# DELHI DEVELOPMENT AUTHORITY v. KENNETH BUILDERS & DEVELOPERS LTD. & ORS

- **Citation:** [2016] 3 S.C.R. 1126
- **Court:** Supreme Court of India
- **Decided:** 2016-06-29
- **Case number:** Civil Appeal No. 5370 of2016
- **Bench:** Madan B. Lokur, N.V. Ramana
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/delhi-development-authority-v-kenneth-builders-developers-ltd-ors-31128
- **Pages:** 27

## Headnote

Contract Act, 1872 - s. 56 - Contract impossible of
performance ~Auction of 'residential' land by DDA on 'as is where
is' basis - For construction of houses - Bid of the respondent-builder
accepted - Project land allotted and possession thereofgiven to
builder - Development agreement between DDA and the builder -
As per agreement various approvals and clearances from the
appropriate authorities including environmental age11cies was o
responsibility of the builder - The development work on project
land objected to by Department of Forests of Government of National
Capital Territory (GNCTD) on the ground that the land fell in the
Ridge and hence construction without consent of Ridge Management
Board and permission of the Supreme Court not allowed - Ministry
of Environment and Forest, Government of India gave environment
clearance subject to condition that Delhi Pollution Control
Committee (DPCC) gave "consent to establish" - However, DPCC
refused to give "consent to establish" in absence of "ridge
demarcation report" - Builder also could not obtain "ridge
demarcation report" - Builders writ petition under Art. 226 of
Constitution for setting aside of auction, for declaration that project
was incapable of performance and sought refund of the amount
paid to DDA - High Court held that if DPCC did not permit
construction activity, the builder was entitled to refund of the entire
amount deposited witli'DDA - Even after the judgment of High
Court, DPCC refused to grant "consent to establish" - Appeal by
DDA and also by GNCTD and DPCC - Held: Despite the fact that
builder took all the necessary steps to commence the construction
activity, it co_uld not proceed the development activity due to the
impasse created_ by the Government agencies - Thus the development
agreement between DDA and the builder was frustraied having
become impossible of performance within meani111g of s.56, due to
1126
DELHI DEVELOPMENT AUTHORITY v. KENNETH
BUILDERS & DEVELOPERS LTD. & ORS.
the intervening circumstances not contemplated by either party -
DDA directed to refimd the deposit made by the builder with interest
@6%.
Dismissing the appeal filed by DDA, the Court
HELD: 1. The objection to the maintainability of the writ
petition, having not been raised by the DDA before the High
Court or even in the petition filed in this Court, cannot be
entertained. The submission has been advanced by the DDA for
the first_ time during the final hearing of these appeals. It is too
late in the day to raise such an objection. [Para 27) [1146-D]
2.1 The respondent-builder 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. Under these
circumstances, the provisions of Section 56 of the Contract Act,
1872 would be attracted to the facts of the case. [Para 32) [1147F-G)
2.2 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 poiμt of view of the object and purpose that the
parties had in view when they entered -into the contract. This
impracticability or uselessness could arise due to some
intervening or supervening circumstance which the parties had
not contemplated. However, if the intervening circumstance was
contemplated by the parties, then the contract would stand despite
the occurrence of such circumstance. In the present case, the
DDA certainly did not contemplate a prohibition on construction
activity on the project land which would fall within the Ridge or
had morphological similarity to the Ridge. It is this circumstance
that frustrated the performance of the contract in the. sense of
making it impracticable of performance. [Paras 33 and 34) [1148=
D-E; 1150-A-B)
Satyabrata Ghose v. Mugneeram Bangur & Co. (1954)
SCR 310 - relied on.
2.3 It is true that the Government of India had n

## Text

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[2016] 3 S.C.R. 1126
DELHI DEVELOPMENT AUTHORITY
v.
KENNETH BUILDERS & DEVELOPERS LTD. & ORS.
