Ghaziabad Development Authority Vs.Union of India and Anr.

Citation: AIR 2000 SC 2003

Facts

GDA, though informed the plaintiffs about the allotment of plots to them, yet even after more than considerable time had elapsed, never conveyed the property to them. Latter approached MRTP Commission which granted them not only amount paid by them to the defendants for the possession of the plot alongwith the interest due, but also awarded them damages for mental agony, which were disputed by GDA

Issues: Whether Court can award damages for mental agony w.r.t. breach of contract? If yes, in what cases?

Held:

Usually, no damages in contract are awarded for injury to the plaintiffs’ feelings, or for his mental distress, anguish, annoyance, loss of reputation or social discredit caused by the breach of contract. Exception: if the contract is one whose performance is to provide piece of mind or freedom from distress (eg: watching movie in theatre, booking holidays abroad, booking a hotel, etc) or if at the time the contract was made, such damages were within the contemplation of the parties as a likely consequence of the breach of contract.

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 public may make applications for availing benefit of the scheme. Such applications are offers. Some of the offers having been accepted by the Authority result into a contract between the applicant and the Authority. In present case, since the contract was breached by GDA by not giving the possession of the house to the claimants even after reasonable period of time had elapsed; it was liable for paying back the amount taken along with interest; and not the damages w.r.t. mental agony for it did not fall into any of the exception.

Author: Vishrut Kansal