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28. The appellant contended that the revised layout plan was submitted not only for the hotel site but for group housing, community center, open and green area and service plans regarding roads, sewerage and water pipe lines were subject to it. The content lion of the appellant is that the respondent was aware of pendency of revised layout plan on March 30, 1998 as Municipal Corporation of Delhi had sent a notice raising 50 objections to the building plans of respondent. Respondent despite having knowledge of the revised layout plan pending with the Municipal Corporation of Delhi had paid the amount of second installment of Rs. 65,38,29,000/- along with interest of Rs. 3,26,01,884/- and the ground rent up to December 31, 1998 amounting to Rs. 2,45,95,046/-. The appellant relied on the letter dated June 26th, 1998 of the respondent categorically stipulating that the respondent had the knowledge of pendency of revised layout plan of appellant for the entire plot at the Andrews Ganj.

29. The appellant contended that the respondent is imputing the liability on the appellant on the ground that there was misrepresentation by the appellant regarding the sanctioned plans and that the respondent was unaware of the revised layout plan having been submitted by the appellant to the Municipal Corporation of Delhi which had not been approved and unless the revised layout plan had been approved, the building plan of the respondent could not be considered for sanction by Municipal Corporation of Delhi and consequently the project of the respondent was considerably delayed. The appellant contended that the building plans were got prepared by the respondent from its architect which were based on the layout of the hotel site which was already approved. On 20th March 1998, the plans which were forwarded by appellant to the Municipal Corporation of Delhi were accepted and processed by Municipal Corporation of Delhi. The counsel for the appellant contended that respondent with full knowledge elected to continue the contract by paying second installment on 30th June, 1998 and further affirmed the contract by continuing to act under it until 31st March, 1999. According to appellant, the respondent was not entitled to rescind the contract but could on by claim damages for the alleged delay, if any, that it could prove. The appellant also contended that the revised layout plan submitted to the Municipal Corporation of Delhi proposed changes in the general pool housing section only and not in the community centre and non-sanction of the building plans with the submission of the revised layout plan has been linked arbitrarily. According to the appellant, the agreement to sub lease in the facts and circumstances will be voidable and not void. He relied on 1968 SC 956 (958) Para 4; Ningawwa Vs. Byrappa Shiddappa Hirenknrabar and Others where it was held that a contract or other transaction induced or tainted by fraud is not void but only voidable at the option of the party defrauded. The relevant observation of the Supreme Court is as under:

86. Dealing with the argument regarding layout plans, it must be noticed that layout plans had been sanctioned and sanctioning of the construction plans of the respondent was dependent upon it. In the clarification meeting held on December 12, 1996, the appellant had represented that there was a sanctioned layout plan and the respondent had given the offer on the representation made that there was layout plan. However, a revised layout plan was submitted by the appellant on February 17, 1997. The plans for construction of Hotel of the respondent were not approved as the sanction of revised layout plans of the appellant was pending. The revised layout plans submitted by the appellant were only approved on August 13th, 1999. Therefore, in these circumstances, the construction of the hotel within three years from the date of handing over possession could not be completed which was a condition precedent for performance of the contract within the time schedule. The appellant can not be permitted to contend that not providing the information regarding the submission of the revised layout plans and revised service plans did not introduce complexities in the whole project. What is glaring is that it was almost after one year, the period for completion of project was three years, that the respondent discovered that the revised layout plans were pending and consequently the construction plans could not be approved. Great emphasis was led on the part of appellant regarding objections raised by the Municipal corporation of Delhi to the building plans submitted by the respondent. In our opinion, it will not absolve the appellant of the consequence of non-disclosure of the fact that the revised layout plans had been submitted by the appellant to the Municipal corporation of Delhi and they had not been sanctioned and this fact was not communicated to the respondent who embarked upon this project involving considerable finance. The contention of the appellant that the revised layout plans related to general pool housing area and not of the community centre in which the hotel site was located, is also of not much help to the appellant. Even if such revised layout plans were not directly related to the approval of the building plans of the respondent, the fact about the pendency or submission of revised layout plan ought to have been communicated to the respondent, as without the sanctioned lay out plan, construction plans of the respondent would not have been approved. From the facts as pleaded, it is apparent that the entire HUDCO project at Andrews Ganj was one and in the circumstances the plea of the appellant that the revised layout plans did not concern the hotel site is of not much help to the appellant. The approval granted by the Municipal Corporation of Delhi by its resolution dated 25th March, 1994 was an approval in respect of HUDCO Place in its entirety and not for distinct or separate parts. Contention of the appellant that the respondent was aware of the pendency of the revised layout plans in Aril, 1998 whereas the respondent contended that they came to know about it in June, 1998, is also not of much help to appellant. It is not material whether the respondent came to know in April 1998 or June 1998; what is material is that this relevant information was not given to the respondent by the appellant at the time of execution of letter of allotment and thereafter on 4th July, 1997 at the time of execution of agreement to sub-lease. The respondent gained a right in the facts and circumstances and under law on account of misrepresentation on the part of the appellant and attributable to the appellant and this right cannot be denied to the respondent on the ground that the respondent had acquiesced with the acts of misrepresentation on the part of appellant by paying second installment with interest and ground rent on 30th June,1998. As a matter of fact that shows the bona fide and genuineness of the respondent in executing the agreement. The respondent on account of non-disclosure of correct situation regarding the revised layout plans did not repudiate or avoid the contract but merely intended that the breaches committed by the appellant be remedied and sought extension of time and contended that the time to pay the 3rd installment stood enlarged and opted for performance of contract which is apparent from the letter dated 31st May, 1999 of the respondent. In these circumstances, it goes without saying that the appellant committed beaches which released the respondent under the obligation to agreement to sub-lease in relation to the time for payment nor the appellant can capitalize on his own default and take shelter under the expression ''due to reason whatsoever''. In this context, let us see how the arbitrator has examined the whole controversy. Observations of the Learned Arbitrator are as under:-

