Bombay High Court
Lodha Developers Limited vs State Of Maharashtra And 4 Ors on 7 January, 2020
Author: Sarang V. Kotwal
Bench: K.K. Tated, Sarang V. Kotwal
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 2737 OF 2015
Macrotech Developers Ltd., ]
a Company registered under the ]
provisions of Company's Act, 1956 ]
having its office at 412, Vardhaman ]
Chambers, Cawasji Patel Street, ]
Fort, Mumbai - 400 023. ] ..Petitioner
Versus
1. State of Maharashtra, ]
through Principal Secretary, ]
Ministry of Urban Development, ]
Urban Development Department, ]
Mantralaya, Mumbai - 400 001. ]
2. Mumbai Metropolitan Region ]
Development Authority ]
a statutory Corporation established ]
under the provisions of Mumbai ]
Metropolitan Region Development ]
Authority Act, 1974 having its ]
office at Bandra Kurla Complex, ]
Bandra (E), Mumbai - 400 051. ]
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3. The Metropolitan Commissioner, ]
Mumbai Metropolitan Region ]
Development Authority at Bandra ]
Kurla Complex, Bandra (E), ]
Mumbai - 400 051. ]
4. The Additional Metropolitan ]
Commissioner - 1, Mumbai ]
Metropolitan Region Development ]
Authority, having his address at ]
Bandra Kurla Complex, Bandra (E), ]
Mumbai - 400 051. ]
5. The Chief, Transport and ]
Communication Division, ]
Mumbai Metropolitan Region ]
Development Authority, ]
Bandra Kurla Complex, ]
Bandra (E), Mumbai - 400 051. ] ..Respondents.
....
Mr. Milind Sathe, Senior Advocate a/w. Ms. Nikita Panse i/b. Veritas
Legal for Petitioner
Ms. G.R.Shastri, Addl. G.P. a/w. Mr. Amit Shastri, AGP for Respondent
No.1 - State.
Ms. Kiran Bhagalia, Advocate i/b. Mrs. Chitra Phadke for Respondent
No.2.
....
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CORAM : K.K. TATED &
SARANG V. KOTWAL, JJ.
RESERVED ON : 17th DECEMBER, 2019
PRONOUNCED ON : 07th JANUARY, 2020
JUDGMENT :[PER SARANG V. KOTWAL, J.]
1. Rule. With consent of the parties, Rule is made returnable forthwith.
2. The Petitioner has approached this Court with a prayer that the order dated 23.12.2014 passed by Respondent No.3, Metropolitan Commissioner, Mumbai Metropolitan Region Development Authority (for short, 'MMRDA'), the demand notice dated 24.6.2015 issued by Respondent No.5, Chief, Transport & Communications Division, MMRDA and internal note dated 27.8.2007 in respect of the proposed fees to be charged for enclosure of balcony in respect of Wadala Truck Terminal be quashed and set aside. The demand notice dated 24.6.2015 issued by Respondent No.5 was based on the impugned order passed by Respondent No.3 on 23.12.2014. The Petitioner is basically challenging the premium directed to be paid for permission to enclose the balconies.
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3. The brief facts involved in this petition are as follows:
. Respondent No.2, Mumbai Metropolitan Region Development Authority (MMRDA) was entitled to develop a plot known as 'Wadala Truck Terminal (WTT)'. MMRDA is a statutory Corporation established under the Mumbai Metropolitan Region Development Authority Act, 1974 (hereinafter referred to as, 'MMRDA Act'). Around March 2010, Respondent No.2-MMRDA issued a tender inviting bids for allotment of WTT plot to be developed in accordance with the applicable laws.
4. According to the Petitioner, in the pre-bid meeting, Respondent No.2 clarified that the provisions of the Development Control Regulations (hereinafter referred to as, 'DCR') for Greater Mumbai would be applicable to the project.
5. After the tender process, Respondent No.2 accepted the bid of the Petitioner and vide letter dated 22.11.2010 allotted WTT plot to the Petitioner on the terms and conditions mentioned in it. On or about 10.1.2011, the Development Plan for WTT plot was sanctioned by the Government of Maharashtra. 4 / 23 5
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6. According to the Petitioner, around May-June 2011, the Petitioner submitted plans to Respondent No.2 for sanction and approval for development of WTT plot. The plans contemplated development of several residential buildings on WTT plot. The plans also provided for balconies in the units of the buildings which were proposed to be enclosed.
