Mutual Agreement for Shop Exchange Does Not Constitute Sub-letting Warranting Cancellation of Allotment or Blacklisting.

The writ petitioner, Sanjeev Kumar Choudhary, was allotted Shop No. 9 in 2025, while Shop No. 18 (previously held by his wife) was allotted to Pushpa Shah.

Both parties entered into a mutual agreement to exchange possession, whereby the petitioner occupied Shop No. 18 and Shah occupied Shop No. 9.

On 26.02.2026, the appellants cancelled the petitioner's allotment and blacklisted him for one year on grounds of unauthorized sub-letting.

The Single Judge stayed this order, leading to a Special Appeal by the School.

During the proceedings, Pushpa Shah filed an affidavit confirming the mutual exchange and expressing no objection.

The Court heard the writ petition and the appeal together for final disposal.

1. Whether the mutual exchange of shops between two valid allottees constitutes "sub-letting" justifying cancellation of allotment and blacklisting.

2. Whether the order of blacklisting/debarment was legally sustainable in the absence of proper notice to the petitioner.

The Court applied the principle of natural justice regarding the requirement of proper notice prior to blacklisting an individual.

It further applied the principle of equity and administrative fairness, holding that where an action (sub-letting) is based on a specific complaint that is subsequently withdrawn or clarified by the complainant through a sworn affidavit, the basis for the punitive administrative action ceases to exist.

The Court observed that the appellants’ primary justification for the impugned order was a complaint by Pushpa Shah and a subsequent finding that the petitioner was in possession of a shop not formally allotted to him.

However, the Court highlighted that Shah’s subsequent affidavit admitted the mutual agreement and explicitly supported the petitioner’s case.

The Court reasoned that since the "aggrieved" party (Shah) consented to the arrangement, the "sub-letting" charge lacked substance.

Regarding the blacklisting, the Court noted the appellants’ own concession that the order was passed without following the requisite procedure of providing notice to the petitioner.

Consequently, the Court found that the controversy could be resolved by formalizing the existing possession rather than pursuing punitive measures.

The Court directed the appellants to pass a formal order of exchange, officially allotting Shop No. 18 to the petitioner and Shop No. 9 to Pushpa Shah.

This direction was issued without prejudice to any other grounds the appellants might have for future proceedings.