WP(C) NO.1590/2008 & others 1 REPORTABLE * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) Nos.1590/2008, 1593/2008, 7967/2007, 8142/2007, 8167/2007, 8181/2007, 8506/2007, 8616/2007, 9093/2007, 1040/2008, 1045/2008, 1046/2008, 1074/2008, 1085/2008, 1086/2008, 1142/2008, 1188/2008, 1189/2008, 1294/2008, 69/2008 & 1405/2008 % Date of Decision : 08th April, 2008. CHHANGA LAL ..... Petitioner in W.P.(C) 1590/2008. RAJ KUMAR ..... Petitioner in W.P.(C) 1593/2008. Through Mr.Pankaj Kumar, Advocate. RISHABH KUMAR JAIN ..... Petitioner in W.P.(C) 7967/2007. SWATI GARG ..... Petitioner in W.P.(C) 8167/2007. VIBHA AGGARWAL ..... Petitioner in W.P.(C) 8181/2007. V.P.GUPTA ..... Petitioner in W.P.(C) 8616/2007. Through Mr. Sugriv Dubey, Advocate RAJESH MAKKAR & ORS. ..... Petitioner in W.P.(C) 1405/2008. Through Mr.S.K.Sinha, Ms.Parvinder Kaur Malhotra and Ms.Ritika Gupta, Advocates. MANIT GUPTA ..... Petitioner in W.P.(C) 9093/2007. Through Mr. D K Sharma, Advocate. VERSUS M.C.D. ..... Respondent Through Ms.Madhu Tewatia with Ms.Sidhi Arora, Advocates for MCD in WP(C)Nos.7967/07, 8616/2007, & 8167/2007. Ms.Mansi Gupta, Advocate for MCD in WP(C)Nos.1593/2008. Ms.Sumita Kapil, Standing Counsel for MCD with G.P.Dwivedi, Advocate in WP(C) WP(C) NO.1590/2008 & others 2 Nos.1590/2008. Ms.Smita Shankar, for MCD with G.P.Dwivedi, Advocate in WP(C) No.1189/2008. Mr.Sanjeev Sabharwal, Advocate for MCD in WP(C)Nos. 9093/2007 & 1405/2008. Mr. Anoop Bagai, Advocate for respondent no.1 in WP(C) No.8181/07. A N D JAI PARKASH ..... Petitioner in W.P.(C) 8142/2007. RAMESH KUMAR ..... Petitioner in W.P.(C) 8506/2007. Through Mr. Prabhat Ranjan, Advocate. ASHOK KUMAR JAIN ..... Petitioner in W.P.(C) 1046/2008. SHYAM SUNDER ..... Petitioner in W.P.(C) 1074/2008. RAMESH CHAND ..... Petitioner in W.P.(C) 1085/2008. SANJAY MAUSHIK ..... Petitioner in W.P.(C) 1086/2008. RAJESH KUMAR ..... Petitioner in W.P.(C) 1142/2008. BABITA MANGAL ..... Petitioner in W.P.(C) 1188/2008. VISHNU PRASAD ..... Petitioner in W.P.(C) 1189/2008. RAJESH KUMAR ..... Petitioner in W.P.(C) 1045/2008. RISHI PRAKASH ..... Petitioner in W.P.(C) 1040/2008. Through Mr.S.K.Sinha, Ms.Parvinder Kaur Malhotra and Ms.Ritika Gupta, Advocates. RAJNI GUPTA ..... Petitioner in W.P.(C) 1294/2008. Through Mr. Ajit Prasad, Advocate. VERSUS M.C.D. & Anr. ..... Respondents. Through Ms.Mansi Gupta, Advocate for MCD Mr.S.S.Sahu for Ms.Sonia Sharma, Advocate for G.N.C.T. in WP(C)No.1294/2008. Ms. Madhu Tewatia with Ms. Sidhi Arora, Advocates for MCD in 8142/2007. Ms. Mansi Gupta, Advocate for MCD in WP(C) No.1074/2008. Mr.Mukesh Gupta, Advocate for MCD in WP(C) NO.1590/2008 & others 3 WP(C)No.1085/2008. Mr.Sanjay Goel, Advocate for MCD in WP(C)No.1045/2008. Mr.Rajeev Sharma, Advocate for respondent no.2 in WP(C)No.8506/2007. Mr.S.P.Sharma with Ms.Shishir Singh, Advocates for respondent no.2 in WP(C) No.8142/2007. Mr.P.L.Gautam, Advocate for MCD in WP(C)No.1142/2008. Mr. Sanjeev Sabharwal, Advocate for MCD in WP(C) No.1189/2008 and 1040/2008. Mr.Ajay Arora, Advocate for MCD in WP(C) No. 1040/2008. Mr. Sanjeev Sabharwal, Advocate for respondent no.2 in WP(C) Nos. 1046/08, 1142/08, 1086/08, 1085/2008, 1074/08, 1188/08 and 1198/08. Ms. Smita Shankar, Advocate for respondent no.1 in WP(C) No. 1188/08 and 1198/08 A N D DHARAMVIR SINGH … Petitioner. Through : Mr. Shiv Kumar Sharma, Advocate. Versus UOI & ORS. …Respondents. Through : Mr. V. Babu Joseph, Advocate. for UOI. Ms. Suparna Srivastava, Advocate for MCD. CORAM : HON’BLE MR. JUSTICE SANJIV KHANNA 1. Whether Reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporter or not? YES WP(C) NO.1590/2008 & others 4 3. Whether the judgment should be reported in the Digest? YES SANJIV KHANNA, J: 1. Menace of stray cattle in Delhi has resulted in a series of directions being issued by this Court in WP(C) No.3791/2000 titled as ―Common Cause Versus Union of India‖. Municipal Corporation of Delhi (hereinafter referred to as MCD for short) prepared a re- settlement scheme for shifting of unauthorized dairies to Ghogha on the outskirts of Delhi. Approximately 180 acres of land has been earmarked and allotted to MCD to develop a colony on self- financing basis. Allotment of dairy plots was to be made on first come first serve basis as per circular no.539/Dir./VS./2006 dated 1/8/2006 issued by MCD. Public notices were thereafter issued inviting applications for allotment of dairy plots. The relevant public notice taken on by MCD reads as under : ― Hon‘ble Delhi High court has issued directions in writ petition no.3791/2000 Common Cause Vs. Union of India and others that all the unauthorized dairies run in the Urban area of Delhi be got closed. In compliance the Government has taken the decision to relocate in developed area in Ghogha the unauthorized dairies. There is permission to carry on dairy activities in this area in the master plan as also this area can be approached conveniently through road. All the dairy owners are therefore informed by this notice that the Delhi Municipal Corporation is going to start development in Ghogha a dairy colony and is also inviting applications from the dairy WP(C) NO.1590/2008 & others 5 owners operating within the city area for booking of plot which is as follows :- 1. 