JAMMU DEV AUTHORITY Vs. CHANDER SHEKHAR

JUDGEMENT

(1.) THIS shall dispose of two letters patent appeals, i.e. LPA No. 41/2004 filed by Jammu Development Authority and LPA No. 271/2002 filed by Shri Mata Vaishno Devi Shrine Board. In both appeals under challenge is order/judgment dated 14.06.2002 of the learned Single Judge passed in OWP No. 1038/2001 permitting writ petitioner to pay an amount of Rs. 22,35,750 along with compound interest at the rate of 18% per annum from the date Jammu Development Authority came in possession of the site in question.

(2.) IN brief, facts of the case are that on 18.09.1989 hotel site No. 3 measuring 3.75 kanals situated at Rail Head Complex, Jammu, was auctioned by Jammu Development Authority (hereinafter called as JDA). The highest auction bid was offered by Chander Shekhar (writ petitioner in OWP No. 1038/2001 and hereinafter called as bidder) representing his firm M/s. Krishen Chand Ganesh Dass Girdhari Lal and Company. The bid was accepted for consideration of Rs. 30.01 lacs and in consequence thereof the bidder deposited 25% of the bid amount i.e. Rs. 7,50,250 on the fall of hammer as stipulated in the auction notice. In terms of Clauses 6 and 7 of the auction notice, balance 3/4th of the bid amount was to be paid by the successful bidder within a period of thirty days from the date of communication of acceptance of the bid and in the event of any default in making payment of balance amount within the stipulated period, the earnest money deposited by the bidder was liable to be forfeited and site put to fresh auction. The balance amount of Rs. 22,35,750 was to be deposited within one month from the date of communication of acceptance of the bid which was communicated to the bidder on 23.10.1989. On receiving notice to this effect the bidder assured that the balance amount would be remitted to the JDA within couple of days. However, instead of depositing balance amount with the JDA, the bidder approached the then Minister, Government of J&K Housing & Urban Development Department, requesting to pay balance amount in five equal annual instalments starting from 18.09.1990. It appears that the Minister sent request of the bidder to pay balance amount in five equal instalments to the JDA for its consideration. However, JDA in its 41st meeting held on 05.06.1990 decided to forfeit 1/4th of the bid amount because it was of the opinion that terms and conditions as advertised in the auction notice cannot be altered once the auction is closed and highest bid offered is accepted at the fall of hammer, as it would give undue financial advantage to the bidder. The decision of the Board was communicated to the bidder informing him that 1/4th of the bid amount has been forfeited as he had failed to deposit the balance amount within the stipulated time. The bidder filed arbitration application No. 218 of 1990 for referring the matter to the arbitrator. The grievance made in the arbitration application was that forfeiture of 1/4th of the bid amount and re -auctioning of the site in question without disposal of representation filed by the bidder to deposit balance amount in five equal annual instalments, is illegal. Vide order dated 28.09.1990 notice of the arbitration application was ordered to be issued and in the meantime the Court directed that hotel site in question shall not be re -auctioned.

(3.) IT appears that during pendency of the arbitration proceedings the site in question along with the adjoining land was offered to the Shri Mata Vaishno Devi Shrine Board (hereinafter called as the Shrine Board) and price of the site offered was Rs. 10 lacs per kanal. The site in question along with adjoining land, total measuring seven kanals, was allotted to Shrine Board after accepting Rs. 70 lacs as the amount of price of the land. On deposit of the amount of consideration possession of the land including the hotel site in question was handed over to the Shrine Board on 21.10.1994 and since then the Shrine Board is in physical possession of the land. Shrine Board when, on coming in possession of the land, started raising construction at the site in question, bidder filed an application in the arbitration proceedings for restraining the Shrine Board from raising any construction. Learned Judge seized of the arbitration application, vide order dated 11.01.1996, permitted the bidder to implead Shrine Board as party to the arbitration proceedings and by an interim order of the even date restrained Shrine Board from raising any construction over the site in question. Shrine Board challenged the said order in appeal and vide order dated 15.03.1996 appeal was disposed of permitting the Shrine Board to file objections. It is stated that Shrine Board filed objections on 26.03.1996.