(Civil Appeal No .. 53 70of2016)
JUNE 29, 2016
( MADAN B. LOKUR AND N.V. RAMANA, JJ. )
Contract Act, 1872 - s. 56 - Contract impossible of
performance ~Auction of 'residential' land by DDA on 'as is where
is' basis - For construction of houses - Bid of the respondent-builder
accepted - Project land allotted and possession thereofgiven to
builder - Development agreement between DDA and the builder -
As per agreement various approvals and clearances from the
appropriate authorities including environmental age11cies was o
responsibility of the builder - The development work on project
land objected to by Department of Forests of Government of National
Capital Territory (GNCTD) on the ground that the land fell in the
Ridge and hence construction without consent of Ridge Management
Board and permission of the Supreme Court not allowed - Ministry
of Environment and Forest, Government of India gave environment
clearance subject to condition that Delhi Pollution Control
Committee (DPCC) gave "consent to establish" - However, DPCC
refused to give "consent to establish" in absence of "ridge
demarcation report" - Builder also could not obtain "ridge
demarcation report" - Builders writ petition under Art. 226 of
Constitution for setting aside of auction, for declaration that project
was incapable of performance and sought refund of the amount
paid to DDA - High Court held that if DPCC did not permit
construction activity, the builder was entitled to refund of the entire
amount deposited witli'DDA - Even after the judgment of High
Court, DPCC refused to grant "consent to establish" - Appeal by
DDA and also by GNCTD and DPCC - Held: Despite the fact that
builder took all the necessary steps to commence the construction
activity, it co_uld not proceed the development activity due to the
impasse created_ by the Government agencies - Thus the development
agreement between DDA and the builder was frustraied having
become impossible of performance within meani111g of s.56, due to
1126
DELHI DEVELOPMENT AUTHORITY v. KENNETH
BUILDERS & DEVELOPERS LTD. & ORS.
the intervening circumstances not contemplated by either party -
DDA directed to refimd the deposit made by the builder with interest
@6%.
Dismissing the appeal filed by DDA, the Court
HELD: 1. The objection to the maintainability of the writ
petition, having not been raised by the DDA before the High
Court or even in the petition filed in this Court, cannot be
entertained. The submission has been advanced by the DDA for
the first_ time during the final hearing of these appeals. It is too
late in the day to raise such an objection. [Para 27) [1146-D]
2.1 The respondent-builder 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. Under these
circumstances, the provisions of Section 56 of the Contract Act,
1872 would be attracted to the facts of the case. [Para 32) [1147F-G)
2.2 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 poiμt of view of the object and purpose that the
parties had in view when they entered -into the contract. This
impracticability or uselessness could arise due to some
intervening or supervening circumstance which the parties had
not contemplated. However, if the intervening circumstance was
contemplated by the parties, then the contract would stand despite
the occurrence of such circumstance. In the present case, the
DDA certainly did not contemplate a prohibition on construction
activity on the project land which would fall within the Ridge or
had morphological similarity to the Ridge. It is this circumstance
that frustrated the performance of the contract in the. sense of
making it impracticable of performance. [Paras 33 and 34) [1148=
D-E; 1150-A-B)
Satyabrata Ghose v. Mugneeram Bangur & Co. (1954)
SCR 310 - relied on.
2.3 It is true that the Government of India had notified the
project land as "Residential" and that the project land was shown
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as "Residential" in the MPD-2001 and MPD-2021. But that fact
alone would not change the position at law. The exact boundaries
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1128
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SUPREME COURT REPORTS
[2016] 3 S.C.R.
of the Ridge do not appear to have been demarcated and in the
absence of demarcation, it could not be said with any degree of
certainty by the DDA that merely because of the two notifications
issued by the Ministry of Urban Development the project land
could be used for residential purposes even if it fell within the
Ridge. This would be ignoring the position at law and would be
stretching the argument a little too far. The DDA was unaware
that even if the project land did not fall within the Ridge yet any
development activity thereon would require permission from the
Ridge Management Board as well as from this Court since there
was morphological similarity between the Ridge and the project
land. It is this intervening circumstance which eventually
frustrated the implementation of the contract. [Para 35] [1150-BD]
2.4 When the DDA informed the builder 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 byelaws, environmental clearances etc. The terms and conditions of
"as is where is" or environmental clearances certainly did not
extend to commencement of construction activity prohibited by
law except after obtaining permission of the Ridge Management
Board and this Court. On the contrary, it was the obligation of
the DDA to ensure that the initial path for commencement of
construction was clear, the rest being the responsibility of the
developer. The failure of the DDA to provide a clear passage due
to an intervening circumstance beyond its contemplation went to
the foundation of implementation of the contract with the builder
and that is what frustrated its implementation. [Para 37] (1150G-H; 1151-A-B]
Punjab Urban Planning & Development Authority v.
