Writ Jurisdiction Not Maintainable to Adjudicate Fraud or Coercion Claims Arising From Full and Final Settlement Agreements.

In brief

The question

1. Whether the High Court should exercise its writ jurisdiction under Article 226 of the Constitution to adjudicate a dispute arising from a settlement memorandum alleged to be signed under coercion

The court held

the Court answered that writ jurisdiction is not the appropriate remedy for disputes involving signed settlements and allegations of coercion

It also directed

The Division Bench upheld the Single Judge's order, finding no infirmity in the decision to relegate the parties to a Civil Court. The Appeals were dismissed, while preserving the Appellants' liberty to pursue alternate remedies (such as a civil suit) where evidence can be led regarding the alleged fraud or coercion

01Facts

The Appellants, retired Government employees, booked apartments in the ‘NBCC Green View Apartments’ project in 2012 and received possession in 2017-2018

p. 3

In 2021, IIT Delhi declared the structures unsafe for habitation

p. 3

Consequently, the District Disaster Management Authority (DDMA) ordered Respondent No. 1 (NBCC) to refund the total consideration with interest

p. 3

Although NBCC initially promised a uniform settlement policy, it subsequently issued a ‘Buy Back Offer’ for principal amounts only

p. 4

Facing financial hardship and cessation of rent payments by NBCC, the Appellants executed an ‘Acceptance-cum-Declaration Memorandum’ (Memorandum) as a "One-Time Full and Final Settlement"

p. 5

Later, NBCC offered other allottees the option of re-allotment in a reconstructed project

p. 5

The Appellants filed Writ Petitions seeking parity and re-allotment, which were dismissed by the learned Single Judge on the grounds that the dispute was contractual and involved disputed questions of fact regarding coercion

p. 6

02Issues

i.1. Whether the High Court should exercise its writ jurisdiction under Article 226 of the Constitution to adjudicate a dispute arising from a settlement memorandum alleged to be signed under coercion

p. 8, para 25 · p. 10, para 31

ii.2. Whether the Appellants, having accepted a full and final settlement, can challenge a subsequent policy change as being discriminatory and arbitrary

p. 9, para 29 · p. 10, para 30

03Law Applied

The Court applied the principles of Article 226 of the Constitution of India regarding the discretionary nature of writ jurisdiction

p. 7, para 18

It relied on the settled doctrine that writ courts generally do not adjudicate "disputed questions of fact," particularly allegations of fraud or coercion in the execution of private contracts

p. 6, para 17 · p. 10, para 31

The Court further considered the principle of "Full and Final Settlement," whereby a party who voluntarily accepts a settlement is precluded from resiling unless the underlying agreement is proved to be vitiated by law

p. 9, para 27

Provisions in the judgment · 1 · Linked ones open on LawLens

Limitation Act, 1963 Section 5

04Reasoning

The Court reasoned that once the Appellants executed the Memorandum and accepted the settlement amount, the relationship became primarily contractual

pp. 8-9

The Appellants did not protest or allege coercion immediately after receiving payment; grievances only arose after NBCC introduced a more favorable policy for other residents

p. 9, para 29

The Court held that to challenge NBCC’s subsequent "Uniform Settlement Policy" or claim "Promissory Estoppel," the Appellants must first invalidate the initial Memorandum

p. 10, para 31

Determining whether the Memorandum was signed under "helplessness" or "coercion" requires an examination of evidence, which is outside the scope of summary writ proceedings

p. 10, para 31

The Court found that the Respondents’ status as "State" does not automatically convert a dispute over a signed settlement into a constitutional matter if the underlying facts regarding the validity of that settlement are contested

pp. 9-10