Amit Kukreja vs. State Of Chhattisgarh

Facts

The petitioners were allotted plots in a commercial complex by the Raipur Development Authority (RDA) under a 30-year lease scheme, following a tender published on March 1, 2018. The RDA subsequently demanded Goods and Services Tax (GST) on the premium, which had been challenged by the petitioners in earlier writ petitions decided on July 26, 2023. Following this, the RDA issued notices for payment of the remaining amount along with GST and surcharge. The petitioners replied, raising various issues, including the cancellation of the layout by the government. Despite these objections, the RDA, by an order dated November 20, 2023, cancelled the allotment of the plots and forfeited the entire security deposit. The petitioners filed these writ petitions challenging the cancellation order.

Held

The Court held that it was a settled proposition of law that if a contract contains an arbitration clause, parties should invoke it for dispute resolution. The petitioners had approached the High Court directly without invoking the arbitration clause provided in Clause 31 of the contract, which designates the Chairman, Raipur Development Authority, as the arbitrator. Therefore, considering the arbitration clause, the Court was not inclined to entertain the writ petitions on merits. However, to provide an opportunity for redressal, the Court directed that the impugned order dated November 20, 2023, be kept in abeyance for 15 days. During this period, the petitioners were directed to file an application before the Arbitrator to invoke Clause 31 of the contract for the resolution of their grievances. The Court explicitly stated that it had not expressed any opinion on the merits of the case.

Key Issues

1. Whether the High Court should entertain writ petitions when the contract between the parties contains an arbitration clause for dispute resolution, specifically concerning the cancellation of plot allotment and forfeiture of earnest money deposit? Petitioner's contention: The petitioners argued that the RDA demanded GST on the premium, which was challenged and decided by this court previously. Despite this, the RDA proceeded to cancel the allotment and forfeit the security deposit, even though the layout was allegedly cancelled by the government. They approached the High Court directly due to these actions. Revenue/State's contention: The respondents (RDA) contended that after issuing several notices, including a final notice, for the payment of the balance amount, the petitioners failed to pay. Consequently, the allotment was cancelled and the earnest money deposit was forfeited as per the terms and conditions of the contract. They also pointed out the existence of an arbitration clause in the agreement.