P&H HC Restores Gurugram Plot To Allottee After Resumption Without Section 17(3) Notice, Subject To Rs 5.6 Crore Payment In Two Months

In brief

The question

1. Whether the resumption order was invalid because the authorities failed to issue the notice required by Section 17(3) of the HUDA Act before resuming the site.

The court held

The Court partly allowed the petition, set aside the resumption order and the orders dismissing the appeal and revision, and restored the site subject to the petitioner depositing ₹5,59,56,225, rounded to ₹5,60,00,000, within two months.

It also directed

If the amount was not deposited within that period, the petition would be deemed dismissed.

01Facts

The petitioner was allotted SCO Site No. 70, Sector 55–56, Gurugram, at an auction price of ₹1.08 crore. She paid 25% of the price but defaulted on the balance 75%. The authorities resumed the site on 1 March 2021; her appeal and revision were dismissed on 14 December 2021 and 15 June 2022, respectively.

pp. 2, paras 1–2

The petitioner challenged those orders, contending that no notice under Section 17(3) of the Haryana Urban Development Authority Act, 1977 (HUDA Act) had been issued before resumption. The respondents did not dispute that no such notice had been issued.

pp. 3–5, paras 3–5

During the proceedings, the authorities stated that a similarly placed site had been sold at auction for ₹7,46,08,300; the petitioner agreed to pay 75% of that auction price to secure restoration.

pp. 5–6, 9–10, paras 6–11

02Issues

i.1. Whether the resumption order was invalid because the authorities failed to issue the notice required by Section 17(3) of the HUDA Act before resuming the site.

pp. 3–5, paras 3–5

ii.2. Whether, despite the procedural defect, restoration should be made conditional on payment calculated by reference to the auction price of a similarly placed site.

pp. 7–10, paras 8–12

03Law Applied

Section 17(3) of the HUDA Act requires the Estate Officer, before resuming a property for default or breach, to issue written notice allowing the transferee 30 days to show cause why resumption and forfeiture should not be ordered; Section 17(4) requires consideration of the transferee’s response and a reasonable opportunity of hearing before an order is made.

p. 4, para 4

The Court also applied the principle that resumption and forfeiture are drastic measures to be used as a last resort, with proportionality assessed in light of the facts of each case, as stated in M/s Teri Oat Estates (P) Ltd.

pp. 6–7, para 8

Following the balancing approach in Shobhana Devi and another v. State of Haryana and others, the Court used the percentage of the allotment price unpaid at the date of resumption to determine the amount payable by reference to the reserve or auction price of a similarly placed property.

pp. 7–9, para 8

Provisions in the judgment · 3

Haryana Shehri Vikas Pradhikaran Act, 1977 Section 17Section 15Section 8A

04Reasoning

The mandatory notice under Section 17(3) had not been issued, and the respondents did not contest that fact; the resumption orders were therefore procedurally unsustainable.

pp. 4–5, para 5

In determining the appropriate relief, the Court applied the equitable approach in Shobhana Devi: the petitioner had paid 25% before resumption, leaving 75% unpaid, and the comparable site had been sold for ₹7,46,08,300.

pp. 6, 8–9, paras 7–8

The petitioner accepted payment of 75% of that auction price, which the Court considered a fair means of balancing the parties’ interests.

pp. 9–10, paras 9–11