JUDGMENT
S.S. Chadha, J.
(1) This petition under: Article. 226 of the Constitution of India seeks a writ of certiorari to quash the impugned orders dated July 3, 1987. July 6, 1987 and July 10, 1987 cancelling the bids allotments of the petitioners of plots Nos. 80, 81, 82 and 158, Transport Centre, Rohtak Read, New Delhi and forfeiting the earnest money deposited by the petitioners at the time of auction of each plot.
(2) The Delhi Development Authority (hereinafter referred to as the Authority) issued a public notice for auction of. commercial plots for shops/offices, godowns, workshops, nursing home and cold storage. The terms and conditions of allotment by auction of perpetual lease-hold tights in the plots have been framed under the Delhi Development Authority (Disposal of Developed Nazul Land) Rules, 1981 (for short called the Rules) framed in exercise of the powers conferred by Clause (j.) of subsection 2) of Section 56 read with sub-section (3) of Section 22 of the Delhi Development Act, 1957 (for short called the Act).
(3) The terms and conditions provide, inter alia, that the officer conducting the auction could normally accept, subject to conferment on by the Vice-Chairman, the highest bid offered at the fall of hammer at the auction, and the person whose bid has been, accepted is required to pay as earnest money a sum equivalent to 25 per cent of his/her bid ethic in cash or by bank draf’ in favor of the Authority. When the bid is confirmed by the Vice-Chairman of the Authority the intending allottee is to be informed of such acceptance in writing and the intending allottee is required, within 90 days thereof, to pay to the Authority, the balance 75 per cent amount of the bid in cash, or by bank draft in favor of the Authority. Another condition is that the allottee may, with previous consent of the Authority in writing sell or transfer the floor space to be constructed on the plots meant for shops/offices only. The written consent can be granted on such terms and conditions and payment of charges as contained in the Brochure of terms and conditions of auction.
(4) Clauses (ix) and (xiv) of the terms and conditions which are ‘elevant in this case are reproduced below :- (ix) The allottee shall not be entitled to sell, transfer. assign or otherwise part with possession of the whole or any part of the plot, before or after the erection of the building without the previous consent in writing of the Lesser. In the event of the consent being .given, the Lesser may impose such terms and conditions as he thinks fit and shall also be entitled to claim and recover a portion being 50 per cent of the unearned increase in the value of the land (i.e. ‘differencc between the premium paid arid the market value of the plot at the time of sals, transfer, assignment or. parting with the possession. Provided that the Lesser shall have pre-emptive right to purchase the property after deducting 50 per cent of the unearned Increase as aforesaid. (xiv) If it is discovered that the lease of the plot has been obtained by suppressing or. any fact or mis-statement or mis-representation or fraud or if mere is any breach of the conditions of the lease, the lease wm be for tilted and the possession of me plot and the building thereon taken over by the Lesser -and the allottee win nut be entitled to any compensation whatsoever nor to return or any premium paid by him.”
(5) The auction was held on May 4, 1987 for plots numbers, inter alia, 80, 81 and 82. at transport Centre at Kontak Road, merit for ‘goods agency. ‘The petitioners made the highest bid or Rs. 5,55,001- in. the auction held on May 4, 1987 in respect of toe plot of land having No. 80 in Transport Centre, Romak. Road, New .Delhi. The petitioners paid a sum of Rs. 1,40,000- on May 4, 1987/ at the time to the auction towards earnest money of 25 per cent. The petitioners made inc highest bid to Rs. 6,50,0001- in the auction held on May 4, 1987 in respect to plot of land having No. 81, Transport Centre. .RohtaK Road.. New Delhi,. The petitioners paid a sum of Rs. 1,65,000 on-May 4, 1987 at the time of tie auction as earnest money. The petitioners gave the highest bid or Rs. 7,76,000 in the auction held on May 4, 1987 in respect of plot of land having No. 82, Transport Centre, Rohtak Road, New Delhi. The petitioners paid a sum of Rs. 1,94,000 on May 4, 1987 at the time of the auction towards earnest money of 25 per cent. The petitioners made the highest bid of Rs. 31 lacs in the auction held on May 7, 1987 in respect of plot of land meant for workshop having No. 158 .in Transport Centre, Rohtak Road, New Delhi. The petitioners paid a sum of Rs. 7,95,000 on May 7, 1987 at the time of auction towards earnest money of 25 per cent.