Raghu Nath Gupta 2012 (8) SCR 118 : 2012 (8 ) SCC
197 -relied on.
2.5 The certain circumstances had intervened, making it
impracticable for the builders to commence the construction
activity on the project land and thus, the contract between the
DDA and the builder was impossible of performance within the
DELHI DEVELOPMENT AUTHORITY v. KENNETH
BUILDERS & DEVELOPERS LTD. & ORS.
meaning of that word in Section 56 of the Contract Act. Therefore,
it cannot be said that the contract between the DDA and the
respondent-builders was not frustrated. [Para 39) (1151-G-H;
1152-A-B]
3. DDA is directed to refund the deposit made by the
respondent-builder with interest at 6% per annum calculated from
11th September, 2006 (the date on which entire amount was
deposited by the builder with DDA) till realization. (Para 40)
(1152-C)
4. The question raised by Government of National Capital
Territory and Delhi Pollution Control Committee, as to whether
DDA was the final authority in the matter of determining the land
use particularly when it related to the Ridge . is left open for
consideration in an appropriate case. (Paras 41, 42) (1152-D, FJ
Kenneth Builders and Developers Ltd. v. Union of India
and others, MANU/DE/1815/2010 ; IN. Godavarman
v. Union of India (2013) 8 SCC 198 - referred to.
Case Law Reference
MANU/DE/1815/2010
(2013) 8 sec 198
(1954) SCR 310
referred to
referred to
relied on·
para 2
para 25
·para 33
2012 (8) SCR 118
relied on
· para 38
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5370
of2016.
From the Judgment and Order dated 30.07.2010 of the High Court
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of Delhi at New Delhi in Writ Petition (Civil) No. I 0.647 of2009
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WITH
C. A. No. 5371 of2016.
A. Sharan, Parag Tripathi, Sr. Advs., Vishnu B. Saharya, Viresh
B. Saharya, Shrehan Siddhartha, M/s. Saharya & Co., Sum it Pushkarma,
Alok Gupta, Advs. for the Appellant.
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Kapil Siba1, Sanjiv Sen, Ashok Panda, Sr. Advs., Mahesh Agarwal, Ankur
Saigal, Rishabh Parikh, Raghav Dwivedi, E. C. Agrawala, D. N.
Goburdhan, Ms. Pallavi Chopra, Lal Ramtiamma, Mohan Prasad Gupta,
Shadman Ali, Gaurav Sharma, D.S. Mahra, Ms. s'ushma Suri, Advs. for
the Respondents.
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. The Judgment of the Court was delivered by
MADAN B. LOKUR, J. I. Delay condoned. Leave granted
in both petitions.
2. The appellant (Delhi Development Authority or the DDA) in
the first appeal is aggrieved by the judgment and order dated 30th July,
20 l 0 passed by a Division Bench of the High Court of Delhi in W.P.(C)
No. 10647 of2009.' The grievance of the DDA is that even though the
Hig11 Court held that the project land that we arc 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 DOA pursuant to the acceptance of the developer's bid in an
auction, along with interest thereon.
·
3. Jn 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 ODA is the final authority to determine land
use, even though its determination pertains to the Ridge in the National
Capital Territory ofDdhi.
4. Before referring to the facts of the case, which we have taken
frcim the appeal filed and argued by the ODA, we \VOLiid like to mention
that there has been protracted correspondence between the ODA.
