GHAZIABAD DEVELOPMENT AUTHORITY ETC. ETC. versus UNION OF INDIA AND ANR.

Citation: [2000] SUPP. 1 S.C.R. 447 · Decided: 12-05-2000 · Supreme Court of India · Bench: S. RAJENDRA BABU

Judgment (excerpt)

GHAZIABAD DEVELOPMENT AUTHORITY ETC. ETC. 
A 
v. 
UNION OF INDIA AND ANR. 
MAY 12, 2000 
[S. RAJENDRA BABU AND R.C. LAHOTI, JJ.] 
Contract Act, 1872-Breach of contract-Development Authority 
advertised various schemes for allotment of developed plots for construction 
B 
of apartments and/or flats for occupation by the allottees-Allottees Invested C 
money for the scheme-Failure and unreasonable delay in handing over 
possession of plots-Held, in such cases rules as to remoteness of damage 
would apply-Damages for mental agony is not payable in cases of ordinary 
commercial contract-Hence, MRTP Commission erred in awarding 
compensation for mental agony-Remoteness of damages-Tort-Monopolies 
and Restrictive Trade Practices Commission Act, 1969, Consumer Protection D 
Act, 1986-Uttar Pradesh Urban Planning and Development Act, 1973. 
Contract: 
Breach of contract-Assessment of damages-Principles of-Held, 
broadly the principle underlying assessment of damages is to put the aggrieved E 
party monetarily in the same position, as far as possible, in which it would 
have been if the contract had been performed-Types of damages-may be 
liquidated or unliquidated. 
Breach of contract-Relationship governing the performance and 
consequencesflowingfrom such breac~Working of-Held, would be worked F 
out under the provisions of the Contract Act or the Specific Relief Act except 
to the extent governed by the law applicable to the Authority floating the 
Scheme-Contract Act, 1872, Section 73-Specific Relief Act, 1949. 
Breach of contract-Loss suffered by a party-Held, such loss may be 
compensated as the parties could have contemplated at the time of entering G 
into the contract, which directly flows, from its breach 
lnte:-est: 
Payment of-Where there is no express or implied contract for its H 
447 
448 
SUPREME COURT REPORTS (2000) SUPP. I S.C.R. 
A payment-Held, may be awarded on equitable grounds. 
Payment oHcheme advertised by Authority had a stipulation in its 
brochure that they were not liable to pay any interest in the event of an 
occasion arising for return of the amount paid or deposited by the buyers 
of the land-Held, such clause applicable to such cases in which the buyer 
B is himself responsible for creating circumstances providing occasion for the 
refund 
Ghaziabad Development Authority promoted and advertised several 
schemes for allotment of developed plots for construction of apartments and/ 
or flats for occupation by the allottees. Several persons who had subscribed 
C to the schemes, approached different forums e.g. Monopolies and Restrictive 
Trade Practices Commission, Consumer Forum and High Court, complaining 
of failure or unreasonable delay in accomplishing the schemes. In all the cases 
the Court or Commission or Forum had found the appellant-Authority guilty 
of having unreasonably delayed the completion of the scheme or guilty of 
D failure to perform the promise held out to the claimants and therefore directed 
the amount paid or deposited by the respective claimants to be refunded along 
with interest. MRTP Commission had also awarded an amount of Rs. 50,000 
payable as compensation for 'mental agony' suffered by the claimants for 
failure of the Authority to make available the plots as promised by it. Hence 
this appeal. 
E 
Dismissing the appeal, this Court 
HELD: I.I. When a Development Authority announces a scheme for 
allotment of plots, the brochure issued by it for public information is an 
invitation to offer. Several members of the public may make applications for 
F availing benefit of the scheme. Such applications are offers. Some of the offers 
having been accepted, subject to rules of priority or preference laid down by 
the Authority, result in a contract between the applicant and the Authority. 
The legal relationship governing the performance and consequences flowing 
from breach would be worked out under the provisions of the Contract Act 
G and the Specific Relief Act except to the extent governed by the law applicable 
to the Authority floating the scheme. In case of breach of contract one party 
may claim damages from the other party. The damages may be liquidated or 
unliquidated. Broadly the principle underlying assessment of damages is to 
put the aggrieved party monetarily in the same position, as far as possible, in 
which it would have been if the contract had been performed. Here the rule as 
H to remoteness of damages comes into play. Such loss may be compensated 

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