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2026 Supreme(Raj) 287

HIGH COURT OF JUDICATURE FOR RAJASTHAN, BENCH AT JAIPUR
SAMEER JAIN, J.
Pooranmal Phoola Devi Memorial Trust, Through Its Managing Trustee Dr. S.S. Agarwal – Petitioner 
Versus 
State Of Rajasthan, Through Principal Secretary, Urban Development And Housing Department, Government Of Rajasthan – Respondent 
S.B. Civil Writ Petition No. 5717 of 2025
Decided On : 25-05-2026

Advocates Appeared:
For the Petitioner: Mr. Sandeep Pathak with Ms. Shefali Sharma.
For the Respondent: Mr. V.D. Gathala, AGC, Mr. Ajay Shukla with Mr. Raghav Sharma, Ms. Jyoti Sharma, Mr. Shivam Sharma.

Administrative authorities cannot unilaterally cancel an allotment for delayed payments if they have previously accepted payments and engaged with the party beyond the default, as such conduct constitutes a waiver of strict timelines and violates the principles of natural justice and legitimate expectation.

Headnote:(A) Administrative Law - Natural Justice - Cancellation of Land Allotment - Principle of Audi Alteram Partem - Any administrative action resulting in civil consequences, such as cancellation of an allotment, necessitates prior issuance of a show-cause notice and an opportunity of hearing, regardless of the existence of clauses mentioning automatic cancellation. (Paras 30, 31)

(B) Contract Law - Essence of Time - Waiver by Conduct - In transactions involving institutional land allotment, time is not of the essence unless specifically and unequivocally stipulated. The acceptance of delayed performance and continued engagement with the party by the authority constitutes a clear waiver of strict adherence to timelines and bars reliance on such delays to justify cancellation through the doctrine of estoppel. (Paras 28, 29, 35, 36)

Facts of the case:
A charitable institution was allotted land for establishing a healthcare and educational infrastructure. Despite specific payment schedules, the institution delayed certain installment payments. The authority, despite these delays, received the payments, oversaw the development process, and continued to issue compliance requests. Subsequently, the authority unilaterally cancelled the allotment and refunded the amounts without any prior notice or opportunity for a hearing, claiming that the allotment stood automatically cancelled by operation of law due to payment delays.

Findings of Court:
The court held that the authority's proactive participation in the development process and acceptance of delayed payments created a legitimate expectation that the allotment remained valid. The failure to grant a pre-decisional hearing violated fundamental principles of fair administrative action. The doctrine of estoppel prevented the authority from rescinding a transaction after repeatedly treating it as subsisting.

Issues: The main issues were whether payment delays constituted automatic termination of the allotment, whether the cancellation violated natural justice principles, and whether the authority was estopped from cancelling the allotment due to its subsequent conduct.

Ratio Decidendi: Strict contractual clauses concerning timelines are superseded by the requirement for fairness in State action when the authority, through deliberate conduct, ignores delays and continues to perform under the contract. Administrative authorities are not permitted to adopt inconsistent stances, and the breach of natural justice renders the cancellation order void ab initio.

Result: Petition allowed; impugned cancellation set aside and allotment restored.

Table of Content
1. introduction of dispute regarding unilateral cancellation of land allotment. (Para 1)
2. petitioner's contention that allotment subsisted through payment acceptance and administrative conduct. (Para 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16)
3. respondent's justification for auto-cancellation due to non-compliance with statutory payment timelines. (Para 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24)
4. court establishes facts and recognizes waiver through acceptance of delayed payments. (Para 25 , 26 , 27 , 28 , 29 , 30)
5. administrative actions impacting civil rights must adhere to natural justice principles. (Para 31)
6. estoppel and legitimate expectation arise from consistent state conduct. (Para 32 , 33 , 34 , 35)
7. in institutional land allotments, time is not of the essence. (Para 36 , 37)
8. restoration of land allotment based on equitable and fair administration. (Para 38 , 39 , 40 , 41 , 42 , 43 , 44)

JUDGMENT :

SAMEER JAIN, J.

1. The present petition has been instituted impugning the illegal and arbitrary action of the respondent–Jaipur Development Authority, (hereinafter referred to as ‘JDA’), whereby the second, third, and fourth installments deposited by the petitioner-trust towards allotment of land for the development of a hospital and medical education facility have been unilaterally refunded, and the allotment of land was cancelled, without any prior notice or intimation to the petitioner, sans granting any opportunity of hearing; thus resulting in gross violation of the principles of natural justice.

SUBMISSIONS MADE BY LEARNED COUNSEL REPRESENTING THE PETITIONERS :

2. At the outset, learned counsel appearing on behalf of the petitioner–trust apprised this Court with regard to the locus standi of the present petitioners. It was submitted that the petitioner No. 1-Pooranmal Phoola Devi Memorial Trust, is a duly registered trust (Trust deed annexed as annexure no.2) and is governed by the provisions of the Rajasthan Improvement (Disposal of Urban Land) Rules, 1974 (hereinafter referred to as ‘the Rules of 1974’). It was further submitted that petitioner No. 2, Dr. S.S. Agarwal, is the Managing Trustee (Authorization letter annexed as annexure no.1) of the said trust and is duly authorized to represent and espouse the cause of the trust in the present proceedings. Learned counsel further contended that the petitioner–trust is actively engaged in the field of medical education within the State of Rajasthan for several decades and has been rendering services in the said domain since the year 1980. It was emphasized that the trust has established a credible standing and experience in promoting medical education and allied healthcare facilities. It was further submitted that, with a bona fide intention to expand its activities and to contribute towards the development of hospital infrastructure and medical educational institutions, the petitioner– trust had approached the State Government in the year 2015, seeking allotment of suitable land for the aforesaid purposes. Pursuant thereto, a recommendation came to be made in favour of the petitioner-trust for allotment of land for establishing a hospital and medical education center/college, in furtherance of its stated objectives.

3. In the aforesaid backdrop, learned counsel for the petitioners further submitted that, in the 118th meeting of the Land and Building Disposal Committee held on 30.07.2015, a recommendation was made for allotment of land on concessional rates. It was further submitted that the said recommendation attained further affirmation at the highest administrative level, inasmuch as in the 3rd meeting of the Cabinet Empowered Committee of the State Government held on 29.09.2021, a conscious decision was taken to allot the subject land to the petitioner–trust itself. Despite such decision, there was an inordinate and unexplained delay on the part of the authorities, and only after a lapse of nearly eight years from the initial

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