Buyers Paid ₹6.41 Crore for Rohini Plot but DDA Asked Them to Surrender It for a Park: Delhi High Court Orders Alternate Plot
DDA Promised Alternate Plot After Taking Back Unusable Residential Land: Delhi High Court Directs It to Honour Its Promise
Facts
The Delhi Development Authority issued a public notice on 9 March 2019 for the electronic auction of residential properties.
Naresh Kumar and Pinki Goyal participated in the auction and deposited approximately ₹7.03 lakh as earnest money. Their bid was accepted on 24 April 2019, and they were allotted Plot No. 46, Block E-2, Sector 7, Rohini, Delhi.
Around the same time, proceedings concerning the land at Naharpur were pending before the Delhi High Court. On 30 April 2019, the Court directed that the auction of land in the village would remain subject to the outcome of the pending petition.
Despite this order, the Delhi Development Authority issued a Letter of Intent to the petitioners on 19 June 2019 without informing them about the pending litigation or the Court’s direction. The petitioners thereafter made further payments.
On 3 September 2019, the Authority demanded the remaining sum of ₹4,80,91,121 within 90 days.
In another writ petition, the Delhi High Court passed a status quo order on 8 November 2019 concerning the plot-allotment process. The Authority did not disclose this order to the petitioners and continued insisting upon timely payment, failing which interest would be charged.
To comply with the demand, the petitioners obtained a loan of ₹4.15 crore from ICICI Bank and paid it to the Authority. They paid the remaining ₹65,91,121 from their own funds on 26 November 2019.
Even after receiving the entire amount, the Authority did not deliver possession. The petitioners later discovered the pending litigation and status quo order.
The petitioners and six other allottees intervened in the pending proceedings, after which the status quo order was vacated. The Authority then called upon them to take possession and execute conveyance documents.
The petitioners received paper or symbolic possession on 19 March 2021. A conveyance deed was executed on 16 April 2021 and registered on 18 June 2021.
However, local residents of Naharpur repeatedly obstructed development and construction in the area. The Authority’s engineering officials were also prevented from undertaking infrastructure work, and there was even a physical altercation between villagers and Authority officials.
The original plot formed part of an area containing a volleyball court used by local residents. An area legislator and Authority member requested that residential Plot Nos. 44, 45 and 46 be merged with the adjoining land reserved for a park, dustbin and public conveniences.
At a meeting held on 26 August 2021, the Authority proposed that the petitioners surrender Plot No. 46 and accept an alternate plot. Its internal records also stated that the original plot was not suitable for residential purposes.
The petitioners consented to the exchange and gave Plot No. 106 in Block E-1 as their first preference and Plot No. 111 as their second preference. They furnished written consent on 27 August and 21 September 2021.
The Authority initially processed the proposal for cancellation of the original conveyance deed and allotment of an alternate plot. Its records reflected that the proposal originated from the Authority and was intended to accommodate the local demand for retaining the playground.
The Authority later reversed its position. It claimed that after execution of a registered conveyance deed, exchanging the original plot for an alternate plot was not permissible under the Delhi Development Authority (Disposal of Developed Nazul Land) Rules, 1981.
The petitioners approached the Delhi High Court seeking allotment of Plot No. 111 or another suitable residential plot. Alternatively, they sought cancellation of the original conveyance deed and refund of approximately ₹6.86 crore, including consideration, processing fees, stamp duty and registration charges, with interest.
Issues
- Whether the Delhi Development Authority made a clear and unequivocal promise to allot an alternate plot if the petitioners surrendered Plot No. 46.
- Whether the petitioners altered their position in reliance on that promise.
- Whether the proposal for exchanging the plots originated from the petitioners or from the Authority itself.
- Whether the Authority could resile from its representation after obtaining the petitioners’ consent to surrender the original plot.
- Whether the doctrine of promissory estoppel applied against the Delhi Development Authority.
- Whether the Nazul Land Rules, 1981 prohibited allotment of an alternate plot after execution of a conveyance deed.
