Meerut Development Authority's Re-Auction Of Plot After Price Rise Arbitrary; Allahabad High Court Orders Reconsideration

Questioning the fairness of the Meerut Development Authority's actions in a land allotment dispute, the Allahabad High Court has held that the authority acted arbitrarily in cancelling the allotment and re-auctioning the plot after its value increased, and directed that the allottee's claim be reconsidered strictly in accordance with clause 6(10) of the auction brochure governing restoration of cancelled plots.

Setting aside the re-auction and subsequent sale, the court observed that a public authority dealing with land allotments cannot be permitted to benefit from its own wrongful action and must follow the terms of the brochure while deciding restoration.

The bench of Justice Arun Kumar observed:

“The said action of the Development Authority appears to be arbitrary, as after the availability of the approach road when the value of the land in dispute had increased, it decided to re-auction, by illegally cancelling the allotment of the petitioner. The subsequent decision to re-auction the plot, after improvement in its value, raises serious concerns regarding fairness in administrative action.”

The dispute arose from an e-auction conducted on August 27, 2018 by the Meerut Development Authority for a residential bulk plot in Meerut, where Anil Kumar emerged as the highest bidder and deposited 25% of the bid amount by January 17, 2019.

According to the petitioner, under the brochure, he became entitled to possession after deposit of 25% of the bid amount. He made repeated representations seeking possession and also deposited money towards construction of the approach road, but possession was not handed over.

Instead, the Development Authority cancelled the allotment on January 10, 2024, citing non-payment of installments.

The allottee challenged the cancellation before the State Government in revision under Section 41(3) of the U.P. Urban Planning and Development Act, 1973. During pendency of the proceedings, the Government passed an interim order on August 12, 2024 directing the parties to maintain status quo, but the Authority proceeded with an e-auction of the same plot on August 12–13, 2024.

By order dated October 3, 2024, the state government set aside the Authority's order dated June 18, 2024 but directed that the plot could be restored only if the allottee deposited the value discovered in the subsequent auction.

The allottee's request for restoration at the circle rate was rejected by the Development Authority on December 16, 2024, following which a sale deed was executed on February 3, 2025 in favour of a third party, giving rise to the present writ petition under Article 226 of the Constitution.

The petitioner argued that cancellation for non-payment of instalments was unjustified when the Authority itself had failed to deliver possession despite receiving 25% of the bid amount.

The Development Authority contended that the auction was on an “as-is-where-is basis” and that instalment payments were independent of the development of infrastructure.

The Court held that while the allottee was bound to follow the payment schedule, the Authority also failed to comply with its obligation under the brochure by not handing over possession after receipt of 25% of the bid amount, clarifying that the allottee's obligation to pay instalments was not conditional upon provision of the approach road and the Authority's obligation to deliver possession was equally not dependent upon such development.

The court further held that the state government erred in directing recovery of the plot value at the rate discovered in an auction that had already been found unsustainable.

“Moreover, the Development Authority proceeded to hold the auction, in disobedience of the order of the respondent no.1, therefore by directing the petitioner to deposit the same value of the land in dispute, as quoted by the highest bidder in it, amounts to granting benefit to the Development Authority for its own wrong,” the court held.

Holding that the re-auction conducted during the subsistence of the status quo order was legally unsustainable, the court ruled that no enforceable rights accrued to the subsequent auction purchaser.

Accordingly, the Court set aside the re-auction, quashed the sale deed, directed a refund to the auction purchaser, and remanded the matter for fresh consideration of Anil Kumar's claim under the original brochure terms within one month.

For petitioner (Anil Kumar): Advocates Ajay Kumar Singh, Ashish Kumar Singh, Devansh Misra.

For respondents (State of U.P. & Ors.): Advocates Aditya Krishnatreya, Amit Krishna, J. N. Maurya, Mihir Ghosh Roy, Shiv Prakash Gupta.