Delhi High Court
Veena Garg vs Delhi Development Authority on 19 April, 2022
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 19th APRIL, 2022
IN THE MATTER OF:
+ W.P.(C) 6297/2020 & CM APPLs. 22390/2020, 20540/2021 &
20541/2021
VEENA GARG ..... Petitioner
Through Mr. Akash Nagar, Advocate
versus
DELHI DEVELOPMENT AUTHORITY ..... Respondent
Through Mr. R K Dhawan, Standing Counsel
for DDA
CORAM:
HON'BLE MR. JUSTICE SUBRAMONIUM PRASAD
SUBRAMONIUM PRASAD, J.
1. This writ petition has been filed seeking the following prayers:-
"a) Allow the Present petition;
b) Direct DDA to refund the amount illegally retained
by them to the Petitioner along with interest of 18%
p.a. from the date of deposit"
2. The facts, in brief, leading to the instant petition are as follows:-
i. It is stated that on 09.03.2019, the Respondent/DDA had issued
notice that e-auction of industrial property on 'as is where is
basis' would be conducted. The application for e-auction was
made available from 01.04.2019 and the last date for
submission of the mandatory documents, along with Earnest
Money Deposit (EMD) was 21.04.2019.
Signature Not Verified
Digitally Signed
By:RAHUL SINGH
Signing Date:21.04.2022
17:26:02
ii. The Petitioner herein sought to bid for sub-unit No.128, plot
No. B-351, Mangolpuri Industrial Area Phase-1, and
consequently, she submitted her online application on
16.04.2019, along with EMD of Rs.10,51,259/- (5% of the
reserve price).
iii. The Petitioner received an e-mail dated 27.04.2019 informing
that her bid stood the highest, subject to acceptance of the bid
by Department/Corporation. Thereafter, another e-mail dated
01.06.2019 was received by the petitioner with the subject
'Letter of Intent'. The award value was stated to be
Rs.3,21,24,000/-.
iv. As per the Tender Document for E-Auction (2018-19), the
Petitioner was expected to deposit 20% of the bid premium and
the difference of 5% reserve price at second stage within 7 days
from issuance of the Letter of Intent after acceptance of the bid
by the competent authority.
v. It is stated that on account of ill health, the Petitioner failed to
deposit 20% of the bid premium as was required. Accordingly,
the Petitioner sent a letter dated 10.06.2019 to the Deputy
Director (Industrial), DDA, stating that she had only received
information about her bid being accepted on the night of
07.06.2019. It is stated that since the petitioner had been
hospitalised, she was unable to deposit the requisite amount.
The petitioner accordingly sought for an extension of 15 days to
deposit the balance amount. In response to this letter dated
10.06.2019, the Deputy Director (Industrial) vide letter dated
Signature Not Verified
Digitally Signed
By:RAHUL SINGH
Signing Date:21.04.2022
17:26:02
01.07.2019 rejected the Petitioner's request for grant of
extension for a period of 15 days.
vi. It is stated that the Petitioner has sought for a refund of the 5%
EMD that had been deposited by her during the first stage. A
legal notice dated 21.09.2019 has also been sent to the
Respondent. However, the Petitioner is yet to receive any
response with regard to the refund of the EMD.
vii. Aggrieved by the same, the Petitioner has approached this
Court by way of the instant writ petition.
3. Heard Mr. Akash Nagar, learned counsel for the Petitioner, Mr. R. K.
Dhawan, learned Standing Counsel for the DDA and perused the material on
record.
4. Mr. Akash Nagar, learned Counsel for the Petitioner, contends that
the Petitioner only came to know that she was the highest bidder on
07.06.2021, with the Letter of Intent having been issued to her on
01.06.2021 demanding a payment of 20% of the bid premium which was to
be paid within 7 days of the issuance of the said Letter.
5. Learned Counsel for the Petitioner states that the Petitioner was ill
from 02.06.2019 and had been advised to take bed rest. He contends that
she had been admitted in the emergency ward of Satyawadi Raja Harish
Chandra Hospital, Narela, Delhi and, therefore, she was precluded from
making the payment because of reasons beyond her control. He states that
she had written a letter on 10.06.2019, i.e. three days after the due date,
explaining her condition and had sought for a concession from the
Respondent/DDA to condone the delay and grant an extension of 15 days.
Signature Not Verified
Digitally Signed
By:RAHUL SINGH
Signing Date:21.04.2022
17:26:02
6. Learned Counsel for the Petitioner states that the rejection of the
request of extension of time by the DDA is unconstitutional and arbitrary.
He states that it is not as if the Petitioner was running away from her liability
to make the payment and that the DDA ought to have considered the case
sympathetically. He further states that in any event, the Petitioner is entitled
to a refund of the 5% of the reserve price and the same cannot be retained by
the Respondent/DDA illegally.
7. The learned Counsel for the Petitioner also places reliance on the
judgment of the Supreme Court in Kailash Nath Associates v. Delhi
Development Authority and Anr., (2015) 4 SCC 136, substantiate his
contentions that the earnest money cannot be forfeited in its entirety.
8. To appreciate the rival contentions, it is necessary to peruse the
relevant Clauses of the tender document. The relevant Clauses of the tender
document read as under:-
"2.2 Earnest Money Deposit: To be able to
participate in e-auction, the prescribed EMD
amounting to 25% of the bid premium is to be
submitted in two stages as follows:-
a) 5% of the Reserve price at first stage by all
Bidders i.e. before participation in the e-auction
programme.
b) 20% of the Bid premium and difference of 5%
reserve price at second stage by successful bidder (H-1
Bidder) within seven days from the issue of LOI after
acceptance of their bid by the competent authority.
c) The EMD shall be payable on-line through
NEFT/RTGS/E-PAYMENT on DDA's e-auction Portal
i.e.www.tenderwizard.com/DDAAUCTION. Detailed
instructions to guide the bidder through the e-Payment
steps are available on the said portal/website.
d) No offer/bid shall be accepted without successful
payment of Earnest Money Deposit.