60 sq.mtr. plot for fairy with five cattles. 2. 96 sq.mts. plot for dairy with eight cattles. The rate/price of the developed plot would be Rs.2500/- per sq.mts. The rate/price of the plot is inclusive of development charges i.e. of civil work, road, sewerage, electricity, water, gardening and cleaning. It does not include the expenses required for putting of the shed for the cattle. The said expense will have to be borne by the owner of the plot. The owner of the cattles according to the requirements can book plot in the office of the Veterinary Office of the concerned zone. The price of the plot will have to be deposited only after acceptance of the booking by the department. Thereafter date for deposit of the amount will be notified. Those persons who will not book the plot, they will have to close down their dairies immediately otherwise will have to suffer consequences. Plot can be booked by 20th September, 2004. /- Rakesh Mehta Commissioner Delhi Municipal Corporation.‖ 2. The form prescribed by MCD in column 4 required the applicant to state the place where the dairy was being presently run and column 5 required the applicant to give details of number of cattles and the size of the plot for which application was being made i.e. 60 sq.mts. or 96 sq.mts. The applicant was also required to verify the application form by declaring that the information furnished by him was true and correct to his knowledge and WP(C) NO.1590/2008 & others 6 nothing was concealed and in case any information given in the form was found to be incorrect, the applicant would be responsible for the same and would face legal consequences. 3. 5857 applications were received for booking of as many as 8344 dairy plots out of which 2569 applications were for plots measuring 60 sq.mts., while the remaining 5775 applications were for plots measuring 96 sq.mts. Thereafter by public notices published in news papers on 13.10.2004, the applicants were required to deposit 50% of the developed cost of the plot i.e. Rs.1250/- per sq. mts. The balance amount was payable after layout plan, roads and drains were constructed. The last date of payment of Rs.1250/- per sq. Mts. was extended upto 31.1.2005. 4. Said applications were examined and thereafter in the month of May and August, 2005 allotment letters were issued by MCD. The allotment letter stated as under : ― This is to certify that the aforesaid plot(s) is/are allotted in the Ghogha Dairy Colony for the purposes of running the dairy activities only. The possession of the plot(s) shall, however, be handed- over only on payment of the remaining 50% of the plot(s) cost, within one month subject to terms and condition of allotment.‖ 5. Thus, the respondents had sufficient time to verify and examine the applications and thereafter allotment letters were issued. In all cases petitioners have paid 50% or 100% towards the price of plot as demanded in the allotment letter. However, possession of the WP(C) NO.1590/2008 & others 7 plots has not been handed over to them. 6. Allegations about fraudulent allotment of plots led the court to pass an order in the Common Cause case (Supra) on 30th August, 2006 directing that running of dairy business would be the sole criteria for allotment and if anyone was found ineligible on that criteria, possession of the plot shall not be delivered to him. In a connected writ petition titled ―Vikash Jain Vs. Govt. of NCT of Delhi bearing W.P.(C) No.14715/2005, the court directed that even provisional allotment should be made after verification and not otherwise. Allegations were also made against the members of the Monitoring Committee which was formed. In these circumstances the court in the Common Cause case (Supra) vide order dated 18th March, 2007 re-constituted the Monitoring Committee. On 5th May, 2007 the court recorded that MCD had admitted in their additional affidavit that 67% allotments made in Ghogha dairy complex by the Veterinary Officer were found to be wrong and bogus after verification as the applicants concerned did not meet the eligibility criteria of having a dairy. The Veterinary Officer was suspended but it appears that he approached a civil court and obtained a stay order. The case of the Veterinary Officer was that allotments were subject to verification of the eligibility of the allottee to be carried out by the Micro Chipic Agency. [see in this regard detailed order passed by this Court in case of Common Cause (Supra) dated WP(C) NO.1590/2008 & others 8 31st May, 2007) reported in 141 (2007) DLT 164]. 