TMI Blog2016 (6) TMI 1466X X X X Extracts X X X X X X X X Extracts X X X X ..... at the exact boundaries of the Ridge had not been identified by anybody and this is apparent from a letter dated 13th June, 2008 sent by the Secretary (Environment) of the GNCTD to the DDA wherein it was pointed out that there is some discrepancy between the areas notified by the Ministry of Urban Development of the Government of India in the notifications dated 8th January, 2002 and 23rd February, 2006 and the boundaries of the Ridge. It was further pointed out that the process of identification had been initiated by the Department of Forests of the GNCTD but it appears that the demarcation was not completed by the time the writ petition was filed by Kenneth Builders. The interpretation of Section 56 of the Contract Act came up for consideration in Satyabrata Ghose v. Mugneeram Bangur and Co. [ 1953 (11) TMI 19 - SUPREME COURT ]. It was held by this Court that the word impossible used in Section 56 of the Contract Act has not been used in the sense of physical or literal impossibility. It ought to be interpreted as impracticable and useless from the point of view of the object and purpose that the parties had in view when they entered into the contract. This impracticability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lhi in W.P.(C) No. 10647 of 2009. Kenneth Builders and Developers Ltd. v. Union of India and Ors. MANU/DE/1815/2010 The grievance of the DDA is that even though the High Court held that the project land that we are concerned with was Residential as contended by the DDA, yet the High Court held that in the event construction activity thereon is not permitted by the Delhi Pollution Control Committee (or the DPCC) the developer (Kenneth Builders) would be entitled to a refund of the entire amount deposited with the DDA pursuant to the acceptance of the developer's bid in an auction, along with interest thereon. 3. In the connected appeal, the Appellants (Government of the National Capital Territory of Delhi or the GNCTD and its Department of Forests) are aggrieved by the same judgment and order to the extent that it has been held that the DDA is the final authority to determine land use, even though its determination pertains to the Ridge in the National Capital Territory of Delhi. 4. Before referring to the facts of the case, which we have taken from the appeal filed and argued by the DDA, we would like to mention that there has been protracted correspondence between th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be for the amount of premium offered for the project land to execute the project and that the project was being offered on an as is where is basis . It was stated that the presumption is that the intending purchaser has inspected the site and has familiarized himself with the prevalent conditions in all respects including status of infrastructure facilities available etc. before giving its bid. It was stated that on acceptance of the bid, the highest bidder would be required to deposit 25% of the bid amount as earnest money and the balance 75% of the bid amount was required to be deposited with 90 days of the issuance of the allotment-cum-demand letter. It was also stated that possession of the project land would be handed over on payment of the entire bid amount and on execution of the development agreement, except an area of approximately 4 hectares on which there is a JJ cluster. The terms and conditions also required the developer to comply with all the statutory requirements and Rules and Regulations of all public bodies including payment of fees and taxes etc. 10. Kenneth Builders was the highest bidder in the auction held on 26th April, 2006 and its bid was accepted. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilable in connection therewith including the sub-surface conditions, the hydrological and climatic conditions etc. It was also deemed to have satisfied itself of the correctness and sufficiency of all the material and all its obligations under the contract, including dealing with concerned authorities such as environmental agencies of the State and Central Government. Clause 11.1 of the Development Agreement in this regard is important and this reads as follows: 11.1 Sufficiency of Information The Developer shall be deemed to have satisfied itself of the correctness and sufficiency of all the material and all its obligations under the Contract, including dealing with the concerned authorities not limited to MCD, Delhi Jal Board, Electric supplying agency concerned, Delhi Fire Services, DUAC, the environmental agencies of the State and Central Government, Authority or its authorized officers who are duly authorized to give approval on behalf of the Authority at its own cost and expense, as well as all the contingencies and all matters and things necessary for the proper execution and completion of the project and the remedying of any defects therein, before submitting the tend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the EIA Notification, 2006 on the basis of the mandatory documents enclosed with the application viz., the Questionnaire, EIA, EMP and the additional clarifications furnished in response to the observations of the Expert Appraisal Committee constituted by the competent authority in its meetings held on 13th 14th March 2008, 1th 3rd May 2008 and 26th May, 2008 and awarded Silver grading to the project. 