HUDA allottees entitled to earnest money refund: HC

Saurabh Malik

Tribune News Service

Chandigarh, December 4

In a major relief for allottees of residential plots by HUDA, the Punjab and Haryana High Court has quashed the policy instructions whereby an allottee could surrender his plot within 60 days subject to deduction of 10 per cent of total consideration.

Allowing a bunch of 12 writ petitions, a Division Bench of Justice Daya Chaudhary and Justice Sudhir Mittal riled that the petitioners would be refunded earnest money four weeks from receiving the order’s certified copy.

The matter was brought to the High Court’s notice by Rajesh Kumar and other petitioners through counsel Harmanjit Singh Sethi, Sandeep Sharma, Lalit Rishi and Manmohan Saroop.

Successful in the draw of lots, their request for surrender of plots were sent to HUDA prior to issuance of allotment letters. The request was rejected in January 2018 on the grounds that the policy dated November 30, 2017, did not permit refund.

Justifying their stand, the respondents averred that the provision for refund of earnest money was not there in the advertisement and brochure issued in 2016.

On the contrary, a condition prescribed that 25 per cent of the tentative sale price was to be deposited within 30 days of issuance of allotment letter and the remaining 75 per cent in lump sum within 60 days, failing which the allotment letter could be cancelled without notice and earnest money forfeited.

The petitioners did not deposit the amount in accordance with the conditions and as such, their allotments stood cancelled and earnest money forfeited.

Appearing before the Bench, Sethi and other counsel argued that the policy dated November 30, 2017, was framed after the draw of lots and could not apply to the petitioners. They claimed that the policy was contrary to Regulation 5(5) of the Haryana Urban Development (Disposal of Land and Building) Regulations and, thus, illegal.

Referring to the regulations, the Bench asserted that a perusal thereof left no manner of doubt that an applicant could communicate acceptance or refusal of allotment in writing within 30 days of issuance of allotment letter.

The Bench pointed out that in case of refusal, the applicant was entitled to refund of earnest money tendered with the application. The Bench noted that HUDA has issued policy instructions in the nature of executive instructions, contrary to Regulation 5(5).

“The regulations are statutory in nature, having been framed in exercise of powers conferred by Section 54 of the Haryana Urban Development Authority Act, 1977, and no executive instructions can be issued contrary to the statutory regulations. Thus, the modification of the format of the allotment letter made in terms of policy instructions dated November 30, 2017, is without jurisdiction. HUDA is duty bound to act in accordance with Regulation 5(5) and accordingly, the petitioners are entitled to refund of earnest money,” observed the Bench.