Delhi Development Authority vs M/S 2Nd Computers

$~2
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 09.07.2026
+ LPA 273/2026 & CM APPLs. 24945-47/2026
DELHI DEVELOPMENT AUTHORITY .....Appellant
Through: Mr. Tushar Sannu, Mr. Priyankar
Tiwary and Ms. Pulak Gupta Joshi,
Advocates.
Versus
M/S 2ND COMPUTERS .....Respondent
Through: Mr. Ravi Data, Mr. Rajesh Sharma
and Mr. Karan Mehta, Advocates.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE TEJAS KARIA
TEJAS KARIA, J. ( ORAL )
1. The present Letters Patent Appeal assails the order dated 14.01.2026
(“ Impugned Order ”) passed by the learned Single Judge in W.P.(C)
2754/2021 (“ Writ Petition ”).
2. The brief factual matrix leading to the filing of the present Appeal is
as under:
2.1. The Appellant issued an online tender/e-auction (“ Auction ”)
for the allotment, on a freehold basis, of built-up property
bearing Unit No. 23, Ground Floor, District Centre, Laxmi
Nagar, Delhi (“ Subject Property ”), at a reserve price of
₹61,21,460/- (“ Reserve Price ”).
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:13.07.2026
18:25:42
LPA 273/2026 Page 1 of 7

2.2. The Respondent participated in the Auction and was declared
the highest bidder for an amount of ₹1,01,50,460/-. Thereafter,
the Appellant issued the Letter of Intent dated 03.09.2019
(“ LOI ”) in favour of the Respondent. Pursuant to the LOI, the
Respondent deposited 25% of the bid amount, amounting to
₹25,37,615/-.
2.3. Pursuant to the Demand Letter dated 22.10.2019 (“ Demand
Letter ”) issued by the Appellant, the Respondent deposited the
balance consideration along with processing fees and GST,
aggregating to ₹1,02,64,469/-.
2.4. Subsequently, on 24.12.2019, the Appellant received a
complaint stating that the Laxmi Nagar District Centre 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 Price of the Subject Property. In view
of the alleged discrepancy in the fixation of the Reserve Price,
the Appellant cancelled the allotment of the Subject Property in
favour of the Respondent on 25.12.2020.
2.5. Vide Cancellation Letter dated 18.01.2021 (“ Cancellation
Letter ”), the Appellant communicated the cancellation of the
allotment to the Respondent and requested the Respondent to
apply for refund of the amount deposited (“ Deposited
Amount ”) by furnishing the requisite bank details and
supporting documents to enable the Appellant to process the
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:13.07.2026
18:25:42
LPA 273/2026 Page 2 of 7

refund. The relevant extract of the Cancellation Letter is
reproduced hereinbelow:
“ This is in reference with the unit allotted to you through E
-auction held on 29.07.2019. In this regard , it is to state
that due to some administrative reasons the Competent
Authorities have cancelled the above allotment & approved
the refund of the amount deposited by you.
Therefore, it is highly regretted to inform you that the unit
allotted to you / has been cancelled. You are hereby,
requested to apply for the refund alongwith all the payment
details, bank details such as Bank Account No., IFSC code
etc. and a cancelled cheque so that the amount deposited
by you may be refunded at the earliest. ”
2.6. 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 Property and execute the
conveyance deed in favour of the Respondent.
2.7. The learned Single Judge disposed of the Writ Petition, inter
alia , observing as under:
“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 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.
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.
24. The writ
petition is disposed of in the above terms.”
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:13.07.2026
18:25:42
LPA 273/2026 Page 3 of 7

3. 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
Amount. 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 Property. 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 Amount.
4. Learned Counsel for the Appellant further 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 Amount, being the rate
contemplated under the terms and conditions of the Auction (“ Auction
Terms ”), and that too only for a maximum period of 180 days. It was
further contended that the award of interest beyond the period of 180 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.
5. Per contra , learned Counsel for the Respondent submitted that the
Appellant retained the Deposited Amount for several years despite having
cancelled the allotment of the Subject Property on account of its own
administrative error. It was further submitted that the Respondent was
deprived of the use and benefit of the Deposited Amount without any fault
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:13.07.2026
18:25:42
LPA 273/2026 Page 4 of 7

on its part and, therefore, is entitled to be compensated by way of interest at
the rate of 18% per annum for the period during which the Appellant
continued to retain the Deposited Amount.
6. We have heard learned Counsel for the Parties and perused the
material placed on record.
7. The controversy arising in the present Appeal is confined to the rate
of interest payable on the Deposited Amount after the Appellant cancelled
the allotment of the Subject Property in favour of the Respondent. It is not in
dispute that the Respondent deposited the entire consideration amount
within the time stipulated in the Demand Letter. It is also not in dispute that
the cancellation of the allotment was occasioned by the Appellant’s own
administrative error in fixation of the Reserve Price and was not attributable
to any default on the part of the Respondent. Upon cancellation of the
allotment, vide the Cancellation Letter, the Deposited Amount continued to
remain with the Appellant.
8. 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 ninety
days and 25% per annum where the delay exceeds ninety days, subject to the
conditions specified therein.
9. In the present case, once the Appellant decided to cancel the allotment
of the Subject Property on account of its own administrative error, it was
incumbent upon the Appellant to ensure that the Deposited Amount was
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:13.07.2026
18:25:42
LPA 273/2026 Page 5 of 7

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 Amount before this
Court in an interest-bearing account, instead of continuing to retain the
Deposited Amount without taking any action. Admittedly, the Deposited
Amount could not have been legally retained once allotment was cancelled
by the Appellant.
10. In the aforesaid circumstances, the Appellant is liable to compensate
the Respondent by refunding the Deposited Amount 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
payable for the period during which the Appellant retained the Deposited
Amount after cancellation of the allotment of the Subject Property.
11. The submission advanced on behalf of the Appellant that interest
ought to be computed only for a maximum period of 180 days in terms of
Clause 8 of the Auction Terms is devoid of merit. The said period of 180
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 Amount was required to be
refunded by the Appellant to the Respondent immediately upon cancellation
of the allotment of the Subject Property.
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:13.07.2026
18:25:42
LPA 273/2026 Page 6 of 7

12. 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.
TEJAS KARIA, J
DEVENDRA KUMAR UPADHYAYA, CJ
JULY 9, 2026
HK
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:13.07.2026
18:25:42
LPA 273/2026 Page 7 of 7