2. xxx xxx xxx 3. The Expert Committee after due considerations of the relevant documents submitted by the project proponent and additional clarifications furnished in response to its observation have accorded environmental clearance as per the provisions of Environmental Impact Assessment Notification-2006 and its subsequent amendments, subject to strict compliance of the terms and conditions as follows: PART A-SPECIFIC CONDITIONS I. Construction Phase. (i) Consent for Establishment shall be obtained from Delhi Pollution Control Committee under Air and Water Act and a copy shall be submitted to the Ministry before start of any construction work at the site. (ii) to (xxvi) xxx xxx xxx II. Operation Phase xxx xxx xxx PART B-GENERAL CONDITIONS: x ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is to be preserved in its pristine glory. In the Preamble of the said Master Plan for Delhi-2001, one conceptual sketch indicating the ridge has been shown as one of the eight concepts only, whereas the land use Plan is the legal documents/plan showing the details which are to be referred for the purpose of establishing the area/land use, in this case for the ridge/regional park. Delhi Government through its notification dated 24.05.1994 has delineated the boundaries of the ridge but the same has not been identified on the site. This notification is Under Section 4 for the areas to be earmarked as reserved forests under the Delhi Forest Act. The land pocket where DDA has proposed residential development, was clearly shown under District Part in-MPD-2001, and the land use of the same has already been changed from Recreational Use (District Park) to residential vide Gazette of India notification Nos. A-13011/30/1995-DDIB dated 08.01.2002 and 23.02.2006 (copies enclosed). The said notifications were issued following the due process of law and taking relevant factors into consideration. No objection in respect of the land use of the Project land were raised by any departments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as residential. According to the DDA, the land in question was earlier earmarked for recreational (District Park) purposes. However, that was subsequently altered by the two notifications dated 08.01.2002 and 26.02.2006 by carrying out modifications in the Master Plan (MPD-2001). The stand of the DDA is also this that the land use of any particular area is to be determined under the Master Plan and the authority which does such determination is the DDA and not any other authority, such as the DPCC. The clear stand of the DDA is that the DPCC has no right or business to raise any objection with regard to the land use and that is solely within the domain and powers of the DDA. The stand of the DDA is, however, not accepted either by the DPCC or the Department of Forests, Government of NCT of Delhi. In fact, both the DPCC and the Department of Forests (respondents 2 and 4 herein) along with the Government of NCT of Delhi (Respondent No. 3) have taken a unified stand that the land in question falls within the ridge and more so because the Department of Forests has found the said land to be part of Khasra Nos. 444 and 445 of village Tehkhand which, in the revenue record, has been shown ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consent to establish under the Air Act and the Water Act. It was not open to the GNCTD, the Department of Forests or the DPCC to question the land use of the project land as determined by the DDA on the ground that it was within the Ridge. 22. At this stage, it is necessary to mention that during the pendency of the writ petition in the High Court, it came out that during a meeting convened by the Lieutenant Governor on 23rd June, 2009 on some other issue, the case of Kenneth Builders came up, perhaps for an informal discussion. Nevertheless, it was decided in that meeting that the question of the status of the project land should be referred to the MoEF (even though it had already granted environmental clearance) and that the decision of the MoEF would be accepted as final. These facts were put to the learned Additional Solicitor General appearing in the matter and he sought time to take instructions. Eventually, the following response dated 3rd December, 2009 was sent by the MoEF to the learned Additional Solicitor General: Sub: Opinion of the Ministry of Environment and Forest in regard to WP (C) No. 0647/2009 Ref.: Secretary, Environment, NCT's D.O. No. F.11 (105 