7. Vide letter dated 24.5.2011, Respondent No.2 inter alia granted 'in principle approval' to the plans submitted for the proposed residential development work on WTT plot. The relevant Clause for the purpose of this petition, i.e. Clause (iii), reads thus :
"iii. The applicant shall pay development charges, premium for staircase, lift and lift lobbies, premium for columns projected beyond building line, enclosed balcony premium etc. to MMRDA at the time of taking the possession of plot from MMRDA as ensured by applicant in his Undertaking given on 06/05/2011."
8. It was mentioned in the undertaking dated 6.5.2011 given by the Petitioner to Respondent No.4 Additional Metropolitan Commissioner-1, Mumbai, that the Petitioner would make requisite payment for depositing the premiums and 5 / 23 6 wp-2737-15.odt development charges at the time of receiving possession of the plot and when the Petitioner would be able to start the construction.
9. Vide letter dated 22.7.2011, the Petitioner requested MMRDA to allow them to pay certain charges in installments. Those charges included development charges, staircase premium, balcony enclosure premium and external columns. The balcony enclosure premium was quantified at Rs.2,95,24,000/-. According to the Petitioner, the amount was arrived at by calculating premium @ Rs.2,000/- per balcony. The premium @ Rs.2,000/- per balcony was based on the circular issued by the Municipal Corporation of Greater Mumbai (hereinafter referred to as, 'MCGM') on 11.4.2002, which had mentioned that the balcony enslosure fee would be Rs.2,000/- for area of balcony upto 5 sq. mtrs.
10. It is mentioned in the Petition that pursuant to the 'in principle approval' being granted, the Petitioner held several meetings and discussions with the Officials of Respondent No.2 MMRDA with regard to the development of seven residential buildings on WTT plot and also on the issue of Commencement 6 / 23 7 wp-2737-15.odt Certificate. During the discussions, the Petitioner was told that they were liable to pay the balcony enclosure fee @ Rs.20,000/- per balcony admeasuring upto 5 sq. mtrs. It is case of the Petitioner that the Officials of Respondent No.2 agreed to accept the payment of the balcony enclosure fee @ Rs.2,000/- per balcony charged by MCGM and issued Commencement Certificate subject to the Petitioner submitting an undertaking to the effect that the Petitioner would pay the difference in charges, if any, as per the final decision taken by Respondent No.2. Accordingly, the Petitioner submitted an undertaking dated 20.7.2011. Clauses (3) & (4) thereof, which are relevant for the purpose of this Petition, are as follows :
"3) We have represented to MMRDA to recover these charges as per MCGM policies as per the tender conditions. Now on our request, MMRDA has agreed to accept charges as per MCGM policy on provisional basis subject to M/s. Lodha Crown Buildmart Pvt. Ltd.
submitting an undertaking for paying the difference in charges as per the final decision taken by MMRDA with competent sanction as per law.
4) In pursuance of the above we hereby undertake to pay the difference in the above referred charges, if any, required to be paid as per the law as and when the final decision in this regard." 7 / 23 8
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11. It is case of the Petitioner that thereafter there was some correspondence between the Petitioner and Respondent No.2 in respect of the premium which was to be paid. Respondent No.5 vide his letter dated 31.10.2013 (Exhibit-R to the petition) asked the Petitioner to pay the difference in charges of balcony fees with 18% interest per annum as per MMRDA rates amounting to Rs.30,09,76,825/- (upto 14.10.2013) and thereafter interest of Rs.1,10,342/- per day after 14.10.2013.
