Kiran Raj

The Supreme Court of India, Division Bench of Justice Sanjay Kumar and Justice K. Vinod Chandran, highlighting nepotism in the allotment of flats in a Haryana government housing society, cancelled the allotments on Tuesday (February 17), holding that governing body members abused their positions to benefit themselves and their subordinates. The bench set aside a Punjab and Haryana High Court order that had declined to interfere with the allotment of two super deluxe flats. The court found that a governing body member secured a flat for himself despite not meeting eligibility criteria at the time of application and subsequently facilitated allotment to his own subordinate. The bench directed cancellation of both allotments, imposed costs on the society and the beneficiaries, and ordered a fresh draw of lots among eligible applicants.

The appeal arose from a challenge to the allotment of two super deluxe flats constructed by a government employees’ welfare society registered under the Societies Registration Act, 1860. The appellant, a member of the society and an employee on long deputation with the Haryana Urban Development Authority (HUDA), questioned the allotment made to a governing body member and another employee.

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The society had invited applications for cancelled memberships, stipulating eligibility conditions including minimum deputation service and a specified basic pay range within pay band levels 10 to 20. Before expiry of the application period, one flat was allotted to a presiding governing body member. Subsequently, after the last date for submission of applications and earnest money, another governing body member sought allotment of the cancelled flat, which was accepted. The appellant contended that the beneficiary did not meet the deputation requirement at the relevant time and had not applied within the stipulated period.

With respect to the second allottee, the appellant asserted that although the allotment was through draw of lots, the candidate did not satisfy the prescribed pay band level. The respondents maintained that allotments were made in accordance with prior decisions of the Governing Body and that the appellant, having participated in the process, could not challenge the outcome.

The Court recorded at the outset that “Nepotism and self-aggrandizement are anathema to a democratic system, more so when it happens within a society comprising members of the government service, enabling housing facilities to its members by transparent allotment.”

On the maintainability of the writ petition, the Court stated, “we perfectly agree with the said findings of the High Court,” noting that members were government employees and that allotment of flats stood connected with land allotted by the Government. It observed that governing body members, even if ex officio, “should act in a fiduciary capacity for the common good, ensuring fairness, transparency and accountability, while eschewing favouritism, bias and arbitrariness.”

Examining the preferential allotment clause, the Court observed that “such preferential allotment cannot be made, even if it be made to a governing body member, who does not satisfy the eligibility criteria of membership, which would then be violative of the bye-laws of the Society.”

On facts, the Court recorded, “on the last date of application the third respondent was not even an employee of HUDA or a governing body member of HEWO.” It further stated, “There could have been no preferential allotment given to the governing body member who was not even satisfying the six months deputation period in the service of HUDA.” Concluding on that allotment, the Court stated, “We find absolutely no reason to uphold the allotment made to the third respondent which is a clear act of favouritism and blatant display of self-aggrandizement.”

With respect to the fourth respondent, the Court recorded that the ineligibility was “stark and obvious.” It stated, “There is no stipulation either in the decision of the governing body or in the rules and regulations that there should be a specific number of applicants for a determinate number of flats.” The Court further observed that the entry of the third respondent to HUDA “not only facilitated preferential allotment to himself but also to his subordinate.” It concluded, “We find no reason to uphold the allotment to the fourth respondent also.”

The Court directed, “we are inclined to set aside the judgment of the Division Bench of the High Court and allow the appeal imposing costs of Rs.1 lakh on the second respondent with further costs of Rs.50,000/- on the third respondent and costs of Rs.25,000/- on the fourth respondent. The second respondent shall pay Rs.50,000/- to the appellant as litigation expenses and the balance shall be deposited with the Legal Services Committee of the Supreme Court, with whom the third and fourth respondents also shall deposit the costs imposed on them, within a period of two months from today.”

“We make it clear that the costs imposed on the second respondent would be capable of recovery from the governing body members, except the 3rd respondent on whom we have separately imposed costs, which the second respondent would be entitled to proceed with after issuing notice to the members of the Governing Body, who took the decision for allotment.”

“We further make it clear that the entire amounts deposited by the third and fourth respondents shall be refunded to them within a period of one month without any interest and they shall vacate the premises within one month of the refund.”

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“The second respondent shall carry out a fresh draw of lots with respect to the two super deluxe flats from the four eligible applicants available at the earlier point of time, after obtaining their consent. If there is only one person left, then one of the super deluxe flats shall be allotted to the appellant and he shall be given time of six months from the date of allotment to make the deposit. It is also made clear that if the other applicants are not desirous of allotment, then the second respondent would be entitled to make a re-allotment of the flat left over based on the existing eligibility as of now.”

Advocates Representing the Parties

For the Petitioners: Mr. Pradeep Dahiya, Advocate

For the Respondents: Mr. Shadan Farasat, Senior Advocate; Mr. Alok Sangwan, Senior A.A.G. for the State of Haryana; Mr. Shirish K. Deshpande, Advocate

Case Title: Dinesh Kumar v. The State of Haryana and Ors.

Neutral Citation: 2026 INSC 163

Case Number: Civil Appeal arising out of Special Leave Petition (C) No.16057 of 2025

Bench: Justice Sanjay Kumar and Justice K. Vinod Chandran