JUDGMENT
K. Ramamoorthy, J.
(1) The petitioner took part in the auction held by the Dda on 31.3.1994 and it was the successful bidder for the entire C.S.C. Nand Nagri Block- B, Delhi plot measuring about 1268.32 sq. mts. for Rs. 30 lakhs. As per the conditions of auction, he deposited Rs. 7.50 lakhs, being the 25% of the bid money. After having deposited the 25% of the money, the petitioner did not pay the balance. On 4.4.1994 the petitioner wrote to the Dda for the removal of the tubewell in the middle of the plot and re-road the drains running to the center of the plot. “The Dda by letter dated 7.4.1994 called upon the petitioner to pay 75% of the bid amount being Rs. 22,50,050.00 (Rs. 50.00 was towards documentation charges). On 13.4.1994 the petitioner wrote to the Dda in the following terms : “WE refer to your Bid Acceptance/ Demand Notice dated 7.4.94 regarding the plot auctioned by Dda at Csc, Pocket-B, Nand Nagri (G.T.B. Enclave). According to the directions given by Delhi Development Authority, we visited the site and tried to erect our board at site. However, the Mcd Horticulture Department objected, damaged and removed the board from the site. The M.C.D. says that the site in question has been handed over to the M.C.D. and as such D.D.A. has no authority to hand over the site/land/sell without their consent as it is M.C.D. property now. Kindly look into the matter and issue necessary instruction to the concerned department of M.C.D.”
The petitioner on 13.4.1994 lodged a complaint with the Sho against MCD. On 15.4.1994 the petitioner sent a communication to the Horticulture Department, second respondent for the return of the material of the petitioner at site. On 16.4.1994 the petitioner sent a letter to the first respondent Dda in the following terms: “THIS is in continuation of our letter of even number dated 13.4.94 (DDA Dy. No. 12066 dated 13.4.94). Subsequently, we discussed the matter personally with you in this regard. The Csc Site at Pocket-B, Nand Nagri (Guru Teg Bahadur Enclave) was auctioned in public on 31.3.94. Our bid for Rs. 30,00,000.00 has been accepted by D.D.A. on deposit of 25% of the bid value i.e. Rs. 7,50,000.00 vide your confirmed Demand Notice No. 790, File No. 15(01)94/CL dated 7.4.94. The date for payment of final premium has been fixed by D.D.A. as on 22.5.94 i.e. 45 days from 7.4.94. However, the D.D.A. has not replied to our letter dated 13.4.94 as yet. As informed you earlier, on 11.4.94 evening we erected our board 20′ x 10′ at site on 18′ high rails, publicising the project. To our surprise the next day morning i.e. 12.4.94 the board was removed. On inquiry we came to know that the Horticulture Department of M.C.D. has removed the board after damaging it, alongwith rails and other fittings. On inquiry we are told by the concerned staff that the site in question is handed over to Mcd on 21.4.93. We made further inquiries from M.C.D. & D.D.A. Horticulture Department and as per record maintained at both the offices the plot which was auctioned by the D.D.A. as a Csc is handed over to M.C.D. on 21.4.93 and since then the whole area is maintained by the M.C.D. We are therefore, put to a loss by this act on the part of M.C.D. & D.D.A. and mental torture and sentimental value of our Company which the public has a great regards for our achievements as Promoters & Builder in this area has suffered a lot. The D.D.A. has fixed 22.5.94 for payment of final premium. The plot in question seems to be in dispute between M.C.D. & D.D.A. Therefore, before we make final payment to D.D.A., we require a confirmation in writing that the plot in question is free from dispute, encumbrances and will be handed over to us peacefully without any hitch. As the D.D.A. is at fault which has put us in trouble therefore, the payment of the final premium would be made only after 45 days from the fresh confirmation.”
