Jammu & Kashmir HC Orders Srinagar Development Authority To Repay Deposited Amount With Interest on Cancellation of Letter of Intent

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Facts

On 21st September 2020, Justice Ali Mohammad Magrey heard the case of Fida Ahmad Dar vs. Srinagar Development Authority & Ors., via video-conferencing. The Court allowed the Writ Petitions and quashed the notice issued by Srinagar Development Authority.

The Respondents invited applications for allotment of flats at Gulposh Apartments, Bemina. The Petitioner paid Rs 1000, after which he was given a form. He submitted the same with Rs 3 lakhs on 27th July 2013. On 20th November 2014, the Respondents issued a notice to the Petitioner ordering him to pay the first instalment. The notice was delivered only on 5th December 2014, thereby leading to elapse of time in 10 days. Thereafter, the Petitioner approached the Respondents and prayed for extension of at least three months for making the payment of 1st instalment of Rs. 8,75,000.

The Petitioner suffered a huge loss due to the floods in the valley. Therefore, he was not in a position to pay the 1st instalment. The Respondents did not respond to his prayer. He, therefore, approached them directly who did not give any extension. Rather, he was issued with a notice asking him to pay the 1st instalment. In case he defaults, his letter of intent was said to be cancelled. Further, it will lead to the forfeiture of ₹3 lakhs made by the Petitioner and the flat shall be re-advertised.

Thereafter, the Petitioner approached this Court wherein the Respondents were directed to give reasons to the Petitioner. The Respondent failed to adhere to the Order. They issued a notice cancelling the letter of intent of the Petitioner.

Petitioner’s Arguments

The following Writ Petitions were filed by the Petitioner under Article 226 of the Constitution of India-

1. A Writ of Certiorari for quashing the notice issued wherein the letter of intent was cancelled.

2. A Writ of Mandamus directing the Respondents to hand over possession of flats to the Petitioner after giving reasonable time to the petitioner for making the payment and further directing them to hand over the possession of the flat to the petitioner as per the draw of lots on spot as early as possible.

Respondent’s Arguments

The Petitioner was given enough time to pay the 1st instalment. He was served three notices to facilitate the same. The matter was placed before the Auction Committee wherein it was decided that despite providing various opportunities, the petitioner has failed to deposit the instalment. Therefore, his letter of intent was cancelled. The Petitioner cannot claim the allotment of the said flat as no legal right of the Petitioner has been infringed.

Court’s Analysis

Despite the Oder of the Court to give a reasonable time of payment to the Petitioners, the Respondents issued a notice cancelling the letter of intent. Therefore, this amounted to contempt of Court. The flat for which the Petitioner has already been allotted. The Court did not proceed against the officers who violated the Court Order.

Court’s Decision

The Court allowed the Writ of Certiorari and quashed the notice to the extent of forfeiture of 3 lakhs. Further, by Writ of Mandamus, the Respondents were directed to pay 3 lakhs along with an interest of 9% from the date of deposition of the amount to its realization, within one month.


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