The Supreme Court of India has set aside the allotment of two super deluxe flats by the HUDA, Urban Estate and Town and Country Planning Employees Welfare Organization (HEWO), terming the process a “farce” and a “blatant display of self-aggrandizement.” A bench comprising Justice Sanjay Kumar and Justice K. Vinod Chandran ruled that the allotments made to a governing body member and his subordinate were arbitrary, biased, and violated the society’s own eligibility criteria.
Background
The case involved the allotment of two super deluxe flats in an apartment complex built by HEWO, a society registered under the Societies Registration Act, 1860, intended to provide housing to employees of the Haryana Urban Development Authority (HUDA/HSVP). The appellant, Dinesh Kumar, a HUDA employee with 14 years of service, challenged the allotments made to Respondent No. 3 (a governing body member) and Respondent No. 4 (an accountant working under Respondent No. 3).
Kumar alleged that the respondents were ineligible and that the society had displayed favoritism. While the Punjab and Haryana हाईकोर्ट upheld the maintainability of the writ petition under Article 226, it dismissed the challenge on merits, holding that Kumar was estopped from challenging the process after participating in a draw of lots.
Arguments of the Parties
The respondents argued that HEWO is a private entity and not “State” under Article 12, thus not subject to writ jurisdiction. They further contended that the allotments followed a “common place practice” decided by the Governing Body and that the third respondent, as a governing body member, was entitled to preference based on earlier internal decisions. They also maintained that the fourth respondent met the basic pay requirement.
The appellant’s counsel, Mr. Pradeep Dahiya, argued that the हाईकोर्ट’s dismissal was “cursory” and failed to address the arbitrary exercise of power and clear bias evident in the facts.
Court’s Analysis
The Supreme Court first affirmed the हाईकोर्ट’s finding that the society is subject to writ jurisdiction under Article 226, noting that the land was allotted by the Government and the members were all government employees. Justice K. Vinod Chandran, writing for the bench, observed:
“Nepotism and self-aggrandizement are anathema to a democratic system, more so when it happens within a society comprising members of the government service… the Governing Body members… should act in a fiduciary capacity for the common good, ensuring fairness, transparency and accountability, while eschewing favouritism, bias and arbitrariness.”
Allotment to Respondent No. 3
The Court found that on the last date for applications (June 18, 2021), Respondent No. 3 was not even an employee of HUDA or a member of HEWO. He took charge on August 12, 2021, and was allotted a flat that had been surrendered by another member. The Court noted that Respondent No. 3, in his official capacity, addressed a communication to himself in his individual capacity, which the Court described as a “complete farce.”
The Court further noted that he did not satisfy the mandatory six-month service requirement for membership at the time of allotment and had not deposited application fees or earnest money before the deadline.
Allotment to Respondent No. 4
Regarding Respondent No. 4, the Court found that although he met the basic pay requirement, he did not fall within the stipulated “pay band level” (level 10 to 20). The society had attempted to “regularize” his allotment after the draw of lots by carving out an exception. The Court remarked:
“The third respondent’s entry to HUDA and as a consequence to HEWO thus, not only facilitated preferential allotment to himself but also to his subordinate. We find no reason to uphold the allotment to the fourth respondent also.”
The Decision
The Supreme Court allowed the appeal and set aside the judgment of the हाईकोर्ट. The bench issued the following directions:
- Costs: The Court imposed costs of ₹1 lakh on HEWO (Respondent No. 2), ₹50,000 on Respondent No. 3, and ₹25,000 on Respondent No. 4. HEWO was directed to pay ₹50,000 to the appellant as litigation expenses.
- Refund and Eviction: The amounts deposited by Respondents 3 and 4 are to be refunded without interest, and they must vacate the premises within one month of the refund.
- Fresh Draw: HEWO must conduct a fresh draw of lots for the two flats among the four eligible applicants who were available originally. If only the appellant remains interested, one flat shall be allotted to him with a six-month window to make the deposit.
- Recovery: The Court allowed HEWO to recover the costs imposed on it from the individual governing body members who took the decision for the illegal allotments.
- Case Title: Dinesh Kumar v. The State of Haryana and Ors.
- Case No.: Civil Appeal No. of 2026 (@SLP (C) No. 16057 of 2025)
