Gujarat High Court Vacates Stay on Auction of Shops Built in Residential Housing Project at Rajkot, Citing Valid Development Permission
Sanchayita Lahkar
The Gujarat High Court Single Bench of Justice Mauna M. Bhatt has lifted an earlier interim stay on the planned auction of commercial shops within the Rangoli Park Apartments in Rajkot. The stay, imposed on August 26 to halt the auction set for August 28, was vacated after the Court found the development permission granted in 2015 covered both residential and commercial construction. Noting that the petitioners, who opposed the auction, had already accepted possession of their residential units in 2017 when the shops were in place, the Court held that the auction could proceed as the construction conformed to statutory limits.
The dispute arose from the construction and proposed auction of commercial shops within the residential complex known as Rangoli Park Apartments in Rajkot, developed by the Gujarat Housing Board under the Mukhya Mantri Gruh Awas Yojna. The petitioners, purchasers of self-financed residential units in the project, challenged the construction of these shops and sought to restrain their auction, asserting that the project was meant exclusively for residential use.
The petitioners contended that the housing scheme under which they acquired their units was not an affordable housing project and therefore did not permit commercial construction. They relied on the non-agricultural use permission granted by the Collector, which was restricted to residential development, as well as on the project brochure circulated in 2014. They also referred to a 2017 reply received under the Right to Information Act to argue that the inclusion of commercial shops violated the scheme’s terms.
The Gujarat Housing Board countered that the land remained in its ownership and the petitioners held only leasehold rights over their individual units. The Board relied on the development permission obtained from the Rajkot Urban Development Authority in 2015 and the subsequent building-use permission, both of which sanctioned residential and limited commercial construction. It pointed to the affordable housing policy of 15 January 2014, which allows commercial development up to 10 per cent of the total area or as permitted under local General Development Control Regulations, whichever is higher.
Evidence before the Court included the project brochure, conveyance deeds, development permission, building-use permission, and the policy framework governing affordable housing.
The Court recorded: “It is noticed that the applications were invited for application in the year 2014 and thereafter, the development permission dated 25.05.2015 was sought by Housing Board from RUDA in the year 2015. The said permission refers to residential as well as commercial construction. It is not the case that construction was done beyond the development permission.”
The Court further observed: “Moreover, it cannot be ignored that the applicants – original petitioners had taken possession of the dwelling units in the year 2017 and they are residing since then. The shops were constructed along with dwelling units and when Building Use permission was granted to the applicants – original petitioners, the shops were in existence.”
On the argument regarding the applicability of the affordable housing scheme, the Court stated: “Under affordable housing policy dated 15.01.2014, this Mukhya Mantri Gruh Awas Yojna was developed by the Housing Board which permits commercial construction to the extent of 10% of the total construction or as per the local GDCR provisions whichever is higher.”
Addressing the lack of evidence regarding excess commercial construction, the Court recorded: “In this case, no evidence is produced that the construction is beyond 10% as permissible under the policy dated 15.01.2014. Therefore, the submission canvassed on behalf of the applicants – original petitioners that since they are having the self-financed scheme, the commercial construction is not permissible does not merit acceptance.”
Justice Mauna M. Bhatt ordered: “In view of forgoing reasons the stay granted not to auction the commercial shops under order dated 26.08.2025 stands vacated forthwith.”
The Court disposed of the Civil Application seeking restraint against the auction of commercial shops and directed that the main Special Civil Application No. 17817 of 2018, along with Civil Application No. 1 of 2019, be listed for further hearing on October 9, 2025.
Advocates Representing the Parties
For the Petitioners: Ms. P. J. Joshi, Advocate
For the Respondents: Mr. G. H. Virk, Government Pleader with Mr. Simranjitsingh H. Virk, Advocate and Ms. Nency P. Sheth, Advocate; Mr. G. H. Virk, Government Pleader with Ms. Dharitri Pancholi, Assistant Government Pleader; Mr. Devang Bhatt, Advocate for Mr. H. S. Munshaw, Advocate; Mr. Nishant Lalakiya, Advocate
Case Title: Rajsinhbhai Chhaganbhai Kadchha & Anr. v. State of Gujarat & Ors.
Case Number: R/Special Civil Application No. 17817 of 2018 with Civil Applications Nos. 1 of 2019 and 1 of 2024
Bench: Justice Mauna M. Bhatt
