Recently, the Supreme Court has expressed surprised at the decision of the Jammu and Kashmir High Court, which allowed a man to keep a piece of land obtained through auction in 1999, even though he failed to deposit 50% of the required sum by 2010, despite clear indications of non-compliance.

The division bench of Justices Sanjiv Khanna and S V N Bhatti has directed Jammu Development Authority to hold fresh auction as another attempt to sell the plot in second bid also resulted into default in payment.

Case Brief -

The case before the court stemmed from an appeal filed by the Jammu Development Authority, challenging the ruling issued by the High Court of Jammu & Kashmir and Ladakh in Jammu on December 2, 2022.

S Paramjeet Singh took part in a public auction conducted on April 12, 1999, where his winning bid of Rs 8,30,000 secured him the purchase of plot number 244 in Sector 1/Sector 1A, Trikuta Nagar Housing Colony, Jammu. Following this, the Jammu Development Authority (JDA) issued a letter of intent to Singh on May 26, 1999, requiring him to make a 50% deposit of the premium within 30 days from the date of issuance, with the remaining 50% to be paid within the subsequent 60 days.

Following the issuance of the letter of intent on May 26, 1999, Singh promptly made a deposit of 50% of the premium, which amounted to Rs 4,15,000, within the stipulated 30-day period. However, he failed to pay the remaining 50% of the premium as required.

The Jammu Development Authority (JDA) asserted that they had sent multiple letters to Singh requesting payment of the second installment or the balance amount. Nevertheless, Singh contested these claims, stating that he had not received the letters and denied any knowledge of them.

In a significant development, Singh did write a letter dated May 23, 2001, referencing a communication from May 02, 2001, in which he was reminded to make the outstanding 50% payment of the premium. Nevertheless, despite this communication, Singh did not deposit the remaining 50% of the premium amount until the year 2010.

After JDA cancelled the allotment, it issued an advertisement on December 09, 2010 for a fresh auction, which was published on December 11, 2010 in newspapers.

Immediately thereupon, Singh filed a Writ Petition before the High Court in December 2010. JDA, on its part, had conducted the fresh auction and had received a bid of Rs 38,00,000 from Vivek Mahajan.

"In view of these facts, we fail to understand how Original Writ Petition was allowed and LPA filed by the JDA was dismissed, with the observation that the allotment in favour of Singh survives and should be acted upon. The defaults and failure to pay the consideration on the part of Singh are apparent and do not even warrant elucidation," the bench said.

The court opined the Original Writ Petition should have been dismissed.