12. The Petitioner vide their letter dated 11.11.2013 requested Respondent No.2 to recall the above demand made by them. However, this request was not acceded to. The Petitioner thereafter challenged the letter dated 31.10.2013 by way of Writ Petition (Lodging) No.1730/2014 before this Court. During hearing of the said Writ Petition, the learned Counsel for MMRDA made a statement that they would withdraw the demand letters dated 31.10.2013 and 22.7.2014 (reiterating the demand made on 31.10.2013) and would issue a fresh notice and would pass orders in accordance with law after hearing the Petitioner. Accepting this statement, this Court disposed of the petition vide order dated 14.8.2014. 8 / 23 9
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13. After the order was passed in above Writ Petition, in September 2014, the representatives of the Petitioner attended the hearing before Respondent No.3, made oral submissions and filed written submissions. Thereafter, vide order dated 23.12.2014, Respondent No.3 rejected the contention of the Petitioner and upheld the demand made by Respondent No.2 from the Petitioner @ Rs.20,000/- per balcony. It was observed in the order that the fee to be charged for the same was administrative matter and the then Metropolitan Commissioner, MMRDA in his discretion had issued administrative order dated 27.8.2007 specifying the scale of fees which would be applicable. The Petitioner is challenging this order dated 23.12.2014 as well as the demand made by Respondent No.5 on 24.6.2015 pursuant to the order dated 23.12.2014. Vide demand notice dated 24.6.2015, Respondent No.5 called upon the Petitioner to pay the difference in charges of fees for enclosure of balcony with interest @ 18% per annum (upto 20.6.2014) which worked out to be Rs.34,40,87,138/- and per day interest after 20.6.2014 was calculated to the tune of Rs.1,17,591/-.
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14. Respondent Nos.2 to 5 have opposed this Writ Petition by filing affidavit dated 5.7.2019. The affidavit is affirmed by the Planner (A/c) of MMRDA-Respondent No.2. It is mentioned in the affidavit that the Petitioner was well aware of the circular dated 27.8.2007 whereby MMRDA had fixed the rates for charging fees for enclosing balconies in exercise of its powers similar to the exercise of powers of MCGM mentioned in the circular dated 30.4.2002.
15. It is the contention of these respondents in the affidavit that at no point of time, MMRDA had made any representation that the permission for enclosing the balconies would be granted by charging the premium at the same rates as those of MCGM. It was further contended that MMRDA, being a Special Planning Authority, the Metropolitan Commissioner had to take a decision as to the rates of fees payable for such permission and he had decided the same vide circular dated 27.8.2007. It is further stated in the affidavit that the Petitioner had accepted this position and had submitted an undertaking dated 20.7.2011 that the Petitioner would pay the difference between MCGM rates and MMRDA's rates 10 / 23 11 wp-2737-15.odt for enclosing the balconies. It is further mentioned in the affidavit that, Metropolitan Region Authority constituted under the MMRDA Act has delegated administrative powers to Metropolitan Commissioner. It is contended in the affidavit that the Metropolitan Commissioner had levied the fees for enclosure of balconies as a Planning Authority which was permitted under Section 22(m) of the Maharashtra Regional and Town Planning Act, 1966 (hereinafter referred to as, 'MRTP Act').
16. We have heard Shri. Milind Sathe, learned Senior Counsel for the Petitioner and Ms. Kiran Bhagalia, learned Counsel for Respondent No.2.
17. Shri.Sathe submitted that the Metropolitan Commissioner, MMRDA had no power to fix the rates of premium for enclosing the balconies. He submitted that vide letter dated 22.7.2011, the Petitioner had agreed to pay the premium for balcony enclosures @ Rs.2,000/- per balcony. At no point of time, the Petitioner had agreed to make the payment @ Rs.20,000/- per balcony. He specifically relied on the exact wordings of Clause (4) of 11 / 23 12 wp-2737-15.odt the undertaking dated 20.7.2011 in which it was mentioned that the Petitioner had undertaken to pay the difference in the charges, if any, required to be paid as per the law as and when the final decision was taken in that regard. According to Shri.Sathe, this particular undertaking shows that the Petitioner had to pay the charges only if they were required to be paid as per the law. According to Shri.Sathe, since the Metropolitan Commissioner, MMRDA was not empowered to fix the rates for enclosure of the balconies, the Petitioner was not required to pay the charges. He referred to Section 22 (m) of the MRTP Act, and in particular, referred to the amendment made in the year 2010. According to Shri.Sathe only the State Government or the Planning Authority was authorized to provide for imposition of fees, charges and premium at the rate which could be fixed by them.
18. Shri.Sathe referred to the Development Control Regulations, 2010 for Wadala Truck Terminal, Inter State Bus Terminal (I.S.B.T.) and other complimentary activities, amenities and infrastructures facilities at Wadala (hereinafter referred to as 'DCR 2010 for WTT'). He submitted that as per these Regulations, 12 / 23 13 wp-2737-15.odt the balconies were excluded from FSI computation and, therefore, in any case, even for enclosure of balconies no additional premium could be charged by the respondents.