Signature Not Verified
Digitally Signed
By:RAHUL SINGH
Signing Date:21.04.2022
17:26:02
e) The Earnest Money Deposit will be adjusted in
the payment against the premium of bid Payable to the
Authority by the successful Bidder (H-1 Bidder).
f) The Earnest Money Deposit paid by the bidders,
whose offers have not been accepted shall be returned
to them without any interest. The same shall be
refunded electronically in the Bank account of the
unsuccessful bidders within 15 days of the completion
of auction process. The deposit shall not be adjusted
against any other scheme.
g) Only the Bidders making payments of first stage
EMD, will be allowed to participate in the e-Auction
process.
xxx
2.4.3. After the bids are confirmed/accepted by the
Competent Authority, a communication shall be sent
to the successful bidder and the second stage EMD
(20% of the premium offered) to be submitted within
7 days from the Date of issue of LOI through online
payment. In case the second stage EMD is not
submitted within the stipulated period, the first stage
EMD (5% of the reserve price) submitted along the
Bid shall be forfeited.
xxx
2.4.7. The bidder, after submission of Bid, shall not be
permitted to withdraw, surrender or modify his bid on
any ground whatsoever. If he withdraws or surrenders
the Bid, the entire amount of earnest money shall be
forfeited without prejudice to other rights or remedies
available to DDA.
xxx
4. Bids: One the bid is placed, the bidder cannot
reduce or withdraw the bid for whatever reason. If
Signature Not Verified
Digitally Signed
By:RAHUL SINGH
Signing Date:21.04.2022
17:26:02
done so, EMD amount shall be forfeited."
(emphasis supplied)
9. A perusal of the Clause 2.4.7 and Clause 4 shows that in order to
participate in the e-auction, the 25% of the bid money is to be submitted in
two stages:
a) 5 % of the reserve price has to be deposited before participating
in the e-auction programme, i.e. with the bid.
b) 20% of the bid premium and difference of 5% reserve price
already deposited along with the bid had to be deposited by the
successful bidder within 7 days of the issuance of letter of
intent after acceptance of their bid by the competent authority.
10. The Petitioner had deposited 5% of the reserve price. However, she
had failed to deposit 20% of the bid premium which was to be paid with the
acceptance of the bid. Clause 2.4.3 states that in case the bidder fails to
deposit 20% of the bid premium within 7 days from the issue of Letter of
Intent, the first stage of the EMD bid (5% of the reserve price) shall stand
forfeited. The Petitioner is now praying for a deviation from the terms
stipulated in the tender document. It is well settled law that participating in
the tender, a bidder cannot seek for deviation from the tender document
which has been accepted by the petitioner on his own accord. It goes against
contractual obligations steeped in accepting such a tender, and therefore,
violates the principles under Article 14 of the Constitution with respect to
other bidders.
11. Clause 2.4.7 and Clause 4 state that once bid is placed, the bidder
cannot replace or withdraw the bid. The contention that the Petitioner wants
return of the 5% of the reserve price which is actually the Earnest Money
Signature Not Verified
Digitally Signed
By:RAHUL SINGH
Signing Date:21.04.2022
17:26:02
cannot be permitted under Clause 4 and that would be in violation of Clause
2.4.7. It also goes against Clause 2.4.3 wherein it is stated that if the bidder
fails to deposit 20% of the bid premium as required under the second stage,
then the EMD shall stand forfeited.
12. The ratio of the judgment of the Apex Court in Kailash Nath and
Associates (supra), also does not apply to the facts of this case, for the
reason that it arose from a suit which had been filed by the bidder and in the
case therein, there had been no breach of contract on behalf of the bidder
that would warrant forfeiture of the Earnest Money Deposit. Furthermore, in
the said judgement, the Supreme Court had observed that there were cases
wherein forfeiture of EMD could take place even before an agreement was
reached between the bidder and the authority. The relevant paras have been
reproduced as under:
"41. It must, however, be pointed out that in cases
where a public auction is held, forfeiture of earnest
money may take place even before an agreement is
reached, as DDA is to accept the bid only after the
earnest money is paid. In the present case, under the
terms and conditions of auction, the highest bid
(along with which earnest money has to be paid) may
well have been rejected. In such cases, Section 74
may not be attracted on its plain language because it
applies only "when a contract has been broken".
42. In the present case, forfeiture of earnest money
took place long after an agreement had been reached.
It is obvious that the amount sought to be forfeited on
the facts of the present case is sought to be forfeited
without any loss being shown. In fact it has been shown
that far from suffering any loss, DDA has received a
much higher amount on re-auction of the same plot of
land."
(emphasis supplied)
Signature Not Verified
Digitally Signed
By:RAHUL SINGH
Signing Date:21.04.2022
17:26:02
13. The reliance of the learned Counsel for the Petitioner on Sub-clause
(f) of Clause 2.2 is also misplaced. The said Clause applies to the persons
who are unsuccessful in the tendering of the bid and cannot apply to the
persons whose bids have been accepted. A perusal of the tender document,
i.e Clause 2.4.3, shows that persons whose bids have been rejected due to
the failure to deposit the amount would result in forfeiture of the 5% of the
reserve price which had been filed along with the bid.
14. In view of the above, the instant writ petition has no merits, and,
therefore, is dismissed. Pending applications stand disposed of.
SUBRAMONIUM PRASAD, J.
APRIL 19, 2022
hsk
Signature Not Verified
Digitally Signed
By:RAHUL SINGH
Signing Date:21.04.2022
17:26:02
