Nitya Vaishnavi Singh vs Delhi Development Authority

Tejas Karia, J

The present intra-Court Appeal has been filed, being aggrieved by the impugned judgment and order dated 24.11.2025 (“Impugned Order”) passed in W.P.(C) 17862/2025 (“Writ Petition”), whereby the learned Single Judge has dismissed the Appellant’s Writ Petition challenging the forfeiture of the Appellant’s Booking Amount and Deposit of ₹4,00,000/- (Rupees Four Lakhs Only) by the Respondent for the application for allotment of a  Middle Income Group(“MIG”)Flat in the ‘First Come First Serve’(“FCFS”)Housing Scheme, Phase-IV.

FACTUAL MATRIX

The Appellant applied for a MIG Flat in the FCFS Scheme introduced by the Respondent by depositing ₹4,00,000/- (Rupees Four Lakhs Only) as Booking Amount, as per the Scheme Brochure, which was adjustable against the price of the Flat and was a non-interest bearing deposit as per the Scheme.

The Appellant was successful in securing an allotment of a  MIG Flat being No. 314, Tower-M, Sector-19B, Dwarka, New Delhi(“Subject Flat”) under the FCFS Scheme. Accordingly, the Respondent issued the Allotment- cum-Demand  Letter(“Letter”)fixing  the  Disposal Price  at  ₹1,28,74,387/- (Rupees One Crore Twenty Eight Lakhs Seventy Four Thousand Three Hundred Eighty Seven Only). The Letter adjusted the amount of ₹4,00,000/- (Rupees  Four  Lakhs  Only),  which  was  already  paid  by  the  Appellant  plus GST  from  the  total  cost.  Accordingly,  the  final  net  demand  was  raised  for ₹1,27,78,407/- (Rupees One Crore Twenty Seven Lakhs Seventy Eight Thousand Four Hundred and Seven Only) taking into consideration other charges as per the Letter.

The Appellant had applied for a home loan from the State Bank of India (“SBI”) and obtained an in-principle sanction, however, the loan facility was abruptly withdrawn by SBI due to an erroneous CIBIL reporting entry by a  third-party concerning the Appellant’s mother’s credit score. The same was entirely beyond the Appellant’s control and the said error was subsequently admitted by the third-party confirming that the default was solely due to their reporting fault.

The  Appellant  submitted  a  representation  to  the  Respondent  seeking an extension of time to rectify the error and pay the balance of the Disposal Price.  The  Respondent  kept  this  representation  ‘under  active  consideration’for a period of more than seven months and the matter was escalated to high-ranking officials of the Respondent, including the Principal Commissioner (Housing) and Director (H-1).

The Subject Flat was put up for auction in the Dwarka Housing Scheme-2024 without issuing any Show Cause Notice or Notice of Cancellation to the Appellant. However, the auction of the Subject Flat remained unsuccessful. Thereafter, the Respondent listed the Flat again in a Special Housing Scheme-2025, where the Subject Flat was successfully auctioned at a Base Reserve Price of approximately ₹14.68 Lakhs higher than the Appellant’s Allotment Price.

Despite securing higher price, the Respondent proceeded to forfeit 100% of the Appellant’s Deposit / Booking Amount of ₹4,00,000/- (Rupees Four Lakhs Only). Being aggrieved by such  forfeiture, the Appellant sent a Legal  Notice  dated  01.09.2025  to  the  Respondent  demanding  a  refund.  As there was no response to the Legal Notice, the Appellant preferred the Writ Petition before this Court.

Vide Impugned Order, the Writ Petition was dismissed upholding the forfeiture  of  the  Booking  Amount  on  the  ground  that  the  cap  on  forfeiture under  Regulation  8(3)  of  the  DDA  (Management  and  Disposal  of  Housing Estates) Regulations, 1968(“Regulations”)was inapplicable.

Being aggrieved by the Impugned Order, the Appellant has  preferred the present Appeal.

SUBMISSIONS ON BEHALF OF THE APPELLANT

The learned Counsel for the Appellant submitted that:

10.1. The  present  Appeal  raises  several  issues  of  law,  fact  and  mixed questions  of  fact  and  law.  The  learned  Single  Judge  committed an error by framing a false dichotomy between ‘Booking Amount’  and  ‘Disposal  Price’,  thereby  failing  to  appreciate  that the ‘Booking Amount’ is by very nature and substance a‘Deposit’ as defined under Regulation 2(12) of the Regulations.