7. The Monitoring Committee constituted by this court held several meetings to examine and verify the applications and ensure that plots are allotted to eligible persons and bogus allottees are weeded out. Zonal Committees were formed to visit premises of each and every applicant and verify, whether he was having an illegal or unauthorized dairy. The team consisted of the Zonal Officer, Veterinary Doctor from the Govt. of NCT of Delhi and SHO in each of the 12 zones. In this manner about 1373 applications have been verified out of which 535 applications are found to be valid and meeting the eligibility criteria and 838 applications are found to be made applicants who do not meet the eligibility criteria. 8. There is no dispute that applicants or persons not meeting the eligibility criteria cannot be and should not be allotted plots. In the present case I am satisfied that the petitioners do not meet the eligibility criteria. I have also examined the writ petitions and find that in most of the cases there is no evidence or material to show that the petitioners were in fact running or are running an illegal dairy. Cases where there is some reliable material or document, which creates a doubt have been segregated and MCD has been asked to file reply on merits. To be fair to the counsel for the petitioners in most of the cases they did not press and gave up WP(C) NO.1590/2008 & others 9 their claim for allotment of plots after initial hesitation. 9. Thus, there has been misrepresentation on part of the petitioners herein. MCD has submitted the original files maintained by them with respect to each of the individual applicant-petitioner for the plots at Ghogha Dairy Colony. I will make reference to the application filed by Mr. Rishabh Kumar Jain, the petitioner in WP (Civil) No. 7967 of 2007, the lead case in the present bunch of petitions. The petitioner in unequivocal terms had stated that he had been running a dairy business from the premises bearing no. 484/5A-3B Shalimar Park, Shahadara, New Delhi. He has further mentioned that he had 15 cattle and for the said purpose he has sought allotment of three plots measuring 60 sq Mtrs.; each at Ghogha. MCD had issued him an allotment letter on the basis of this representation by the petitioner. However, on inspection it was found that the petitioner was running a sweet shop and was not having any illegal dairy. While the petitioner does sell dairy products from the said shop but that by itself does not satisfy the eligibility criteria- ―running an illegal/unauthorised Dairy within Delhi‖. The said being the sole criterion for allotment of plots, non- fulfilment of the said condition disqualifies the petitioner. The petitioner knew that he is not entitled to allotment of plot and had made a misrepresentation. Therefore MCD is well within it‘s rights to rescind the consent so granted, as the same is vitiated on WP(C) NO.1590/2008 & others 10 account of the misrepresentation played by the petitioner. In view of the above, the claim for allotment of plots is liable to be rejected. 10. The main issue in question is whether the petitioners are entitled to refund of 50% or 100% of amount deposited by them towards purchase of plot. The petitioners have made a prayer that the entire amount deposited by them should be refunded. MCD on the other hand has taken the stand that the entire amount is liable to be forfeited. In the counter affidavit filed by the MCD in the lead case of Rishab Kumar Jain Vs. MCD bearing W.P.(C) No.7967/2007 it is stated that the decision to forfeit the money deposited by the petitioner was taken by the Stray Cattle Committee for the following reasons : ― 4. Refund of money in respect of ineligible applicants The Committee recommends that the earnest money deposited by the ineligible applicant dairy owners be not refunded and the same would stand forfeited in pursuance of directions dated 30.04.2006 of the Hon‘ble High Court of Delhi and separate action should also be contemplated against such ineligible applicant diary owners in consultation with the Law Department for booking of the dairy plots fraudulently. The applicants in their applications for allotment had categorically declared that – “It is certified that the above information is true and correct to the best of my knowledge and belief and nothing has been concealed therefrom. In case, the same (in part &/or in whole) is found incorrect at any stage, I shall solely be responsible and shall be liable for action, as per law.” WP(C) NO.1590/2008 & others 11 11. Thereafter, letters were written by the MCD stating inter alia as under : ―2. The Hon‘ble High Court of Delhi, vide its orders dated 30.08.2006, inter-alia, directed as under : - ‗…………..The running of dairy business will be the sole criteria to allot the plots with possession and if anyone found to be ineligible on the aforesaid criteria the possession shall not be given to such applicants. Similarly, if a person after taking possession of the plot is found misusing the same for the purpose other than running of dairy, the allotment will stand cancelled and money deposited will be forfeited by the MCD………….