On 18.4.1994 the petitioner wrote a letter to the Vice Chairman, D.D.A. requesting him to look into the matter to restore the site to enable the petitioner to pay the final premium in time. The petitioner would state in the petition that there is a dispute between the first respondent and the second respondent is evident from the construction of the boundary well allegedly put up by the second respondent. On 19.4.1994 the petitioner wrote to the M.C.D. in the following terms : “THIS is in continuation of our letter dated 15.4.94. As you are aware that we are the successful bidders for the whole site-CSC, Pocket-B, Guru Tegh Bahadur Enclave, Nand Nagri auctioned by the D.D.A. on 31.3.94. As per intimation given by the D.D.A. we erected one Board at site indicating among other things our intention to construct a Shopping Centre. Our board has been removed from the site for the reason known to you. At present, the site is covered from all the sides and there is no entry point as the Mcd has put a boundary wall. According to the plan circulated by the D.D.A. the main entrance to the site is from the Main Road sides. This areas has been blocked by a wall. We are removing a part of the wall to get an entry into site and will arrange to erect our board there on 28.4.94. You are, therefore, kindly requested to intimate us if you have got any objection in the matter so that necessary steps are taken in this matter.”
According to the petitioner, the M.C.D. is claiming title to the plot which had been auctioned by the first respondent D.D.A. The D.D.A. did not inform the intending buyers about the dispute between D.D.A. and the M.C.D. The petitioner was fully justified in expectation that the property which had been auctioned by the D.D.A. would be free from encumbrances and that was a legitimate expectations. In view of the dispute between the M.C.D. and the D.D.A. the D.D.A. cannot hand over the vacant possession of the property to the petitioner. The petitioner is entitled to the peaceful possession of the plot which the D.D.A. was capable of giving and, therefore, the auction held by the D.D.A. could not be further implemented and in view of this the petitioner is entitled to return of the money. The petitioner has prayed for the following reliefs :
(A)issue an appropriate writ order or direction directing the respondent No. I (D.D.A.) and the respondent No. 2 (M.C.D.) to resolve their in terse disputes regarding C.S.C. site plot Nand Nagri Block B. Delhi admeasuring 1268 sq. mts. purchased by the petitioner in the auction conducted by the D.D.A. on 31.3.94; and
(B)issue an appropriate writ, order or direction restraining the respondent No. 2 (M.C.D.) from creating hindrances in the peaceful enjoyment by the petitioners, their agents and assigns of C.S.C. site plot Nand Nagri Block-B Delhi purchased by the petitioners in an auction conducted by the D.D.A. on 31.3.1994; and
(C)issue an appropriate writ, order or direction restraining the respondent No. 1 (D.D.A.) from canceling the auction bid of the petitioner in respect of C.S.C. site plot, Nand Nagri Block-B admeasuring 1268.32 sq. mts. for non payment of the balance bid amount upon such terms and conditions as this Hon’ble Court may deem fit to impose in the facts and circumstances of the case and in the interest of justice; and
(D)issue an appropriate writ, order or direction restraining respondent No. 2 (M.C.D.) from alienating, encumbering or parting with the possession of the C.S.C. site plot, Nand Nagri Block-B during the proceedings of the present proceedings; and
(E)issue an appropriate writ order or direction restraining the respondent No. 1 Delhi Development Authority not to forfeit the sum of Rs. 7,50,000.00 paid as earnest money being 25% of the bid amount for non payment of the balance demand in view of the dispute inter-se between the Delhi Development Authority and the Municipal Corporation of Delhi;
(F)issue an appropriate writ order or direction directing the Delhi Development Authority not to commence levy of interest on the balance of Rs, 22,50,050.00 of the bid amount demanded by the Delhi Development Authority vide their communication dated 7.4.1994 and direct the Delhi Development Authority to grant interest on the earnest money deposited by the petitioner in compliance with the condition of auction;
(G)issue such other or further orders or directions as may be deemed just and proper in the fact and circumstances of the case and in the interest of justice.”
(2) The learned Counsel Mr. Vashisht submitted that the Dda was not in a position to give possession of the property, therefore, the petitioner was fully justified in not paying the balance 75%. The Dda has no right to forfeit the sum of Rs. 7,50,000.00 . The learned Counsel for the Dda submitted that the auction conditions provide for forfeiture and the petitioner did not act in accordance with the terms and conditions of the auction notice, the Dda was always ready to hand over possession of the property and, as a matter of fact, the petitioner by letter dated 16.4.1994 asked for extension of time by 45 days for the payment of balance amount. The possession of the plot was always with the Dda and in terms of Clause 2(viii) of the Terms and Conditions of the Auction, the auction was liable to be cancelled and the Dda was entitled to pass an order forfeiting the earnest money.