10.2. The FCFS Scheme was a statutory scheme introduced through Gazette Amendment dated 17.02.2023 under Regulation 28-A of the Regulations and, therefore, the cap of forfeiture prescribed in Regulation  8(3)  of  the  Regulations  cannot  be  overridden  by  the Brochure.

10.3. In DDA v. Atul Gupta 1996 SCC OnLine Del 855, the Division Bench  of  this  Court  held  that  the  Regulations  apply  universally to the disposal of all built-up properties  by the Respondent. The Impugned Order has incorrectly distinguished the law laid down in the said decision on the premise that its applicability is restricted to auctions.

10.4. The Respondent cannot evade Regulation 8(3) of the Regulations merely because it administratively chose to demand a reduced fixed amount of ₹4,00,000/- (Rupees Four Lakhs Only) instead of the maximum permissible 20% of the Disposal Price, thereby penalising the Appellant for complying with a concession.

10.5. The Respondent is estopped from denying that ₹4,00,000/- (Rupees Four Lakhs Only) is a statutory ‘Deposit’ under Regulation 8(1) of the Regulations given that it treats this amount as ‘Deposit’ for mandatory refunds to unsuccessful applicants under Regulation 8(4) of the Regulations.

10.6. The  Respondent  cannot be permitted to  approbate  and  reprobate by  invoking  Regulation  8(3)  of  the  Regulations  as  source  of  its power to cancel the allotment while simultaneously disowning the limitation on forfeiture contained in the very same Sub- Regulation.

10.7. The Impugned Order has failed to adjudicate the contention of the Appellant regarding ‘waiver by conduct’ and ‘unjust enrichment’ by the Respondent. Since the Respondent kept the request of the Appellant for extension of time ‘under active consideration’ for over seven months from November 2023 to May 2024, the Respondent cannot cancel the allotment retrospectively without a fresh notice fixing a reasonable date for payment or notice for cancellation of the allotment to the Appellant. Further, the Respondent had unjustly enriched itself as, in re-auction of the Subject Flat, the Respondent received approximately ₹14.68 Lakhs higher than the Appellant’s Allotment Price. Accordingly, the Respondent suffered no financial  loss  and  in  fact  made  a  windfall  profit.  Therefore,  the forfeiture of the Appellant’s entire Deposit constitutes a‘Penalty’ prohibited under Section 74 of the Indian Contract Act, 1872.

10.8. The Impugned Order has rendered the statutory scheme of Regulation 8 of the Regulations internally incoherent by assigning two contradictory meanings to the term ‘Deposit’within the same Regulation 8 of the Regulations as the same constitutes a single indivisible mechanism for payment of Disposal Price of a flat on sale by the Respondent. Such an interpretation is violative of Article 14 of the Constitution of India, 1950.

10.9. In  Ishwar  Chand  Jain  v.  DDA  2024:DHC:1552,  this  Court  has held that Regulation 8(3) of the Regulations is the source of power given to the Respondent for cancelling an allotment. Having invoked Regulation 8(3) of the Regulations for the power to cancel, the Respondent cannot disavow the limitation on forfeiture contained in the very same Sub-Regulation. The Respondent cannot accept the benefit of a provision while rejecting its burden.

10.10. Accordingly, the present Appeal deserves to be allowed by setting aside the Impugned Order and directing the refund of Booking Amount of ₹4,00,000/- (Rupees Four Lakhs Only) along with legal cost, damages and interest, as deemed fit.

SUBMISSIONS ON BEHALF OF RESPONDENT

The learned Counsel for the Respondent submitted that:

11.1. Regulation 8(3) of the Regulations has no application in the present case  as  it  deals  with  the manner  of  deposit  of  Disposal Price.  The  Disposal  Price  means  such  price  as  may  be  fixed  by the authority as  defined in Regulation 2(13)  of the Regulations and is different from ‘Booking Amount’.

11.2. Regulation 8 of the Regulations relates to Disposal Price and, therefore, Regulation 8(3) of the Regulations, on which the Appellant has relied upon, relates to forfeiture of 20% of the Disposal Price and not Booking Amount.

11.3. In the Circular dated 29.06.2023, whereby FCFS Scheme was launched for Phase-IV, the Booking Amount was ₹4,00,000/- (Rupees Four Lakhs Only) to be adjusted against the cost of the flat. However, the said Booking Amount was non-refundable and liable to be forfeited in case of surrender / cancellation.

