Delhi Development Authority v. Anil Kumar Malhotra

1. Exemption is allowed, subject to all just exceptions.

2. The Application stands disposed of. CM No. 43269/2026

3. The Appellant has filed the present Application under Section 5 of the Limitation Act, 1963 read with Section 151 of the Code of Civil Procedure, 1908 seeking condonation of delay of 139 days in filing the present Appeal.

4. Having regard to the averments made in the Application, the same is allowed and the delay in filing the present Appeal is condoned.

5. The Application stands disposed of. LPA 503/2026 & CM No.43267/2026

6. The present Letters Patent Appeal assails the order dated 14.01.2026 (“Impugned Order”) passed by the learned Single Judge in W.P.(C) 4183/2021 (“Writ Petition”).

7. The brief factual matrix leading to the filing of the present Appeal is as under: a. The Appellant issued an online tender auction (“Auction”) for the allotment of built-up property bearing Shop Nos. 16 and 14 located on the Ground Floor, District Centre, Laxmi Nagar, Delhi (“Subject Properties”). The reserve price of Shop NO. 16 was fixed at ₹23,40,842 and Shop No. 14 was fixed at ₹18,25,554/- (“Reserve Prices”). b. The Respondent participated in the Auction and was declared the highest bidder. Pursuant to the Letter of Intent dated 03.09.2019 (“LOI”) issued by the Appellant, the Respondent deposited 25% of the bid amount along with the Auction Award fee for allotment of the Subject Properties. c. Thereafter, the Appellant issued the Demand-cum-Allotment Letters dated 22.10.2019 (“Demand Letters”) to the Respondent, pursuant to which the Respondent deposited the remaining consideration amount of ₹34,16,176/- for Shop NO. 16 and ₹26,27,710/- for Shop No. 14. d. On 25.12.2020, the Appellant received a complaint stating that the Subject Properties ought to have been classified under Circle Rate Category ‘D’, instead of Category ‘F’, which had been adopted by the Appellant while determining the Reserve Prices of the Subject Properties. In view of the alleged discrepancy in the fixation of the Reserve Prices, the Appellant cancelled the allotment of the Subject Properties in favour of the Respondent. e. Vide Cancellation Letter dated 31.12.2020 (“Cancellation Letter”), the Appellant communicated the cancellation of the allotment to the Respondent and requested the Respondent to apply for refund of the amounts deposited (“Deposited Amounts”) by furnishing the requisite bank details and supporting documents to enable the Appellant to process the refund. f. Being aggrieved by the Cancellation Letter, the Respondent instituted the Writ Petition, seeking quashing of the Cancellation Letter and issuance of directions to the Appellant to hand over possession of the Subject Properties and execute the conveyance deed in favour of the Respondent. g. The learned Single Judge disposed of the Writ Petition, inter alia, observing as under:

8. It is the case of the Appellant that, by way of the Cancellation Letter, the Respondent was called upon to furnish its bank account details, IFSC particulars and a cancelled cheque to facilitate refund of the Deposited Amounts. However, the Respondent failed to furnish the requisite bank details and, instead, assailed the Cancellation Letter by filing the Writ Petition seeking possession of the Subject Properties. It is contended on behalf of the Appellant that, in the absence of the requisite bank details and supporting documents from the Respondent, the Appellant was unable to process the refund of the Deposited Amounts.

9. Learned Counsel for the Appellant submitted that the Appellant could, at the highest, be held liable to pay interest at the rate of 18% per annum on the refund of the Deposited Amounts, being the rate contemplated under the terms and conditions of the Auction (“Auction Terms”), and that too only for a maximum period of 60 days. It was further contended that the award of interest beyond the period of 60 days, as directed by the learned Single Judge, is punitive in nature, imposes an undue burden on the public exchequer and that, in the facts of the present case, the interest of the public exchequer ought to prevail over the private interest of the Respondent.

10. Per contra, learned Counsel for the Respondent submitted that the Appellant retained the Deposited Amounts for several years despite having cancelled the allotment of the Subject Properties on account of its own administrative error. It was further submitted that the Respondent was deprived of the use and benefit of the Deposited Amounts without any fault on its part and, therefore, is entitled to be compensated by way of interest for the period during which the Appellant continued to retain the Deposited Amounts.

11. We have heard learned Counsel for the Parties and perused the material placed on record.

12. In the present case, it is not in dispute that the Respondent deposited the entire consideration amount within the time stipulated in the Demand Letters and that the cancellation of the allotment was occasioned by the Appellant’s own administrative error in fixation of the Reserve Prices and was not attributable to any default on the part of the Respondent. Upon cancellation of the allotment, vide the Cancellation Letter, the Deposited Amounts continued to remain with the Appellant.

13. Clause 8 of the Auction Terms stipulates that where a successful bidder seeks extension of time for payment of the balance consideration, the Competent Authority may grant such extension subject to payment of interest at the rate of 18% per annum where the delay does not exceed thirty days and 25% per annum where the delay exceeds thirty days, subject to the conditions specified therein.

14. In the present case, once the Appellant decided to cancel the allotment of the Subject Properties on account of its own administrative error, it was incumbent upon the Appellant to ensure that the Deposited Amounts were refunded to the Respondent within a reasonable period. Even if the Appellant was unable to process the refund in absence of bank account details not provided by the Respondent, upon institution of the Writ Petition by the Respondent, the Appellant ought to have taken appropriate steps, which could have included depositing the Deposited Amounts before this Court in an interest-bearing account, instead of continuing to retain the Deposited Amounts without taking any action. Admittedly, the Deposited Amounts could not have been legally retained once allotment was cancelled by the Appellant.