(6) Subsequently by four identical letters dated May 19, 1987 the petitioners were informed that their respective bids had also been confirmed by the Vice-Chairman of the Authority. The petitioners were further asked to pay the balance of the amount by August 16, 1987. The balance amounts demanded from the petitioner as under in respect of the four plots of land were for plot No. So Rs. 4,15,050 For plot No. of. Rs. 492,050 For plot No. 02 Rs 5,82050 Fort plot No. 158 Rs 23,05050
(7) The Authority later issued tour separate letters dated June 8, 198/ coming upon petitioners to show cause Within 15 days from the date or issue or me said notices as to way the plus allotments of the said plots of land in favor of the petitioners should not be cancelled for alleged violation of the terms and conditions of the auction and as to why the earnest money should not be forested It is apposite to reproduce the relevant portion of the identical notices :- “AND Whereas the said plot of land has been permitted to be used as Goods Agency/ Workshop and the floor space to be constructed thereon, is not saleable under the terms and conditions of the auction. And Whereas you are not entitled to sell/transfer, assign or otherwise part with the possession of the whole or any part of the plot before or after the creation of the building without previous consent in writing of the Lesser under the said terms and conditions of auction. And Whereas it has been noticed that you have given large size advertisement in daily newspaper “Times of India”, dated 10-5-1987, for sale of floor space for workshop/showrooms/ godowns and offices through you Promoters Mjs. Alaknanda (P) Ltd., 4128, Asaf Ali Road, New Delhi-2, which is contrary to the said terms and conditions of the auction.”
(8) The petitioners responded to the four show cause notices in their four separate representations dated June 15. 1987. One of the main submissions made is that the aforesaid advertisement invited applications for offer/booking/allotment and does not in any way tantamount to any sale/transfer/assignment or involve any parting with the possession of the said plots of land. The text of the advertisement was enclosed with the replies and it was urged that it is apparent from the contents India and another of the advertisement thatthe petitioners have not effected any sale/transfer of the said plots and, therefore, have not violated any terms and conditions of the auction.
(9) The respondents by four identical letters dated July 3, July 6, July 6 and July 10, 1987 have cancelled the bids/allotment and forfeited the earnest money deposited by the petitioners. The only reason given in tile impugned orders is that the petitioners “could not give a satisfactory reply to the above show cause notice”.
(10) Shri S. P. Kalra, the learned counsel for the respondents has raised a preliminary objection that the dispute involved in the present writ petition is essentially in the realm of contract and not amenable to the writ jurisdiction of this Court. The respondents had auctioned the plots in dispute on certain terms and conditions offered at and before the auction and the Petitioners had agreed to adhere to and abide by the terms and conditions offered by the respondents. It is urged that the petitioners have preached Clause (ix) of the terms and conditions and therefore, in exercise of the powers conferred under Clause (xiv) the respondents have exercised its powers of termination the contract under the terms and conditions agreed to This submission, though attractive., cannot stand close scrutiny.
