Budvel Auction: HMDA Gets Shock from High Court, Told to Pay Rs 200 Crore with Interest

The Telangana High Court has directed the Hyderabad Metropolitan Development Authority (HMDA) to refund over ₹200 crore, along with 18% annual interest, to two companies that purchased government land in Budvel through an e-auction. Justice K. Lakshman issued the order after finding that HMDA failed to disclose an important ongoing court case related to the land before collecting payment from the buyers.

The court was hearing petitions filed by Bhagwati Devi Baldwa and M/s My Home Infrastructure Private Limited. Both companies won plots in an HMDA auction held on August 10, 2023. The petitioners argued that the HMDA had not informed them about a pending writ petition and interim court order concerning the land, which was issued just a day before the auction.

The dispute stems from an e-auction notification issued by HMDA on August 4, 2023. The authority put 17 plots up for sale in Budvel village, stating clearly that the lands were “100% encumbrance-free” and had no legal disputes. The notification assured bidders of clear title ownership and promised execution of sale deeds after full payment.

Following the auction, Bhagwati Devi Baldwa successfully bid for Plot No. 14 for ₹206.88 crore, and M/s My Home Infrastructure won Plot No. 15 for ₹298.93 crore. Both companies paid the required amounts within the set timeline and received pre-final allotment letters from HMDA confirming full payment.

However, after making the payments, the buyers learned that a private party had filed a writ petition on August 8, 2023—two days before the auction—claiming ownership of parts of Plots 14 and 15. On August 9, the High Court issued an interim order allowing the auction to proceed but specified that any allotment of Plots 14 and 15 would be subject to the outcome of the pending case.

The petitioners claimed they were unaware of this litigation during the auction and only discovered it afterward. They argued that the HMDA deliberately failed to share this critical information, despite being present in court when the interim order was issued.

In response, HMDA argued that the matter was contractual and not maintainable under Article 226 of the Constitution. It also claimed it did not receive the court’s order before issuing offer letters. However, Justice Lakshman rejected these claims, pointing out that HMDA had legal representation at the court hearing and was aware of the order on the day it was issued.

The judge emphasized that public bodies like HMDA must act fairly and transparently, especially when handling high-value public assets. He said that even in contractual matters, courts can intervene under Article 226 when there is unfairness or a violation of Article 14 of the Constitution.

The Court concluded that the failure to disclose the pending case and interim court order was a serious breach. It held that the petitioners had every right to rely on HMDA’s assurance of litigation-free land and ordered the refund with interest.