No. F.100(56)/86/Impl/ Cl/Pt, restoration could be granted on charging Rs. 60/- per Sq.Mtrs. as restoration charges.

21. The Additional Director (OSB) to whom the file was marked, vide note dated 24.9.1992 recommended restoration of the bid subject to payment of interest and restoration penalty.

22. At this stage, matter took the usual bureaucratic turn. On 27.10.1992, a note was put on the file as to who had been authorized by the Vice-Chairman to act on his behalf in respect of taking the necessary decision for restoration of the bid.

23. File travelled from desk to desk. The Additional Director (OSB) put a note dated 28.3.1993, inter alia, noting:-

''As regards to the officer authorized by the authority to act on behalf of the authority in the context of management of lease owned by the authority, I could not find any Resolution in spite of my best efforts.

Sd/-

(Illegible)

28.3.1993''

24.File meandered. Somebody found a quick solution. Why find the person who was authorized to restore the bid? It is better to refund the balance due after forfeiting the earnest money. This is the sum and substance of the nothings on the file. Accordingly, letter was issued to Smt.Pushpa Madnani on 10.1.1997 refunding Rs. 5,75,000/- after deducting the earnest money.

25. To say the least, action of the DDA is shocking. Noting on the file as noted above records that under the policy, Smt.Pushpa Madnani was entitled to the bid being restored subject to her depositing restoration charges @ Rs. 60/- per Sq.Mtrs. as also the stipulated interest @ 18% per annum on account of delayed payment. Having so held in her favor, DDA proceeded to consider as to which officer could issue the letter. Finding no delegation in favor of any, the soft option was followed.

26. If no other officer was empowered, Vice Chairman, DDA had the authority to pass the necessary orders. It was his duty to have passed a formal order.

27. Issuance of a formal order restoring a cancelled allotment under the policy of DDA is an administrative functioning and Vice-Chairman, DDA should have ensured a proper delegation. In the instant case if none was found, Vice-Chairman, DDA could have acted himself.

28. Record shows that when matter was referred to the Lieutenant Governor, Delhi on the recommendations of the permanent Lok Adalat which too had the benefit of perusing the file, the Lieutenant Governor simply rejected the matter without giving any justification in support of his decision.

29. Record would reveal that the officers of DDA submitted a misleading note on 13.6.2001. In the note it is recorded that Smt.Pushpa Madnani had to seek extension of time at least 7 days before the last date for making payment i.e. 7 days before 14.3.1992. This is so recorded in a note dated 13.6.2001 of the Chief Legal Adviser.

30. Order passed by the Lieutenant Governor on 10.7.2002 records that he has noted the aforenoted noting on the file. The Lieutenant Governor has recorded the following in his order dated 10.7.2002 rejecting the recommendation of the permanent Lok Adalat :-

''The case of Smt.Pushpa Madnani is covered under the Nazul Rules 1981 and not under the guidelines issued by Commissioner Lands dated 1.5.1991 as the rights in the plot were never transferred to her due to non payment of the demanded amount within the stipulated time. Smt. Madnani did not pay the 75% of the bid amount within the stipulated period of 60 days nor applied for extension of time. She suo moto deposited 5,75,000/- on 25.9.92 out of Rs. 11,66,295/- demanded from her as 75% of the bid amount even though her bid had been cancelled after the expiry of sixty days on 14.3.92. The relaxation can be given up to 180 days if the full 75% is paid and if the auction purchaser applied to Dy. Director 7 days prior to the last date of payment. This stipulation was not followed by Smt. Madnani.''

31. Issue of extension of time in making the payment and issue of restoration of a cancelled bid are entirely different. Under the terms of auction, petitioner could have sought extension of time without any penalty provided the application was filed 7 days prior to the last date for making payment. Restoration charges, as per policy, noted above empowered DDA to restore the cancellation of a plot, if request is received within 30, 60 or 90 days of the cancellation subject to restoration charges levied in the sum of Rs. 20/-, Rs. 40/- and Rs. 60 /- respectively per Sq.Mtr.

32. As noted above, request of Smt.Pushpa Madnani was received within 90 days when the bid was cancelled. As noted above, DDA officers rightly opined that subject to levy of penalty, bid be restored. How the matter got derailed thereafter has been noted by me above. Unfortunately, the Chief Legal Adviser, DDA put up a note which was totally misdirected and this led the Vice-Chairman, DDA to pass an erroneous order.

33. Right under the policy of DDA to have the cancellation restored on payment of penalty in the sum of Rs. 60/- per Sq.Mtr. was clearly vested in the parents of the petitioner. This right has been violated. Writ petition must succeed.

34. Rule is made absolute. Impugned letter of cancellation dated 6.5.1992 and the letter dated 10.1.1997 are quashed. Mandamus is issued to DDA to raise a fresh demand upon the petitioner. Basis of demand would be restoration charges @ Rs. 60/- per Sq.Mtr.

35. Should the petitioner pay interest on the balance sum payable as per the original demand and the restoration charges.

36. It is not disputed that after his parents died in the year 1993, till 1997 petitioner slept over the matter. In my opinion, petitioner must pay the interest on the amounts which would be due and payable being the balance of the bid amount as also the restoration charges till date of the present petition being filed. DDA would be entitled to charge interest from the petitioner on the said outstanding amounts @ 12% per annum. Necessary demand be raised on the petitioner within 6 weeks from today. On the petitioner paying the said sum within 2 weeks thereafter, possession of the plot be handed over to the petitioner and the necessary conveyance deed be executed on the petitioner completing the procedural formalities.

37. No costs.