Court Strikes Down Nepotistic Housing Allotments in Haryana Welfare Body

The Supreme Court in this case delivers a sharp rebuke against nepotism and institutional favouritism in cooperative housing allotments, reaffirming that transparency and fiduciary responsibility cannot be diluted merely because a body is structured as a registered society.

What's The Matter?

The dispute arose from the allotment of two “super deluxe” flats by the HUDA Employees Welfare Organization (HEWO), a society constituted ostensibly for the benefit of employees of the Haryana Urban Development Authority (HUDA/HSVP).

The appellant, an eligible member by virtue of deputation and pay-band requirements, challenged the allotment granted to a governing body member and his subordinate, alleging blatant favouritism and manipulation of procedure.

The High Court had dismissed the challenge, largely on the reasoning that the appellant had participated in the draw of lots and was therefore estopped from questioning the outcome.

The Supreme Court disagreed. At the threshold, it upheld the maintainability of the writ petition under Article 226, recognising that even though HEWO was a society, its composition, functioning, land allotment by the Government, and the presence of ex officio government officers brought its actions within the realm of public law scrutiny.

When public resources and state-linked privileges are involved, the cloak of private status cannot immunise arbitrary conduct.

On merits, the Court’s language is uncharacteristically direct. It described nepotism and self-aggrandizement as “anathema to a democratic system,” particularly within institutions comprising government servants.

The preferential allotment made to the governing body member was found to be patently illegal: at the relevant time, he did not even satisfy the eligibility criteria of minimum service or timely application.

The allotment letter issued in his own official capacity to himself in his personal capacity was characterised as a “complete farce.”

The allotment to the fourth respondent, a subordinate working under the third respondent, also did not withstand scrutiny.

The Court found that the relaxation of pay-band eligibility after the draw of lots amounted to retrospective regularisation designed to protect an otherwise ineligible allottee.

The absence of documentary clarity in the application process further compounded the arbitrariness.

Importantly, the Court rejected the High Court’s reliance on estoppel. Participation in a flawed process does not sanctify illegality, particularly where arbitrariness is writ large.

Judicial review, the Court reiterated, is concerned not merely with participation but with structural fairness.

In a rare and pointed exercise of accountability, the Supreme Court not only set aside the allotments but also imposed costs on the society and the beneficiaries. It directed refund of deposited amounts, mandated a fresh draw of lots among eligible candidates, and clarified that costs imposed on the society could be recovered from the responsible governing body members.

The message is unmistakable: governance within welfare bodies cannot be reduced to patronage networks.

Disclaimer: This content is published strictly for educational and informational purposes only. It does not constitute legal advice, nor should it be relied upon as a substitute for professional legal counsel.

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Case Details:

DINESH KUMAR VS. STATE OF HARYANA - C.A. No. 1701/2026 - Diary Number 26966 / 2025 - 17-Feb-2026

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