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Jammu Development Authority vs S. Paramjeet Singh & Anr.

Not available · 2023 INSC 922Decided 13 Oct 2023
Not available
Sanjiv Khanna · S.V.N. Bhatti

Background

In 1999, S. Paramjeet Singh won a public auction conducted by the Jammu Development Authority (JDA) for a plot in Trikuta Nagar Housing Colony, Jammu, bidding Rs. 8,30,000. He paid only 50% of the premium and never paid the remaining balance despite being asked to. After more than a decade of non-payment, JDA cancelled the allotment in 2010 and re-auctioned the plot, receiving a higher bid of Rs. 38,00,000 from Vivek Mahajan. Singh challenged the cancellation in the High Court, which ruled in his favour and held that his original allotment survived, prompting JDA's appeal to the Supreme Court.

Decision Breakdown

The Supreme Court held that the High Court's decision was unsustainable given Singh's clear and prolonged default in paying the balance premium, which was never disputed. The Court found no justification for reviving an allotment that had lapsed due to non-payment over more than ten years, especially after a fresh, higher-value auction had already taken place. It set aside the High Court's judgment and directed a re-auction of the plot, ordering that Singh's earnest money be forfeited (with only the remaining deposited amount refunded with 8% interest from 2001), while the second auction's bidder, Vivek Mahajan, would be refunded his earnest money with 15% interest to balance the equities.

Lesson Learnt

A public auction allotment can lawfully be cancelled, and earnest money forfeited, where the allottee fails to pay the balance consideration within the stipulated terms: prolonged delay and non-payment will not entitle a defaulting bidder to revive an allotment years later.

Official source (sci.gov.in)View Judgment (PDF)

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