Ms 2Nd Computers vs. Delhi Development Authority
Original PDF →Facts
The Delhi Development Authority (DDA), the respondent, conducted an e-auction for a property in Laxmi Nagar, Delhi. The petitioner was the highest bidder at Rs. 1,01,50,460/-. The DDA issued a Letter of Intent and a demand letter for the remaining payment. The petitioner deposited the entire sale consideration, including processing fees and GST, totaling Rs. 1,02,64,469/-. Despite the petitioner's requests, the DDA failed to hand over possession or execute the conveyance deed. Subsequently, the DDA issued a communication dated January 18, 2021, cancelling the allotment. The DDA's justification for cancellation was a bonafide mistake in calculating the reserve price, as the property was in Category 'D' colony, not 'F' as initially assumed. The DDA proposed to refund the deposited amount.
Held
The Court held that the cancellation of the allotment by the respondent (DDA) was arbitrary and unjustified. The Court found that the petitioner had fulfilled all their obligations by making the entire payment without delay and without any allegations of fraud or collusion. The Court emphasized that the responsibility to conduct proper verification of the property's category lay with the authority issuing the auction notice before its issuance. Since the respondent had utilized the petitioner's deposited amount, and the cancellation was due to the respondent's own error, the Court directed the respondent to refund the entire amount paid by the petitioner along with interest. The interest rate was determined based on the terms of the e-auction notice: 18% per annum for the first 90 days from the date of deposit and 25% per annum thereafter until the date of actual payment. The Court also noted that the petitioner was not required to apply for a refund, as the cancellation was initiated by the respondent. The respondent was directed to comply with this order within four weeks.
Key Issues
1. Whether the cancellation of the allotment by the Delhi Development Authority (DDA) was arbitrary and illegal, considering the petitioner had fulfilled all payment obligations and there were no allegations of fraud or collusion against them? (Question of law and fact, turning on principles of contract law and administrative law). 2. If the cancellation was found to be unjustified, what relief should be granted to the petitioner, particularly concerning the refund of the deposited amount? Petitioner's arguments: The petitioner contended that they had made the entire payment as per the auction terms and conditions without delay. They argued that the DDA's error in calculating the reserve price should not prejudice them, as the fault lay entirely with the respondent. They sought the refund of their money along with interest, referencing the interest rates stipulated in the e-auction terms for delayed payments. Respondent's arguments: The DDA admitted to a bonafide mistake in calculating the reserve price due to an incorrect categorization of the colony. They argued that any direction other than refunding the amount would cause a loss to the public exchequer, as the property was to be re-auctioned with the correct reserve price. They reiterated their position as stated in their counter-affidavit.
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
O R D E R % 14.01.2026
This is a writ petition filed under Articles 226 and 227 of the Constitution of India seeking the following prayers:- “a) Issue a writ of Mandamus, Certiorari or any other appropriate writ, order or directions for quashing the impugned communication dated 18.01.2021 issued by Respondents whereby Allotment made through E-Auction held on 29.07.2019 has been arbitrarily cancelled; b) Issue appropriate writ order or directions directing the Respondent to hand over physical possession of property being Shop/Unit No. 23, Ground Floor, District Centre, Laxmi Nagar, Delhi measuring 44.43 Sq. meters to the Petitioner and to execute conveyance deed in favour of Petitioner;” This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 19/01/2026 at 12:56:44
The brief facts are that the respondent issued an online tender/E- Auction for allotment of Built up property being Unit No. 23, Ground Floor, District Centre, Laxmi Nagar, Delhi on free hold basis, with the Reserve Price of Rs.61,21,460/-.
The petitioner participated in said auction and was declared the highest bidder for an amount of Rs.1,01,50,460/-. Thereafter, the respondent issued Letter of Intent (“LOI”) dated 03.09.2019 in favour of the petitioner. Pursuant to receipt of LOI, the petitioner deposited 25% of bid amount i.e., Rs.25,37,615/-.
Consequently, the respondent issued the Demand Letter dated 22.10.2019 calling upon the petitioner to deposit remaining 75% i.e, Rs.76,12,890/-within 90 days from the issuance of demand letter, which was duly complied with by the petitioner.
Thus, the petitioner has deposited the entire sale consideration along with processing fees and GST amounting to Rs. 1,02,64,469/-.
Thereafter, the petitioner made repeated request to the respondent to hand over the possession but neither the possession was given by respondent, nor the conveyance deed was executed in favour of the petitioner.
Feeling aggrieved by the inaction of the respondent, the petitioner send a legal notice calling upon the respondent to hand over physical possession of property. In response to the same, the respondent issued the impugned communication dated 18.01.2021, wherein it cancelled the allotment made through auction.
Hence, the present petition.
