Gujarat High Court Vacates Stay On Auction Of Shops Constructed In Residential Area In Rajkot Citing Grant Of Development Permission
LIVELAW NEWS NETWORK
30 Sept 2025 8:45 PM IST
The Gujarat High Court recently vacated its earlier order staying a proposed auction for sale of commercial shops constructed in residential premises known as Rangoli Park Apartments in Rajkot.
For context, the court had on August 26 directed the Gujarat Housing Board not to auction the commercial shops scheduled on August 28. Vacating the stay the court noted that the development permission pertained to construction for both residential and commercial units and when the possession of units was taken by the petitioners–who had challenged such construction–in 2017 the shops were in existence.
The court also observed that there was no evidence brought on record to show that the commercial construction was more than the percentage permissible under the Mukhya Mantri Gruh Awas Yojna (scheme).
Justice Mauna M Bhatt in her order noted that the petitioners had applied and were allotted dwelling units after payment of requisite charges. Petitioners had argued that Gujarat Housing Board has constructed the commercial shops beyond plan and brochure given and commercial shops were constructed in parking allotted to the petitioners.
Accordingly, the Court had earlier considered grant of stay against the auction which was to be held on August 28.
"However, from the submissions canvassed and the documents on record 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 (Rajkot Urban Development Authority) in 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. 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," it said.
The court noted that under the affordable housing policy dated 15.01.2014, the 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 General Development Control Regulations provisions whichever is higher.
"Further, 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 and therefore, 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 said.
The petitioners argued that Rangoli Park were constructed under the Mukhya Mantri Gruh Awas Yojna which is a self-finance scheme under which the applicants – original petitioners were directed to pay the amount and this is not the affordable housing for which commercial construction is permissible.
It was submitted that in affordable housing scheme commercial construction to the extent of 10% of total area is permissible which is not the case here and only residential construction is permitted.
Despite that the respondent – Gujarat Housing Board had constructed the commercial shops which is beyond the permission granted by the Collector and therefore also the auction of shops is to be restrained.
The State authority argued that Building Use permission granted by the Rajkot Urban Development Authority (RUDA) refers to permission of residential as well as commercial units for the subject premises. It was argued that the petitioners had not contended that the construction was done beyond the development permission.
Case title: RAJSINHBHAI CHHAGANBHAI KADCHHA & ANR. v/s STATE OF GUJARAT & ORS