In a sharp rebuke against alleged favouritism in a government-linked housing society, the Supreme Court of India has set aside the allotment of two “super deluxe” flats made by a Haryana-based employees’ welfare organisation.
Calling the exercise a “clear act of favouritism and blatant display of self-aggrandizement,” the bench ordered fresh allotment and imposed costs on the officials involved.
The ruling came in Dinesh Kumar v. The State of Haryana and Ors., arising out of Civil Appeal No. … of 2026 (@ SLP (C) No. 16057 of 2025).
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Background of the Case
The dispute centred on the Haryana Urban Estate and Town and Country Planning Employees Welfare Organization (HEWO), a society formed to provide housing benefits to serving and retired employees of the Haryana Urban Development Authority (HUDA), now known as HSVP.
Two super deluxe flats became available after earlier memberships were cancelled. As per decisions of the governing body, one flat could be allotted by preference to a governing body member, while the other was to be allotted through a draw of lots among eligible applicants.
Dinesh Kumar, the appellant, had completed 14 years of deputation in HUDA and applied within time. He met the required criteria, including minimum service and pay band level.
However, one flat was first allotted to a presiding governing body member before the last date of application. That allotment was later cancelled. Soon after, the third respondent - who had taken charge as Chief Controller of Finance in HUDA only on August 12, 2021 - sought allotment of the same flat.
The governing body accepted his request and issued an allotment letter. Notably, the letter was addressed by the third respondent, in his official capacity, to himself in his personal capacity.
The second flat was allotted to the fourth respondent through a draw of lots. Kumar challenged both allotments before the High Court, alleging bias and unfairness. The High Court dismissed his petition. He then approached the Supreme Court.
Court’s Observations
The bench examined the society’s rules closely. It noted that membership was open to employees with at least six months of service on deputation. The super deluxe flats also required a specific basic pay and pay band level.
“The third respondent was not even an employee of HUDA on the last date of application,” the bench observed. He had not completed the minimum six months of deputation. Nor had he submitted an application or deposited earnest money within the prescribed time.
The judges were particularly critical of the manner in which the allotment letter was issued. “Annexure A-1 is a communication addressed by the 3rd respondent; in his official capacity, to himself; in the individual capacity, making it a complete farce,” the court noted.
On the preferential allotment, the court made it clear that even a governing body member must satisfy eligibility conditions. “Such preferential allotment cannot be made… who does not satisfy the eligibility criteria of membership,” the bench said.
As for the fourth respondent, the court found that he did not meet the stipulated pay band level requirement. An exception was later created by the governing body to regularise the allotment.
The court questioned this reasoning. “We fail to understand how the draw of lots would be stultified… by reason only of four members being available,” it remarked. There was no rule requiring a minimum number of applicants.
The bench also pointed out that the fourth respondent worked as an Accountant in the office headed by the third respondent, raising further concerns.
“The third respondent’s entry to HUDA and as a consequence to HEWO thus, not only facilitated preferential allotment to himself but also to his subordinate,” the court said.
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Decision
Allowing the appeal, the Supreme Court set aside the judgment of the High Court and cancelled both allotments.
The court imposed costs of ₹1 lakh on HEWO, ₹50,000 on the third respondent, and ₹25,000 on the fourth respondent. Part of the cost was directed to be paid to the appellant as litigation expenses, with the remainder to be deposited with the Supreme Court Legal Services Committee.
The court further ordered:
- Refund of all amounts deposited by the third and fourth respondents within one month, without interest.
- Vacating of the flats within one month of refund.
- A fresh draw of lots for the two super deluxe flats among the four eligible applicants available at the earlier stage, after obtaining their consent.
- If only one applicant remains, one flat shall be allotted to the appellant, who will be given six months to make the deposit.
With these directions, the appeal was allowed. Pending applications, if any, were disposed of.
Case Title: Dinesh Kumar v. The State of Haryana and Ors.
Case No.: Civil Appeal No. … of 2026 (@ SLP (C) No. 16057 of 2025)
Decision Date: February 17, 2026
