HARCHARAN DASS GUPTA Vs. DEVELOPMENT AUTHORITY

JUDGEMENT

(1.) This appeal is directed against the order dated 4th July, 2005 passed by the learned single Judge in IA No. 8460/2004, filed by the appellant herein under O. XXXIX, Rr. 1 and 2, C. P. C. and IA No. 1586/2005, filed by respondent No. 1 herein under O. XXXIX, R. 4, C. P. C., arising out of CS (OS) No. 1435/2004. The appellant herein filed a Suit against the Delhi Development Authority, respondent No. 1 herein, and the Oriental Bank of Commerce, respondent No. 2 herein, seeking for a decree of declaration that the contract awarded by respondent No. 1 herein in favour of the appellant under letter dated 7th August, 2003 is null and void and also for a decree of permanent injunction restraining the Delhi Development Authority from invoking and encashing the bank guarantees as mentioned in the plaint and also for a decree of permanent injunction restraining the Oriental Bank of Commerce from releasing any amount payable under the subject bank guarantees.

(2.) In order to appreciate the contention of the counsel appearing for the parties, it would be necessary to deal with the relevant facts leading to filing of the aforesaid Suit. The appellant was awarded a contract for construction of 400 dwelling units by respondent No. 1 under the aforesaid letter dated 7th August, 2003. In terms of the agreement between the parties, the appellant furnished performance bank guarantee in the sum of Rs. 25 lacs on 1st November, 2003 and also furnished various bank guarantees having identical terms, totalling to Rs. 48 lacs, towards mobilisation advance received by the appellant from the Delhi Development Authority. After obtaining the mobilisation advance totalling to Rs. 48 lacs from respondent No. 1, the appellant did not take steps for execution of the contract contending inter alia that the contract in respect of which the aforesaid bank guarantees were furnished by the appellant were obtained by fraud and that without informing and giving vital information to the appellant about an existing nallah at the project site, the appellant was induced and coerced to execute the aforesaid work. The contention raised is that the main contract, which has been awarded in favour of the appellant by respondent No. 1, is void due to non-disclosure of the material facts. It is contended that respondent No. 1 has played fraud by not bringing to the knowledge and information of the appellant about an existing nallah at the project site, which information is a Basic fundamental of the contract between the parties. The stand of the appellant is that it was neither informed nor was aware of the existence of a nallah at the site in question and that it was only when the appellant got possession of the land after the work was awarded and inspected the site, did the appellant discover the existence of a nallah, which was also not shown in the site plan.

(3.) The basis on which the aforesaid plaint was filed was that neither the appellant was aware of the existence of a nallah nor the same was indicated by the respondent No. 1 in its site plan and that the appellant could discover about the existence of the nallah only after the work was awarded to it and the site was handed over to it. The interim application, which was filed by the appellant was for an order restraining the respondent No. 1 from encashing the bank guarantees, was considered and heard by the learned single Judge and on consideration of the records and for the reasons stated in the order, the application was dismissed.