Dismissed

Delhi Development Authority v. Anil Kumar Malhotra

Delhi HC13 Jul 2026LPA/503/2026

Case brief

AI extract

What is this about?

DDA appealed against a Single Judge's order directing refund of an auction allotment deposit with interest at 18% p.a. for 30 days and 25% p.a. thereafter, following cancellation caused by DDA's error in fixing reserve prices. The Division Bench held DDA could not legally retain the deposited amounts after cancellation and found no ground to interfere.

What the court decided

AI extract

Delhi Development Authority Vs Anil Kumar… — Public Procurement and Tenders | Delhi HC (2026)

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$~81

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IN THE HIGH COURT OF DELHI AT NEW DELHI

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% Date of Decision: 13.07.2026

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- LPA 503/2026

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DELHI DEVELOPMENT AUTHORITY .....Appellant Through: Mr. Tushar Sannu, Mr. Vaibhav Tripathi & Ms. Palak Gupta Joshi, Advs.

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Versus

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ANIL KUMAR MALHOTRA .....Respondent Through: Mr. D.K. Mehta & Mr. Rishabh Mehta, Advs.

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CORAM:

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HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE TEJAS KARIA

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TEJAS KARIA, J. ( ORAL )

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CM No.43268/2026 (for exemption)

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Exemption is allowed, subject to all just exceptions.

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The Application stands disposed of.

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CM No. 43269/2026

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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.

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

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The Application stands disposed of.

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LPA 503/2026 & CM No.43267/2026

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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 ”).

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Page 1 of 6

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LPA 503/2026

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Signature Not Verified

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Signed By:NEELAM SHARMA Signing Da te:1 6.07.2026 17:38:54

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The brief factual matrix leading to the filing of the present Appeal is as under:

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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 ”).

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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.

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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.

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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.

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Page 2 of 6

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LPA 503/2026

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Signature Not Verified

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Signed By:NEELAM SHARMA Signing Da te:1 6.07.2026 17:38:54

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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.

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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.

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g. The learned Single Judge disposed of the Writ Petition, inter alia , observing as under:

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“22. 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 30 days from the date of deposit and thereafter at the rate of 25% p.a., within 4 weeks from today.

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23. In case, the respondent fails to comply with the directions passed in this order, the petitioner will be at liberty to revive the petition.

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24. The writ petition is disposed of in the above terms.”

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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

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LPA 503/2026 Page 3 of 6

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Signature Not Verified

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Signed By:NEELAM SHARMA Signing Da te:1 6.07.2026 17:38:54

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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.

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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.

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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.

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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

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Page 4 of 6

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LPA 503/2026

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Signature Not Verified

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Signed By:NEELAM SHARMA Signing Da te:1 6.07.2026 17:38:54

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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.

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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.

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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.

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In the aforesaid circumstances, the Appellant is liable to compensate the Respondent by refunding the Deposited Amounts along with interest. With respect to the applicable rate of interest, Clause 8 of the Auction Terms provides an appropriate benchmark for determining the rate of interest

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LPA 503/2026

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Page 5 of 6

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Signature Not Verified

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Signed By:NEELAM SHARMA Signing Da te:1 6.07.2026 17:38:54

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payable for the period during which the Appellant retained the Deposited Amounts after cancellation of the allotment of the Subject Properties.

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The submission advanced on behalf of the Appellant that interest ought to be computed only for a maximum period of 60 days in terms of Clause 8 of the Auction Terms is devoid of merit. The said period of 60 days is prescribed in the context of the maximum extension permissible for payment by a successful bidder and has no application to the facts of the present case. In the present matter, the Deposited Amounts were required to be refunded by the Appellant to the Respondent immediately upon cancellation of the allotment of the Subject Properties.

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Accordingly, we find no ground warranting interference with the Impugned Order. In view of the aforesaid, the present Appeal is dismissed. The pending Applications, if any, also stand disposed of. There shall be no order as to costs.

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TEJAS KARIA, J

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DEVENDRA KUMAR UPADHYAYA, CJ

JULY 13, 2026 HK

Page 6 of 6

LPA 503/2026

Signature Not Verified

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Signed By:NEELAM SHARMA Signing Da te:1 6.07.2026 17:38:54

Delhi Development Authority v. Anil Kumar Malhotra

Case brief

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What the court decided

Delhi Development Authority v. Anil Kumar Malhotra

Case brief

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