Kenneth Buildt:rs and the Secretary (Environment) cum Chairman of
the Delhi Pollution Control Committee of the GNCTD. However, we
are of opinion that it is not necessary to detail the contents of every
letter between them and we propose not to burden this judgment with
F · avoidable details, as long as the narrative does not suffer.
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5. The principal question that arises for our decision is whether
the development agreement between the DDA and the developer
Kenneth Builders was frustrated within the meaning of Section 56 of
the Indian Contract Act. 1872 due to some intervening circumstances
not contemplated by either party. Our answer to the question is in the
affimiative.
The facts of the case
6. The DDA proposed a public-private partnership project for the
development of an area of 14.3 hectares of prime land at Tehkhand in
1 K1:11i1e1h fluildcr' a11,J Developers Ltd. v. Union of India and others. MANU/Ofj
1315/2010
DELHf DEVELOPMENT AUTHORITY v. KENNETH BUILDERS &
DEVELOPERS LTD. &ORS. [MADAN 8. LOKUR,J.]
South Delhi for the construction of750 premium residential flats in a self
contained community to be sold by private real estate development on
free sale basis. Jn addition to the premium residential flats, the developer
wou Id have to construct 3 500 resettlement houses for the economically
weaker sections of society with each house having a super area of 26
sq. metres. These resettlement houses and the developed common
facilities relating thereto would be handed over to the DDA for allotment.
7. According to the DDA (and there is no dispute about this) the
project land was notified on I st August, 1990 for "Recreation" (District
Park) in the Master Plan for Delhi - 200 l (MPD-200 I). According to
the DOA (and again there is no dispute in this regard) two notifications
were issued by the Ministry of Urban Developmeut of the Government
of India on 8th January, 2002 and 23rd February, 2006 converting the
project land from "Recreation" (District Park) to "Residential".
8. On 20th March, 2006 the DDA issued an advertisement for
involving the private sector in Delhi's development and for the development
of the project land for the construction of750 residential flats and 3500
resettlement houses. Pursuant to the advertisement, an auction was
held by the DDA in terms of the Delhi Development Authority (Disposal
of Developed Nazul Land) Rules, 1981 on an ·'as is where is basis" and
as per the terms and conditions prescribed for the auction.
9. The terms and conditions for the auction specifically mentioned
that the bid would 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.
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I 0. Kenneth Builders was the highest bidder in the auction held
on 26th April, 2006 and its bid was accepted. On 15th June, 2006 a
demand-cum-allotment letter was issued to it requiring payment of
balance 75% of the bid amount. It is not in dispute that Kenneth Builders
deposited the entire bid amount-0fRs. 450.01 crores with the ODA on
11th September, 2006.
11. Pursuant to the deposit.of the entire bid amount by Kenneth
Builders, a ho objection certificate' was issued by the DOA on 6th
November, 2006 for submission of building plans for the project to the
Planning Department of the DOA. )hereafter, on 4th December, 2006
possession of I I .70 hectares of the project land was handed over to
Kenneth Builders but an area of approximately 2.60 hectares covered
by the JJ cluster was left out and possession thereof was not given.
12. On 5th September, 2007 a Developmen.t Agreement was
signed between the DOA and Kenneth Builders whereby it was agreed,
inter alia, that Kenneth Builders would construct 3500 houses for the
resettlement of slum dwellers and 750 free sale flats which Kenneth
Builders would be entitled to dispose of. Kenneth Builders would also
develop roads and peripheral services for the entire project.
13. In terms of the development agreement it was the responsibility
of Kenneth Builders to obtain various approvals and clearances from
the appropriate authorities including environmental agencies of the State
and the Central Government. Clause 6 of the Development Agreement
is important in this regard and this reads as follows:
"6. Responsibility of Developer to get various approvals and
clearances
6.1 The Developer shall be responsible for approval of drawings
and for obtaining other "No Objection Certificate; from the
appropriate authorities and Deptts 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 011 behalf of the Authority. (sic)
6.2 The delay in submission ofapplications, drawings, construction
plans and compliance of the observation: shall be the responsibility
of the Developer, and any delay in grant of approvals by the
aforesaid Government bodies shall not relieve the Developer of
any ofits responsibilities under the Contract."
