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TMI Blog2012 (8) TMI 1151X X X X Extracts X X X X X X X X Extracts X X X X ..... after, the balance bid amount had to be paid and thereafter DDA had to execute the necessary conveyance deed. Vide Ex. P-3 dated February 18, 1982, M/s. Kailash Nath & Associates were intimated by DDA that the Vice Chairman had confirmed the bid, and this required M/s. Kailash Nath & Associates to pay the balance bid consideration in sum of ` 2.34 crores to DDA by May 18, 1982. 2. There were several other bidders of other plots whose bids were likewise confirmed and intimation sent. Including M/s. Kailash Nath & Associates bidders made a representation to DDA on May 5, 1982 praying that time be extended to deposit the remaining 75% of the bid amount, and it appears that the financial condition in the market in the realty sector was not too healthy. 3. DDA agreed to consider the request, and probably since a large number of auction purchasers were to be affected, it decided to constitute a committee to consider the matter. The Committee submitted its recommendations on July 21, 1982, recommending to the Vice Chairman DDA that time may be extended for remaining payment to be made, but upon the condition that the bidders would pay interest at different rates for different periods of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e. no collective decision would be taken. 7. Whereas DDA informed a few bidders that time had been extended qua them to make payments of the balance bid amount, no communication was addressed to M/s. Kailash Nath & Associates as also a few other bidders, and as regards M/s. Kailash Nath & Associates it sent letters Ex. P-11 to Ex. P-18 between December 09, 1985 to October 10, 1987 to DDA, seeking information as to when it could pay the balance bid amount and with what rate of interest. 8. DDA did not respond to these letters till December 01, 1987, when it wrote the letter Ex. P-19 informing M/s. Kailash Nath & Associates that before its case was considered, it should give its consent for making payment of balance amount of 75% bid amount within the period to be fixed together with interest on the belated payment. The letter reads as under: "WITHOUT PREJUDICE" F. No. (2)/S2/82-Impl.-I/4 DELHI DEVELOPMENT AUTHORITY VIKAS SADAN I.N.A. NEW DELHI From DIRECTOR (C.L.) DELHI DEVELOPMENT AUTHORITY NEW DELHI...........198..... To M/s. Kailash nath & Associates,1006, Kanchanjanga Bldg., 18, Bara Khamba Road, New Delhi-110001. Sub: Regarding pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land and thus it had no role to play in the commercial decision required to be taken and that it was for DDA to take the necessary decision. 11. Since M/s. Kailash Nath & Associates were not communicated any decision it sent a representation Ex. P-21 on September 06, 1988, and receiving no response sent another representation Ex. P-23 on February 02, 1989 requesting DDA to send intimation as to by what date it could make payment and with what rate of interest. 12. It appears that M/s. Kailash Nath & Associates and a few other similar situate bidders got information that DDA was intending to cancel their bids and forfeit the earnest money deposited by them i.e. 25% of the bid amount and thus M/s. Kailash Nath & Associates and a few other bidders filed a writ petition, registered as WP(C) No. 2395/1990 in this Court, alleging discrimination i.e. pleading that there was no justification to grant extension of time to a few bidders and deny the same to a few and for which instances were highlighted of those bidders who were granted extension of time to pay the balance bid amount. It was urged that having assured that time would be extended to make the payment, a statutory authority li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time to make the payment, by its conduct and action DDA had waived even October 28, 1982 as the date by which balance consideration had to be paid and unless DDA notified another date, making it the date of the essence of the contract, DDA could not unilaterally terminate the contract. 17. In response, DDA filed a written statement, inter-alia, taking the plea that it had agreed to extend the time to make payment as per Ex. P-8 and that M/s. Kailash Nath & Associates did not pay within the time granted therein and was thus in breach. As regards its letter Ex. P-19, DDA pleaded that the same was sent without prejudice and thus merely because it agreed to consider whether or not to extend the time to make payment, it was not obliged to do so. DDA pleaded that the auction was governed by The Delhi Development Authority (Disposal of Developed Nazul Land) Rules 1981 and as per Rule 24 if the balance bid amount was not paid within 3 months of the bid being confirmed, the same was liable to be cancelled and the earnest money forfeited. DDA pleaded that the rules were statutory and being not challenged, the suit had to be dismissed. Thus, in law it was the case of DDA that merely