Delhi Development Authority vs Dr. Fresh Assets Limited & Anr.

Court
Delhi High Court

* IN THE HIGH COURT OF DELHI AT NEW DELHI
th
% Reserved on: 20 February, 2026
th
Pronounced on: 30 April, 2026
+ RFA 232/2021, CM APPL. 14752/2021, 14753/2021 & 46719/2021
DELHI DEVELOPMENT AUTHORITY
Through its Vice Chairman
Vikas Sadan, INA, New Delhi .....Appellant
Through: Ms. Manika Tripathy, Standing
Counsel and Mr. Ashutosh Kaushik,
Panel Counsel with Mr. Saksham
Singh, Adv.
Versus

1. DR. FRESH ASSETS LIMITED
Through its Authorized Representative
Sh. Pabitra Patra

Having its office at:
B-1/E-24, Mohan
Co-operative Industrial Estate,
New Delhi - 110044

2. MINISTRY OF URBAN DEVELOPMENT
Nirman Bhawan, New Delhi
Through its secretary,
Service through Standing Counsel,
Union of India. .....Respondent
Through: Mr. Anil K. Khaware, Mr. Yogendra
Kumar and Mr. Manoj Ram,
Advocates for Respondent No.1.
CORAM:
HON'BLE MS. JUSTICE NEENA BANSAL KRISHNA
J U D G M E N T
NEENA BANSAL KRISHNA, J.
RFA 232/2021 Page 1 of 13

Signature Not Verified
Signed By:VIKAS
ARORA
Signing Date:30.04.2026
17:30:42
1. Regular First Appeal under Section 96 read with Order XLI Code of
Civil Procedure, 1908 (CPC) has been filed against the Impugned Judgment
and Decree dated 13.02.2020 whereby the Suit for the Recovery of
₹46,85,671/- as interest @ 18% per annum on a principal amount of
₹63,12,500/- from 17.12.2008 to 29.01.2013 and future and pendente lite
interest @ 18% p.a. from 29.01.2013 until its realization.
2. The Plaintiff/Respondent had filed a Suit for Recovery of
₹46,85,671/- as interest on the wrongful retention of the principal amount
of ₹63,12,500/- for four years.
3. The brief facts as per Plaint, are that the Plaintiff is a Company
incorporated under the provisions of Companies Act, and inter alia, deals in
real estate, development of properties and constructions activities. The
Defendant No.1, i.e. Delhi Development Authority (DDA) had advertised
for an auction of plot bearing site no. 4, near plot no. A-373 Defence
Colony, New Delhi-110024 measuring about 91 sq. meters. The reserve
price of the said plot in the auction was Rs. 1,29,90,614/-, and in the auction
held on 17.12.2008, the Plaintiff was declared as the highest bidder. The
Plaintiff deposited Rs. 63,12,500/- towards the earnest money with the
Defendant No.1 authority, as under:
DateCheque No.Amount (Rs.)
07.12.2008428520 (Oriental Bank of Commerce)7,50,000/-
17.12.2008428518 (Oriental Bank of Commerce)5,00,000/-
17.12.2008781322 (Oriental Bank of Commerce)10,02,500/-
17.12.200872674740,60,000/-
TOTAL63,12,500/-

RFA 232/2021 Page 2 of 13

Signature Not Verified
Signed By:VIKAS
ARORA
Signing Date:30.04.2026
17:30:42


4. Thereafter , a Writ Petition W.P.(C) 123/2009 was filed by Sh.
Rajesh Kumar Sethi & Ors., i.e. the residents of Defence Colony, for setting
aside the auction, inter alia, claiming the action of DDA as arbitrary and
illegal, wherein it was claimed that in the event of auction and construction
in the said plot, i.e. site no.4. the width of the road around the said plot be
reduced for the air and light to flow into the property A-373. Besides, the
proposed auction was alleged to be contrary to stipulated norms, and hence,
be held impermissible.
5. Initially, the Defendant had opposed the petition i, but later
conceded that the auction of the said plot should have been carried out by
the DDA. Consequently, an additional affidavit was filed by the DDA, in
W.P.(C) 123/2009, stating that the auction be cancelled . The Plaintiff
herein, contested the Petition and filed the Application for impleading
himself as a party, which was allowed, vide order dated 15.03.2011.
6. The Plaintiff, after the acceptance of the highest bid, asked the
Defendant for early culmination of the auction vide letters dated 14.02.2009,
18.12.2008, 22.12.2008, 29.12.2008, 25.02.2009, 27.08.2009 and
07.08.2018.
7. The Plaintiff, thus vide letter dated 20.09.2012 asked the Defendant
No.1 to refund the earnest money of Rs.63,12,500 along with 18% interest
p.a. However, the Defendant No.1, on 29.01.2013 returned the earnest
money of Rs. 63,12,500/- (only the principal amount), via RTGS, back to
the Plaintiff. The plaintiff asserted that the money was retained by the DDA,
RFA 232/2021 Page 3 of 13

