M/S. KAILASH NATH ASSOCIATES Vs. DELHI DEVELOPMENT AUTHORITY & ANR.


This case is arises out of auction conducted by the Delhi Development Authority (“DDA”) wherein the appellant made the highest bid for Plot No.2-A, Bhikaji Cama Place, District Centre, New Delhi for 3.12 Crores (Rupees Three Crores Twelve Lakhs). As per the terms and conditions of the auction, the appellant, being the highest bidder, deposited a sum of Rs.78,00,000/- (Rupees Seventy Eight Lakhs), being 25% of the bid amount, with the DDA, this being earnest money under the terms of the conditions of auction. On 18.2.1982, the DDA acknowledged the receipt of Rs.78,00,000/- (Rupees Seventy Eight Lakhs), accepted the appellant’s bid and directed the appellant to deposit the remaining 75% by 17.5.1982. However, as there was a general recession in the industry, the appellant and persons requesting to extend the payment time. As per committee, DDA extended time for payment upto 28.10.1982 with varying rates of interest starting from 18% and going upto 36%.Several letters written by written by the appellant to DDA from 1984 to 1987 but no answer was forthcoming by the DDA. Apellant claimed that persons similar to the appellant, namely, M/s. Ansal Properties and Industries Private Limited and M/s Skipper Tower Private Limited had been allowed to pay the balance 75% premium. Also, Court force in the contention raised on behalf of the appellant regarding discrimination. Apellant requested recovery of damages and recovery of the earnest amount of Rs.78,00,000/- (Rupees Seventy Eight Lakhs). Shortly , DDA reauctioned the property with of fetched of 11.78 crores. Court ordered refund of the earnest money forfeited together. As a result, earnest money that should be refunded should only be refunded with 7% per annum and not 9% per annum interest as was done in other cases. The DDA having chosen to fight the present appellant tooth and nail even on refund of earnest money, when there was no breach of contract or loss caused to it, stands on a different footing. We, therefore, turn down this plea as well. Appeal is allowed and both the parties will bear their own costs.

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