Delhi High Court Strikes Down DDA’s Retrospective Payment Cut-Off for Auction Allottees, Directs Allotment of Mangolpuri and Rohini Plots After Full Payment Was Made by December 2020
Facts
The Delhi High Court decided two connected writ petitions filed by Praveen Gupta and Deevik Garg against the Delhi Development Authority, seeking directions for handing over possession/allotment of plots purchased through DDA e-auctions.
In Praveen Gupta’s case, the petitioner was declared the successful bidder for Industrial Plot No. B-349, Mangol Puri Industrial Area, Phase-I, Delhi, in an e-auction held on 26 April 2019. He deposited 25% of the premium and was issued a demand-cum-allotment letter dated 18 July 2019 requiring payment of the balance 75%, amounting to ₹2,10,93,000. Extensions were granted up to 20 April 2020, but the COVID-19 pandemic intervened. The petitioner sought further extension and later deposited the entire balance amount on 29 December 2020.
Despite receipt of payment, DDA cancelled the bid by letter dated 9 April 2021 and forfeited the earnest money, relying on its Circular dated 2 December 2020. A corrigendum dated 17 June 2021 was also issued.
In Deevik Garg’s case, the petitioner was the highest bidder for Plot No. 86, Pocket E-1, Sector-7, Rohini, New Delhi, in an e-auction held on 24 April 2019. The bid amount was ₹3,87,57,040. He deposited 25% and was asked to pay the balance ₹2,90,67,880. He sought extension, and during COVID-related disruption, DDA issued circulars extending time. He deposited the principal amount on 18 December 2020 and interest on 24 December 2020, yet possession was not handed over.
The controversy centred around DDA’s Circular dated 2 December 2020, which treated allottees differently depending on whether their demand letters were issued before or after 1 October 2019.
Issues
Whether Point B of DDA’s Circular dated 2 December 2020 was arbitrary and violative of Article 14 of the Constitution.
Whether DDA could prescribe 1 November 2020 as a payment deadline through a circular issued later on 2 December 2020.
Whether the petitioners’ payments made in December 2020 should be accepted.
Whether DDA was justified in cancelling the allotments despite receiving full balance consideration before 31 December 2020.
Petitioner’s Arguments
The petitioners argued that the Circular dated 2 December 2020 was arbitrary, unreasonable and violative of Article 14 because it created two classes of allottees from the same category of successful bidders without any rational basis.
They submitted that the circular was issued on 2 December 2020 but prescribed 1 November 2020 as the last date for payment for one category of allottees. Therefore, the so-called benefit had already expired before the circular came into existence, making compliance impossible.
The petitioners further argued that they were diligent and had repeatedly sought extensions during the COVID-19 pandemic. DDA neither rejected their requests nor communicated any clear decision. Having accepted the amounts, DDA could not thereafter cancel the allotments.
They relied on judgments including V.P. Sunita v. DDA, Raj Kumar Sharma v. DDA, Mohd. Sultan v. DDA, Kailash Nath Associates v. DDA, R.K. Saxena v. DDA, and Dhanpothowar Co-operative Group Housing Society Ltd. v. DDA, to argue that delay may be condoned in appropriate circumstances and acceptance of delayed payment may amount to extension.
Respondent’s Arguments
DDA argued that the petitioners failed to pay within the original and extended timelines. It submitted that under Rule 28 of the Delhi Development Authority (Disposal of Developed Nazul Land) Rules, 1981, and the tender terms, time could be extended only up to a specified limit, failing which the bid could be cancelled and earnest money forfeited.
DDA contended that due to COVID-19, it had already granted additional relief through circulars dated 17 June 2020 and 2 December 2020. According to DDA, petitioners whose demand letters were issued before 1 October 2019 were required to make full payment by 1 November 2020. Since both petitioners paid in December 2020, they were not entitled to regularization.
DDA further argued that accepting such delayed payments would create an undesirable precedent and encourage other defaulting bidders to seek similar relief.
Analysis of the Law
The Court held that Point B of the Circular dated 2 December 2020 could not be legally sustained. The circular was issued on 2 December 2020 but required certain allottees to have made payment by 1 November 2020. Therefore, on the very date the circular came into force, the time for compliance had already expired.
The Court held that an extension must give a future opportunity to perform an obligation. A circular that informs a party that the deadline had already expired before issuance is self-defeating, arbitrary and contrary to fairness in administrative action.
The Court further held that the classification between allottees whose demand letters were issued before 1 October 2019 and those whose demand letters were issued after that date had no rational nexus with the object of the circular. The object was to mitigate hardship caused by the COVID-19 pandemic, and that hardship affected all allottees who were unable to make payment, irrespective of the date of the demand letter.
Precedent Analysis
The Court relied on S. Seshachalam v. Bar Council of Tamil Nadu, where the Supreme Court explained the twin test under Article 14: classification must be based on intelligible differentia, and that differentia must have a rational nexus with the object sought to be achieved.
Applying this test, the Court held that DDA’s classification failed both requirements. The distinction based solely on the date of issuance of the demand letter was artificial and irrational.
The Court distinguished Jitin Garg v. DDA, noting that it concerned a different factual situation where the allottee fell under Category A and had failed to comply despite an actual extension. The Court also held that DDA’s reliance on Meerut Development Authority, Jitin Verma v. DDA, and Shikhar v. National Board of Examination did not help because the present challenge was specifically to the arbitrariness of the Circular dated 2 December 2020.
Court’s Reasoning
The Court found that Category A allottees under the circular were given a real and effective extension till 31 December 2020. However, Category B allottees were given no meaningful opportunity because their deadline was fixed retrospectively as 1 November 2020, even though the circular was issued only on 2 December 2020.
The Court rejected DDA’s argument that Point B was intended to protect genuine bidders. It held that the issue was not between genuine and non-genuine bidders, but between two classes of defaulting allottees who were similarly affected by the pandemic.
The Court also noted that DDA had itself granted extensions earlier, showing that it had the authority to relax payment timelines. Therefore, denying a meaningful extension to one class of similarly situated allottees without rational basis was arbitrary.
In Praveen Gupta’s case, the entire balance amount was deposited on 29 December 2020. In Deevik Garg’s case, the balance amount with interest was deposited by 24 December 2020. Since both deposits were made before 31 December 2020, the Court held that DDA could not sustain cancellation based on the invalid retrospective cut-off of 1 November 2020.
Conclusion
The Delhi High Court allowed both writ petitions and struck down Point B of DDA’s Circular dated 2 December 2020 as discriminatory and violative of Article 14.
The Court held that the petitioners were entitled to allotment of their respective plots:
Praveen Gupta: Industrial Plot No. B-349, Mangol Puri Industrial Area, Phase-I, Delhi.
Deevik Garg: Plot No. 86, Pocket E-1, Sector-7, Rohini, New Delhi.
DDA was directed to communicate the balance amount, interest, if any, and incidental charges within four weeks. The petitioners were directed to pay the same within four weeks thereafter, upon which allotment letters were to be handed over.
Case: Praveen Gupta v. Delhi Development Authority; Deevik Garg v. Delhi Development Authority
Court: Delhi High Court
Case Number: W.P.(C) 6761/2021 and W.P.(C) 7612/2021
Judge: Justice Jasmeet Singh
Date: 3 July 2026
Result: Petitions allowed; Point B of DDA Circular dated 2 December 2020 struck down; allotment of plots directed.