- Whether the original plot was suitable for residential use.
- Whether the Authority could simultaneously maintain that Plot No. 46 was unfit for housing and insist that the petitioners retain it as a residential plot.
- Whether the petitioners were entitled to Plot No. 111 or another property of similar size and value in the same locality.
- What would happen to the conveyance deed and possession of the original plot after the alternate allotment.
Petitioner’s Arguments
The petitioners argued that they had paid the entire consideration of approximately ₹6.41 crore and had taken a substantial bank loan for the purchase.
Despite full payment, they never received effective physical possession of a usable residential plot. Local villagers prevented construction, and internal development, including roads, sewerage, water and electricity infrastructure, remained incomplete.
They submitted that the Authority itself admitted that Plot No. 46 was no longer feasible for residential use and wanted to merge it with the adjacent park and playground.
The exchange proposal did not originate from the petitioners. The Authority, following meetings with the local legislator and residents, asked them to surrender Plot No. 46 in return for an alternate residential plot.
The petitioners agreed to this arrangement and provided written consent. They did not develop the original plot, pursue possession or initiate separate proceedings concerning it because they relied on the Authority’s assurance that a replacement would be provided.
They maintained that the case attracted both legitimate expectation and promissory estoppel. The Authority made a clear representation, intended it to be acted upon and induced them to alter their legal and financial position.
According to the petitioners, the Authority could not be permitted to approve the surrender when it served its public purpose and then refuse the corresponding alternate allotment.
They also argued that the Authority was approbating and reprobating by declaring the plot unfit for residential use while simultaneously insisting that they retain it as their residential property.
Respondent’s Arguments
The Delhi Development Authority argued that the petitioners had paid the consideration and received possession. A registered conveyance deed was executed on 16 April 2021, which conferred complete title upon them.
Once title and possession had been transferred, the parties’ rights and obligations under the auction process stood concluded. The Authority claimed that it no longer had any continuing responsibility for the plot.
It submitted that the petitioners failed to develop the property after acquiring ownership. Any later encroachment or obstruction could not be attributed to the Authority.
The Authority contended that it was not required to protect an allotted plot from encroachment after possession and execution of the conveyance deed.
It further stated that the proposed cancellation and alternate allotment had been reconsidered by senior officials. The Lieutenant Governor returned the proposal for clarification concerning:
- Whether the original conveyance deed could be cancelled;
- Whether the petitioners’ conditional consent was acceptable; and
- Whether an alternate plot could be allotted without an auction.
Following further consideration, the Authority concluded that swapping plots after execution of a registered conveyance deed was impermissible under the Nazul Land Rules, 1981.
It therefore argued that neither cancellation of the existing allotment nor allocation of an alternate plot was legally permissible.
Analysis of the Law
Promissory Estoppel
Promissory estoppel is an equitable principle intended to prevent injustice. It applies when:
- One party makes a clear, unambiguous and unequivocal promise;
- The promise is intended to affect legal relations;
- The promisor knows or expects that it will be acted upon;
- The other party acts upon it and alters its position; and
- Allowing the promisor to withdraw would result in unfairness.
The doctrine is not confined to contractual claims and may itself provide a cause of action in India.
A promisee does not always have to prove a separately measurable financial loss. It is sufficient to show that the promise caused the promisee to alter their position.
Application Against Public Authorities
Promissory estoppel applies against the State, statutory authorities and other instrumentalities covered by Article 12 of the Constitution.
Government assurances are not empty declarations. Public bodies must act fairly, consistently and without arbitrariness when citizens organise their affairs in reliance on official representations.
A public authority may avoid a promise where enforcement would violate an express statutory prohibition or overriding public interest. The burden lies upon the authority to identify that prohibition or demonstrate the conflicting public interest.
Prohibition Under the Nazul Land Rules
The Authority broadly relied on the Nazul Land Rules, 1981 but did not identify any specific provision prohibiting an alternate allotment after execution of a conveyance deed.
A general reference to policy or rules was insufficient to defeat the equity created in the petitioners’ favour.
