'Nepotism Anathema To Democracy' : Supreme Court Cancels Deluxe Flat Allotments To Haryana Officials

Highlighting nepotism in the allotment of the flats in a Haryana government housing society, the Supreme Court on Tuesday (February 17) cancelled the allotment of flats, holding that governing body members abused their positions to benefit themselves and their subordinates.

“Nepotism and self-aggrandizement are anathema to a democratic system, more so when it happens within a society comprising members of the government service…”, observed a bench of Justices Sanjay Kumar and K Vinod Chandran, while set aside the Punjab & Haryana High Court's order, which had refused to intervene in the allotment process.

The case arose from a challenge by one Dinesh Kumar, a member of the HUDA, Urban Estate and Town and Country Planning Employees Welfare Organization (HEWO), against the allotment of two high-end super deluxe flats that became available after earlier memberships were cancelled. Instead of following a transparent draw of lots, the governing body decided to give preferntial allotment. In this process, one flat was effectively allotted by a senior officer to himself despite his ineligibility on the cut-off date, and the second was allotted to his subordinate, whose application was incomplete and outside the prescribed pay-band criteria.

Against the High Court's refusal to intervene, the appellant moved to the Supreme Court.

One flat was initially allotted in May 2021 to the presiding member of the Governing Body. However, he later surrendered the allotment after ceasing to hold office.

The third respondent took charge as Chief Controller of Finance, HUDA only on August 12, 2021, and became a Governing Body member by virtue of that position. On September 13, 2021, he sought allotment of the cancelled flat, which was promptly approved.

The Court found that as on the last date for applications and earnest money deposit, the third respondent was neither an employee of HUDA nor a Governing Body member. He had not applied within time, nor deposited membership fees or earnest money. The communication of allotment was addressed by him in his official capacity to himself in his individual capacity, which the Court described as making the process a “complete farce”.

Calling the allotment process opaque and filled with favouritism, the judgment authored by Justice Chandran observed that the allotment cannot be extended retrospectively to individuals who were not even members of the governing society, or employees, on the cut-off date, terming such action a “clear act of favouritism and blatant display of self-aggrandizement.”

This meant that the cut-off date, i.e., the last date for submitting applications, was June 18, 2021. The third Respondent-beneficiary officer joined HUDA on August 12, 2021, nearly two months later, and therefore could not claim the preferential treatment reserved for governing body members, the court said.

“We observe at the risk of repetition that on the last date of application the third respondent was not even an employee of HUDA or a governing body member of HEWO. The third respondent took charge as per Annexure P-11 on 12.08.2021 in HUDA, by virtue of which he became a governing body member of HEWO. There could have been no preferential allotment given to the governing body member who was not even satisfying the six months deputation period in the service of HUDA. We find absolutely no reason to uphold the allotment made to the third respondent which is a clear act of favouritism and blatant display of self-aggrandizement.”, the court observed..

“…as on the date of allotment, there was not even the membership fees deposited by the 3rd respondent, leave alone the submission of an application along with earnest money deposit, before the last date.”, the court said.

The second flat had been allotted through a draw of lots to the fourth respondent, who was working as an Accountant in the office headed by the third respondent.

With regards to the allotment made to the Respondent No.4, the court said that he was not even within the pay band criteria, making him ineligible to apply for the allotment of flat.

“as admitted by the second respondent, the 4th respondent though satisfying the basic pay requirement, was not between the pay band level stipulated…On the application of the fourth respondent, there is no date or place indicated, nor is there any date or details of the demand draft, evidencing payment of earnest money indicated therein. The fourth respondent is obviously working as an Accountant with the office of the Chief Controller of Finance, HUDA, Panchkula as indicated in the application, which office is held by the third respondent. The third respondent's entry to HUDA and as a consequence to HEWO thus, not only facilitated preferential allotment to himself but also to his subordinate. We find no reason to uphold the allotment to the fourth respondent also.”, the court observed.

Resultantly, calling the conduct a “blatant display of favouritism,” the Court imposed costs of ₹1 lakh on the society, ₹50,000 on Respondent No.3 officer who benefited from self-allotment, and ₹25,000 on Respondent No.4, the subordinate allottee. The beneficiaries were directed to vacate the flats after refund, and HEWO was ordered to conduct a fresh draw of lots strictly from among eligible applicants.

The appeal was allowed in the aforestated terms.

Cause Title: Dinesh Kumar Versus The State of Haryana and Ors.

Citation : 2026 LiveLaw (SC) 171

Click here to download judgment

Appearance:

For Petitioner(s) : Mr. Pradeep Dahiya, Adv. Ms. Mahima Benipuri, Adv. Mr. Rakshit, Adv. Mr. Sunny Kadiyan, AOR

For Respondent(s) : For R-1 & R-5 Mr. Alok Sangwan, Sr. A.A.G. Mr. Samar Vijay Singh, AOR Mr. Sumit Kumar Sharma, Adv. Mr. Rajat Sangwan, Adv. Mr. Aman Dev Sharma, Adv. Ms. Sabarni Som, Adv. Mr. Gaj Singh, Adv. Mr. Harsh Mehla, Adv. Ms. Divya Sharma, Adv.

For R-2 Mr. Shadan Farasat, Sr. Adv. Mr. Bharat Gupta, AOR Ms. Sansriti Trivedi, Adv. Ms. Sarah Sunny, Adv. Ms. Suvarna Swain, Adv.

For R-3 Mr. Shirish K. Deshpande, AOR Ms. Rucha Pravin Mandlik, Adv. Mr. Raghav Arora, Adv. Mr. Viraj Parakh, Adv. Mr. Adv Deepak Jindal, Adv. 1

For R-4 M/s. Deshpandes And Mandliks, AOR