JUDGMENT
Markandeya Katju, C.J.
1. This appeal has been filed against the impugned judgment dated 20th June 2003. We have heard the learned counsel for the parties and have perused the record.
2.In this appeal we are only concerned with that part of the impugned judgment, which quashes the forfeiture of the earnest money deposit and directs that the petitioner should be refunded half of the said amount, i.e. Rs. 50,000/- within six weeks.
3. The facts in detail have been set out in the judgment of the learned Single Judge and hence we are not referring to the same except where necessary.
4. It is alleged in the writ petition that the DDA had issued a public notice in respect of an auction of some residential properties, and one of the said properties was Plot No. B-1/1/3, Janak Puri, New Delhi. The petitioners with the intention of purchasing the property in the name of their daughter, i.e. petitioner No. 3 Ms. Kavita Vohra had authorised their Manager, to bid for the plot in the public auction for and on behalf of the petitioner No. 3. It has been alleged that the said Manager had been authorised to bid for the plot to be given as a gift by the petitioner Nos. 1 and 2 to the petitioner No. 3. The auction was to be held on 7th March 2003 and accordingly the Manager participated in the auction and was the highest bidder. It is alleged that the bid in the said auction was mistakenly made under a bonafide belief in the name of petitioner Nos. 1 and 2, whereas the same should have been done in the name of petitioner No. 3. However, subsequently petitioner Nos. 1 and 2 were informed about the same by the said Manager and immediately on coming to know of the same, a representation was made to the DDA on 12th March 2003.
5. In paragraph 11 of the writ petition, it is stated that on 21st February 2003, petitioner Nos. 1 and 2 received a demand letter from the DDA for Rs. 32,16,000/- vide Annexure P-5. Immediately on receiving the said demand notice, the petitioners 1 and 2 contacted the Office of DDA and requested that the property be allotted in the name of their daughter, i.e. Petitioner No. 3 vide Annexure P- 6. However, they received a letter dated 27th May 2003 from DDA stating that the change of the name of the intending purchaser cannot be allowed, and their request cannot be accepted. The petitioners were informed by the said letter of DDA that the change in the name of the intending purchaser cannot be allowed in view of condition No. 4 of the brochure for sale by auction of the residential plots. Thereafter on 20th June 2003, the competent authority cancelled the bid and the earnest money deposited was forfeited, vide Annexure P-10.
6. A counter affidavit was filed on behalf of the DDA and we have perused the same.
7. In paragraph 1 and 2 it is stated that the petitioners jointly participated in the auction held on 7th March 2003 and give the highest bid of Rs. 44,00,000/- in their own name for the property in question and also deposited the earnest money jointly on the same day. Hence it is incorrect to say that there was any bonafide mistake.
8. In paragraph 3 of the counter affidavit, it is stated that at the request of the petitioners, the case of the petitioners was examined by the answering respondent but could not be acceded to because as per the term and condition No. 4 of the Brochure for Sale by Auction of residential plot, a change in the name of the intending purchase cannot be allowed under any circumstances. This was intimated to the petitioners by the respondent. A true copy of the Brochure is annexed as Annexure R-I to the counter affidavit.
9. In paragraph 6 of the counter affidavit, it is stated that it was subsequently brought to the notice of the respondent that an allotment of another property bearing No. C-2/134, Janak Puri, New Delhi already existed in the name of petitioner No. 1. Hence the competent authority cancelled the bid of the plot in question and forfeited the earnest money deposited by the petitioners on account of double allotment stating that the petitioner Nos. 1 and 2 had violated the term and condition No. 1 of the Brochure. The aforesaid condition No. 1 reads as under:
Any individual who is not a minor and is a citizen of India, may purchase lead hold right in any one plot, by bid in the auction, if he/she, his wife/her husband or any of his/her minor or dependent children or dependent parents or dependent minor sisters and brother, ordinarily residing with him/her do not own in full or in part on lease hold or free hold basis, any residential plot or flat or house/or have been allotted or hire purchase basis residential plot or house in the Union Territory of Delhi, and neither he/she has transferred any residential plot/house or flat to any one in the past/nor has transferred his/her membership in any cooperative house building society/CGHS in Delhi.
10. Clause 10 of the terms and conditions for Sale, copy of which is annexed as R-I to the counter affidavit, reads as under:
10. In case the highest bidder fails to make the balance 75% amount within the stipulated period, as mentioned in the demand letter or within such extended period, if any, granted by the Competent Authority on his written application, the bid shall automatically stand cancelled and the Earnest Money shall stand forfeited. In that eventuality the competent authority shall be competent to re-auction the residential plot.
11. Hence, it was submitted by the respondent that there was nothing illegal in forfeiting the earnest money.
12. In our opinion, the learned Single Judge erred in law in quashing the forfeiture of half the money deposited. In our opinion, the entire earnest money was liable to be forfeited and the learned Single Judge should not have interfered with the terms and conditions laid down in the Brochure of the DDA.
On the facts of the case, it is evident that the petitioners had deliberately sought to acquire a property when they were not entitled to do so, since petitioner No. 1 already had a flat in his own name. In our opinion the writ petitioners did not act bonafide in the matter. The learned Single Judge in paragraph 18 of his judgment has observed:
A condition enable a party to forfeit earnest money would in reality be a clause for liquidated damages. In all such cases, all that the person entitled to damages can secure is reasonable damages not exceeding the amount deposited (Section 74 of the Contract Act).
13. In our opinion what the learned Single Judge overlooked was that he was hearing a writ petition filed by the petitioners, and not a suit filed by DDA against the petitioners. In a writ petition all that a Judge can see is whether there is violation of Law. We do not see any violation of law in the writ petition. The earnest money was forfeited as per condition No. 10 in the brochure. The matter was hence purely contractual.
14. In the circumstances this appeal of DDA is allowed and it is directed that the entire earnest money is liable to be forfeited. The impugned judgment of the learned Single Judge is hereby modified to the aforesaid extent.