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1994 DIGILAW 531 (DEL)

S. HARCHARAN SING v. DELHI CANTONMENT BOARD

1994-08-09

A.D.SINGH, S.D.PANDIT

body1994
ANIL DEV SINGH ( 1 ) BY this writ petition the petitioners, who are the highest bidders in the rental auction of shops/offices conducted by the Delhi Cantonment Board (for short "dcb"), question clause 12 of the terms and conditions of auction under which they are required to deposit sums equivalent to ten years rent for the commercial units for which bids were given by them. The facts giving rise to this writ petition are as under: ( 2 ) DCB construsted a shopping cum Commercial complex known as "kalpataru". The building consists of basement, ground floor, first floor and second floor and has shops, office complex (Cubicles and Hall), Terrace Restaurant etc. In regard to these DCB announced rental auction for July 21, 1994 and July 22, 1994. The interested persons were required to deposit a bank draft of Rs. 25,000. 00 drawn in favour of Cantonment Executive Officer, Cantonment Board, Delhi Cantonment as earnest money before their entry into the auction hall. According to the announcement the terms and conditions of the auction were available in the office of the Revenue Department, DCB and could be obtained on payment of Rs. 100. 00 during office hours on all working days w. e. f. July 14, 1994 and July 22, 1994. The petitioners participated in the auction which took place on the scheduled dates viz. July 21,1994 July 22, 1994 and gave offers in the following manner: ( 3 ) ON July 22, 1994 the petitioners were then called to complete the necessary formalities including payment of 25% of the ten years rent within seven days of the date of the auction i. e. by July 29,1994. This was in accordance with clause 12 of the terms and conditions of auction. On receiving the demand the petitioners are said to have filed their representations/replies. One such reply dated July 27, 1994 has been filed alongwith the writ petition which is annexure "d" thereto. On July 29,1994 the petitioners filed the present writ petition mainly challenging clause 12 of the terms and conditions of the auction which reads as under: "the successful bidders shall be required to deposit a sum equivalent to the ten years rent in the following manner: i) 25% of the deposit within seven days of the date of auction (first instalment ). ii)The remaining 75% within 45 days of the date of acceptance of the highest bid conveyed after obtaining approval of the GOC-in-Chief, Western Command (2nd instalment ). The Earnest money of Rs. 25,000. 00 deposited by a successful bidder at the time of auction shall be adjusted in the 2nd instalment of deposit. ( 4 ) AT this stage clause 13 also needs to be extracted here as like clause 12, it also deals with the matter of deposit and both are to be read together for a proper construction of clause 12, 13. The deposit as aforesaid paid by an allottee shall remain in security with the Cantonment Board, Delhi Cantonment (hereinafter called DCB) and its interest will be adjusted towards the monthly rent of the commercial unit in question. The deposit shall be returned to the allottee on the determination of the lease. However, subject to the provisions of clause 14, no interest shall be payable by the DCB on this deposit since the same would have been adjusted towards the monthly rent and, in turn, the allottee shall have no liability to pay monthly rent to the DCB". ( 5 ) FROM a reading of these clauses it is clear that the successful bidder was required to deposit ten years rent with the DCB as security. The interest which accrues on the deposit was adjustable towards monthly rent of the premises. On determination of the lease the deposit was to be returned to the allottee. ( 6 ) MR. KAPUR,learned counsel for the petitioners submitted that the condition requiring the successful bidder to deposit a sum equivalent to 1 0 years rent of the premises was unconscionable and was imposed on the petitioners as they virtually had no bargaining power as against the respondents. He also submitted that the condition was unreasonable, arbitrary, and violative of Article 14 of the Constitution. Before we deal with the merits of the submission of the learned counsel for the petitioner a question about the maintainability of the writ petition would also arise. Therefore we proceed to decide that question first. It is not disputed that the petitioners participated in the rental auction of shops and offices held on July 21, 1994 and July 22,1994 and gave their bids. Therefore we proceed to decide that question first. It is not disputed that the petitioners participated in the rental auction of shops and offices held on July 21, 1994 and July 22,1994 and gave their bids. The rental auction of the shops/offices in Kalpataru commercial complex was announced earlier and by means of the announcement the bidders were informed that the terms and conditions of the auction and details of the site could be obtained on payment of Rs. 100. 