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C on 3rd August, 2010 in terms of the order of the Delhi High Court, for consent to establish . By its letter of 28th October, 2010 the DPCC made it quite clear that since Kenneth Builders did not have any clearance to carry out any construction on the project land from the Ridge Management Board or from this Court or from the Department of Forests, consent to establish under the Air Act and Water Act could not be given. It was also mentioned that the Department of Forests would be challenging the order of the Delhi High Court in this Court. The letter dated 28th October, 2010 reads as follows: Sub:- Refusal of Consent under Water (Prevention Control of Pollution) Act, 1974 and (Prevention Control of Pollution) Act, 1981 as amended to date. Whereas, you M/s. KENNETH BUILDERS DEVELOPERS PVT. LTD., MAA ANANDMAYI MARG, TEHKHAND, DELHI (hereinafter referred as addressee) have applied for Consent to Estab. (Orange Category) on 30.05.08 vide I.D. No. 25891 Under Section 21 of Air (Prevention Control of Pollution) Act, 1981 and Under Section 25/26 of the Water (Prevention Control of Pollution) Act, 1974 for activity of Residential Construction Project. And whereas, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereas, the case was again taken up by the Consent Management Committee (Orange) in it meeting held on 1.10.10 it was decided: Forest department is going for appeal, therefore, consent be refused. Now, therefore, as decided by the said Committee aforementioned consent to establish application under Air Water Acts to the addressee unit is hereby refused with immediate effect. Please note that the activity of Residential Construction Project without having valid consent under the Air Water Acts is a punishable offence and attracts penal action under the provisions of the said Act. 25. In view of the categorical response, broadly speaking, the controversy remains whether the project land is a part of the Ridge or not and whether the contract between the DDA and Kenneth Builders has been frustrated due to supervening factors or not. To resolve the first controversy, this Court passed an order on 6th October, 2015 for ascertaining whether the project land falls within the Ridge or not. This was in view of the uncertainty in the status of the project land as well as the view expressed by the MoEF in the letter dated 3rd December, 2009 addressed to the learned Additional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Border Road Organisation in 2.25 acres of land belonging to Ministry of Defence at Naraina, Delhi Cantonment on the ground that the said land falls in the Central Ridge and wherein pursuant to the directions of this Hon'ble Court the non-forestry uses are prohibited. The Government of NCT of Delhi after considering the view of the Delhi Ridge Management Board filed before the Hon'ble High Court of Delhi an affidavit dated 30th November, 2011 wherein it was stated that the land in question is situated outside the notified ridge areas but is having morphological features conforming to the Ridge. The Hon'ble High Court of Delhi by order dated 30th November, 2011 disposed of the said Writ Petition with the directions that the Border Road Organisation is restrained from carrying out any further construction works on the land till it obtains necessary clearance from the Delhi Ridge Management Board or (and) this Hon'ble Court through the CEC. A copy of the said order of the Hon'ble High Court of Delhi is enclosed at ANNEXURE-R-2 to this Report. Since then, non-forestry use of any land having morphological features conforming to the Ridge but falling outside the notifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order Road Organisation and DMRC this Hon'ble Court by orders dated 2nd November, 2012 and 21th October, 2013 respectively has granted permission from the non-forestry use of the lands falling in the extended Ridge area . 11. In the above background the CEC is of the considered view that in the present case the proposed construction of buildings can be undertaken only after obtaining clearance from the Ridge Management Board and permission of this Hon'ble Court. Discussion 27. The first submission of learned Counsel for the DDA was that a writ petition Under Article 226 of the Constitution was not maintainable for the reliefs claimed by Kenneth Builders. The reliefs arise out of a contractual dispute and the High Court ought not to have entertained the writ petition. We are not inclined to consider this submission for the reason that no such objection was raised by the DDA before the High Court or even in the petition filed in this Court. The submission has been advanced by learned Counsel for the DDA for the first time during the final hearing of these appeals. It is too late in the day for learned Counsel to raise such an objection and we are not inclined to e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the project land since it fell within the boundaries of the Ridge. 