Delhi Development Authority v. Merta Investment Pvt. Ltd.

5. It is contended by learned counsel for DDA, Mr Anish Dhingra, that pursuant to the Order in the First Petition, DDA appropriately dealt with the representation of the Respondent and also granted a personal hearing to the authorised representative of the Respondent. However, since the Respondent in its letter of 05.02.2021 stated that he is ready to pay only 85% of the bid amount, no allotment could be granted to the Respondent. 5.[1] It was further submitted by learned Counsel for DDA that the learned Single Judge failed to appreciate that the petition filed by the Respondent was not maintainable in view of the fact that there exists an Arbitration Clause in the Bid Agreement dated 01.06.2019 signed by the Respondent. The Respondent had an alternate remedy to approach an Arbitral Tribunal, which the Respondent has failed to do and hence, is not entitled to any relief from this Court. 5.[2] It was further submitted that the learned Single Judge did not LPA 639/2022 Pg. 5 of 13 appreciate that the facts in the Gaurav Enterprises case (supra) which are completely different from the present case and the Impugned Judgment has wrongly relied thereupon to grant relief to the Respondent. 5.[3] DDA also filed a compilation of judgments as well as the “DDA Fee Bill Policy 2022” on 12.11.2022 as directed by this Court, while reserving judgment in the matter.

6. Mr Ravi Sikri, learned senior counsel appearing on behalf of the Respondent has contended that there was a variation in the size of the Plot as mentioned in the e-Auction document, and that which was allotted to the Respondent which was a difference of approximately 24% in area. The Respondent has correctly asked for a pro-rata reduction in the price at the time of allotment and furnished a letter undertaking his willingness to accept a 15% rebate in costs, calculated on a pro-rata basis, as per Clause 5 of Chapter-III of General Terms and Conditions of the e-Auction. However, DDA summarily rejected the Respondent‟s representation. 6.[1] It was further submitted that there was no infirmity with the Impugned Judgment. Despite complying with all terms and conditions as specified in the Allotment Letter as issued by DDA and making of payments specified thereunder, the Plot was not allotted to the Respondent, leading to a second round of litigation before this Court. 6.[2] It was further submitted by learned senior counsel appearing on behalf of the Respondent that the judgment in Gaurav Enterprises case (supra) is squarely applicable to the facts of the present case and that in contravention of the Order in the First Petition, DDA exercising its LPA 639/2022 Pg. 6 of 13 power in an arbitrary and illegal manner, failed to execute a Conveyance Deed in favour of the Respondent. 6.[3] The Respondent also filed a Bill of Costs and relevant invoices reflecting costs and legal expenses incurred by the Respondent, including those incurred in W.P.(C) 7181 of 2020. Invoices totalling in the sum of Rs.11 Lakhs have been filed.

7. We have heard learned counsel for the parties in detail and have had occasion to peruse the record.

8. The Impugned Judgment, at the outset, records that, although the Order in the First Petition had directed DDA to dispose of the representation of the Respondent, in the light of a judgment of a Coordinate Bench of this Court in Gaurav Enterprises case (supra), the said directions were not complied with, which led to a second round of litigation before this Court. 8.[1] The learned Single Judge further held that the conditions set out for the allotment of the plot for execution of the Conveyance Deed having been complied with by the Respondent, DDA as a matter of equity could not have cancelled the allotment of the Respondent. 8.[2] We agree with the findings of the learned Single Judge. A Coordinate Bench of this Court in the Gaurav Enterprises case (supra) while dealing with a similar issue relating to variation of area of the plot, held that the action of DDA in not accepting the bid and returning the amount deposited by the Petitioner was arbitrary and irrational. Consequently, it was directed that the plot area as actually available, be allotted by DDA at the 15% pro rata reduced price, and the possession of the plot therein be handed over to the aggrieved party. LPA 639/2022 Pg. 7 of 13 The Respondent‟s case is in fact on a better footing than in the Gaurav Enterprises case (supra), as unlike in the Gaurav Enterprises case (supra), the Respondent herein had made the entire payment to DDA.