Signature Not Verified
Signed By:VIKAS
ARORA
Signing Date:30.04.2026
17:30:42
for more than four years, i.e. 07.12.2008 till 29.01.2013 on which no interest
was paid.
8. The Plaintiff claimed commercial rate of interest @ 18% per annum
from the date of amount deposited till its realization. The claim of the
Plaintiff towards the interest @ 18% p.a. on the earnest money, is as under:
Date of<br>depositAmount<br>(Rs.)DaysInterest (Rs.)
07.12.20087,50,000/-15145,59,973/-
17.12.20085,00,000/-15043,70,849/-
17.12.200810,02,500/-15047,43,553/-
17.12.200840,60,000/-150430,11,296/-
TOTAL46,85,296/-
9. Further, the Plaintiff filed an Application CM Appl. No. 10781/2013
in the W.P. (C) No. 123/2009. The Application and the Writ Petition bearing
no. W.P.(C) 123/2009 both were disposed of, by this Court vide order dated
06.08.2012, whereby the Plaintiff sought the liberty to file the fresh petition.
10. Consequently, a Writ Petition No. 5483/2013 was filed by the
Plaintiff seeking recovery of the interest, over and above the principal
amount/earnest money. Thereafter, this Court, vide order dated 10.09.2013
directed the Plaintiff to file a Civil Suit for the recovery of the interest.
11. On 15.10.2013, a Legal Notice was sent to Defendant Nos.1 & 2 as
per the mandate under section 80 CPC for the recovery of the interest.
Thereafter, the Plaintiff filed a Suit on 22.04.2016, for the Recovery of

RFA 232/2021 Page 4 of 13

Signature Not Verified
Signed By:VIKAS
ARORA
Signing Date:30.04.2026
17:30:42

₹46,85,671/- along with interest @ 18% per annum on a principal amount
of ₹63,12,500/- from 17.12.2008 to 29.01.2013 and interest @ 18% per
annum from 29.01.2013 until its realization, and further Damages for
wrongful retention Rs. 46,85,671/-.
12. The Defendant No.1/DDA in its Written Statement took a
defence that though admittedly the Legal Notice dated 15.10.2013, was sent
by the Plaintiff under Section 80 CPC read with Section 53B of the DDA
Act, 1957, but as Section 53B DDA Act, a Demand/Legal Notice has to be
served two months prior to the institution of the Suit. Section 53B (2) DDA
Act also mandates that if such a Demand/Legal Notice is served, then the
Suit be instituted within 6 months from the date of cause of action arises.
13. It is apparent from the Plaint that the last cause of action arose on
29.01.2013, i.e. when the payment was released by the DDA to the Plaintiff.
Thus, the present Suit should have been filed by the Plaintiff by 28.07.2013,
as per Section 53B (2) DDA Act. However, the present Suit was filed by the
Plaintiff in July, 2014, is barred under the Section 53-B DDA Act.
14. On merits, the averments made in the Plaint for interest were
denied.
15. The Plaintiff in his Replication, vehemently opposed the
averments made by Defendant No.1 and submitted that the DDA Act, 1957,
has no applicability in the present case, as the Legal/Demand Notice was
sent to Defendant Nos. 1&2 as per procedure prescribed Under Section 80
CPC. It is a well settled law that the DDA Act, only applies when the relief
is sought within the ambit of DDA Act.
RFA 232/2021 Page 5 of 13