(11) The authority has been constituted under the Act. It is an instrumentality and agency of the state. Chapter V of the Act provides for the acquisition and disposal of land. Under Section 22 of the Act. the central Government may by notification in the Official Gazette and upon such terms and conditions as may be agreed upon between the Government and the Authority, place at the disposal of the Authority all or any developed and undeveloped lands in Delhi vested in the Union (known and hereinafter referred to as ‘Nuzulland’) for the purpose of development in accordance with the provisions of the Act. After any such Nuzulland has been developed by, or under the control and supervision of the Authority, it has to be dealt with by the Authority in accordance with the Rules made and directions given by the Central Government in this behalf”. The Rules have been framed and noticed in the Gazette violated September 26, 1981 providing ‘for the manner of dealing, with nuzulland. Allotment by auction is provided in Chapter Iii of the Rules, The Authority is required under Rule 27 to publish, later alia, the terms and conditions of auction and other details, including the arms and conditions required to be fulfillled and fees payable for participation in the auctions by the intending purchasers. Immediately after the auction, an application’ ‘a writing is taken from the highest. bidder. That application prays for allotment of the perpetual lease-hold rights in the plot under the Rules. Attached to it are the- terms and conditions of the allotment by auction and those contained in the performa of the deed. The forfeiture of the earnest money is provided in Rule 32. Rule 43 provides for the execution of the lease. It is the admitted case of the respondents that the lease deeds have not yet been executed.
(12) In (1) -Ms. Radhakrishan Aggarwal V. State of Bihar and others”, , their Lordships quoted with approval the division of cases in which the breach of alleged obligation by the State or agency can beset up into three types, namely, “(i) Where a petitioner makes a grievance of breach of promise onthe part of the State in cases where on assurance or promise made by the State he has acted to his prejudice and predicament, but the agreement is short of a contract within the meaning of Article 299 of the Constitution; (ii) Whore the contract entered into between the person aggrieved and the State is in exercise of a statutory power under certain Act or Rules framed there under and the petitioner alleges a breach on the part of the State ; and (iii) Where the contract entered into between the State and the person aggrieved is non-statutory and purely contractual and the nights in liabilities of the parties are governed by the terms of the contract, and the Petitioner complains about breach of such contract by the State”. The case of the petitioners clearly false in category (ii) above. The Authority purports to exercise the right under the contract, but. none exists as admittedly no lease-deed has been executed’. The rule inhibiting arbitrary action by the state applies when the State Or its agency or instrumentality is dealing with the public by way of entering into contracts. The Authority under the statutory Rule 43 ” is required to execute with every allottee of nuzalland a lease in accordance with the prescribed forms and in addition a lease deed may contain conditions as may be necessary in the circumstances of the case. The Authority” refusing to execute the, lease on the alleged ground that the petitioners have violated the terms and conditions of the auction. The petitioners case is that the Authority has committed contravention of its own statutory Rule and the impugned actions are patently arbitrary alter India and another violation of the petitioners’ fundamental tights as guaranteed by Article 19(1)(g) of the Constitution of India. In “(2) D.F.O. South Kheri V. Ram Saneh“, Air 1973 S.C. 20, their Lordships were unable to hold that merely because the source of the right which was claimed, was initially in a contract, the party must go to a suit and not a petition by way of a writ “There can be no doubt that the petition was maintainable even if the light to relief arose out of an alleged breach of contract, where the action challenged was of a public authority invested with statutory power”. The writ claimed by the petitioners, in our view is not in the realm of a contract but against breach of statutory obligation.
(13) That takes us to the consideration of the merits of the writ petition. The impugned show cause notices refer to the advertisement in daily newspaper for sale of floor space/work shop/go downs/offices through the promoters of the petitioners. According to Mr. S. P. Kalra, the perusal of the advertisement shows that the petitioners have offered for sale the floor space for workshop/showrooms/offices/godowns for the three plots meant for ‘goods agency’ and one plot meant for ‘workshop’. In the advertisement, it has further been mentioned that the investment is guaranteed high appreciation and best suited for workshop, pare parts shop, showroom and agency owners etc. at a reasonable price with convenient Installments payments plan to suit the purchaser. It has further been mentioned in the advertisement that he space is available for as low as Rs. 50,000 onwards with small initial payment. It has also been promised in the advertisement for more profits and more appreciation. The counsel urges that a number of complaints) telegrams have been received from the public by the Authority that the petitioners have indulged into illegal “ale o” floor space and committed the fraud against the Authority as well as public at large. The stand that even booking for the sale of floor space without obtaining the consent of the Authority is violative of the term” and conditions of the auction and the impugned orders have rightly been issued.