The Authority also failed to demonstrate how allotment of Plot No. 111 would disturb the auction scheme, violate a statutory requirement or prejudice public interest.
Approbation and Reprobation
A public authority cannot take inconsistent positions to suit its convenience.
The Authority’s records stated that Plot No. 46 was unsuitable for residential use and should be merged with a park or playground. Having induced the petitioners to surrender it on that basis, it could not later insist that they retain the same property as a residential plot.
Precedent Analysis
State of Himachal Pradesh v. Kundlas Loh Udyog
The Supreme Court comprehensively summarised the doctrine of promissory estoppel.
It held that the doctrine is based on fairness, justice and good conscience. A clear promise becomes binding when it is intended to be acted upon and the promisee alters their position in reliance upon it.
The Court clarified that:
- Promissory estoppel can provide an independent cause of action;
- Proof of actual financial detriment is not always necessary;
- Alteration of position is sufficient;
- The doctrine applies against the State and its instrumentalities;
- State action must be fair, non-arbitrary and consistent; and
- A public authority may withdraw a representation only where equity, statutory law or overriding public interest justifies doing so.
The Delhi High Court applied these principles directly to the Authority’s promise of an alternate plot.
Court’s Reasoning
The Court examined internal documents obtained through the Right to Information Act and found that the exchange proposal did not originate from the petitioners.
The Authority itself considered Plot Nos. 44, 45 and 46 unsuitable in their existing location because local residents wanted the volleyball court and adjoining park preserved.
Its officials proposed merging the residential plots with the park and offering an alternate plot to the petitioners. The petitioners merely responded to that official proposal.
The Authority made a clear representation that if the petitioners gave up Plot No. 46, they would receive a replacement. This representation was intended to alter the parties’ legal relationship because it involved surrendering an already conveyed property in exchange for another residential plot.
The petitioners acted upon the promise. They:
- Furnished consent letters;
- Agreed to surrender Plot No. 46;
- Did not undertake construction on it;
- Did not pursue litigation for its effective possession;
- Waited for several years for an alternate allotment; and
- Accepted the possibility of receiving a comparatively smaller plot.
Their conduct constituted a material alteration of position.
The Court noted that the petitioners had already invested approximately ₹6.41 crore and undertaken a ₹4.15 crore loan obligation. Yet they were left without a usable residential plot because they trusted the Authority’s assurance.
The Authority failed to cite any provision of the Nazul Land Rules expressly prohibiting the proposed exchange. It also failed to demonstrate any public-interest reason for refusing the alternate allotment.
The Court found the Authority’s position internally inconsistent. It could not maintain that Plot No. 46 was unfit for residential use and needed to be merged with a playground, while also forcing the petitioners to accept that property as their residential allotment.
Permitting the Authority to withdraw its promise would cause manifest injustice. The doctrine of promissory estoppel therefore bound it to provide an alternate plot.
Conclusion
The Delhi High Court allowed the writ petition.
It directed the Delhi Development Authority to allot Plot No. 111, Block E-1, Sector 7, Rohini, to the petitioners.
If that plot could not be allotted, the Authority was required to provide another residential plot of similar size and value in the same vicinity as a replacement for Plot No. 46, Block E-2, Sector 7, Rohini.
Upon allotment of the replacement property and execution of its conveyance deed, the conveyance deed dated 16 April 2021 concerning Plot No. 46 would stand cancelled. Possession of the original plot would then be deemed to have reverted to the Authority.
Case Details
Case: Naresh Kumar & Another v. Delhi Development Authority & Another
Court: High Court of Delhi at New Delhi
Case Number: Writ Petition (Civil) 6425/2022 with Civil Miscellaneous Applications 19450/2022, 24952/2022 and 43766/2023
Judge: Hon’ble Mr Justice Jasmeet Singh
Date: 16 July 2026
Result: Writ petition allowed; Delhi Development Authority directed to allot Plot No. 111 or another residential plot of similar size and value in the same vicinity, with the original conveyance to be cancelled after replacement allotment.