Signature Not Verified
Signed By:VIKAS
ARORA
Signing Date:30.04.2026
17:30:42
16. Further, it is also submitted that an Application Under Order VII
Rule 11, filed by the Defendant No.1 in on the same issue of limitation
under Section 53B of the DDA Act, was dismissed in I.A. 24684/2014 in
C.S.(OS) No. 1936/2014, vide Order dated 29.07.2015 by this Court.
17. The Issues on the pleadings, were framed vide Order dated
18.07.2017, as under:
1. “Whether plaintiff is entitled for recovery of Rs.<br>46,85,671/ -? OPP<br>2. Whether plaintiff is also entitled for interest if so at<br>what rate? OPP<br>3. Whether plaintiff is also entitled for future interest<br>on the suit amount w.e.f. 29.01.2013? OPP<br>4. Whether plaintiff is also entitled for cost of the<br>suit? OPP<br>5. Whether suit of the plaintiff is barred by limitation<br>in view of Section 53 B? OPD<br>6. Relief.”1. “Whether plaintiff is entitled for recovery of Rs.
46,85,671/ -? OPP
2. Whether plaintiff is also entitled for interest if so at
what rate? OPP
3. Whether plaintiff is also entitled for future interest
on the suit amount w.e.f. 29.01.2013? OPP
4. Whether plaintiff is also entitled for cost of the
suit? OPP
5. Whether suit of the plaintiff is barred by limitation
in view of Section 53 B? OPD
6. Relief.”
18. The Plaintiff in support of its case, examined PW1 Sh. Pabitra
Patra who tendered his evidence by way of affidavit as Ex. PW-1/A,
wherein he reiterated the content of his Plaint and replication and proved the
relevant documents as Ex.PW1/1 till PW-1/33.
19. The Defendant in support of its case examined DW1 Sh. Amit
Kumar, Assistant Director (OSB), DDA who in his affidavit of evidence Ex.
DW1/A reiterated the contents of the Written Statement.
20. The Learned Additional District Judge after appreciating the
evidence, observed that Plaintiff is a commercial entity dealing with
development of property and construction, and its investment was for
commercial reasons only. If this amount had been not held up, it would have

RFA 232/2021 Page 6 of 13

Signature Not Verified
Signed By:VIKAS
ARORA
Signing Date:30.04.2026
17:30:42

gainfully invested somewhere else by the Plaintiff. Therefore, it was held
that the Plaintiff is entitled for the interest for the period from 07.12.2008 till
29.01.2013 @ 12% per annum, on the earnest money amount of Rs.
63,12,500/- and future interest @ 9% per annum from the date of judgment
till its realization with cost of the Suit. The suit was accordingly, decreed.
21. Aggrieved by the Impugned Judgment dated 13.02.2020, the
present Appeal has been preferred by the Defendant No.1 on the grounds
that the learned Trial Court has wrongly decreed the Suit in favour of the
Plaintiff, on an assumption that the Plaintiff had made its stand known to
Defendant No.1 for the return of the earnest money with interest @18%,
through the Application under Order I Rule 10 CPC, filed in
W.P.(C)123/2009, which contained the letter dated 25.02.2009, whereby
18% interest was claimed.
22. Further, the Ld. Trial Court wrongly observed that the reasoning in
Para 8 of the Impugned Judgment dated 13.02.2020. In the Application
under Order I Rule 10 CPC, filed by the Plaintiff in W.P.(C)123/2009, was
sufficient enough to show that the Plaintiff was not interested in the refund
of the money along with interest, but it was more interested in challenging
the Writ Petition and taking a chance that he might succeed.
23. Since the Plaintiff voluntarily intervened in Writ Petition bearing
No. W.P.(C) 123/2009 by moving an Application under Order I Rule 10
CPC, the Plaintiff himself chose to involve themselves in the litigation
challenging the auction. Consequently, their proactive participation, negates
any grounds for claiming interest during that period.
RFA 232/2021 Page 7 of 13

