CUTTACK: The Orissa High Court has dismissed a petition challenging Life Insurance Corporation of India (LIC)’s public auction of flats, which were first allotted to policy holders through a draw of lots and then cancelled in 2014.
In early 2014, the LIC launched “LIC’s Policy Holders’ Housing Scheme” for the allotment of 75 flats at Jeevan Bima Nagar, Phase-II, Chandrasekharpur in Bhubaneswar. Policy holders could submit applications depositing Rs 1 lakh. A policy holder who was among the successful applicants after the draw of lots before cancellation of the allotments the same year had filed the petition.
The petition alleged that LIC is now attempting to profit from the same flats by hiking prices to Rs 80.54 lakh from the earlier Rs 58.10 lakh, which amounts to arbitrary and exploitative conduct unbecoming of a state entity.
The LIC submitted that the cancellation of allotment was compelled by the government’s instruction not to register flats without record of rights (ROR). The ROR was unavailable in 2014 and was only obtained in 2024, after due mutation and reclassification of land.
After obtaining legal possession and clearances, LIC reinitiated sale through public auction as required for fair disposal. Given the time lapse and cost escalation, the current pricing reflects present-day market and construction realities, it claimed.
The petitioner sought direction to LIC to execute the necessary conveyance deed and transfer possession of the flat originally allotted to them in 2014.
However, Justice SK Panigrahi said, “The court cannot ignore the practical realities of urban development, land classification, and escalating construction costs. It is not open to a writ court (HC) to freeze pricing or enforce historic transactions when the statutory and legal framework has significantly changed over a decade.”
“LIC, being a public authority, is entitled to re-value and dispose of its assets in a lawful, transparent manner, and no malafide can be imputed to its decision to conduct an e-auction in 2025,” Justice Panigrahi ruled in a recent judgment.
Justice Panigrahi also ruled that without a sale agreement, registration, or part-performance beyond a token application fee, no enforceable legal right vested in the petitioner. “He had, at best, an inchoate interest that lapsed upon lawful cancellation,” the judge added.