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Synopsis

The Supreme Court has expressed its surprise over the Jammu and Kashmir High Court's order allowing a man who failed to deposit 50% sum of a plot secured in auction in 1999, till 2010, to retain the piece of land, despite the apparent defaults.

A 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.

The matter before the court arose out of an appeal by the Jammu Development Authority, which took exception to the judgment of December 02, 2022 passed by the High Court of Jammu & Kashmir and Ladakh at Jammu.

One S Paramjeet Singh had participated in a public auction held on April 12, 1999. His bid of Rs 8,30,000 for purchase of plot no 244, Sector 1/Sector 1A, Trikuta Nagar Housing Colony, Jammu was accepted. By letter of intent on May 26, 1999, the JDA had called upon Singh to deposit 50% of the premium within 30 days from the date of issue and the balance 50% within 60 days thereafter. 

Singh deposited 50% of the premium of Rs 4,15,000 within 30 days after issue of the letter of intent on May 26, 1999. However, he did not pay the balance 50% of the premium. 

JDA claimed that a number of letters were written to Singh to pay the second installment/balance payment. However, Singh did not respond. On the contrary, Singh denied having received the letters. 

However, one letter was written by Singh on May 23, 2001, referring to the communication of May 02, 2001, wherein he was asked to make the balance payment of 50% of the premium. Balance 50% of the premium amount was not deposited till 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.

The bench was informed Mahajan, who had deposited an earnest money of Rs 2,71,000, has not paid the balance money.

"We are also of the opinion that given the time lapse, the plot should be re-auctioned. To balance out the equities, we direct that respondent no 2 – Vivek Mahajan will be refunded Rs 2,71,000 along with simple interest at the rate of 15% per annum. Earnest money paid by the respondent no 1, Singh will be forfeited and will not be refunded. Rs 4,15,000, less the earnest money deposited by Singh, will be refunded to him with simple interest at the rate of 8% per annum with effect from January 01, 2001," the bench directed.

The court set aside the High Court's judgment is set aside and allowed the appeal by JDA in the terms.

Case Title: JAMMU DEVELOPMENT AUTHORITY vs. S. PARAMJEET SINGH & ANR.