bec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us on the strength of the decision of a Division Bench of this Court reported as (1998) DLT 843 Ashwini Kapur & Anr. v. UOI & Anr. which holds that pertaining to Nazul land, earnest money (being 25% of the bid amount) is liable to be forfeited not only on the general principles of law laid down by the Supreme Court in the decision reported as AIR 1970 SC 1986 Shree Hanuman Cotton Mills & Anr. v. Tata Air Craft Ltd. but even on the strength of 'The Delhi Development Authority (Disposal of Developed Nazul Land) Rules 1981' or the controversy that the learned Single Judge ignored Rule 29 of the said Rules, which rule since the very inception of the rules in the year 1981 also empowered DDA to likewise do. The reason for our not entering into this debate is that the land in question is not Nazul land. 23. Holding that the plea of bar of res-judicata raised by DDA was premised on WP(C) No. 2395/1990 filed and it being dismissed, the learned Single Judge correctly opined that the bar of res-judicata would not apply since the writ petition was dismissed as not maintainable and not on merits. 24. Noting that the plot had been re-auctioned by DDA in the year 1994 at a bid amount o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecause DDA intimated, and that too making it expressly 'Without Prejudice' its willingness to consider further extending time to make the payment, did not oblige it to do so and would not mean that it had waived October 28, 1982 as the date by which the contract had to be finalized. 27. As noted by us, the learned Single Judge has decided in favour of M/s. Kailash Nath & Associates by placing reliance upon the decision reported as (1870) L.R. 10 281 Webb v. Hughes. 28. The decision reported as (1870) L.R. 10 Eq. 281 Webb v. Hughes concerned a contract for sale requiring the sale to be completed on February 26, 1869 i.e. February 26, 1869 was the date of the essence of the contract. Before the said date arrived the purchaser desired title documents to be shown or produced and the seller responded by delivering an abstract of title, which was found to be incomplete. The solicitors of the parties exchanged communications with respect to the title and the date February 26, 1869 expired. There was evidence that the parties continued to exchange correspondence with respect to the title till April 20, 1869 and not being able to resolve the issue, the suit was filed for specific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty has by conduct waived the date originally agreed as being of the essence of the contract. 32. In the decision reported as AIR 1986 Karnataka 14 M/s Venkateswara Minerals v. Jugalkishore Chiranjital, Firm, parties entered into agreement on February 1, 1968 for delivery of goods by appellants on March 16, 1968. On March 20, 1968 respondents contended that appellants had committed breach of contract and requested for refund of sale price within 8 days. On April 9, 1968, appellant contended that time was not of the essence and delivery was not made due to respondents fault. On August 2, 1968 respondent offered to extend the period of delivery by 7 days from date of receipt of this notice. But, no acceptance was communicated to respondent. On August 24, 1968 appellants wrote contending they have not committed breach. It was held that mere discussions on time being extended to complete the contract did not shift the original date by which the contract had to be performed and thus damages had to be awarded to the buyer. 33. In the decision reported as AIR 1958 SC 512 Keshavlal v. Lalbhai T. Mills Ltd., on July 4, 1942 and July 24, 1942 orders were placed by appellants with responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... club, the Supreme Court observed that in such private affairs, it would be good faith in taking an action which is rooted in the minds of modern men and women i.e. in a modern democratic society and no more. The decision guides that where a private affair i.e. a contract is so perverted by a party that it offends the concept of a fair-play in a modern society, alone then can the action be questioned as not in good faith and suffice would it be to state that anything done not in good faith would be unreasonably done. 37. The learned Single Judge has held that the property was ultimately auctioned in the year 1994 at a price which fetched DDA a handsome return of ₹ 11.78 crores and there being no damages suffered by DDA, it could not forfeit the earnest money. 38. The said view runs in the teeth of the decision of the Supreme Court reported as AIR 1970 SC 1986 Shree Hanuman Cotton Mills & Anr. vs. Tata Aircraft Ltd. which holds that as against an amount tendered by way of security, amount tendered as earnest money could be forfeited as per terms of the contract. 39. We may additionally observe that original time to pay the balance bid consideration, as per Ex. P-1 was May 18 ..... 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