DELHI DEVELOPMENT AUTHORITY v. KENNETH BUILDERS &
DEVELOPERS LTD. & ORS. [MADAN B. LOK UR, J.]
14. Kenneth Builders was also deemed to have inspected the site
and its surroundings and checked the info1111ation available 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 ofall 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
I 1.1 of the Development Agreement in this regard is important and this
reads as follows:
"11.1 Sufficiency oflnformation
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 tender. The Developer
has agreed and understood that no request for change in the terms
and conditions of the Contract shall be entertained at any stage
on any ground whatsoever."
15, The problems for Keirneth Builders began when, pursuant to
the Development Agreement, it attempted to establish infrastructure
facilities on the project land such as its site office, DOA office, sample
flat for the economically weaker sections etc. sometime in February/
March 2008. It was then that the Department of Forests of the GNCTD
-raised objections to carrying out such activities on the ground that the
project land falls in the Ridge and hence all activities were required to be
suspended.
16. The objection of the DepartmentofForests compelled Kenneth
Builders to ~op all building activity on the project land and that resulted
in an exchange of letters for the next several months between the ODA,
the GNCTD and Kenneth Builders. To cut a long story short, the DOA
insisted that the project land was "Residential" and that the project could
be undertaken thereon. The GNCTD was equally clear that the project
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land falls within the Ridge and no construction activity could be carried
out without the consent of the Ridge Management Board and the
permission of this Court. On its part, the Ministry of Environment and
Forest, Government of India (or the MoEF) kept aloof from the
controversy and gave environmental clearance for the project on 15th
July, 2008 subject to the condition that a "consent to establish" shall be
obtained by Kenneth Builders from the DPCC under the Water
(Prevention and Control of Pollution) Act, 1974 (for short the Water
Act) and the Air (Prevention and Control of Pollution) Act, 1981 (for
short the Air Act) and a copy submitted to the said Ministry before the
start of any construction work at the site. The relevant extract of the
environmental clearance given by the MoEF reads as follows:
"Subject: Construction of residential housing project atTehkhand
New Delhi by Mis Kenneth Builders & Developers Pvt. Ltd.
Environmental Clearance - Reg.
Dear Sirs,
This has reference to your application No. nil, dated 15.01.2008
and subsequent letters dated 23.04.2008 and 23.05.2008 seeking
prior Environmental Clearance for the above project under the
EIA Notification, 2006. The proposal has been appraised as per
prescribed procedure in the light of provisions under 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 r$!sponse to the
observations of the Expert Appraisal Committee constituted by
the competent authority in its meetings held on 13th 14th March
2008, I st & 3rd May 2008 and 26th May, 2008 and awarded
"Silver" grading to the project.
2. xxx xxx xxx
3. The Expe1i Committee after due considerations of the relevant
documents submitted by the project proponent and additional
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clarifications furnished in response to its observation have accorded
environmental clearance as per the provisions of Environmental
Jmpact Assessment Notification - 2006 an·d its subsequent
amendments, subject to strict compliance of the terms and
conditions as follows:
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DELHI DEVELOPMENT AUTHORITYv. KENNETH BUILDERS &
1135
DEVELOPERS LTD. & ORS. [MADAN B. LOK UR, J.]
PART A - SPECIFIC CONDITIONS
A
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)
xxxxxxxxx
II. Operation Phase
xxxxxxxxx
PART B - GENERAL CONDITIONS:
xxxxxxxxx
4. and 5. xxx xxx xxx
6. The Ministry reserves the right to add additional safeguard
measures subsequently, if found necessary and to take action
included revoking of the environment clearance under the
provisions of the Environmental (Protection) Act, 1986, to ensure
effective implementation of the suggested safeguard measures in
a time bound and satisfactory manner.
7. All other statutory clearances such as the approvals for Storage
of diesel from Chief Controller of Explosives, Fire Department,
Civil Aviation Department. Forest Conservation Act 1980 and
Wildlife (Protection) Act, 1972 etc. shall be obtained, as applicable
by project proponents from the respective competent authorities.