Signature Not Verified
Signed By:VIKAS
ARORA
Signing Date:30.04.2026
17:30:42

24. Moreover, it was only on the disposal of the W.P.(C)123/2009 , that
the Plaintiff sought to recover the earnest money from the Delhi
Development Authority, vide its letter dated 20.09.2012. It is claimed that
the Plaintiff is also not entitled to any interest on the earnest money, because
the terms and conditions of the auction Ex. PW1/3, did not provide for the
payment of any interest, over and above the earnest money.
25. Moreover, it has not been considered that the cause of action first
arose in 26.04.2012 i.e. when the auction of the sale was cancelled vide
Order dated 26.04.2012 in W.P.(C) 123/2009. The Suit has been filed on
22.04.2016.
C.M. App. No. 46719/2021 under Order 41 Rule 22: Cross Objections
by the Plaintiff/Respondent:
26. The Plaintiff/Respondent No.1 filed cross objections wherein he
has he has sought a grant of interest @ 12% p.a. for the left-out period from
29.01.2013 (when the earnest money was refunded by the Defendant No.1/
DDA to the Plaintiff) till 30.06.2014 (the date of filing of the Suit bearing
no. C.S.(OS) 1936/2014, which was later transferred to the District Courts).
27. The Defendant No.1/Appellant in his reply to the cross objection
has averred that the cross objections are barred by limitation, as they were
not filed within the stipulated time period i.e. within one month from the
date of service of Notice of the day, fixed for hearing the Appeal.
Submissions Heard and Record Perused.
28. The first and principal objection urged on behalf of the
Appellant/Defendant No.1 is that the Suit was barred by Section 53B of the
DDA Act, 1957, inasmuch as it was not instituted within 6 months from the
RFA 232/2021 Page 8 of 13

Signature Not Verified
Signed By:VIKAS
ARORA
Signing Date:30.04.2026
17:30:42
date the cause of action last arose, which, according to the
Appellant/Defendant No.1, was 29.01.2013 i.e. when the earnest money was
refunded to the Plaintiff.
29. For the better understanding, Section 53B DDA Act is reproduced
as under:
“53B. Notice to be given of suits.- (1) No suit shall be
instituted against the Authority, or any member
thereof, or any of its officers or other employees, or
any person acting under the directions of the Authority
or any member or any officer or other employee of the
Authority in respect of any act done or purporting to
have been done in pursuance of this Act or any rule or
regulation made thereunder until the expiration of two
months after notice in writing has been, in the case of
the Authority, left at its office, and in any other case,
delivered to, or left at the office or place of abode of,
the person to be sued and unless such notice states
explicitly the cause of action, the nature of relief
sought, the amount of compensation claimed and the
name and place of residence of the intending plaintiff
and unless the plaint contains a statement that such
notice has been so left or delivered.
(2) No suit such as is described in sub-section (1)
shall, unless it is a suit for recovery of immovable
property or for a declaration of title thereto, be
instituted after the expiry of six months from the date
on which the cause of action arises…….”
30. Pertinently, the present suit is not one seeking enforcement of any
right created under the DDA Act. The relief claimed by the Plaintiff is for
interest on the earnest money of Rs.63,12,500/- received by the Appellant on

RFA 232/2021 Page 9 of 13

Signature Not Verified
Signed By:VIKAS
ARORA
Signing Date:30.04.2026
17:30:42

17.12.2008, was retained by the Appellant for more than 04 years, and
returned only on 29.01.2013 without any interest.
31. In M/s Lucky Star Estates (India) Pvt. Ltd. v. Delhi Development
Authority in RFA(OS) 10/1987, this Court, dealing with a similar challenge
based on Section 53B, held that a suit seeking damages/interest on the
principal amount/earnest money wrongfully retained by DDA, does not ipso
facto fall under the expression of „any act done or purporting to have been
done under this Act, ’ so as to attract the special 06 month limitation
envisaged under sub-section (2). It was observed that the DDA cannot take
refuge under Section 53B(2) DDA Act, to defeat substantive contractual or
restitutionary claims which are otherwise, within the general limitation
period, as per law.
32. Admittedly, an Application, i.e. I.A. 24684/2014 in CS(OS)
1936/2014, under Order VII Rule 11 CPC, was earlier filed by the
Appellant, raising the identical plea that the suit was barred by Section 53B
(2) of the DDA Act. By the order dated 29.07.2015, this Court rejected the
said Application, holding that the suit for recovery of interest on earnest
money was not liable to be rejected on the ground of Section 53B.
33. Therefore, learned trial court, rightly observed that the suit was not
barred by Section 53B of the DDA Act.
34. The next limb of challenge is that in view of Clause 7 of the
advertisement issued by Defendant No.1, the Plaintiff could not have been
awarded any interest, beyond what was stipulated therein.