Ms. Sen, learned standing counsel for the respondent, has drawn my This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 19/01/2026 at 12:56:44
attention to paragraph No.6(b) of the counter-affidavit, which reads as under:- “b.While floating this E-auction, the Reserve Price for the premises in question was calculated by the Respondent taking the Category 'F' of the notified circle rates. However, in the meantime a complaint dated 24/12/2019 was received, stating that Laxmi Nagar District Centre was 'D' Category and not 'F'. This fact was then immediately brought to the notice of higher authorities. The bonafide mistake in calculation was examined by the Finance Wing and in view of the gravity of the issue involved; the Competent Authority in this case Vice-Chairman, DDA (Respondent) was constrained to cancel the allotment of the Petitioner on 25/12/2020 and approved the refund of their deposited amount and further approved to put the shops for re- auction with correct reserve price. The decision of Competent Authority was communicated to the Petitioner vide letter dated 18-01-2021 with request to apply for refund along with all the payment details, bank details such as Bank Account No., IFSC code etc. and a cancelled cheque so that the amount deposited by him may be refunded at the earliest. Theof the related file noting are annexed herewith as Annexure-A.”
Ms. Sen, learned standing counsel for the respondent,submits that there was an error at the Delhi Development Authority’s (“DDA”) end and the circle rate of the unit in question were calculated on the basis of the assumption that the property was actually in category “D” colony but the circle rate was calculated on the basis category “F” colony. Hence, the This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 19/01/2026 at 12:56:44
reserve price was much lower than what it should have been. She further states that the unitis to be re-auctioned and any other direction would cause loss to the public exchequer. She further draws my attention to the counter- affidavit where the same is also reiterated.
Mr. Chadha, learned senior counsel for the petitioner, states that the petitioner is agreeable to refund of the money provided the same is returned along with interest as demanded by the DDA in the “Terms and Conditions of E-Auction for Allotment of Built-UpShop/Office/Kiosk, on Free Hold Basis Under The Delhi Development Authority (Management Disposal Of Housing Estate) Regulations, 1968” of the online tender auction notice. In this regards, he draws my attention to paragraph No. 8 under the heading “2. E-auctioning and Submission of Documents”, which reads as under:- “8.Thedemand-cum-allotment letter would be sent to the successful bidder immediately after the bid is accepted by the competent authority. The highest bidder shall make the payment of balance 75% of the amount demanded vide demand cum allotment letter referred to above within 90 days from the date of issue of demand letter by Bank Draft/ Pay Order/NEFT/RTGS payable at Vikas Sadan, INA, New Delhi branches of Central Bank of India/ State Bank of India shall submit a copy of the bank challan to Dy. Director (CE). The Competent Authority may, in his absolute discretion, extend the last date of payment up to a maximum period of 180 days beyond the last date of payment with reference to the date of issue of demand letter subject to payment of interest on the balance amount at rate of 18% per annum where the delay does not exceed by 90 days and at the rate of 25% per annum where the This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 19/01/2026 at 12:56:44
delay exceeds 90 days provided that bidder/auctioner has applied to the Competent Authority for grant of extension of payment within 20 days from the date of issue of the demand letter.”
I have heard learned counsel for the parties.
It is undisputed fact that the petitioner has made the entire payment to the respondent in respect of the unit in question without any delay and in accordance of the terms and conditions of the online tender auction notice. There are no allegations of collusion or fraud committed by the petitioner.
The fault lies totally at the respondent’s end, as before issuing auction notice, it is the responsibility of the authority issuing auction notice to make sufficient verifications of the property and see the category it lies in.
The petitioner participated in the auction, was declared as the successful bidder and duly made the entire payment.The respondent has utilized the said consideration and the amount deposited by the petitioner has been with the respondent ever since the date of the deposit.
A perusal of the paragraph No. 8 under the heading “2. E-auctioning and Submission of Documents” from the auction notice(reproduced above) shows that the respondent is charging interest on non-payment of the amount at the rate of 18% p.a. where the delay in payment is under 90 days from the prescribed date and at the rate of 25% p.a. where the delay exceeds 90 days from the prescribed date.
If the respondent is charging interest on non-payment of the amount at the rate of 18% p.a. where the delay is under 90 days from the prescribed date and at the rate of 25% p.a. where the delay exceeds 90 days from the prescribed date, the same is the accepted rate of interest to be charged from the respondent as well. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 19/01/2026 at 12:56:44
Ms. Sen, learned standing counsel for the respondent, further draws my attention to the letter of 18.01.2021 which reads as under:- This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 19/01/2026 at 12:56:44
On the perusal of the letter, reproduced above, I am of the view that merely writing a letter does not tantamount to refunding the money. The petitioner is not required to apply for a refund in case the respondent is the one cancelling the allotment on its own.
It is the duty of the respondent to return the money and the bank details, etc. are already available with the respondent as the petitioner has made payments through NEFT/RTGS credit.
A perusal of the letter also shows that there is no mention of the respondent refunding the amount with interest. Hence, the same only seems to be an eye-wash.
For the said reasons, the amount paid by the petitioner shall be returned by the respondent along with the interest at the rate of 18% p.a. for 90 days from the date of deposit and thereafter at the rate of 25% p.a. till the date of payment, within 4 weeks from today.
In case, the respondent fails to comply with the directions passed in this order, the petitioner will be at liberty to revive the petition.
The writ petition is disposed of in the above terms. JASMEET SINGH, J JANUARY 14, 2026/DM This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 19/01/2026 at 12:56:44
Reproduced from the public record of the Delhi High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.