Decision on DDA flats
An important decision has come for those buying land and plots in Delhi. The Delhi High Court has clearly said that if Delhi Development Authority (DDA) sells a plot on As Is Where Is Basis, then the buyer cannot refuse to pay the money later on the ground that there are no facilities like roads, water, sewer or electricity. In this case, a plot buyer deposited about Rs 4.45 crore as earnest money, but did not pay the remaining amount. DDA confiscated the earnest money and now Delhi High Court has also justified this step of DDA.
This dispute dates back to 2007, when DDA auctioned a commercial plot in Dwarka Sector-20. In this auction, the buyer made the highest bid of Rs 17.51 crore for plot number 8. According to 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% amount was to be paid within 90 days.
Why was there a delay in paying the outstanding amount?
After winning the bid, DDA sent a letter to the buyer asking him to deposit the remaining amount. But the buyer did not pay the money on time. First he asked for time citing some personal reasons, then he said that he did not get the loan from the bank. Later the buyer’s argument changed. He said that he will not pay the remaining amount until basic facilities like water, sewer, road and electricity are provided on the plot.
Court door if facilities are not available
The buyer filed a petition in the Delhi High Court saying that the DDA was not providing infrastructure on the plot. But the High Court rejected this petition in the year 2017. The court accepted that the real problem of the buyer was not lack of facilities, but lack of money. After this DDA confiscated the earnest money of the buyer.
The buyer challenged the forfeiture of the earnest money and the matter was referred to an arbitrator. Even there the buyer did not get any relief. In the decision given in September 2020, the arbitrator clearly said that the buyer has violated the terms of the auction and the seizure of earnest money is justified. After this the buyer again reached Delhi High Court.
What did Delhi High Court say?
The Delhi High Court, while giving its verdict on 11 November 2025, rejected the buyer’s petition. The court said that the plot was sold in as is condition. The buyer had agreed to see the site and understand the conditions before the auction. Also, it was not necessary for DDA to provide facilities before receiving the full amount. The court clearly said that in such cases, DDA has no legal obligation to provide roads, water or sewer first.
Why was the seizure of Rs 4.45 crore considered correct?
The court also explained that the earnest money is not just a penalty, but it is a guarantee that the buyer will complete the deal. If the buyer backs out of the deal, the government agency suffers a loss. Such as wastage of time, expense of re-auction, loss of revenue and legal expenses. Therefore, the court held that the seizure of Rs 4.45 crore was not unreasonable or illegal.
This decision is important for all those people who are thinking of buying a plot or land from DDA or any government institution. If As Is Where Is Basis is written in the auction terms, it means that the plot is being purchased as is. Later there will be no excuse of lack of facilities. If payment is not made on time, the earnest money may be lost.
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