35. Clause 7 of the advertisement reads as under:
RFA 232/2021 Page 10 of 13

Signature Not Verified
Signed By:VIKAS
ARORA
Signing Date:30.04.2026
17:30:42
“7. If the bid is not accepted, the Earnest Money will be
refunded to the bidder without any Interest. If DDA has to
withdraw the residential plot from auction (including not
handing over the residential plot to successful bidders
due to any reason like excess area or less area, etc.) then
the E.M, and premium deposited will be returned to the
auction purchaser without any interest upto a period of
06 months period from the date of auction. Beyond 06
months period, DDA will pay an interest of 7% for the
amount lying with DDA for such period.”
36. On bare perusal of Clause 7, it is evident that the Appellant/DDA did
not exclude the liability to pay interest. On the contrary, it acknowledged
that where DDA retains the earnest money beyond 06 months, it is
contractually bound to pay interest @ 7% p.a. for the period during the
retention period of the earnest money/principal with the Defendant
No.1/DDA.
37. Reliance is placed upon Lucky Star Estates (India) Pvt. Ltd. (supra),
wherein the Court held DDA liable to pay interest on monies wrongfully
retained, and repelled the contention that the authority could rely on
contractual silence, to avoid such liability.
38. In the present case, the Appellant did withdraw from the auction on
26.04.2012 and retained the Plaintiff’s earnest money for more than four
years, yet refunded only the principal amount on 29.01.2013, without paying
the interest @ 7% p.a., as envisaged in Clause 7 of the advertisement made
by the Appellant/DDA. The Appellant is, therefore, in breach even of its
own contractual stipulation.

RFA 232/2021 Page 11 of 13

Signature Not Verified
Signed By:VIKAS
ARORA
Signing Date:30.04.2026
17:30:42

39. Therefore, the learned Additional District Judge has rightly
observed that the Plaintiff is a commercial entity engaged in development of
properties and construction and that its investment in the auction was driven
by commercial considerations. Had the amount of ₹63,12,500/- not retained
with the Appellant from 07.12.2008 to 29.01.2013, the Plaintiff could have
gainfully utilised it in its business. The Appellant/Defendant No.1, on the
other hand, enjoyed the benefit of the retained amount throughout this
period.
40. The Appellant/ Defendant no.1 further asserted that the Plaintiff
voluntarily chose to intervene in the Writ Petition and to contest the auction
and, therefore, cannot claim interest for the period during which the writ
petition remained pending. This contention is absolutely misconceived. It is
a matter of record that in W.P.(C) 123/2009, filed by the residents
challenging the auction. The Plaintiff’s participation in the Writ Petition was
in its capacity as the successful bidder, seeking to protect its legitimate
commercial interest in the auction of site no. 4, and not as a volunteer who
kept the litigation alive for speculative gain.
41. Subsequently, the Writ Petition was ultimately disposed of on the
basis of DDA's own stand that the auction ought to be cancelled by way of
additional affidavit. The cancellation of the auction was, therefore, not a
consequence of any election or default on the part of the respondent. Once
the Appellant itself resolved not to proceed with the auction, elementary
fairness required that the earnest money be refunded promptly along with a
reasonable interest. Thus, the Plaintiff cannot be penalized for having been
impleaded as a respondent, in the writ proceedings.
RFA 232/2021 Page 12 of 13

Signature Not Verified
Signed By:VIKAS
ARORA
Signing Date:30.04.2026
17:30:42

42. The suit of the Plaintiff for interest, has been rightly, decreed.
Cross-Objections of the Plaintiff/Respondent:
43. The grievance in the cross-objections is that while the Ld. Trial
Court has awarded interest @ 12% p.a. from 07.12.2008 till 29.01.2013, it
has inadvertently omitted to grant interest for the period from 29.01.2013,
i.e. when the earnest money was refunded, till 30.06.2014, i.e. when the
present Suit was instituted.
44. Once, as per the admissions of the Respondent/Plaintiff himself that
the entire earnest money was refunded on 29.01.2013, there is no question of
grant of interest thereafter, on the earnest money. Therefore, as has been
claimed by the Respondent, having received the entire earnest money on
29.01.2013, there is no further liability of the Appellant to pay the interest
for the period from the date of return of earnest money till the date of filing
of the Suit.
45. The cross-objections filed by Respondent No.1/Plaintiff in C.M.
Appl. 46719/2021, are without merit, and is therefore, dismissed.
Conclusion:
46. In light of the above discussion, there is no merit in this Appeal ,
which is hereby, dismissed. Cross-objections filed by the respondent, also
has no merit and is hereby, dismissed. Pending Applications, if any, are
disposed of.

(NEENA BANSAL KRISHNA)
JUDGE
APRIL 30, 2026/ R

RFA 232/2021 Page 13 of 13

Signature Not Verified
Signed By:VIKAS
ARORA
Signing Date:30.04.2026
17:30:42