Case: Ganga Retreat &amp; Towers Ltd.  Vs. State Of Rajasthan

the contents thereof it was argued that in the case of former the transaction is void while in the case of latter it is merely voidable. It was also urged that the appellants could avoid the transaction at any time. In our view, this judgment is of no assistance to the appellants as on facts we have found that the default committed by the respondent-State , if any, stood condoned by the appellants. 47. In either case, we find that the appellants are not entitled to any relief in the realm of the law of contracts. In spite of having acquired knowledge of the true facts assuming that there was any mistake or misrepresentation to begin with and having learnt that the title which was sought to be conferred on them by the respondents was not such full title as they had contemplated it to be, they proceeded to have the sale deed executed and registered in their favour, seeking extensions of time and paying interest for the period of delay in payment. The contract stood accomplished into a demise and the transaction ended. It is writ large that the appellants had elected to stand by the contract by digging the land, sinking the basement and raising about 9 floors above, investing crores of rupees. They have by their own conduct rendered the position irreversible and restitution impractical. We have not been shown any law or authority based whereon the appellants may annual and avoid a concluded contract and fix liability on respondents for the cost of their construction which they have voluntarily chosen to raise in spite of being aware of all the relevant facts and circumstances. 48. The learned counsel for the appellants referred to the provisions of Section 90(1) and (2) of the Jaipur Development Authority Act, 1982, which read as under: "90. Control by State Government -(1) The Authority shall exercise its powers and perform its duties under this Act in accordance with the policy framed and the guidelines laid down, from time to time by the State Government for development of the areas in the Jaipur Region.(2) The Authority shall be bound to comply with such directions which may be issued, from time to time, by the state Government for efficient administration of this Act." 49. It was contended that the State Government has the complete control over the JDA and therefore could direct the JDA to adhre to the FAR 2.0 as against the FAR 1.75 provided under the 1996 Regulations. We do not find much force in this submission. A reading of this section clearly shows that the Government can direct the authority to exercise its powers and perform its duty in accordance with the policy framed and the guidelines laid down from time to time. Policy and guidelines can be issued for general application or for a class of persons or area or based on some such other criteria as may withstand the test of Article 14 of the Constitution. The power conferred by Section 90 cannot be exercised by the Government to give directions to increase the FAR in one individual or particular case. The appellants cannot claim a right to get exemption from the prevalent law nor heard to say that since the Government had the power to give direction, its failure to exercise the power of issuing direction by reference to Section 90 of the JDA Act, it has perpetuated the breach of contract. 50. Counsel for the appellants also brought to our notice the provisions of Section 298(1) of the Rajasthan Municipalities Act, 1959 to contend that Government had the power to cancel or modify the Bye-laws framed by the Board and the failure to do so reflects that the government did not intend to stick to the representation made by it in the auction notice or in the sale deed. Section 298 reads as under: "298 Power of Government to cancel or modify bye-laws and rules of boards—(1) The State Government may at any time by notification in the Official Gazette repeal wholly or in part or modify any rule or bye-law made by any board.Provided that before taking any action under this sub-section, the State Government shall communicate to the board the grounds on which it proposes to do so, fix a reasonable period for the board to show cause against the proposal and consider the explanation and objections, if any of the board." Section 298 provides that the State Government has the power to cancel or modify bye-laws or rules framed by the board. Again this is of no avail to the appellants. Power under Section 298 is in the nature of power of superintendence. It is a general power given to the Government that in case the Government feels that the bye-laws framed or the orders issued are not reasonable or are detrimental to the public interest or there is any other good ground available, then, it can repeal the bye-laws wholly or in part or modify any rule or bye-law made by the Board after inviting objections. The power could not have been exercised to suit the needs of an individual case as has been contended by the learned senior counsel for the appellants. It may be noted that the learned senior counsel for the respondent pointed out during the course of hearing that the amended bye-laws were more beneficial to the appellants as there was number of exemptions to be taken into account while calculating the FAR, namely, storage on all floors, balcony, guard-door, lobby, terrace garden, service floor, AC plant room, locker, dark room, PBX room, guard room, power house, lift room and the lift well. Under the amended bye-laws of 1996 the appellants would get more covered area thus causing no prejudice to them. This has been strongly refuted by the counsel for the appellants. We need not go into this disputed question as it is of no consequence to the points already decided. 51. For the reasons stated above,