20.20 The Letter of Allotment provided 5 years, but when the Agreement to Sub-Lease was drawn up by HUDCO it was regarded that 3 years was sufficient. Leela Hotels wanted the time enlarged to 5 years, and to persuade HUDCO to agree to do so. Leela Hotels described it as a typographical error. But HUDCO made no response. It neither confirmed nor denied that there was an error and the period continued to be 3 years only. HUDCO pleads now that it was a typographical error but the pleading is not supported by evidence and it is possible that the plea has been adopted by reason of the events that have taken place in the course of implementing the Agreement to Sub-Lease. The plea amounts to a tacit admission by HUDCO that in view of the submission of the Revised Layout Plan and the need for Revised Services Plans it would have been necessary to provide a period of 5 years. That, in my opinion, establishes the gross complexities introduced in the time constrained project by the submission of the Revised Layout Plan and Revised Services Plans. If, at the time of executing the Agreement to Sub-Lease, HUDCO had informed the intending Sub-Lessee of the submission of the Revised Layout Plan, Leela Hotels would have come to know of the new scenario and then ecided whether, having regard to the time constraint of 3 years, it was in a position to undertake the obligations projected in the Agreement to Sub-Lease. By withholding that information, HUDCO allowed Leela Hotels to continue under the impression at the time of signing the Agreement to Sub-Lease that there was an approved Layout Plan and approved Services Plans enabling it to embark upon and complete the construction of the hotel. It was not until almost one year of the three years had passed that Lela Hotels discovered that the scenario present to its mind was very different from the ground reality. Knowledge of the new scenario was vital in deciding whether to enter upon the project and sign the Agreement to Sub-Lease because, as it turned out, MD took the decision that the building Plan of Leela Hotels would not be approved until the Services Plans had been approved afresh. In other words, HUDCO by withholding the information of the submission of the Revised Layout Plan denied Leela Hotels a factor critical to its acceptance or non-acceptance of the Letter of Acceptance and the proposed Agreement to Sub-Lease. In fact, as it turned out, the Revised Services Plans were approved only on 30 August 1999, 6 September 1999 and 7 September 1999 and it was thereafter that the building plans could be effectively considered for approval and Leela Hotels could then consider whether the construction of the hotel could be commenced and completed during the few months remaining. It is clear that HUDCO way guilty of misrepresentation by withholding fundamental information critical to the decision whether the Letter of Allotment and the proposed Agreement to Sub-Lease should be accepted or not.