00 from the Revenue Department, DCB, with effect from July 14,1994. Between the date on which the terms and conditions of auction could be obtained and the dates of auction there was a gap of seven days and the petitioner had therefore sufficient notice of this fact. We see no justifiable reason why the petitioners should not stand by the terms and conditions of the auction. Once having participated in the auction on the basis of terms and conditions of auction, including clause 12 thereof, the petitioners cannot now challenge the same. The writ petition is, therefore, liable to be dismissed on this score alone. ( 7 ) NOW turning to the argument of learned counsel for the petitioners that the respondents had a far superior bargaining power as compared to the petitioners and therefore clause 12 would not be binding on them is unsustainable. Though the petitioners did not cite the decisions of the Supreme Court in Central Inland Water Transport Corporation Ltd. and another Vs. Brojo Nath Ganguly and another, (1986) 3 S. C. C 156 and Delhi Transport Corporation Vs. D. T. C. Mazdoor Congress and others, Jt. 1990 (3) S. C. 725, the argument was advanced having in view these judgments. In both the cases the point which fell for consideration of the Supreme Court was whether rule conferring power on the authorities to terminate the services of permanent employees at any time without assigning any reason was valid. The Supreme Court struck down the power as being arbitrary and violative of Article 14 of the Constitution. It was also held that terms of employment which armed the employer to terminate the services of permanent employees at any point of time without assigning any reason was unconscionable. However, this principle cannot be extended to commercial contracts. There is also no ground to assume that the petitioners bargaining power is unequal to that of the DCB. It was also held that terms of employment which armed the employer to terminate the services of permanent employees at any point of time without assigning any reason was unconscionable. However, this principle cannot be extended to commercial contracts. There is also no ground to assume that the petitioners bargaining power is unequal to that of the DCB. Since the principle will not be applicable, the petitioners reliance thereon is wholly misplaced. ( 8 ) THE writ petition basically questions the payment of ten years rent in advance, which according to the petitioners is quiet substantial in nature. For us to say that such a condition is unreasonable is to speak largely in terms of our impression without any solid foundation. There may be myriad considerations for providing this condition, including the need to safeguard and secure the payment of rent of the premises from the successful bidders the value of the land on which the property has been constructed, the cost of construction, the magnitude of the business which is likely to take place etc. The aforesaid argument advanced on behalf of the petitioners is more or less the same which was advanced by flat buyers in the case of Premji Bhai Parmar and others etc. Vs. Delhi Development Authority and others AIR 1980sc 738. It was argued on behalf of the flat buyers in that case that the price of flats fixed by the Delhi Development Authority was exhorbitant. The Supreme Court while disposing of the writ petition held that while determining the prices of flats the authority acted purely in executive capacity. It was further observed that when State or its agent entered into the contractual field with the flat buyers no question arose of violation of any constitutional provision including Article 14 and relations between the parties were not governed by the Constitution. This principle was again followed in Bareilly Development Authority and another Vs. Ajai Pal Singh and others (1989) 2 S. C. C. 116. ( 9 ) SO viewed in the light of the aforesaid discussion, it is not for us to consider whether the condition of payment of ten years rent was reasonable or otherwise. ( 10 ) THE petitioners counsel also contended that according to the Delhi Rent Control Act the respondents cannot be allowed to have a security deposit beyond an amount equivalent to 18 months rent. ( 10 ) THE petitioners counsel also contended that according to the Delhi Rent Control Act the respondents cannot be allowed to have a security deposit beyond an amount equivalent to 18 months rent. The contention has no force as Delhi Rent Control Act is not applicable to the premises in question. ( 11 ) IN view of the foregoing, the writ petition fails and is dismissed in limine.