Court rules against forfeiture clause in plot auction, orders refund, imposes costs to deter future actions

The Court ruled against the forfeiture of the amount deposited by the petitioner in an auction for plot allotment, deeming the forfeiture clause illegal due to the absence of a specific provision. While the petitioner's actions were considered unreasonable, costs were imposed on them to balance equities. The remaining amount was ordered to be refunded within six months to deter similar actions in the future, emphasizing the importance of judicial review in preventing arbitrariness in contractual dealings by government bodies.

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Issues involved:
The petitioner challenged the forfeiture of the amount deposited by him after participating in an auction for plot allotment, questioning the legality of the action u/s Article 226/227 of the Constitution of India.

Details of the Judgment:

Forfeiture of Amount:
The petitioner participated in an auction, deposited a sum at the fall of hammer, and another amount later. Upon requesting a refund due to concerns about infrastructure and project feasibility, a show cause notice for balance payment or forfeiture was issued. The petitioner argued against forfeiture, stating that no provision allowed it without issuance of the letter of intent or allotment letter. The respondents contended that the matter was contractual and not within the Court's jurisdiction u/s Article 226/227. The Court referred to various judgments, including Yogesh Mehta case and CWP No.23204 of 2010, emphasizing the Court's power to adjudicate such matters.

Legal Precedents:
The Court cited the Century Spg. And Mfg. Co.Ltd. case, ABL International Ltd. case, and Noble Resources Ltd. case to establish that a writ petition is maintainable even in contractual matters if violative of constitutional provisions. The Court highlighted the importance of judicial review to prevent arbitrariness in contractual dealings by government bodies.

Decision and Rationale:
The Court found no clause for forfeiture in the auction proceedings without a specific provision. Referring to the Division Bench's observations, the Court deemed the forfeiture clause illegal and struck it down. While the petitioner's action was deemed unreasonable, the respondents' unease was acknowledged. To balance equities and deter such actions, the petitioner was burdened with costs, and the remaining amount was to be refunded within six months.

Conclusion:
The Court disposed of the case, ruling against the forfeiture of the amount but imposing costs on the petitioner to settle equities and discourage similar actions in the future.

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