Retrospective cut-off dates in extension circulars are arbitrary and violative of Article 14.

In brief

The question

1. Whether the Circular dated 02.12.2020 is valid in law or if it is arbitrary and violative of Article 14 of the Constitution

The court held

The Court held that the cancellation orders were legally untenable as they were based on a retrospective and impossible deadline.

It also directed

The Court allowed the writ petitions and struck down Point B of the Circular dated 02.12.2020 as discriminatory and violative of Article 14.

The DDA was directed to: (i) honour the allotments of Industrial Plot No. B-349 (Mangol Puri) and Plot No. 86 (Rohini); (ii) communicate any balance amounts or incidental charges to the petitioners within four weeks; and (iii) hand over the allotment letters within four weeks of receiving said payments.

01Facts

Both petitioners were successful bidders in DDA e-auctions (April 2019) for industrial and residential plots.

p. 2, 3

They deposited 25% of the bid amount and were issued demand letters for the balance 75%.

p. 2, 3

Due to the COVID-19 pandemic and subsequent lockdowns, petitioners requested extensions to deposit the balance.

p. 2, 4

DDA issued a Circular dated 02.12.2020 which created two categories for payment deadlines: Category A (demand letters issued after 01.10.2019) had until 31.12.2020, while Category B (demand letters issued before 01.10.2019) had a retrospective deadline of 01.11.2020.

p. 4, 10

Both petitioners fell into Category B but deposited their balance payments in late December 2020 (before the Category A deadline).

p. 3, 4

DDA cancelled the allotments and forfeited earnest money, claiming the payments were made after the 01.11.2020 deadline.

p. 3, 7

02Issues

i.1. Whether the Circular dated 02.12.2020 is valid in law or if it is arbitrary and violative of Article 14 of the Constitution

p. 10 / para. 31

ii.2. Whether the payments made by the petitioners beyond the retrospectively prescribed timelines must be accepted by the DDA

p. 10 / para. 31

03Law Applied

Article 14 of the Constitution of India, which forbids class legislation but permits reasonable classification provided it is based on an intelligible differentia with a rational nexus to the object sought to be achieved.

p. 11, 12

The twin tests of reasonable classification as articulated in S. Seshachalam v. Bar Council of T.N.

p. 11

Rule 28 of the DDA (Disposal of Developed Nazul Land) Rules, 1981, regarding the authority’s power to extend payment timelines.

p. 7

Principles regarding the limits of judicial review over policy decisions and cut-off dates as discussed in Jitin Garg v. DDA and Shikhar v. National Board of Examination.

p. 16

04Reasoning

The Court found that the 02.12.2020 Circular was inherently arbitrary because it set a compliance deadline (01.11.2020) that had already expired a month prior to the Circular’s issuance.

p. 10, 11

This rendered compliance for Category B allottees impossible and the "extension" illusory.

p. 13

Under Article 14, the Court determined there was no "intelligible differentia" in classifying bidders based solely on the date of the demand letter (pre- or post-October 2019), as the financial hardship caused by COVID-19 was a universal factor for all successful bidders.

p. 13, 14

The Court rejected DDA's justification that the cut-off protected "genuine bidders," noting that extending time to one group does not prejudice those who paid earlier.

p. 14, 15

Since the petitioners acted diligently and deposited the full amount (including interest in Garg's case) before 31.12.2020—the date afforded to Category A—the denial of the same benefit to Category B was deemed manifest unreasonableness.

p. 15, 17