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Supreme Court Upholds Cancellation of Land Allotment for Non-Payment by Trust in UPSIDC Case — Failure to Comply with Payment Terms and Rescheduled Installments Justifies Forfeiture of Earnest Money. The Court held that the appellant's persistent default in payment and failure to execute the lease deed justified the cancellation of allotment under the terms of the allotment letter.

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2026-07-18 06:08:12
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Case Details

2025 INSC 791

Civil Appeal Nos. _____ / 2025 (Arising out of SLP (C) Nos. 31887-88/2017)

2025-01-01

Surya Kant, J.

2025 INSC 791

Kamla Nehru Memorial Trust & Anr.

U.P. State Industrial Development Corporation Limited & Ors.

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Nature of Litigation

Civil appeal against cancellation of land allotment by UPSIDC.

Remedy Sought

Appellant sought to set aside the cancellation of allotment and restoration of the land.

Filing Reason

Appellant challenged the cancellation of allotment due to non-payment of installments.

Previous Decisions

High Court of Allahabad upheld the cancellation of allotment on 29.05.2017.

Issues

Whether the cancellation of allotment was legal and justified. Whether the appellant's defaults in payment warranted forfeiture of earnest money.

Submissions/Arguments

Appellant argued that UPSIDC failed to hand over possession and that the cancellation was arbitrary. Respondent argued that the appellant repeatedly defaulted on payments despite extensions and rescheduling.

Ratio Decidendi

The cancellation of allotment was justified as the appellant was in persistent default of payment terms and failed to execute the lease deed, and the forfeiture of earnest money was in accordance with the terms of the allotment letter.

Judgment Excerpts

The allotment was made conditional upon compliance with certain terms... KNMT failed to pay the instalments and requested rescheduling... UPSIDC issued a final notice dated 13.11.2006, calling upon KNMT to deposit an amount...

Procedural History

The appellant filed a writ petition in the High Court challenging the cancellation, which was dismissed on 29.05.2017. The appellant then appealed to the Supreme Court.

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