(3) The Supreme Court had an occasion to consider the question of the right of the Dda to forfeit the amount in Delhi Development Authority v. Grishthapana Cooperative Group Housing Society Ltd., 1995 Supp (1) Scc 751. The facts as noticed by the Supreme Court are this : “THE appellant proposed to allot land to about 260 Cooperative Group Housing Societies in Dwaraka Phase-1, so also to about 60 such societies in Narela. When the proposal was first made on 1.10.1990, the cost was fixed at Rs. 975.00 per sq. m. for Dwaraka land and Rs. 950.00 for Narela land. The societies interested in the allotment land were required to deposit Rs. 5 lakhs as earnest money and to formally apply for allotment. On the interested societies accepting the offer, formal allotment was made by communication of the appellant dated 25.1.1991. Before possession of the land came to be delivered, the appellant by its communication dated 3.11.1992 stated that the premium of the land shall be payable at Rs. 1650.65 per sq. m. which was the value determined by the Government of India, vide its notification dated 21.10.1992/23.10.1992. Some of the societies approached the Delhi High Court being aggrieved at the enhancement of the premium. The High Court ultimately upheld the enhancement, which decision has since been reported in 26 Delhi Reported Judgments 156. On this Court being approached against the judgment of the High Court by way of special leave petitions, the same came to be disposed of by extending the time of paying the first instalment upto 31.5.1993 which date had been fixed by the High Court as 30.4.1993. This Court made it clear in its order that the facility to pay first instalment with interest will be available only upto 31.7.1993; and no extension of time beyond this date would be granted.”
The respondents not paying the amount, as ordered by the Supreme Court, the Dda forfeited a sum of Rs. 5.00 lakhs, which was payable as earnest money as per clause 4 Ii of the allotment order dated 3.11.1992. This was challenged before this Court and this Court directed the Dda not to make any deduction and directed the Dda to refund the entire amount. That was challenged before the Supreme Court.
(4) The Supreme Court noted the submission on behalf of the Dda in the following terms :
“IN support of the first legal proposition, Mr. Jaitley referred us principally to a three-Judge Bench decision of this Court in Shree Hanuman Cotton Mills v. Tata Air Craft Ltd., in which there is a detailed discussion of what is meant by earnest money and what are the consequences of deposit of such money and when can the same be forfeited. The Bench after reviewing various decisions noted in the judgment which includes that of the Privy Council rendered in Chiranjit Singh v. Har Swarup, (AIR 1926 Pc 1:24 All Lj 248), culled out the following principles regarding the ‘earnest’ at page 139: (SCC p.531, para 21)
“(1)It must be given at the moment at which the contract is concluded. (2) It represents a guarantee that the contract will be fulfillled or, in other words, ‘earnest’ is given to bind the contract. (3) It is part of the purchase price when the transaction is carried out. (4) It is forfeited when the transaction falls through by reason of the default or failure of the purchaser. (5) Unless there is anything to the contrary in the terms of the contract, on default committed by the buyer, the seller is entitled to forfeit the earnest.”
(5) The Society which was the respondent before the Supreme Court contended; “IN view of the aforesaid legal position, the contention advanced by Mr. Bishwajit Bhattacharya for the respondents is that there was no acceptance of the offer given on 3.11.1992 in which mention was made about the rate of premium, being Rs. 1650.65. “The appellant is, therefore, not entitled, according to the learned Counsel, to forfeit the earnest money, as no such money had been deposited after this date in token of acceptance of the proposal.”
(6) The Supreme Court held that the sum of Rs. 5 lakhs, which was deposited, was liable to be forfeited by the D.D.A. and judgment of this Court reversed.
(7) The dictum laid down by the Supreme Court is that the terms agreed between the parties have to be considered for considering the question of the right to forfeiture by one of the parties to the contract.
(8) In Chandigarh Housing Board v. Avtar Singh and Another, , the Supreme Court had again considered and held that the power of forfeiture was intended to prevent fraud and mal practice in allotment.
(9) In the instant case, the petitioner Aggarwal Associates must have inspected the site before bidding at the auction. The Dda was bound to deliver possession of the property only on the petitioner’s depositing the balance 75% of the bid money. Admittedly, the petitioner had not deposited the amount. The petitioner wanted to project a case that the Dda was not in a position to put the petitioner in possession. It is merely a make believe affair. The case of the petitioner cannot be accepted. Therefore, the reliefs prayed for by the petitioner cannot be granted in law. The writ petition, accordingly, stands dismissed. There shall be no order as to costs.