Delhi Development Authority vs Anil Kumar Malhotra

$~81
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 13.07.2026
+ LPA 503/2026
DELHI DEVELOPMENT AUTHORITY .....Appellant
Through: Mr. Tushar Sannu, Mr. Vaibhav
Tripathi & Ms. Palak Gupta Joshi,
Advs.
Versus
ANIL KUMAR MALHOTRA .....Respondent
Through: Mr. D.K. Mehta & Mr. Rishabh
Mehta, Advs.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE TEJAS KARIA
TEJAS KARIA, J. ( ORAL )
CM No.43268/2026 (for exemption)
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 ”).
LPA 503/2026 Page 1 of 6
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:16.07.2026
17:38:54

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.
LPA 503/2026 Page 2 of 6
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:16.07.2026
17:38:54

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:
“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.
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.”
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
LPA 503/2026 Page 3 of 6
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:16.07.2026
17:38:54

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
LPA 503/2026 Page 4 of 6
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:16.07.2026
17:38:54

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.
15. 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
LPA 503/2026 Page 5 of 6
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:16.07.2026
17:38:54

payable for the period during which the Appellant retained the Deposited
Amounts after cancellation of the allotment of the Subject Properties.
16. 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.
17. 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 13, 2026
HK
LPA 503/2026 Page 6 of 6
Signature Not Verified
Signed By:NEELAM
SHARMA
Signing Date:16.07.2026
17:38:54