Summary of this article
Court overturns HSVP’s plot cancellation for arbitrary action.
Judges say cancellation violated affordable housing rights.
Authority ordered to restore allotment or provide alternative.
The Punjab and Haryana High Court on December 1, 2025 set aside the Haryana Shahari Vikas Pradhikaran’s (HSVP'S) cancellation of a residential plot allotted through an e-auction. It said the authority acted arbitrarily by refunding the full amount without notice or reasons. The court said the move violated Article 21 of the Constitution of India, which preserves the right to life and personal liberty, as it deprived the buyer of affordable housing during a period of rising property prices.
The incident came to light when a government servant successfully bid for a residential plot in an e-auction held in January 2023 for Rs 1,50,99,300. The Letter of Intent was issued and he paid the full amount. He even received an allotment letter in December 2023 along with symbolic possession of Plot Number 41 in Pinjore, Haryana.
But in February 2024, the entire amount was credited back to his account. There was no notice, explanation, or hearing before the cancellation. He made attempts to get answers through formal representations and also through a legal notice, but did not get any response. Later he approached the High Court.
Court Criticises Arbitrary Action
A division bench observed that the petitioner had invested his lifetime savings with the intention of building a home. The judges said he followed every requirement, yet the authority cancelled the allotment without any reason. They said this kind of action deprived him of affordable housing and violated his right to life under Article 21, especially when the prices of property rose sharply between 2023 and 2025.
The court said that there was nothing in the record to justify such a drastic decision, adding that the absence of a speaking order, proper reasoning, or any communication made the cancellation arbitrary.
HSVP’s Arguments and the Court’s Response
HSVP argued that the auction of three plots, including the petitioner’s plot, had already been cancelled in July 2023 on account of development issues.
The area had a hilly terrain and the layout required revision resulting in keeping only larger 1,000 square yard plots in the new plan. It said the allotment was an error, adding that it also relied upon a clause in its e-auction policy, which allowed refund without further liability in case it was unable to deliver possession due to litigation or circumstances beyond control.
However, the court rejected the argument, adding that cancellation in February 2024 was not related to any unavoidable situation.
The court said the authority’s conduct showed lack of due diligence. It also added that revising the layout to retain only expensive plots displayed a profit-driven approach rather than a commitment to affordable housing.
Findings on Abuse of Discretion
The bench said the authority acted without transparency. There was no notice, no hearing and no material to justify the redesigning of the site. Site levelling and layout revision for larger plots also contradicted the claim that the land was unsuitable for smaller plots.
The judges underlined that the authority was supposed to work on a no-profit no-loss basis, and was expected to treat all stakeholders fairly. On the contrary, the record revealed administrative lapses. The court referred to another similar case where the authority itself had admitted to committing similar type of mistakes about verification of the condition of land before advertisement of the plots.
Terming this act whimsical and unreasonable, the bench said that such conversion of land, meant for low-cost housing, into high value plots for affluent purchasers was discrimination. It said public authorities cannot exercise their powers in a manner injurious to law abiding citizens.
Alternative Plot Policy And Applicability
The authority contended that its e-auction policy does not allow for the allotment of an alternative plot in such cases. However, the court rejected this reasoning. It said the policy on alternative plots operated separately and specifically allows the authority to carve out new plots through re-planning when required.
“The authority cannot use one policy to circumvent the requirements of another,” the bench said, adding that such an approach would nullify the purpose of providing affordable housing, which is the basic rationale for the existence of the authority.
The court ruled that the cancellation was unjustified. It allowed both the petitions and imposed costs of Rs 1 lakh each, payable within two months. It further directed the authority to restore allotment in the same vicinity. In case the original plot cannot be given now on account of changes in layout, the authority will have to carve out a fresh plot in the revised site or offer a suitable alternative within three months of receipt of the order.
