CHAMAN LAL SINGHAL v. HARYANA URBAN DEV. AUTHORITY AND ORS. INSC 248

NAME OF CASE CHAMAN LAL SINGHAL v. HARYANA URBAN DEV. AUTHORITY AND ORS.

FACTS Chaman Lal Singhal had been allotted a residential plot under the HUDA scheme on clearly specified terms including a structured payment schedule. The reminder notices notwithstanding, Singhal defaulted in making payment within the due dates, after which HUDA cancelled the allotment. In this appeal Singhal claimed the cancellation to be arbitrary and violation of principles of natural justice. He submitted that no reasonable notice and fair opportunity was given for rectifying defaults; hence he urged leniency. It further prayed for enforcement of the agreement not being followed in terms with the principle of equity because enforcement strictly leads to undue hardship. HUDA had pleaded its own case with arguments that they have sent out repeated reminders, cancellation is subject matter under agreed terms with Singhal.

ISSUE Whether HUDA's cancellation of the plot allotment due to non-payment was lawful and in accordance with statutory provisions?

DECISION The Supreme Court upheld the decision of HUDA to cancel the allotment of a plot in favor of Chaman Lal Singhal. The Court further clarified that cancellation was lawful and justified. It observed that the allotment letter clearly stated the terms of payment, which included timelines for installments necessary for the contractual agreement. It was observed that Singhal had failed to follow these terms despite repeated reminders and notices issued by HUDA over a long period. The Court held that HUDA had acted according to the due process procedure, affording sufficient opportunities to Singhal to cure the default. Notices had been issued; adequate notice was provided not only about such issue but also with full time for the particular payment schedule. The Court dismissed Singhal's claim of arbitrariness and held that HUDA's actions were not contrary to the contractual provisions and did not contravene principles of natural justice as he was given a fair opportunity to be heard and to rectify his defaults.

RATIONLE The allotment letter given by HUDA to Chaman Lal Singhal mandated acceptance of the allotment along with paying a stipulated amount within 30 days. In case it was not done, the allotment would lapse, and the earnest money would be forfeited. The remaining amount was to be paid either wholly within 60 days or in instalments as per the payment schedule.Despite reminders and sufficient time offered by HUDA, Singhal did not comply with the terms of payment. Consequently, the allotment was cancelled after 500 days of non-compliance. The Court held that the cancellation was a direct result of the failure on the part of the appellant to meet the payment obligations. Since no valid contract could be established on account of non-compliance, claims of procedural unfairness or lack of natural justice were not applicable. The Court upheld HUDA's actions, affirming that the cancellation and forfeiture of the earnest money were lawful and justified.