(14) Mr. K. K. Lahiri, the learned counsel for the petitioners submits that the advertisement was only for the purpose of informing the public that space might be available with the petitioners. But by no stretch of imagination the invitation to. offer can be construed as a contract of the sale or transfer or assignment or parting with the possession either of the floor space or the whole or a part of the plots. The contention is that a sale transfer of immovable property over Rs. 100 can take place only by an instrument is writing duly registered and none is either alleged or established in the proceedings with the Authority or in this Court.
(15) We may recall the provisions of the Rules. Under Rule 29, the officer conducting the auction is authorised to accept the highest bid offered at the tall of the hammer and the person whose bid has been accepted is required to pay as earnest money a sum equivalent to 25 per cent of his bid. This acceptance of the highest bid by the officer is subject to confirmation by the Vice-Chairman under Rule ?0, there is a power of rejection of the bid for reasons to be recorded, The bids with respect to all the four plots have been confirmed by the Vice-Chairman and the confirmation communicated to the petitioners by letters dated May 19, 1987. The balance of the bid amount is payable within, such period as the vice Chairman may specify in the public notice under Rule 27 or in another public notice. In the notices it was specified that the intending allottee shall be informed of such acceptance in writing: and the intending allottee is required within 90 days thereof, to pay to the Authority the balance 75 per cent amount of the bid. In the letters dated May 19, 1987 the petitioners were called upon to deposit the balance 75 per cent of the bid amount within 90 days i.e. August 16, 1987. The power to forfeit the earnest money under Rule 32 could be ‘exercised only when the petitioners had failed to pay the balance amount of the bid within the period prescribed for. Similar is the provision, contained in Clause 2(viii) of the terms and conditions of the auction. There is no other power to forfeit the earnest money under the Rules. No other clause in terms and conditions of auction have been brought to our notice by the respondents which empowers the Authority to forfeit the earnest money. The forfeiture of the earnest money is thus clearly illeagl. It could be resorted to only if the petitioners had failed to pay the balance amount of the bid within 90 day of the issue of the demand letter. There is no doubt that under Clause (ixl of the terms and conditions of the allotment an allottee is not entitled to sell. transfer a sign or otherwise part with possession of the whole or any part of the plot, before or after “he erection of the building without the previous content in writing of the Lesser, but that eventuality has not yet arisen. The advertisement referred to in the impugned orders do not amount to any sale transfer. India and another assignment or otherwise parting with possession of the plots in dispute or any part thereof. The advertisement is only an invitation to offer and it only invites offers for booking spaces. It does not amount to a sale or transfer or assignment. A sale, tansfer or assignment can only be by an instrument in writing duly registered by which the title in the immovable property passes. The petitioners have not done any overt act in that regard. It may be that after the invitations are received and the plot is developed and the building is erected that the petitioners would ask for the prior consent in writing of the Lesser before the transfer. It may be that the petitioners may obtain the previous consent in writing before the transfer by payment of the charges. This the petitioners can do only after the lease is executed by the Authority in favor of the petitioners. Mere preparation to commit a breach of the term. which may ultimately come into existence, cannot be taken as a breach of the terms and conditions of the contract. The respondents have taken the proceedings on an anticipatory breach of the terms and conditions of a contract which has not yet come into existence as no lease-deed has been executed. The power under Clause (xiv) is to cancel the lease, inter alia. if there is any breach of the terms and conditions of the lease. There is no power under the Rules to cancel the bid. once the Vice-Chairman has confirmed the bid of the highest, bidder.