8. These stipulations would be enforced among others under the
provisions of Water (Prevention and Control of Pollution) Act,
1974, the Air (Prevention and control of Pollution) Act 1981, the
Environment (Protection) Act, 1986 the Public Liability (Insurance)
Act, 1991 and EIA Notification, 2006.
9. Environmental clearance is subject to final order of the Hon 'ble
Supreme Court oflndia in the matterofGoa Foundation v. Union
oflndia in Writ Petition (Civil) No.460 of2004 as may be applicable
to this project.
I 0. xxx xxx"
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17. In view of the above, Kenneth Builders applied to the DPCC
for "consent to establish" on 4th November, 2008. In response, the DPCC
required Kenneth Builders to submit a "ridge demarcation report" at the
earliest. Despite its asking by Kenneth Builders, the ODA did not give
any such report to Kenneth Builders on the ground that the issue had
already been clarified to the GNCTD in a letter dated 17th October,
2008. The letter dated 17th October, 2008 is a little ambiguous inasmuch
as it mentions that the boundaries of the Ridge have been delineated, but
they have not been identified at the site. The letter dated 17th October,
2008 reads as follows:
"Subject: Regarding Residential housing Project at Tehkhand, New
Delhi by Mis Kenneth Builders & Developers Pvt. Ltd.
Sir,
This has reference to letter No. DPCC/MClll/3154: dated 6th
August, 2008, enclosing the copy of the letter of Secretary
(Environment) cum Chairman, Delhi Pollution Control Committee,
Government ofNational Capital Territory of Delhi dated 13th June,
2008. In the Master Plan for Delhi-2001, Ridge has been defined
in an area of7777 hectares which is to be preserved in its pristine
glory. In the Preamble of the said Master Plan for Delhi-200 I,
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 ODA 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 oflndia 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
DELHIDEVELOPMENTAUTHORITYv. KENNETH BUILDERS&
1137
DEVELOPERS LTD. & ORS. [MADAN B. LOK UR, J.]
consideration. No objection in respect of the land use of the Project
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land were raised by any departments including the Forest
Department at that stage.
The Ministry of Environment & Forest, after considering and taking
on record the representation from both Delhi Pollution Control
Committee and ODA (Letter No.F.3(60)MP/D. l l 6 dated 30.6.08)
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with respect to land use of the Project land, has accorded the
Environment Clearance to our project on 15th July, 2008, copy of
the same is attached herewith.
All the facts, documents and detailed plans have been shared and
discussed in detail between the two departments, in meeting. In
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the light of facts been legally converted from recreational use
(District Park) to residential.
In view of the facts, it is requested that the "Consent to Establish"
from Delhi Pollution Control Committee under Air & Water Act
be granted to the applicant at the earliest."
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18. Faced with this impasse and unable to obtain the ridge
demarcation report and therefore the "consent to establish" from the
DPCC, Kenneth Builders approached the Delhi High Court by way of a
writ petition on I st August, 2009 resulting in the impugned judgment and
order. In the writ petition, Kenneth Builders prayed, inter alia, for setting
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aside of the tender/auction notice dated 20th March, 2006 as also the
allotment letter dated 15th June, 2006 and a declaration that the project
was incapable of performance. It was further prayed that the auction
had become void and that Kenneth Builders was entitled to a refund of
the amount paid to the DOA along with interest at 18% per annum till
realization.
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Decision of the High Court
19. The High Court has elaborately discussed the various letters
exchanged between the concerned parties and has thereafter very
succinctly put the controversy in focus in paragraphs 26 and 27 of the
impugned judgment and order. These paragraphs read as follows:
"26. The foregoing demonstrates the controversy between the
parties. The petitioner's stand is that it had made the bid for the
project and had aid the entire amount of Rs.450.0 I crores on the
clear understanding that the project site was residential. This
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understanding, according to the petitioner, was based on the
representation made by the ODA as the detailed facts referred to
above would reveal. In fact, the DOA has maintained and
continues to maintain its stand that the project site is not within
the ridge area and the land use of the same has been clearly
shown as residential. According to the ODA, 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 ODA 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 DOA and not any other authority, such as the DPCC. The
clear stand of the DOA 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 DOA. The stand of the
ODA 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 as "gair mum kin pahar". Thus, according to the said
respondents, no construction activity can be carried out in the
land in question inasmuch as, according to them it falls within the
ridge area. Consequently, the DPCC has refrained from issuing
the "consent to establish" under Water and Air Acts, which was a
requirement and a condition of the clearance given by the Ministry
of Environment and Forests, Government of India.