9. The learned Single Judge while dealing with Clause (5) of Part 1 of Chapter-III of General Terms and Conditions of the e-Auction held that the area was approximate, and since the Respondent was prepared to take a pro-rata reduction of 15%, its request for execution of the Conveyance Deed should have been granted. 9.[1] Clause (5) of Part 1 of Chapter-III on General Terms and Conditions of the e-Auction document reads as follows:

9.[2] A plain reading of this Clause shows that the area of plots available for allotment with the DDA are approximate and depending on the size of the plot, a bidder should be prepared to accept a variation of the plot size and either pro-rata increase or reduction in price up to a margin of 15%. 9.[3] The contention of the Respondent that there was a variation in the size of the Plot stood affirmed by the Engineering Department of DDA on 16.11.2019, despite which, the Cancellation Letter was issued by DDA and the pro-rata reduction in price was not granted to the Respondent. The relevant extract of the Cancellation Letter in this regard states: LPA 639/2022 Pg. 8 of 13 “....However, the petitioner intimated that the actual area of the plot appears to be lesser to the area shown in the e-Auction document and requested to reduce the quoted price on pro rata basis. The matter was referred to Engineering Deptt. in response to which. EE/SED-07 vide letter dated 16.11.2019 intimated that the actual area on the ground of the plot was found to be 112 sq mtrs. against the area mentioned in the e- Auction as 139.07 sq. mtrs.....” 9.[4] In the present case, the reduction in the actual area of the Plot was approximately 25% of the area, yet the Respondent was willing to accept its allotment with a pro-rata reduction of 15% in price at the time of execution of the Conveyance Deed. The actions of DDA to first return the monies deposited by the Respondent, and thereafter, reject the allotment of the Plot was wholly arbitrary and against the principles of equity and good conscience. We thus find no reason to interfere with the findings of the learned Single Judge.

10. DDA relied upon the ABL International Ltd. and Ors. v. Export Credit Guarantee Corporation of India Ltd. and Ors.[2] and the State of U.P. and Ors. v. Bridge & Roof Co. (India) Ltd.[3] to submit that where the parties to the dispute agree to settle their disputes by arbitration, the Court will not permit recourse to another mode of dispute resolution, and since the Clause 1.11 of the General Instructions to Bidders/Prospective Bidders document contains an arbitration clause, in the face of an alternate remedy, the writ petition filed by the Respondent was not maintainable. 10.[1] This objection of the DDA is also not tenable in the present case. The

LPA 639/2022 Pg. 9 of 13 existence of an arbitration clause is not disputed by the parties, however, the actions of DDA are contrary to law as well as the principles of natural justice. The learned Single Judge has aptly dealt with this objection in paragraphs 16 and 17 of the Impugned Judgment to intercede and set aside the Cancellation Order. 10.[2] Reliance has also been placed by DDA on the judgment of the Apex Court in Rajasthan State Industrial Development and Investment Corporation and Ors. Vs. Diamond and Gem Development Corporation Ltd. and Ors.[4] However, the said case relied on the Rajasthan Land Revenue (International Area Allotment) Rules, 1959 and the interpretation of Rule 11A of the said Rules, which facts have no application to the facts of the present case.

11. The Court will not normally exercise its jurisdiction under Article 226 to the exclusion of other available remedies, where the relationship between the parties is contractual and such contract contains an arbitration clause. However, where the Court finds that the action(s) of State or the instrumentality of the State are:

(i) violative of fundamental rights;

(ii) in violation of principles of natural justice;

(iii) wholly without jurisdiction; and/or

(iv) unreasonable and unfair, the Court will exercise its discretion

[See Harbanslal Sahnia and Another Vs. Indian Oil Corpn. Ltd. and Ors.[5] ]. 11.[1] The Supreme Court in the case of Unitech Limited & Ors. v.

LPA 639/2022 Pg. 10 of 13 Telangana State Industrial Infrastructure Corporation (TSIIC) and Others[6] has in this regard, held as follows:- “38............. However, to clear the ground, it is necessary to postulate that recourse to the jurisdiction under Article 226 of the Constitution is not excluded altogether in a contractual matter. A public law remedy is available for enforcing legal rights subject to well-settled parameters.

39. A two judge Bench of this Court in ABL International Ltd. v. Export Credit Guarantee Corporation of India [ABL International] analyzed a long line of precedent [sic: precedents] of this Court to conclude that writs under Article 226 are maintainable for asserting contractual rights against the state, or its instrumentalities, as defined under Article 12 of the Indian Constitution. Speaking through Justice N Santosh Hegde, the Court held: “27....the following legal principles emerge as to the maintainability of a writ petition: (a) In an appropriate case, a writ petition as against a State or an instrumentality of a State arising out of a contractual obligation is maintainable.... 40............ If the state instrumentality violates its constitutional mandate under Article 14 to act fairly and reasonably, relief under the plenary powers of the Article 226 of the Constitution would lie.........

