SC directs DDA to refund Rs 450cr deposited by pvt builder

The builder were supposed to construct houses for economically backward whch were to be handed over to DDA

The Supreme Court on Wednesday directed Delhi Development Authority (DDA) to refund over Rs 450 crore deposited by a builder under a tender for constructing flats near the Ridge area here, which never took off due to lack of forest and environment clearance.

The apex court said it was the failure of DDA to provide a clear passage which frustrated implementation of the proposed project on a public-private partnership for the development of an area of 14.3 hectares of land near the Ridge area of South Delhi for construction of 750 premium residential flats in a self-contained community to be sold by the private real estate developer on free sale basis.

Under the project advertised in 2006, the builder also had to construct 3500 resettlement houses for the economically weaker sections of society which were to be handed over to DDA for allotment.

A bench of Madan B Lokur and N V Ramana refused to interfere with the Delhi High Court verdict which had said if the builder was unable to get permission for the project from the Delhi Pollution Control Committee (DPCC), then it was entitled to refund of the amount deposited by it.

The apex court, which dismissed DDA's appeal, ordered refund of the money with six per cent interest from 2006 till realisation to Kenneth Builders observing that construction was halted due to the "impasse" of government agencies.

"It appears to us that Kenneth Builders did take all necessary steps to commence the construction activity on the project and but due to the impasse created by the governmental agencies, it could not proceed in the development activity," the apex court said.

"We are satisfied that certain circumstances had intervened, making it impracticable for Kenneth Builders to commence the construction activity on the project land," the court said, rejecting DDA's contention that the contract it had with Kenneth Builders was not frustrated.

After depositing the entire bid amount of Rs 450.01 crore with DDA in 2006, Kenneth builders, found that the Department of Forests of Delhi government had 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.

Pursuant to this, the builder had moved Delhi High Court seeking quashing of the tender as well as the allotment of the contract to it by DDA. However, these reliefs were denied by the court which said that the firm will have to first try and obtain consent from DPCC, failing which it was entitled to refund of its deposit.