Srinagar: Holding that a citizen cannot be penalised for lapses committed by a public authority, the High Court of Jammu & Kashmir and Ladakh has ruled in favour of an auction purchaser who waited for over a decade to secure possession of land auctioned by the Jammu Development Authority (JDA), while imposing costs of ₹50,000 on the Authority for misleading the court and causing prolonged delay.
Allowing a writ petition filed by Changa Ram, a resident of Parwah in Jammu district, Justice Wasim Sadiq Nargal observed that the JDA had proceeded with the auction despite the land being under encroachment, thereby subjecting the successful bidder to prolonged litigation and financial hardship.
Ram had participated in a public auction conducted by the JDA in 2011 for allotment of a commercial site measuring 5.38 kanals at Chinor Chowk, Bantalab. He emerged as the highest bidder by offering ₹41 lakh per kanal, amounting to over ₹2.20 crore. Following issuance of a Letter of Intent, he deposited earnest money along with the first installment totalling ₹25.50 lakh.
However, Ram later found that substantial portions of the auctioned land were encroached upon by structures, boundary walls and access lanes. He subsequently approached the JDA on multiple occasions seeking demarcation of the land and removal of encroachments before depositing the remaining installments.
The petitioner submitted several representations between 2011 and 2016, while official measurements conducted by the authorities confirmed encroachments over parts of the site. The court noted that illegal occupation of the land had been reported as early as 2008–09, prior to issuance of the auction notice.
Despite acknowledging encroachments, the JDA maintained that the petitioner had defaulted in payment under a revised schedule and argued that the allotment was liable to cancellation.
The Authority also claimed possession of the available portion could have been handed over had the balance amount been deposited.
Justice Nargal held that the petitioner was justified in withholding payment when the auctioned land was not free from encumbrances, observing that public authorities cannot auction property without ensuring lawful possession.
“The lapse, if any, squarely lies with the respondents who auctioned encroached land,” the court observed, adding that a bidder cannot be compelled to pay the full premium for property whose possession cannot legally be transferred.
Taking note of official records, the court found that about 5.01 kanals had subsequently been cleared of encroachments and directed the JDA to calculate the sale consideration strictly on the rates applicable at the time of allotment in 2011 and not at prevailing market rates.
The Authority was further directed to allot equivalent land measuring about 0.37 kanals in the same or nearby vicinity in lieu of the encroached portion and hand over possession after completion of formalities.
The court directed that ₹25,000 be recovered from the officers responsible for filing misleading affidavits, while another ₹25,000 was imposed for unjustified retention of the petitioner’s money, both to be deposited with the Advocates’ Welfare Fund within four weeks, failing which the matter shall be listed for compliance.
The court also restrained the authorities from cancelling the Letter of Intent issued to the petitioner, emphasising that public bodies exercising monopoly over urban land are under a heightened obligation to act fairly and responsibly in public auctions involving substantial citizen investment.