27. It is in this backdrop that the petitioner felt that there is virtually
no chance of the project going ahead in view of the stalemate
between the ODA and the various governmental depaiiments. It
is on the basis of this situation that the petitioner has sought the
setting aside of the tender/auction as also the allotment letter dated
15.06.2006 in its favour and has sought the return of the money
paid by it along with interest thereon."
DELHI DEVELOPMENT AUTHORITY v. KENN°ETH BUILDERS &
DEVELOPERS LTD. & ORS. [MADAN B. LOK UR, J.]
20. By the impugned judgment and order, the High Court held
that Kenneth Builders was not entitled to have the tender/auction in
which it had participated and in which it was a highest bidder set aside.
Kenneth Builders was also not entitled to have the letter of allotment
issued to it pursuant to the acceptance of its bid in the.auction conducted
by the ODA set aside or to the return of money paid by it to the ODA.
However, it was held that Kenneth Builders would be entitled to have
the DPCC examine its application forthe grant of"cqnsent to establish"
from the stand point of the Water Act and theAir Act within two months
for carrying out the projec.t which was the subject matter of the writ
petition. It was also 11eld that in the event the DPCC does not give its
"consent to establish" and the project cannot be carried out then Kenneth
Builders would be entitled to a return of the entire amount (with interest
at the rate of 6% till realization) paid by it to the ODA since the project
would stand frustrated and would be incapable of performance.
21. For arriving at the above conclusions, the High Court held
that once the Master Plan for Delhi prepared by the DDA earmarks
land for a particular use, then no other authority can challenge the same.
As far as the project land was concerned, the DOA had earmarked it
for residential use and this could not be challenged. The High Court also
held that after the MoEF had given the environmental clearance, the
role of the DPCC was limited to the grant of "consent to establish"
u'nder 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 DOA 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 asJinal. These
facts were putto 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:
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"Sub: Opinion of the Ministry of Environment and Forest in regard
to WP (C) No. 0647/2009
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Ref.: Secretary, Environment, NCT's D.0. No. F.11 (105/PN
CF /Part/09/4582 dated 27 .11.2009).
Sir,
This is with regard to Writ Petition (C) I 0647/2009 of Kenneth
Builders and Developers Ltd. v. UOI & Ors. in the High Court of
Delhi. An opinion was sought from Ministry of Environment and
Forests to the effect that the land in the subject matter of the Writ
Petition mentioned under subject is a part of Ridge or not. The
opinion of Ministry of Environment and Forests in this regard is as
follows:
"Keeping in view the purely legalistic position taken by ODA
and exercise undertaken for identification ofridge, based upon
one or more criterion decided by NCT of Delhi, as relevant for
classification ofany land as "ridge" in Delhi, the said piece of
land measuring 14.3 ha falling in Khasra No.444 and 445
reflected as "Gai Mumkin Pahar" in revenue land, needs to be
considered as ridge in accordance to the spirit of various orders
ofHon'ble Supreme Court in WP (C) 467711985, morphological
features and revenue records. The Hon 'ble Apex Court is still
looking into various aspects of protection & conservation of
Delhi ridge, in WP (Civil) No. 467711985 from time to time.
However, the. Hon'ble High Court of Delhi, if deemed
appropriate, the opinion of Central Empowered Committee, set
up by Hon'ble Supreme Court may be taken".
It is requested to intimate the Hon'ble Court about the opinion of
the Ministry of Environment and Forests when the case will come
up on 4th December, 2009."
