Delhi Development Authority & Anr. vs. Maa Jagdambe Tent

Held

The Court held that it would not return findings on the merits of the writ petition, including its maintainability or the alleged breach of contract, as the writ petition was still pending before the learned Single Judge. Regarding the interim order dated September 6, 2021, directing no precipitate measures, the Court noted that the learned Single Judge had considered the respondent's substantial payments and investments made despite pandemic-related losses, invoking the force majeure clause. The order dated October 11, 2021, declining to vacate the interim order was based on the respondent clearing arrears up to September 6, 2021, and the DDA encashing the bank guarantee. The Court found no reason to interfere with the learned Single Judge's view, considering the pandemic and the prima facie absence of default in arrears. The Court clarified that the interim order did not prevent the DDA from conducting a fresh e-auction. The appeal was dismissed as having no merit.

Facts

The Delhi Development Authority (DDA), the appellant, held an e-auction on October 29, 2020, for a pandal site, accepting the bid of Maa Jagdambe Tent, the respondent, for Rs. 55,10,000/-. A Letter of Intent was issued on November 9, 2020, followed by an acceptance letter on November 19, 2020. The site was allotted on a license fee basis for 9 months, ending August 31, 2021, with a monthly license fee of Rs. 6,12,223/- plus GST. The DDA issued a show cause notice on January 22, 2021, for default in payment. The respondent sought an extension due to the COVID-19 pandemic. The DDA rejected the request and issued a public notice for a fresh e-auction on August 15, 2021. The respondent filed a writ petition, and the learned Single Judge, by order dated September 6, 2021, directed the DDA not to take precipitate measures. The DDA's application for vacation of this order was dismissed on October 11, 2021.

Key Issues

1. Whether a writ petition is maintainable for a dispute arising from a breach of contract, as contended by the appellant (DDA)? 2. Whether the learned Single Judge erred in not vacating the interim order, despite the respondent being a defaulter and the contract having expired, thereby effectively extending the contract impermissibly? 3. Whether the learned Single Judge erred in declining the vacation of the interim order without recording reasons, relying solely on the respondent's statement of payment and the encashment of the bank guarantee? Contentions of the Appellant (DDA): The dispute is contractual, making the writ petition not maintainable. The respondent cannot claim benefit from the pandemic as marriages were still occurring, and contract frustration does not arise merely from altered circumstances making performance onerous. The contract period expired, and the respondent was obligated to hand over possession, thus the impugned orders amounted to an impermissible extension of the contract. The learned Single Judge disposed of the application for vacation of interim directions without recording reasons, relying on the respondent's statement of payment and encashment of the bank guarantee. Contentions of the Respondent: Not recorded in the judgment.