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]Statement about the existing state of the law innocently made cannot constitute misrepresentation if it is later found that the statement was erroneous. This would be particularly so where the other party to whom the statement is made is aware of or has the ability to conveniently apprise itself of the correct state of the facts and the law applicable. Assuming (but without holding) that there was some misrepresentation the appellants had a couple of remedies, i.e., to either rescind the contract or seek restitution or to affirm the contract without prejudice to their right to seek damages by way of restitution for the loss caused by the misrepresentation. It is apparent that the appellants did not rescind the contract or seek restitution by way of damages. Instead they affirmed the contract which is clear from the fact that they immediately commenced construction on the land even though the building plans were on FAR 1.75. Affirmation of the contract and proceeding with the constitution clearly indicates that the appellants did not rescind the contract nor reserved their right to seek restitution by award of damages; or seek restitution rather they affirmed the contract and went ahead withthe time of initiating the legal proceedings in the Court, it was open to the appellants to either affirm the contract without prejudice to their right seeking damages by way of restitution for loss caused by alleged misrepresentation or to rescind the contract by getting the declaration that the contract was not binding on the appellants. The appellants elected the first option. Had the appellants rescinded the contract and prayed for declaration that the contract was not binding on them, then, on its being so declared, terms 9 and 13 of the auction notice would not have bound the appellants in any way. The court while granting the relief could have moulded the relief according to facts and situation prevalent. It would not have in any way of affected the appellants. The appellants cannot be permitted to sit on the fence in indecision and take a chance. By putting up the construction of basement and the other floors above the appellants have encumbered the property. The respondent cannot be fastened with the liability to pay for the construction put up by the appellants with full knowledge of true facts.In our view, this decision has no application to the facts of the present case. In the said case the appellants therein was appointed as organising agent for lotteries of the Respondent State. Subsequently, disputes arose which led to termination of the agency by the State. Appellants therein got an arbitrator appointed under Section 8 of the Arbitration Act, 1940. Claims and counter-claims were filed and evidence adduced by the parties before the Arbitrator. Addition made its award determining the amount payable by the State to the appellants at Rs. 37,75,00,000/- and the amount payable by the appellants to the State by way of counter-claim at Rs. 4,61,35,242/-. District Judge made the award the rule of the court. This was in challenge in the High Court of Sikkim where there were only two Judges. Chief Justice set aside the award while the other Judge held that the matter required to be remitted to the arbitrator for re-determining the quantum of damages. The court thereafter by its order dated 29th September, 1995 directed the matter to be placed before the incoming Chief Justice/Judge. Subsequently both the Chief Justice and the other Judge were, in due course, succeeded by new incumbents to those offices. The new Judge fixed the date of hearing and before him the appellants filed an application opposing the hearing of the appeal in view of section 98(2) CPC. This application was dismissed by the Division Bench as not maintainable in view of the reference made by the Division Bench. This was challenge in this Court. After resolving the controversy on the aforesaid point, the Court proceeded to examine the award made by the arbitrator. It was held that the award under challenge stood vitiated on account of several errors of law, apparent on the face of it and such infirmities go to substantiate the claim of the State that the arbitrator not only acted arbitrarily and irrationally on a perverse understanding or misreading of the materials but was also found to have misdirected himself on the vital issues rendering the award to be bad in law. The arbitrator and the District Judge had recorded a finding that the State in spite of warnings and threats did not actually stop draws or to other subsequent draws by the appellants and allowed the lotteries to go on without any break. That the State government had condoned or waived the lapses and defaults. In this context, the observations quoted above were made by this court. It would be seen that this contract was an executory contract and not completed contract of sale of property. It was observed that a waiver involves a conscious, voluntary and intentional relinquishment or abandonment in known existing legal right. There were persistent and continuous defaults. Even if the past lapses were taken to have been waived by the State, it was observed by the Court that the State could not be compelled to condone the continues wrong and defaults of the appellants to their disadvantage and detriment. Observations quoted above are of no avail to the appellants as in that case the court found that the appellants were continuing with the defaults in an executory contract. The principle laid down in the said case would not be applicable to the facts of the present case.In either case, we find that the appellants are not entitled to any relief in the realm of the law of contracts. In spite of having acquired knowledge of the true facts assuming that there was any mistake or misrepresentation to begin with and having learnt that the title which was sought to be conferred on them by the respondents was not such full title as they had contemplated it to be, they proceeded to have the sale deed executed and registered in their favour, seeking extensions of time and paying interest for the period of delay in payment. The contract stood accomplished into a demise and the transaction ended. It is writ large that the appellants had elected to stand by the contract by digging the land, sinking the basement and raising about 9 floors above, investing crores of rupees. They have by their own conduct rendered the position irreversible and restitution impractical. We have not been shown any law or authority based whereon the appellants may annual and avoid a concluded contract and fix liability on respondents for the cost of their construction which they have voluntarily chosen to raise in spite of being aware of all the relevant facts and298 provides that the State Government has the power to cancel or modify bye-laws or rules framed by the board. Again this is of no avail to the appellants. Power under Section 298 is in the nature of power of superintendence. It is a general power given to the Government that in case the Government feels that the bye-laws framed or the orders issued are not reasonable or are detrimental to the public interest or there is any other good ground available, then, it can repeal the bye-laws wholly or in part or modify any rule or bye-law made by the Board after inviting objections. The power could not have been exercised to suit the needs of an individual case as has been contended by the learned senior counsel for theneed not go into this disputed question as it is of no consequence to the points already decided.