'Depriving Affordable Housing Violates Right To Life': P&H High Court Imposes ₹1 Lakh Cost On HSVP For Cancelling Plot Arbitrarily
The Punjab & Haryana High Court has come down heavily on the Haryana Shahari Vikas Pradhikaran (HSVP) for arbitrarily cancelling plot allotments made through an e-auction and refunding the entire consideration without notice, reason or any speaking order. Terming the action “unjustified, arbitrary and a clear example of mala fide”, the Court has directed restoration of allotments...
The Punjab & Haryana High Court has come down heavily on the Haryana Shahari Vikas Pradhikaran (HSVP) for arbitrarily cancelling plot allotments made through an e-auction and refunding the entire consideration without notice, reason or any speaking order. Terming the action “unjustified, arbitrary and a clear example of mala fide”, the Court has directed restoration of allotments and imposed costs of ₹1 lakh in each petition on HSVP.
Justice Anupinder Singh Grewal and Justice Deepak Manchanda and said, "We cannot lose sight to the fact that the petitioner invested his entire lifetime savings to construct a house as a government servant and had legitimately obtained allotment of Plot No.41, where even symbolic possession was also handed over to him on 02.12.2023. Still, without assigning any reason, the allotment was cancelled, and the payment was refunded on 20.02.2024."
The Court emphasised that such arbitrary action has deprived the petitioner of affordable housing, violating his right to life under Article 21 of the Constitution of India, particularly considering the steep rise in property prices between 2023 and 2025 and we believe that the petitioner cannot be penalized for HSVP's alleged discovery of hilly terrain conditions after allotment.
The petitioner had bid successfully for a plot in H Pinjore in an HSVP e-auction in January 2023. His bid of ₹1,50,99,300 was accepted, the Letter of Intent was issued, and he paid the entire consideration. An allotment letter and an offer of possession were also issued on 02.12.2023.
However, on 20.02.2024, to his shock, the petitioner found the entire amount credited back to his account without any prior notice or explanation. Subsequent representations and a legal notice remained unanswered, leading him to approach the High Court.
Senior Advocate Kshitij Sharma along with Advocate Shruti Sharma for the petitioner argued that a concluded contract had come into existence and that unilateral cancellation without notice violated the Contract Act, policy framework, and basic principles of natural justice. Reliance was placed on State of Jharkhand v. Brahmaputra Metallics Pvt. Ltd. (2020).
HSVP's Defence: Prior Cancellation, Development Issues, Revised Layout
HSVP contended that due to concerns raised about lack of development, the auction of three plots (including the petitioner's) had been cancelled in July 2023 and refund ordered. They claimed the later issuance of the allotment letter was an inadvertent mistake. HSVP also stated that the area was hilly and, upon revision, only 1000-sq-yard plots were retained as per a revised plan.
It relied on Clause 39 of the 2022 E-Auction Policy, which states that in case of inability to deliver possession due to litigation or circumstances beyond control, the entire amount can be refunded and no claim for an alternative plot lies.
Court's Findings: “Whimsical”, “Profit-Driven”, “Abuse of Discretion”
The Court rejected HSVP's justifications, finding that no notice, hearing, or reason preceded the cancellation.
It noted that the cancellation was not due to force majeure or circumstances beyond control and HSVP failed to show any rationale for changing the layout and eliminating smaller, affordable plots.
Site-leveling and revision of layout for larger plots contradicted HSVP's explanation of hilly terrain and the authority's conduct was profit-driven, arbitrary, and contrary to its statutory obligation to provide affordable housing.
The Court noted that the petitioner, a serving CRPF Commandant, had invested his lifetime savings, and the cancellation violated Article 21 in light of escalating property prices.
The Bench also recorded the absence of any documentary justification in HSVP's original record for converting a layout meant for 8-Marlas, 14-Marlas and 1-Kanal plots into exclusively 1000-sq-yard high-value plots.
Court Criticises HSVP's Repeated Lapses
The judgment referred to its earlier decision in Tamanna Babbar v. State of Haryana (CWP-3314-2025), where HSVP had admitted similar lapses and was directed to ensure proper physical verification before advertising sites. The present case, the Court said, reflected yet another instance of administrative negligence and unfair dealing.
Alternative Plot Policy Applicable; HSVP Cannot Take Shelter Under E-Auction Clause
Rejecting HSVP's argument that no alternative plot can be allotted under the e-auction policy, the Court held that:
The e-auction policy and the policy for allotment of alternative plots operate in separate fields.
The 2013 policy expressly requires carving out of alternative plots where needed—even by re-planning or using unplanned pockets.
HSVP, being the framer of both policies, cannot selectively rely on one to defeat the purpose of the other.
HSVP Constituted To Provide Affordable Housing, Expected To Act Fairly
This Court observed that HSVP, being a public authority was constituted to provide affordable housing on a “no profit-no loss” basis and is expected to act fairly, reasonably, and within the legal framework, but in contrary, the conduct of the respondent-HSVP, appears to be profit-driven and detrimental to the middle and lower-income citizens, thus contradicting it's statutory purpose.
It said that keeping in view the conduct of the respondent-HSVP, it can be safely drawn that converting a plan meant for affordable housing into high- value plots exclusively for the higher strata of society indicates exploitation and discrimination by violating the constitutional and administrative law principles.
The Court observed that, the pleadings as well as original record produced before this Court demonstrates lack of due diligence before advertising the original plots and in the absence of any bona fide reasons for subsequent cancellation, the decision reflects abuse of discretion, arbitrariness, and unreasonableness in the Wednesbury sense as no public authority can be permitted to act unfairly or capriciously to the detriment of law-abiding citizens.
Consequently, the bench held that the cancellation of the plot allotted to the petitioner is unjustified, arbitrary and is a clear example of mala fide on the part of the respondent-HSVP.
Hence, both the petitions were allowed, subject to costs of Rs. 1 lakh each, which shall be paid to the petitioners within two months. Further, respondent authority was directed to restore the allotment of the plot to the petitioners in the same vicinity, either by carving out a fresh plot in the newly developed site as per the revised plan or through any other suitable alternative measure, within three months from the date of receipt of a certified copy of the order.
Mr. Kshitij Sharma, Advocate and Ms. Shruti Sharma, Advocate, for the petitioner(s).
Mr. Anant Kataria, DAG, Haryana.
Mr. Deepak Sabherwal, Advocate, for respondents No.2 and 3-HSVP.
Mr. Chander Shekhar Khare, Chief Administrator, HSVP in person.
Title: Vishal Kandwal v. State of Haryana and ors.