11.4. The nature of the Scheme required the Booking Amount to be non-refundable  and  liable  to  be  forfeited  as  the  applicants  could apply for online booking of the flat and had a window of 15 minutes  to  deposit  the  Booking  Amount  in  online  mode  so  that, once  the  Booking  Amount  is  paid,  the  flat  stood  allotted  to  the applicant thereby excluding others.

11.5. In view of the above, there is no infirmity with the Impugned Order and the same is required to be upheld by dismissing the present Appeal.

ANALYSIS AND FINDINGS

We  have  heard  the  learned  Counsel  for  the  Parties  and  examined  the record available before us.

The Circular / Brochure dated 29.06.2023 for launching of DDA FCFS Scheme Phase-IV provides for the process to apply for the said Scheme  by  selecting  a  specific  flat  online  and  making  an  online  deposit  of Booking Amount within a  window of 15 minutes. It is provided that during the period of said 15 minutes, the said flat will not be available for selection by other persons and, therefore, it was advised to ensure availability of required funds for payment of requisite amount for booking. The Scheme further provides that once the Booking Amount is successfully deposited within  the  window  of  15  minutes  and  confirmed  by  the  bank,  the  selected flat will be reserved / booked for the applicant and Demand-cum-Allotment Letter would be issued within a period of 24 hours.

The Circular also provides that the Booking Amount would be adjusted against the cost of the flat but will be non-refundable and shall stand forfeited in case of surrender / cancellation. It is further stated that the maximum interest-free period for Deposit of cost of flat will be 60 days from the date of issuance of Demand-cum-Allotment Letter. Thereafter, 30 days will be  available  for  deposit  of  cost subject  to  levy of  interest  of 11% per annum. However, if the cost is not deposited within the specified period of 90 days, the allotment of the flat shall stand cancelled without giving any further intimation from the Respondent  to  the  Appellant  with  forfeiture of entire Booking Amount.

Accordingly, the terms of the Circular under which the Appellant had applied for allotment of the Subject Flat were absolutely clear and unambiguous.  The  Appellant,  having availed  the  benefit  of  the Scheme as per the terms and conditions of the Circular, cannot seek any relief from this Court contrary to the expressed terms of the Circular.

The relief sought for declaring the provision of 100% forfeiture clause in  the  Circular  being  ultra  vires  Regulation  8(3)  of  the  Regulations  cannot be granted once the Appellant has  applied in terms of the said Circular and availed the benefit thereof.

Regulation 8 of the Regulations provides as under:

“MANNER OF PAYMENT OF DISPOSAL PRICE

(1) When a property is disposed of by sale, every applicant shall deposit a sum equal to 20 per centum of disposal price, of the property rounded to the next hundred along with the application. Such deposit shall be noninterest bearing.

(2) An applicant to  whom the  property  has  been allotted shall have to pay the balance amount of the disposal price (i.e. after adjusting the deposit) within such period as may be specified in the allotment letter.

(3) If the applicant fails to pay the amount within the specified period, the allotment shall be cancelled and a sum of money equal to 20 per centum of the deposit shall be forfeited and the balance refunded.

(4) In the case of such applicants as have not been allotted any property, the deposit specified in sub-regulation (1) shall be refunded.

(5) Authority shall have the sole and exclusive right over the deposit till it is adjusted or refunded with or without deduction as provided in these regulations.”

As per the above provision, every applicant has to deposit a sum equal to 20%  of  the Disposal  Price  along  with  the  application  and,  thereafter,  the applicant has to pay the balance amount of Disposal Price after adjusting the Deposit within such period as may be specified in the Demand-cum- Allotment Letter and if the applicant fails to pay the balance amount within the  specified  period,  the  allotment  shall  be  cancelled  and  a  sum  of  money equal to 20% of the Deposit shall be forfeited and the balance will be refunded.

It  is  the  case  of  the  Appellant  that  in  view  of  the  above  provision  in the  Regulations,  the  Circular  providing  forfeiture  of  100%  of  the  Booking Amount is not justified. According to the Appellant, the Booking Amount is the same as Deposit under Regulation 8(1) of the Regulations and, therefore, the Respondent  was  liable to  forfeit only  20%  of ₹4,00,000/-  (Rupees  Four Lakhs Only) and refund the balance ₹3,20,000/- (Rupees Three Lakhs Twenty Thousand Only) in terms of Regulation 8(3) of the Regulations.

