P&H HC Orders ₹12.88 Lakh Refund With 12% Simple Interest After Haryana Allotted Smaller, Basement-Free Shop Than Advertised

In brief

The question

Whether the respondents acted arbitrarily by allotting a smaller site without a basement at the price bid for the advertised site.

The court held

The Court partly allowed the petition and directed respondents Nos. 2 and 3 to refund ₹12,88,035 with simple interest at 12% per annum from the dates of payment until refund, within two months.

It also directed

If payment was not made within that period, interest would accrue at 15% per annum for the subsequent delay.

01Facts

The respondents advertised commercial Site No. 24, Sector 10, Gurugram, as a double-storey shop measuring 75.625 square metres with a basement. The petitioner became the highest bidder and deposited ₹12,88,035. The allotment letter instead described a 45.38-square-metre shop without a basement, while retaining the same price.

¶ 11–13

The petitioner promptly sought either a plot matching the advertisement or a proportionate price reduction, and later confined his prayer to refund with interest.

¶ 14–15, 19

The respondents admitted that the advertised dimensions were mistaken, but argued that a corrigendum had been issued and a site plan uploaded.

¶ 9, 15, 17–18

02Issues

i.Whether the respondents acted arbitrarily by allotting a smaller site without a basement at the price bid for the advertised site.

¶ 13, 15–18

ii.Whether the petitioner was entitled to a refund of the amount deposited with interest.

¶ 19–22

03Law Applied

The petition invoked the High Court’s jurisdiction under Articles 226 and 227 of the Constitution.

p. 1

The Court applied the principle that public authorities must act fairly and non-arbitrarily; where an authority’s own description of property induces a bidder to participate and the authority cannot provide the property on those terms, it cannot retain the bidder’s money without appropriate relief. The Court also recognised the bidder’s legitimate expectation arising from the advertised description.

¶ 15

04Reasoning

The advertisement and the respondents’ online portal described the site as 75.625 square metres with a basement, while the allotment provided a materially smaller site without a basement and made no corresponding reduction in price.

¶ 11–13

The respondents’ evidence did not establish that a corrigendum had been uploaded or brought to the petitioner’s notice; the site-plan evidence was also insufficient to show that it accompanied the advertisement.

¶ 17–18

Given the respondents’ admitted error and the petitioner’s prompt challenge, the Court found their conduct arbitrary and illegal. Since the petitioner sought only repayment with interest, the Court assessed a fair rate by reference to the interest rates stated by the respondents for the relevant period.

¶ 15, 18–21

05Holding

The Court partly allowed the petition and directed respondents Nos. 2 and 3 to refund ₹12,88,035 with simple interest at 12% per annum from the dates of payment until refund, within two months.

¶ 22

If payment was not made within that period, interest would accrue at 15% per annum for the subsequent delay.

¶ 22

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