(16) The Authority has proceeded on the assumption that the contract which could come into existence on the execution of the lease-deed under Rule 43 world be breached by the petitioners, as the breach by them has become inevitable bythe issue of the advertisement for booking of floor space. That was exactly the case of the other builders as detailed in para 15 of the writ petition such as Pushpa Builders. Vardhman Auto. M.C. Auto/Makhani Construction Raiendras. Madan Builders who had also advertised but their bids were not cancelled and the petitioners allege discrimination by the Authority which is an instrumentality and agency of the State. Para 15 of the counter-affidavit reads as under :- “Paragraph 15 is denied. The action of the respondnt is legal, valid and iustified in canceling the bid of the petitioner. M/s, Vardhinan Properties Ltd. Purchased plot No. 117. Transport Centre Rohtak Road, in the auction held on 4-5-87 was served upon with the show cause notice dt. 24-6-87 and and the same was examined. Mjs. Vardhman Properties Ltd. also filed affidavit that they have not sold or parted with the floor space in respect of plot No. 117, Transport Centre, Rohtak Road. Necessary enquiries from the site were also made and it was found that no action against him was warranted and as such he bid of M/ Vardhman Properties Ltd, was not cancelled. As regard the case of M/s. Makhani Constn. Pvt. Ltd. purchaser of plot No. 123 in the Transport Centre. Rohtak Road, in the auction held on 7-6-87. it is mentioned that a show cause notice has already been served noon the said company and reply of the same by then was considered. The bidder has mt the VC., Dda and assure that no sale of whatsoever of the space will be made in respect of the said plot. They further requested that the show cause notice may be withdrawn. After examining the matter the show cause notice was accordingly withdrawn after obtaining the orders of the competent authority. As regard the case of M/s. Rajindras Properties & Industries it has already been mentioned that the bid of the plot purchased by them has already been cancelled and the earnest money forfeited. As reward the case of Mfs. Madan Builders ^ is not known as to which riot Mis Madan Buyers has purchased from Dda as such the respondents are unable to take action against Mis. Madan Builders.”
(17) It is significant to note that the respondents have not dealt with the case of Pushpa Builders. The respondents have proceeded on the basis of the assurance given by those builders that no sale of the space would be made in respect of the plots and for tins reason the show cause notices against those builders have been withdrawn. The petitioners had also taken the stand that the advertisments invited applications for offer/booking allotment and they do not in any way tantamount to sale transfer as/ assignment or involve with the booking of possession of the plot of land. The only reason given in the impugned order is that it is not a satisfactory reply. The Authority did not hold any enquiry and has not come to . a conclusion that any concluded contract of sale/transfer. assignment had come into existence violating any terms of the auction. The terms and conditions of auction and the rules do not empower the cancallation of the bid on an alleged anticipatory breach of the contract. The petitioners have not remindated the contract and they have also offered to abide by it as the other builders. By mere issue of the advertisement for bookings, the petitioners have not created any impossibility that they cannot abide by the terms of the contract. The petitioners have no where renunciated the terms of the contract with the Authority. There is no reason why they have been discriminated.
(18) The formation of the opinion of the alleged anticipatory breach by the petitioners is in violation of the principles of natural justice inasmuch as no hearing was given to the petitioners. The impugned orders are cryptic and do not show how the mind of the Authority was working and whether or not the submissions of the petitioners made in the answer to the show cause notice were considered. The impunged orders say that the amount of the earnest money deposited by the petitioners at the time of the auction of the plot has been forfeited. The forfeiture of earnest money under Rule 32 could only be if a person fails to pay the balance amount of the bid within the prescribed period. There is no other rule or term of the contract under which the earnest money could be forfeited. It shows a complete non-application of mind by the Authority. By the confirmation of the bid in favor of the petitioners a valuable right has accrued to them. This right could only be withdrawn if there was any power in the Authority to do so. Mere possibility of a breach of the terms of the lease which has not vet come into existence, could not form the basis for the cancellation of the bids.
(19) For the above reasons, the writ petition succeeds. The impugned orders dated July 3, July 6, July 6 and July 10. 1987 cancelling the bids/allotment of the petitioners are hereby quashed. The period from the date of the impugned orders till today shall be excluded in computation of the period for performance of the contract by the petitioners as to the payment of the balance amount of the bids demanded in the letter of the Authority dated May 19, 1987. A writ of mandamus is issued directing the Authority to complete the contract of sale on the terms and conditions between the parties. On the facts and circumstances of the case. we make no order as to costs.