In Atul Gupta (supra), the Division Bench of this Court has held that Regulation  8(3)  of  the  Regulations  places  an  upper  limit  on  the  powers  of the  authority  to  forfeit  a  sum  of  money  equal  to  20%  of  the  Disposal  Price only and the power of forfeiture of the amount specified in Regulation 8(3) of the Regulations will remain unaffected by any agreement or document and, therefore, the Respondent had no power to forfeit any amount exceeding 20% of the Disposal Price of the flat in question.

In the present case, the Disposal Price for the Subject Flat was ₹1,28,74,387/- (Rupees One Crore Twenty Eight Lakhs Seventy Four Thousand Three Hundred Eighty Seven Only) and, therefore, 20% thereof would be approximately ₹25,74,878/- (Rupees Twenty Five Lakhs Seventy Four Thousand Eight Hundred Seventy Eight Only). Accordingly, the Deposit as per Regulation 8(1) of the Regulations would have been the said amount of ₹25,74,878/- (Rupees Twenty Five Lakhs Seventy Four Thousand Eight Hundred Seventy Eight Only). Instead, the Respondent required deposit of only ₹4,00,000/- (Rupees Four Lakhs Only) as Booking Amount for reserving the Subject Flat.

If Regulation 8(3) of the Regulations were to apply to the Subject Flat, the amount of forfeiture would have to be calculated at 20% of the Deposit Amount of ₹25,74,878/- (Rupees Twenty Five Lakhs Seventy Four Thousand Eight Hundred  Seventy Eight Only)  calculated  as per  Regulation 8(1) of the Regulations. Accordingly, the amount to be forfeited would have been ₹5,14,976/- (Rupees Five Lakhs Fourteen Thousand Nine Hundred Seventy Six Only) being 20% of the amount of Deposit being 20% of Disposal Price as required under Regulation 8 (1) of the Regulations as per Appellant’s own case.

Since the amount forfeited by  the Respondent is ₹4,00,000/- (Rupees Four Lakhs Only), which is lower than ₹5,14,976/- (Rupees Five Lakhs Fourteen Thousand Nine Hundred Seventy Six Only), i.e. 20% of the Deposit  Amount  to  be  calculated  at  20%  of  the  Disposal  Price,  there  is  no violation of Regulation 8(3) of the Regulations even assuming that the same is applicable to the facts of the present case.

Accordingly, in the facts and circumstances of the present case, there is  no  violation  of  the law  laid  down  in Atul  Gupta (supra)  as  the amount forfeited by the Respondent is lower than 20%  of the Deposit, if calculated as  per Regulation 8(1) of the  Regulations read with Regulation 8 (3) of the Regulations.

In any event, the Booking Amount cannot be considered as Deposit in terms of Regulation 8(1) of the Regulations as the same was much lower than 20%  of  the Disposal  Price  as  required  therein.  Hence,  Regulation  8(3) of the Regulations will not apply in the facts of the present case.

The  Appellant  had  never  raised  any  objection  at  the  time  of  making payment of the Booking Amount that the same is not in terms of Regulation 8(1) of the Regulations. Further, the Appellant had never challenged the stipulation in the Brochure / Circular issued by the Respondent that the entire Booking Amount shall stand forfeited at the time of making the application. Accordingly, in the absence of any objection about the terms of the Brochure / Circular as well as non-compliance of Regulation 8(1) of the Regulations at the relevant time of applying under the Scheme, the Appellant  has  no  right  to  challenge  the  same  after  the  expiry  of  period  for making the balance payment of Disposal Price in terms of the Letter.

As  regards  the  contention  of  the  Appellant  that  the  submissions  with regard  to  ‘waiver  by conduct’  and  ‘unjust  enrichment’  were  not  considered by  the  learned  Single  Judge  in  the  Impugned  Order,  the  said  principles  do not apply in the facts of the present case as the terms of the Brochure / Circular were absolutely clear and unequivocal that after expiry of the maximum period  of 90  days from the date of the Demand-cum-Allotment Letter, if the balance amount is not paid, the allotment shall stand automatically cancelled and the Booking Amount will be forfeited.

In view of the above analysis, none of the prayers sought by the Appellant  could  have  been  granted  by  the  learned  Single  Judge  in  the  Writ Petition, which has been rightly dismissed. Accordingly, the present Appeal is dismissed as being without any merit. The pending Application stands disposed of. There shall be no order as to costs.