31. In this context, it must not be forgotten that even after having given environmental clearance to Kenneth Builders, the MoEF had second thoughts regarding the status of the project land. This led the MoEF to send the letter dated 3rd December, 2009 referred to above. In other words, the status of the project land was generally 'unclear' at least to the GNCTD and the MoEF. 32. Be that as it may, it appears to us that Kenneth Builders did take all necessary steps to commence the construction activity on the project land but due to the impasse created by the governmental agencies, it could not proceed in the development activity. We agree with learned Counsel for Kenneth Builders that under these circumstances, the provisions of Section 56 of the Indian Contract Act, 1872 (the Contract Act) would be attracted to the facts of the case. Section 56 of the Contract Act reads as follows: 56. Agreement to do impossible act-An agreement to do an act impossible in itself is void. Contract to do act afterwards becoming impossible or unlawful-A contract to do an act which, after the contract is made, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose which the parties had in view; and if an untoward event or change of circumstances totally upsets the very foundation upon which the parties rested their bargain, it can very well be said that the promisor finds it impossible to do the act which he promised to do. Although various theories have been propounded by the Judges and jurists in England regarding the juridical basis of the doctrine of frustration, yet the essential idea upon which the doctrine is based is that of impossibility of performance of the contract; in fact impossibility and frustration are often used as interchangeable expressions. The changed circumstances, it is said, make the performance of the contract impossible and the parties are absolved from the further performance of it as they did not promise to perform an impossibility. The parties shall be excused, as Lord Loreburn says Tamplin Steam Ship Co. Ltd. v. Anglo-Mexican Petroleum Products Co. Ltd. (1916) 2 AC 397, 403 If substantially the whole contract becomes impossible of performance or in other words impracticable by some cause for which neither was responsible. xxx xxx xxx It must be pointed out here that if the parties do cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Ridge Management Board for permission to carry out development activity and also approached this Court for necessary permission but it is another thing to say that these requirements were not within the contemplation of the DDA and certainly not within the contemplation of Kenneth Builders. For a statutory body like the DDA to contend that in the face of the legal position (with which the DDA obviously does not agree), Kenneth Builders ought to have persisted and perhaps initiated or invited litigation cannot be appreciated. 37. When the DDA informed Kenneth Builders that the project land was available on an as is where is basis and that it was the responsibility of the developer to obtain all clearances, the conditions related only to physical issues pertaining to the project land and ancillary or peripheral legal issues pertaining to the actual construction activity, such as compliance with the building bye-laws, environmental clearances etc. The terms and conditions of as is where is or environmental clearances emphasized by learned Counsel for the DDA certainly did not extend to commencement of construction activity prohibited by law except after obtaining permissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lders was impossible of performance within the meaning of that word in Section 56 of the Contract Act. Therefore, we reject the contention of the DDA that the contract between the DDA and Kenneth Builders was not frustrated. 40. Learned Counsel for Kenneth Builders urged that the amount deposited with the DDA ought to be returned with interest at 12% per annum and not 6% per annum as directed by the High Court. We are not inclined to accede to this request. Kenneth Builders had prayed for interest at 18% per annum in the High Court but that was declined and only 6% per annum was awarded. Kenneth Builders is not in appeal before us on this issue. However, we make it clear that the calculation of interest on the amount deposited would be with effect from 11th September, 2006 when the entire amount of Rs. 450.01 crores was deposited by Kenneth Builders with the DDA. 41. The GNCTD and the DPCC raised an issue before us that the DDA was not the final authority in the matter of determining the land use particularly when it related to the Ridge. In the view that we have taken, it is not necessary to go into this question. Conclusion 42. The appeal filed by the DDA is dismiss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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