ASHWANI KAPOOR Vs. UNION OF INDIA

JUDGEMENT

(1.) The facts leading to the filing of the present writ petition are:The Delhi Development Authority (for short "DDA") put up anadvertisement on 7/06/1989 in the newspapers announcing the auctionof a plot for 2/3 star hotel at Pitam Pura, New Delhi. The plot was to be. auctioned as per certain terms and conditions. There is no dispute betweenthe parties about the terms and conditions of the auction including the factthat the auction was on the basis of perpetual leasehold rights and theprovisions of the Delhi Development Authority (Disposal of DevelopedNazul Lands) Rules, 1981 would be applicable. The material terms of auctionfor purposes of the present petition are :

(2.) The petitioner was the highest bidder for the said plot. Against its bidfor Rs. 3.30 crores the petitioner deposited Rs. 85 lacs with the respondenttowards 25% of the bid amount as earnest money on 5/07/1989, i.e. thedate of auction. On 6/07/1989 the respondent issued a demand notice tothe petitioner for payment of the balance amount of Rs. 2 crores 45 lacswithin three months, i.e. by 4/10/1989.

(3.) According to the petitioner the site of the hotel plot was found to betotally undeveloped and not fit for carrying out the construction of the hotel.The DDA had committed a breach of contract inasmuch as a totallyundeveloped plot had been auctioned and sold to the petitioner. Thepetitioner filed a suit in this Court on 29/09/1989. The petitionerprayed that in view of the fact that the plot was undeveloped and there wasbreach of contract on the part of the DDA he was not liable to pay the balanceamount of the auction price. The prayers in the suit were cleverly wordedinasmuch as mandatory injunction was sought against the DDA to direct itto develop the plot in question and the perpetual injunction was also soughtrestraining the DDA from cancelling the allotment of the plot in question infavour of the plaintiff. This Court appointed a Local Commissioner in thesaid suit who is said to have given a report that the plot was undeveloped.Subsequently another Local Commissioner who was a retired Chief Engineerof CPWD was appointed for the same purpose and accoing to his reportthe petitioner could start construction on the plot even though somedevelopment still remained to be done. The petitioner thus failed to ward offits liability to pay the balance 75% of the auction price. The petitionerthereafter sought extension of time to pay the balance amount which theDDA declined to grant. The period of 90 days to deposit the balance 75%amount expired on 4/10/1989. The petitioner did not pay the amount.As per terms of the auction extension for payment could be granted for onemonth on payment of interest 18% per annum on the amount due and fornext two months on payment of interest @ 25% per annum failing which thebid would stand automatically cancelled and the amount already depositedwould stand forfeited. On 4th December, 1990 the request of the petitionerfor grant of extension of time to pay the balance 75% amount was rejected bythe DDA. The effect of rejection of the request of the petitioner was thatauction in favour of the petitioner stood automatically cancelled and theamount already deposited by him stood forfeited as per the terms of theauction. The petitioner then filed a writ petition in this Court being C.W.No.3967190 seeking extension of time to pay the balance amount. In the said writpetition an order was passed on 10/10/1991 operative part whereofis reproduced as under :