Shobha Choudhary vs. State Of Chhattisgarh

Facts

The petitioners applied for commercial plots under the "Devendra Nagar Commercial Complex Scheme" floated by Respondent No. 3, Raipur Development Authority (RDA). They deposited Rs. 73,14,000/- in total as earnest money. Subsequently, they were informed about an 18% GST levy, which was not mentioned in the tender document. Their representations against the GST levy were rejected. The petitioners later discovered that the scheme suffered from statutory defects, including the inclusion of canal/water body land, and that proposed layout changes were rejected by the State Government in 2019 and 2020. Despite these issues, RDA continued to demand the remaining payment and threatened forfeiture. Similarly situated allottees had their writ petitions dismissed by a learned Single Judge on 10.01.2024, who directed them to arbitration as per the contract, keeping cancellation orders in abeyance. The petitioners also sought to join arbitration but faced inaction from the authorities.

Held

The High Court held that the relationship between the petitioners and Respondent No. 3 (RDA) was contractual, arising from participation in a tender and allotment process. The relief sought, namely the refund of deposited amounts with interest, was essentially an enforcement of alleged contractual rights. The Court found that adjudicating such a claim would necessitate examining disputed questions of fact, including the terms of allotment, parties' obligations, alleged statutory impediments, and communications, which cannot be satisfactorily adjudicated in writ jurisdiction under Article 226. The Court agreed with the respondents that the writ petition, in substance, sought refund of money deposited under a contract and was therefore not maintainable. No exceptional circumstances warranting interference in writ jurisdiction for monetary relief arising from a contract were demonstrated. While the petitioners raised an issue about not being permitted to participate in arbitration, the primary relief sought was a direction for refund, which the Court found could not be granted in the present petition. The Court concluded that the relief sought could not be granted under Article 226 but liberty was granted to the petitioners to avail appropriate remedies before a competent civil court or other forum.

Key Issues

1. Whether the High Court can direct the refund of amounts deposited by the petitioners under a contractual arrangement in writ jurisdiction, given the alleged statutory defects in the commercial development scheme? (Article 226 of the Constitution of India). Petitioner's contention: The petitioners argued that the scheme was fundamentally flawed due to lack of statutory approval for the layout plan and the inclusion of impermissible land, rendering the allotment void and the contract frustrated. They sought a refund of the deposited amount with interest. Respondents' contention: The respondents (RDA and State) contended that the dispute arose from a contractual arrangement and that the petitioners should pursue their claim for refund before a competent civil court or other jurisdictional forum, as it involved examination of disputed questions of fact and contractual rights. They argued that such claims are not maintainable in writ jurisdiction.