An important decision has come for the buyers of land and plots in Delhi. The Delhi High Court has clearly said that if the Delhi Development Authority (DDA) sells a plot on an as-is basis, then the buyer cannot refuse to pay on the ground that there are no facilities like roads, water, sewerage or electricity. In this case, the plot buyer paid about Rs. 4.45 crore was deposited as interest, but the balance was not paid. DDA confiscated the interest amount and now Delhi High Court has also justified this move of DDA.
The dispute dates back to 2007, when the DDA auctioned a commercial plot in Dwarka Sector-20. In this auction, the buyer bid the highest for plot number 8 at Rs 17.51 crore. As per the terms of the auction, the buyer had to deposit 25% of the total amount i.e. Rs 4.45 crore as earnest money on the day of winning the bid. The remaining 75% was to be paid within 90 days.
Why the delay in payment of dues?
After winning the bid, DDA sent a letter to the buyer asking him to deposit the balance. But the buyer did not pay on time. First he sought time citing some personal reasons, then he said he did not get a loan from the bank. Later the buyer’s contention changed. He said that he would not pay the outstanding amount until basic facilities like water, sewerage, road and electricity were provided on the plot.
Court gates if facilities are not available
The buyer filed a petition in the Delhi High Court saying that DDA was not providing infrastructure on the plot. But the High Court rejected this petition in the year 2017. The court accepted that the buyer’s real problem was not lack of facilities, but lack of money. After this, the DDA seized the buyer’s deposit money.
The buyer challenged the forfeiture of interest and the matter was referred to arbitration. Even there the buyer has not got any relief. In the September 2020 decision, the arbitrator clearly held that the buyer violated the terms of the auction and forfeiture of interest was justified. After this the buyer again approached the Delhi High Court.
What did the Delhi High Court say?
The Delhi High Court in its judgment on 11 November 2025 rejected the buyer’s plea. The court held that the plot was sold as is. Buyer agrees to view site and understand terms prior to auction. Also, it was not necessary for the DDA to provide the facilities before receiving the full amount. The court clearly said that in such cases the DDA has no legal obligation to first provide roads, water or sewerage.
Why was the confiscation of 4.45 crore considered appropriate?
The court also explained that the earnest money is not just a penalty, but a guarantee that the buyer will complete the deal. If the buyer backs out of the deal, the government agency suffers. Such as wasted time, re-auction costs, loss of revenue and legal costs. Therefore, the court held that the seizure of Rs.4.45 crore was not unreasonable or illegal.
This decision is important for all those who are planning to buy plot or land from DDA or any government body. If the terms of the auction state “as is where is basis”, it means that the plot is being bought as is. Later there will be no excuse for lack of facility. If the payment is not made on time, the interest may be lost.
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