‘ 3. As per the verification reports furnished by the Zonal Committee, constituted in pursuance of the decision of the Stray Cattle Committee (appointed by the Hon‘ble High Court of Delhi vide its orders dated 08.03.2007), you have not been found running dairy at the address as mentioned in the application form while seeking booking of the dairy plot(s). 4. In compliance of direction of the Hon‘ble High Court of Delhi dated 31.05.2007 in CWP No.3791/2000 (Common Cause Society Vs. UOI & Ors.), you are hereby informed that your booking/allotment of dairy plot(s) under Ghogha Dairy Colony Project stands cancelled and the amount deposited towards cost of the dairy plot(s) is forfeited by the MCD pursuant to the directions dated 30.08.2006 of the Hon‘ble High Court of Delhi. 5. This is without prejudice to the rights of MCD to take legal action against you in accordance with law for booking the dairy plot(s), in question, on false declaration.‖ 12. It is apparent that MCD has misread the order dated 30th August, 2006 of this court passed in Common Cause case (Supra). WP(C) NO.1590/2008 & others 12 This is clear from the portion of the said order quoted in the letter of cancellation itself. I have also read the order passed on 30th August, 2006. The relevant portion of which reads as under : ―With regard to the development of Dairy Colony at Ghogha (Narela) although vide order dated 10.11.2005 we had directed the MCD to hand over the possession of the plots to the dairy owners but it seems that the statement was made by the MCD without realizing that adequate electricity and water lines are not available and infrastructure has not been developed. It has been stated in the report that by the end of October, 2006 the NDPL and Delhi Jal Board will be in a position to complete the electrification and water pipelines and thereafter the possession of dairy plots to the eligible applicants after due verification of cattles through Micro chips shall be started. It is stated in the report that the process of verification will start in the first week of December, 2006 and only those persons who are carrying on the dairy business in Delhi and will carry on the same in future will be provided the possession of dairy plots as per the undertaking given by them at the time of provisional booking of their dairy plots. The running of dairy business will be the sole criteria to allot the plots with possession and if anyone found to be ineligible on the aforesaid criteria the possession shall not be given to such applicants. Similarly, if a person after taking possession of the plot is found misusing the same for the purpose other than running of dairy, the allotment will stand cancelled and money deposited will be forfeited by the MCD. The MCD has assured that no plot would be allotted with possession to any applicant without proper verification and permission from the Chairman of the Committee. It has also been noted in the report that MCD has provided a reprieve to illegal dairy owners in Delhi to continue their dairy work in their houses so long the plots applied by them at Ghogha dairy colonies are not provided to them in order to achieve mischievous object of continuing illegal dairies in Delhi.‖ WP(C) NO.1590/2008 & others 13 13. Two directions have been given by the Court in the said order. Firstly that allotment of plots should be made after proper verification by MCD and the sole criterion for allotment should be that the applicant should be carrying on dairy business. Any person who was not eligible would not be given possession of a plot. The second direction given by the court in the said order was that if a person after taking possession of the plot is found misusing the same i.e. using the plot for any purpose other than using the same for the purpose of running of a dairy, he will incur penalty of cancellation of the plot and forfeiture of the money deposited by him. The distinction between the two directions given by the Court has been completely overlooked by the Committee and the MCD. The order has been misread and misunderstood. No direction was given by the Court for forfeiture of the money deposited by an applicant in case the applicant was not eligible. Onus was put on MCD to verify the applications for allotment. MCD was to ensure that only persons carrying on or running an illegal dairy business are given possession of plots. 