This writ petition was filed by M/s Drosia India Limited challenging the order dated December 24, 2024, passed by the Lucknow Development Authority (LDA), which levied interest from the date of the original auction (October 2007) to the date of actual reallotment (December 2015) following an illegal cancellation of the petitioner’s highest bid. The Allahabad High Court held that the initial cancellation of the petitioner’s highest bid—based purely on the expectation of fetching higher prices from smaller adjacent commercial plots—was arbitrary, illegal, and contrary to established legal precedents and State Government policies. The Court further ruled that under the governing terms and conditions of the auction (Clause 10), interest and installments only accrue after the issuance of an allotment letter and the delivery of possession. Consequently, the High Court allowed the writ petition, quashed the impugned orders demanding back-interest, and directed the LDA to re-calculate dues and hand over possession strictly according to the original auction terms.
- Challenge to Arbitrary Interest Levy: The petitioner contested the LDA’s demand for interest spanning from the date of the 2007 auction until the 2015 revocation of cancellation, which was re-imposed despite a favorable revisional order.
- Illegal Cancellation of Highest Bid: Citing Supreme Court jurisprudence, the High Court reiterated that a valid, highest bid above the reserve price cannot be arbitrarily cancelled merely because authorities expect higher monetary gains in future rounds.
- Violation of Auction Terms: The Court noted that under Clause 10 of the auction terms, interest and installments become payable only after the issuance of the allotment letter and possession, meaning no interest could be levied during the period the LDA wrongfully withheld allotment.
- Relief Granted: The writ petition was allowed, the impugned orders dated December 24, 2024, and April 11, 2025, were quashed, and the LDA was directed to issue a revised demand as per the original auction terms within one month and hand over possession of the plot.
J.O. (Web) 2026 ALL 137
M/s Drosia India Limited v. The State of U.P. and Others (D.O.J. 15.07.2026)
J.O. (Web) 2026 ALL 137 click here to view full text of judgment



