New Okhla Industrial Development Authority vs Ravindra Kumar Singhvi (Dead) Thr. Lrs.
Background
A man was allotted a residential plot in NOIDA's Sector 30 in 1981 as a cooperative society member, while a separate plot in Sector 15A had earlier been allotted to his wife. Both had sworn affidavits declaring that neither of them, nor their dependents, owned any other plot in NOIDA: statements that were false, since the Sector 30 allotment had already been made before the wife's affidavit was signed. NOIDA cancelled the Sector 30 plot upon discovering this, but the trial court, first appellate court and the High Court all ruled in the allottee's favour, holding the lease could only be terminated through a formal notice procedure.
Decision Breakdown
The Supreme Court held that the allotment condition barring a family from holding more than one NOIDA plot was violated, and that both husband and wife had filed knowingly false affidavits to conceal this. Relying on the principle that "fraud vitiates everything" (citing S.P. Chengalvaraya Naidu), the Court held that cancellation of an allotment obtained by fraud does not require the formal lease-termination procedure otherwise needed for breach of lease conditions, and that a person who misleads the authority is not entitled to equitable relief. The appeal was allowed, the plaintiff's suit was dismissed, and the courts below were reversed.
Lesson Learnt
An allotment or benefit obtained by concealing material facts in a sworn affidavit can be cancelled by the authority directly, without following the elaborate procedures meant for genuine breach-of-condition cases: fraud undoes the transaction from the start.