Orissa HC orders LIC to allot flats to Bhubaneswar policyholders, permits 10% additional cost

The Orissa High Court nullified Life Insurance Corporation of India’s (LIC) decision to cancel flat allotments under its Policy Holders’ Housing Scheme at Jeevan Bima Nagar, Chandrasekharpur, Bhubaneswar.

In its order, the court has directed LIC to complete the allotment process within eight weeks, conditional on allottees paying an additional 10 percent over the original flat price.

Background of the Dispute

According to the case details, in 2014, LIC conducted a lottery for 75 flats in Phase II of its housing scheme, with applicants paying an initial sum of Rs 1 lakh.

Later, citing legal hurdles such as forest clearance requirements and the absence of an updated Record of Rights (ROR), LIC decided to cancel the allotments and switch to a public auction model.

Despite the resolution of these issues and LIC’s name being updated in the ROR, the corporation maintained its decision to cancel the allotments, offering only refunds with interest. The petitioners, who had complied with all conditions, insisted on receiving the flats originally promised.

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Court’s Ruling on Pricing and Allotment

Taking into account the delay and rising property prices over the past decade, the court permitted LIC to collect 10% additional cost from the allottees.

The petitioners have six weeks to pay the revised amount, after which LIC is required to execute and register the sublease deeds within eight weeks.

Earlier in June, the High Court had dismissed a petition challenging LIC’s public auction of these flats. The petitioner had claimed that LIC’s revised pricing, now at Rs 80.54 lakh from the earlier Rs 58.10 lakh, was arbitrary and exploitative.

LIC contended that the cancellation was necessary due to government instructions barring registration without ROR, which was only updated in 2024. The court noted that no enforceable legal right vested in the petitioners beyond the initial application, and that LIC, as a public authority, is entitled to re-value and dispose of its assets lawfully.