Chhattisgarh HC: RDA's Forfeiture of Plot Registration Fee Under Tender Clause 14 Upheld on Allottee Default; Other Deposits Refundable with Interest - 2025-05-09

Chhattisgarh High Court Upholds RDA's Forfeiture of Plot Registration Fees, Orders Refund of Other Deposits with Interest

Raipur, Chhattisgarh – The High Court of Chhattisgarh, in a common order disposing of a batch of writ petitions, has upheld the Raipur Development Authority's (RDA) decision to forfeit the registration fees of plot allottees in the Kamal Vihar scheme who defaulted on their payment installments. However, Hon'ble Shri Justice Rakesh Mohan Pandey directed the RDA to refund the remaining amounts deposited by the petitioners, along with 6% annual interest, within 45 days.

The judgment, dated November 13, 2024, addresses a long-standing dispute between numerous petitioners (individuals and firms) and the RDA concerning plot allotments in the Kamal Vihar Township Scheme No. 4.

Background of the Dispute

The RDA had launched the Kamal Vihar scheme and issued an auction notice in 2015 for plot allotments. As per Clause 12 of the tender document, successful allottees were required to pay 25% of the total amount within three months, another 25% within six months, and a further 25% within nine months of allotment, with the remainder due at the time of the sale deed registration. Clause 14 stipulated that if an allottee failed to make payments, the allotment would be cancelled and the registration fee (10% of the plot amount) would be forfeited.

The petitioners were allotted plots and most paid the first installment. However, they subsequently failed to pay the remaining installments. Consequently, the RDA cancelled their allotments and forfeited the registration fees, leading to the current batch of writ petitions.

Petitioners' Arguments

The petitioners, represented by Shri Varun Sharma , argued that their failure to deposit further installments was due to several factors: * The Kamal Vihar Scheme had been declared ultra vires by the Hon’ble Supreme Court at one point, raising concerns about the RDA's title to the land. * They had requested title documents from the RDA, which they claimed were necessary before making further payments. * A Validation Act for the Kamal Vihar Scheme was only notified in 2018. * They alleged an undertaking by RDA's counsel during a related court proceeding (MCC No. 327 of 2018) that petitioners might be accommodated at prevailing market rates, which was not honored by the RDA when it later issued a new tender notice in 2023 for some plots. * They contended that the forfeiture was illegal, arbitrary, and malafide, done without specific notice or an opportunity for a hearing.

The petitioners sought quashing of the forfeiture orders, a directive against forfeiture, provision of title documents, applicable discounts, an inquiry into alleged fraud by RDA officials, or alternatively, a full refund of their deposited amounts with 18% interest and consideration for alternative plots.

RDA's Defence

Representing the RDA (Respondents No. 2 & 3), Senior Advocate Shri Ashish Shrivastava argued: * An earlier High Court order dated February 8, 2017, had granted the RDA liberty to re-allot the subject plots, which was subsequently done. This order was affirmed by a Division Bench and the Supreme Court. * The alleged undertaking in MCC No. 327 of 2018 did not find a place in the final order disposing of the MCC and therefore had no binding effect. * Petitioners participated in the tender process fully aware of its terms and conditions, including the payment schedule (Clause 12) and the forfeiture provision (Clause 14). * The RDA had supplied the necessary documents and the petitioners were obligated to make payments, which they failed to do despite repeated requests. * The forfeiture of the registration fee was explicitly permitted under Clause 14 of the tender document. * The RDA was willing to refund the amounts deposited by the petitioners excluding the registration fee. For future schemes, petitioners could participate, and their preference would be considered.

Court's Analysis and Rationale

Justice Rakesh Mohan Pandey , after hearing arguments and perusing documents, made several key observations:

One connected petition, WPC No. 641 of 2023, was dismissed as withdrawn.

The petitioners had participated in the auction fully aware of the tender's terms and conditions.

Despite initial payments, they failed to deposit subsequent installments despite notices from the RDA.

The Court highlighted a crucial aspect: "From a perusal of the pleadings and documents, it is also clear that the petitioners have not challenged the orders whereby the registration fee has been forfeited by the RDA and the allotment was canceled." More specifically, the Court later noted, "Since the petitioners have not challenged the conditions of the auction notice (Annexure-P/1), particularly, Clause 14 of the tender document, therefore, in the opinion of this Court, no relief can be granted with regard to the refund of the registration fee."

Regarding the undertaking in MCC No. 327 of 2018, the Court noted that the MCC was finally disposed of by modifying the order of February 8, 2017, only to the extent that the writ petitions would be heard for all reliefs prayed for.

The Court found that the RDA acted within its rights: "Knowing very well the terms and conditions of the auction notice Annexure-P/1, the petitioners participated in the auction and the plots were allotted to them. They deposited some installment(s) and despite repeated requests, they failed to deposit subsequent installments, therefore, in the opinion of this Court, the Raipur Development Authority (RDA) rightly forfeited the registration fee and cancelled the allotment of plots according to clause 14 of the tender document."

The Verdict

The High Court disposed of the batch of writ petitions with the following directions:

Forfeiture Upheld: The RDA's forfeiture of the registration fee (10% of the plot amount) was deemed justified under Clause 14 of the tender document, as the petitioners had defaulted on payments and had not challenged this specific clause.

Refund of Other Deposits: The RDA was directed to refund the remaining amounts deposited by the petitioners (excluding the forfeited registration fee).

Interest Awarded: Considering the significant lapse of time (installments deposited in 2015-16), the Court ordered that "The amount so deposited by the petitioners shall carry interest @ 6% per annum from the date of deposit till the date of its realization." This refund is to be processed preferably within 45 days from the date of the order.

Future Preference: The Court expressed an expectation that if the petitioners participate in any future schemes floated by the RDA, the authorities would give them preference.

Sympathetic Consideration: If the petitioners make any representations for allotment of plots and plots are available with the RDA, such representations are to be considered sympathetically by the authorities.

This judgment clarifies the enforceability of forfeiture clauses in development authority tenders when allottees default, particularly when the specific contractual term allowing forfeiture is not directly challenged. It also balances the authority's rights with a degree of relief for the petitioners by ordering the refund of other deposited amounts with interest.