14. The Committee has also committed a mistake by incorrectly recording that the petitioners/applicants had paid or deposited any earnest money. The petitioners/applicants had not deposited any earnest money with MCD. I have quoted the public notice inviting offers. Public notice did not mention or state that any earnest WP(C) NO.1590/2008 & others 14 money was to be deposited by the applicant. Public notices issued thereafter asking the applicants to deposit 50% of the purchase price as advance payment did not state that what was being paid was earnest money or an amount that could be forfeited. Rs.1250/- was required to be deposited purchase cost/price. The allotment letter also did not state that the amount deposited or to be deposited was earnest money. The petitioners/applicants therefore have deposited part or whole consideration for purchase of the plot. No earnest money was required to be deposited under the scheme, nor was the same deposited by the petitioners. The reasons recorded by the Committee, therefore, proceed on entirely wrong assumption. The factual foundation itself is incorrect and based on wrong premise. Error has been committed by the respondent/MCD in their decision making process. 15. Learned counsel for the respondent/MCD submitted that the petitioners had made false and incorrect representation and therefore, the amount deposited by the petitioners being 50% of the price of the plot or 100% of the price of the plot is liable to be forfeited. This court thereafter asked the parties to examine the provision of the Contract Act, 1872 and it was pointed out that even in case of factual or fraudulent misrepresentation, doctrine of Restitution applies subject to right of MCD to deduct or set off damages suffered. Doctrine of Pari Delicto was referred to. WP(C) NO.1590/2008 & others 15 Learned counsel for the respondent/MCD thereafter prayed for some time to get instructions but on 10th March, 2008 it was stated that MCD is not ready to reconsider their decision to forfeit the entire amount deposited by the petitioners. 16. At the outset I may note that in the public notices and in the application form there is no clause for forfeiture. Even in the allotment letter it is not stated that the amounts deposited by the petitioners can be forfeited. The original scheme and the resolution passed by the MCD on 25/10/2004 do not contain any provision for forfeiture of money deposited by an applicant. The scheme as prepared states that the applications for allotment of plots may be invited for shifting of dairies, scrutinized and verified by MCD. If found eligible, applicants were to be allotted plots for establishing a dairy on, no profit, no loss basis. 17. Law of Contract is codified law. Though the Contract Act is not a complete Code but where the Act is applicable and covers a case, it is not necessary to look beyond the statute and apply principles of equity, justice and good conscious. (Refer, Lala Kapoor Chand Godha versus Mir Nawab Himayatali Khan reported in (1963) 2 SCR 168). 18. Sections 2 (g) – 2(i) of the Contract Act define the terms ―contract‖, ―void contract‖ and ―voidable contract‖. An agreement enforceable by law is contract. The contract is an agreement or set WP(C) NO.1590/2008 & others 16 of promises giving rise to obligations which can be enforced or are recognized by law. Public notices issued by MCD invited offers. It was an invitation but restricted to unauthorized dairy owners. The petitioners, therefore, have made a misrepresentation of fact in their applications seeking allotment, which as per law of contract was an offer. The respondent/MCD on the basis of misrepresentation initially/provisionally had made allotment to the petitioners but subsequently rescinded/cancelled the allotment but before possession is given. 19. The terms ―void‖ and ―voidable‖ contract are separate and distinct. A void contract is invalid since inception. It is no contract and is still born. Void contracts have to be distinguished from voidable contracts or contracts which become void subsequently after they have been validly executed and entered into. Voidable contracts are not still born and are contracts in the eyes of law. Voidable contracts are enforceable in law at the instance or option of the innocent party or can be rescinded by the said party. They remain a contract till the right to rescind is exercised. 20. Voidable contracts can be divided into two groups. Contracts which are voidable at the inception itself and contracts which are not voidable at the inception but become voidable due to subsequent defaults. (See, Sections 39, 53, 55 of the Contract Act). Sections 19 and 19A deal with voidable contracts at their inception. The said Sections read as under :- WP(C) NO.1590/2008 & others 17 ―Sections 19. Voidability of agreement without free consent:- When consent to an agreement is caused by coercion, fraud or misrepresentation, the agreement