It will be seen from the above that the MoEF had taken a virtual
volte face and had opined that the project land needs to be considered
as Ridge, but if deemed appropriate the opinion of the Central Empowered
Committee might be taken. This was apparently not brought to the notice
of the High Court.
23. Be that as it may, the DOA has challengeo the order of the
Delhi High Court which has effectively directed the ODA to refund the
DELHI DEVELOPMENT AUTHORITYv. KENNETH BUILDERS &
DEVELOPERS LTD. & ORS. [MADAN B. LOKUR, J.)
tender amount to Kenneth Builders since "consent to establish" and
continue with the project had not been granted by the DPCC. The GNCTD
as well as the Department of Forests also filed a Petition for Special
Leave to Appeal being SLP (C) No. 13146of2011 challenging the decision
of the Delhi High Court to the effect that the DOA is the competent
authority to decide the land use.
Subsequent events
24. After the decision of the Delhi High Court, Kenneth Builders
requested the DPCC on 3rd August, 2010 in terms of the order of the
Delhi High Court, for "consent to establish". By its letter of 28th October,
20 I 0 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 orderofthe Delhi High Court in this
Com1. 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.
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Whereas, you Mis KENNETH BUILDERS & DEVELOPERS
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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.2589I under section 21 of Air (Prevention & Control of
Pollution) Act, 1981 and u/s 25/26 of the Water (Prevention &
Control of Pollution) Act, 1974 for activity of Residential
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Construction Project.
And whereas, a letter dt. 27.03.08 addressed to the Commissioner
(L.M.), DOA was received from Deputy ConservatQr of Forest,
South to provide a copy of Environmental Clearance w.r.t. large
scale earth work undertaken by you (the addressee)
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And whereas, a copy of letter dt. 04.04.08 addressed to the
Commissioner (L.M.) DDA was received from the Deputy
Conservator of Forest, South to stop all.construction activity on
the said land until the permission for the same is accorded by the
Ridge Management Board.
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And whereas, as decided by the Consent Management Committee
(Orange) in its meeting held 03.06.08, a letter was issued to the
Deputy Conservator of Forest, South, on 13.06.08 regarding status
of Forest Clearance w.r.t. the said project.
And whereas, a 0.0. letter issued by the Chairman, DPCC on
13.06.08 to the Vice Chairman, ODA regarding immediate
cessation of all construction work on the _project site till the
clearance from the same obtained from the Competent Authorities
including the Ridge Management Board & the Hon'ble Supreme
Court.
And whereas, a letter dt. 23.06.08 has been received from the
Deputy Consen'.ator of Forest Dept. informing that the clearance
from the Ridge Management Board & the Hon'ble Supreme Court
has not been communicated by DOA so far.
And whereas a letter was issued to the Deputy Conservator of
Forest, South on 19.02.09 to confirm whether any forest clearance
and ridge demarcation report to the said project has been granted
or not.
And whereas, a reply was received from the Deputy Conservator
of Forest, South on 17.03.09 informing that no forest clearance
has been accorded so far.
And whereas, a letter was issued to the Deputy Conservator of
Forest, South on 16.04.09 along with the site plans of the project
to inform the status of the area as per the ridge demarcation report.
And whereas, the Hon'ble High Court vide its judgment dt.
30.07.10 directed the DPCC to examine the application of the
petitioner for grant of"Consent to Establish" from the standpoint
of the Water & Air Acts alone within two months fro,m the date
of judgment.
And whereas, after examination, as decided by the Consent
Management Committee (Orange) in its meeting held on 22.09 .10,
a letter was issued to the Forest Deptt. on 01.10.10 to send the
opinion on the judgment at the earliest as the issue pertains the
Forest Department.
And whereas, the case was again taken up by the Consent
Management Committee (Orange) in it meeting held on I. JO. I 0
& it was decided:
DELHI DEVELOPMENT AUTHORITYv. KENNETH BUILDERS &
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DEVELOPERS LTD. & ORS. [MADAN B. LOK UR, J.]
"Forest department is going for appeal, therefore, consent be
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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
c,,.-ascertaining whether the project land falls within the Ridge or not.