AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2012 (8) TMI 1151
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....ing confirmed, within 3 months thereafter, 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 ....
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....mmittee. 6. DDA considered the recommendations of the committee at its meeting held on May 14, 1984 and vide resolution No. 121, Ex. DW-2/P-4, resolved that each individual request would be considered on its own facts 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 S....
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....um on the belated payment. We now request you to kindly convey us your formal approval to our making the said payment in instalments as requested for. Thanking you, Yours faithfully, For KAILASH NATH & ASSOCIATES, Sd/- Partner. Advance copy sent through Special Messenger. 10. With respect to the plot for which M/s. Kailash Nath & Associates had made a bid, the Central Government informed DDA on August 04, 1988 that the land was not Nazul 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 am....
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....the bid and forfeit the earnest money as per Ex. P-26. 16. Suffice would it be to state the plea in law taken by M/s. Kailash Nath & Associates was that notwithstanding time being of the essence of the contract, as per Ex. P-1, requiring it to pay the balance bid amount within three months of the bid being confirmed i.e. by May 18, 1982, since DDA agreed to shift the time for making payment as per Ex. P-8 requiring the balance amount to be paid on various dates set out in Ex. P-8, the last date being October 28, 1982 and thereafter having agreed vide Ex. P-19 on December 01, 1987 to consider favourably to extend 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....
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....n 22 of The Delhi Development Act 1957. As per Section 22 of The Delhi Development Act 1957 lands placed at the disposal of DDA by the Central Government have to be dealt with by DDA as per directions given by the Central Government and suffice would it be to state that 'The Delhi Development Authority (Disposal of Developed Nazul Lands) Rules 1981' are the directions of the Central Government with respect to the Nazul lands. 21. Through the communication dated August 04, 1988 of the Central Government to DDA we have proof that the land in question is not Nazul land. 22. We do not therefore debate with respect to DDA predicating a stand in appeal before 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....
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....e essence of the contract as per Ex. P-1, but DDA extended the time for making balance bid sum vide its letter Ex. P-8, to October 28, 1982 and thereafter vide Ex. P-19, on December 01, 1987, agreed to consider extending the time. Thus, without notifying the extended time i.e. re-fixing the date of the essence of the contract DDA could not revoke the contract and forfeit the security deposit. Per-contra, DDA urges that within the extended time granted as per Ex. P-8 i.e. October 28, 1982, since M/s. Kailash Nath & Associates did not make the payment the contract was breached, entitling DDA to forfeit the earnest money and as regards its letter Ex. P-19 DDA urged that merely because 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 (18....
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....tween the parties does not tantamount to extension of time and the question of estoppel does not arise. There was no extension of time in the present case and damages to be paid by appellants would be computed from February 28, 1943. 31. The decision holds that the principle of law is that where, by agreement, time is made of the essence of the contract, it cannot be waived by a unilateral act of a party and unless there is consensus ad-idem between the parties and a new date is agreed to, merely because a party to a contract agrees to consider time being extended for the opposite party to complete the contract, but ultimately refuses to accord concurrence would not mean that the party 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 ti....
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....ct. 36. Now, in India, reasonableness in State action is a facet of Article 14 of the Constitution of India and in the field of contract would have a considerable play at the pre-contract stage. Once parties have entered into a contractual obligation, they would be bound by the contract and the only reasonableness would be of the kind envisaged by the Supreme Court in the decision reported as AIR 1963 SC 1144 T.P. Daver v. Lodge Victoria No. 363 SC Belgaum & Ors. On the subject of a member of a club being expelled, and the relationship being a contract as per the rules and regulations of the club, adherence whereto was agreed to by he who became a member of the club and the management of the 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 wo....