41. Therefore, while exercising its jurisdiction under Article 226, the Court is entitled to enquire into whether the action of the State or its instrumentalities is arbitrary or unfair and in consequence, in violation of Article 14............” [Emphasis is ours] 11.[2] The Supreme Court and this Court, including in the matters of State of U.P. v. Sudhir Kumar Singh[7], Unitech Limited & Ors. case (supra)

2020 SCC OnLine SC 847 LPA 639/2022 Pg. 11 of 13 which while discussing ABL International case (supra), have also held that writs under Article 226 are maintainable for asserting contractual rights of parties against the State. 11.[3] The judgment in the Rajasthan State Industrial Development case (supra) relied on by DDA in fact would come to the aid of the Respondent. The Supreme Court has held that writ jurisdiction is equitable in nature and that in order to maintain writ of mandamus, the foremost requirement is, that it must not be frivolous and must be filed in good faith. 11.[4] Not only are the facts in the present case undisputed, but the Respondent, in good faith, has complied with all the terms and conditions imposed by DDA since the time of the e-Auction. The actions of DDA, thus, are against the principles of equity and good conscience and cannot be sustained.

12. By order dated 09.11.2022, this Court had directed both the parties to file their Bill of Costs. DDA has filed „DDA Bill Policy of 2022‟ which sets out the fees payable to the lawyers including Panel Lawyers engaged by the DDA in the High Court. The Respondent has filed a detailed Bill of Costs along with copies of invoices setting forth the costs and legal expenses incurred by the Respondent. 12.[1] We note from the invoices that the Respondent has had to file 4 different cases and incur the following expenses as litigation costs owing to the acts of the DDA: S.No. Case Details Costs incurred

1. Writ Petition (Civil) No. 7181 of 2020 Rs.2,50,000/-

2. Writ Petition (Civil) No. 7167 of 2021 Rs.5,50,000/- LPA 639/2022 Pg. 12 of 13

3. Contempt Case (Civil) No. 1142 of Rs.1,00,000/-

4. LPA No. 639 of 2022 Rs.2,00,000/- Total Rs.11,00,000/- 12.[2] Although, DDA has not quantified the costs that it has incurred in prosecuting the above matters, keeping in mind that DDA had to defend 3 cases and file 1 case before this Court, it is likely that the litigation expenses incurred by DDA on prosecuting these 4 cases would have been a few lakhs, to say atleast.

13. The decision to file an Appeal by the DDA in this matter is also inexplicable. This dispute had already been dealt with by the High Court in, not one, but two decisions of the Single Judge of this Court. Even after the Impugned Judgment was passed, it was not implemented by DDA, leading to the filing of a Contempt Petition by the Respondent. Thereafter, in compliance with the order of the Contempt Court, physical possession of the Plot was handed over to the Respondent. 13.[1] The handing over of the Plot did not, however, put a quietus to the dispute as DDA chose to file the present Appeal challenging the order of the learned Single Judge, that too, after it had already been implemented by DDA.

14. All contentions raised before us by DDA were already previously raised before the learned Single Judge and have adequately been dealt with in the Impugned Judgment. No new grounds have been raised before us nor agitated by DDA. In view of the aforegoing, we find no LPA 639/2022 Pg. 13 of 13 infirmity with the order passed by the learned Single Judge which is accordingly upheld.

15. The Appeal and pending applications stand dismissed.

16. The Courts are over burdened with the filing of cases like the present case. Despite the Respondent complying with other requirements of DDA, he was not allotted his Plot for more than three years and that too, after no less than four Court cases and spending Rs.11 Lakhs as litigation costs. 16.[1] We therefore find this to be a fit case to impose costs. However, given the fact, that the authority involved is DDA, we impose only nominal cost in the sum of Rs.25,000/- which shall be paid to the Respondent, no later than within four weeks from the date of this Judgment. Judgment.

(TARA VITASTA GANJU) JUDGE (RAJIV SHAKDHER) JUDGE May 19, 2023/ ha