Cardamom Products (P) LTD. vs. The Union Of INDIA

Held

The Court held that the writ petition is maintainable, citing the Supreme Court's decision in Karnataka Power Corporation Limited Vs. Emta Coal Limited and another, which allows writ jurisdiction in contractual disputes involving state instrumentalities under certain circumstances. The Court found that the Second Respondent was at fault for the delays, particularly in obtaining DTCP approval (granted in 2019, over a decade after the project's initiation). The Petitioner had complied with the lease deed registration, while others who had not were refunded 100%. The Court found no acceptable reason for the distinction in refund policies. Therefore, the Second Respondent could not retain 50% of the deposited amount. The impugned order was set aside, and the Second Respondent was directed to refund the entire amount deposited by the Petitioner, after deducting applicable GST and fees for the cancellation of the registered lease deed. The Court found the Second Respondent's failure to establish the Spice Park even after 10 years shocking.

Facts

M/s. Cardamom Products (P) Ltd. (Petitioner) sought a writ of certiorari mandamus to quash an order dated 11.01.2021 by the Director, Spices Board (Second Respondent), and to direct the refund of Rs. 20,10,000/- paid for plots at Spices Park, Sivagangai District. The Petitioner was allotted plots 33, 34, and 35 in March 2012, paid the full amount by August 2012, and later requested plot 36, making further payments in September 2013. Lease deeds were executed and registered between May and November 2014. The Petitioner intended to commence construction but faced delays due to the Second Respondent's failure to obtain necessary approvals, including DTCP approval which was granted only in July 2019. The Second Respondent issued a show cause notice in July 2020 for alleged breach of contract and failure to perform. The impugned order allowed the surrender of plots but offered only a 50% refund of developmental charges.

Key Issues

1. Whether the writ petition is maintainable in a contractual dispute involving a statutory body, considering the principles laid down in Karnataka Power Corporation Limited Vs. Emta Coal Limited and another (AIR 2022 Supreme Court 2478)? Petitioner's arguments: The writ petition is maintainable as it involves a state instrumentality and contractual disputes. The Second Respondent failed to perform its contractual obligations by not handing over approved plots and causing significant delays in obtaining necessary approvals (like DTCP approval in 2019 for a park initiated in 2012). The Petitioner complied with all instructions, including lease deed registration, yet was denied a full refund, unlike other exporters who did not register lease deeds and received 100% refunds. The Second Respondent's actions were arbitrary and discriminatory. Revenue/State's arguments: The matter deals with contractual disputes, and therefore, the writ petition is not maintainable. The Petitioner breached the lease agreement by failing to commence construction within six months of the agreement (May 2014) and start production within two years of allotment.