Kolkata, Dec. 31 -- The Calcutta High Court has held that a government land allotment cannot be treated as cancelled merely because the allottee failed to pay the balance premium within the stipulated time, unless the state takes specific and formal steps to cancel the allotment and forfeit the earnest money.

A Division Bench comprising Justice Sabyasachi Bhattacharyya and Justice Supratim Bhattacharya delivered the ruling while allowing an appeal filed by the heirs of an allottee in Bidhannagar, also known as Salt Lake, whose land allotment dated back to the late 1960s.

The dispute was related to a plot that was offered on a 999-year lease by the Bengal government. Under the terms of the offer, half of the premium was deposited as the earnest money, while the remaining amount was to be paid within two months after the land was declared ready for possession. The allotment letter stated that failure to pay the balance would make the earnest money "liable to be forfeited" and the allotment "liable to be cancelled".

The state later claimed that the allotment had lapsed automatically due to non-payment. The High Court rejected this argument, observing that the wording of the allotment conditions did not provide for automatic cancellation. The court pointed out that expressions such as "liable to be forfeited" and "at liberty to cancel" clearly showed that further positive action by the government was required.

The Bench noted that no such action was taken for more than four decades. During this period, government authorities issued letters calling the allottee's heirs for hearings, sought documents for mutation, and indicated that the mutation application was under consideration. According to the court, these actions showed that the State itself treated the allotment as continuing. The judges also observed that the time limit for payment of the balance premium was directory and not mandatory, particularly as the State had admitted that extensions had been granted to other allottees in similar situations.

Setting aside the earlier order that had upheld cancellation, the High Court directed the heirs of the original allottee to pay the balance premium, along with interest at six per cent per annum, calculated from 1970, within four working months. Upon payment, the state was directed to execute and register the lease deed in their favour.

Published by HT Digital Content Services with permission from Millennium Post.