19. Shri.Sathe, in support of his contentions, relied on the judgment of two Division Benches of this Court. The first judgment was in the case of Buildarch, Mumbai and another Vs. Municipal Corporation of Greater Mumbai and others, as reported in 2010 SCC OnLine Bom 778. The second judgment being M/s. Cosmos Realtors Vs. The Municipal Corporation for City of Thane & Anr., passed in Writ Petition No.3991/2014 decided on 6.8.2019.
20. As against these submissions, Ms.Bhagalia submitted that the permission for enclosing the balcony was granted only on the condition of paying the premium. If the Petitioner had not agreed to pay the premium, the permission would not have been granted. According to her, the Petitioner had not only accepted the condition to pay Rs.2,000/- for enclosure of each balcony, but, they had also undertaken to pay the difference in rates which was to be fixed subsequently. According to her, when the rates were fixed at Rs.20,000/- per balcony, the Petitioner could not have refused to 13 / 23 14 wp-2737-15.odt pay the balance amount of the difference between the two rates. She submitted that the liability of the Petitioner was a contractual liability and the Petitioner could not have refused to fulfill their obligation. She submitted that enclosing balconies practically increases the usable area of the flats and, therefore, in a prime locality, the Petitioner could not have taken advantage of the additional area without paying the charges.
21. Ms.Bhagalia relied on the judgments of the Hon'ble Supreme Court in the case of Illa Roy Chowdhury Vs. Shyamali Das and others, as reported in (2008) 14 SCC 790, in the case of R.N. Gosain Vs. Yashpal Dhir, as reported in (1992) 4 SCC 683 and in the case of Food Corporation of India and another Vs. Ram Kesh Yadav and another, as reported in (2007) 9 SCC 531.
22. We have considered the rival submissions. In the DCR 2010 (WTT), areas of balconies are excluded from FSI computation. It is provided under Rule 11.2(k) of the said Regulation. Another important provision in this connection is Section 22(m) of MRTP Act, which reads thus :
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wp-2737-15.odt "22. Contents of Development Plan : A Development plan shall generally indicate the manner in which the use of land in the area of a Planning Authority shall be regulated, and also indicate the manner in which the development of land therein shall be carried out. In particular, it shall provide so far as may be necessary for all or any of the following matters, that is to say,--
xxxx xxxx xxxx
(m) provisions for permission to be granted for controlling and regulating the use and development of land within the jurisdiction of a local authority including imposition of fees, charges and premium, at such rate as may be fixed, by the State Government or the Planning Authority, from time to time, for grant of an additional Floor Space Index or for the special permissions or for the use of discretionary powers under the relevant Development Control Regulations, and also for imposition of conditions and restrictions in regard to the open space to be maintained about buildings, the percentage of building area for a plot, the location, number, size, height, number of storeys and character of buildings and density of population allowed in a specified area, the use and purposes to which buildings or specified areas of land may or may not be appropriated, the sub-division of plots the discontinuance of objectionable users of land in any area in reasonable periods, parking space and loading and unloading space for any building and the sizes of projections and advertisement signs and boardings and other matters as may be considered necessary for carrying out the objects of this Act."
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wp-2737-15.odt . This provision clearly mentions that the rates of fees, charges and premium can be fixed only by the State Government or the Planning Authority for grant of an additional FSI or for the special permissions and for the use of discretionary powers under the relevant DCR.
23. Shri.Sathe rightly relied on the judgment of a Division Bench of this Court in the case of Buildarch, Mumbai (supra). It was contended on behalf of the petitioners in that case that the power conferred on the Commissioner under DCR 35(2)(c) to exempt areas set out therein does not confer power on the Commissioner to charge premium or fee. This argument was opposed with the contention that the Regulation 35 empowered the Commissioner to impose necessary conditions as he deemed fit, which would mean that the Commissioner had the power to charge premium under the DCR.
. In consideration of these submissions, the Division Bench relied on the judgment of this Court in the case of Amit Maru Vs. State of Maharashtra in PIL No.94/2008 and also on the judgment of Hon'ble Supreme Court in the case of Ahmedabad Urban 16 / 23 17 wp-2737-15.odt Development Authority Vs. Sharadkumar Jay Antikumar Pasawalla, as reported in (1992) 3 SCC 285. The Division Bench emphasized the observations made in these judgments that the power of imposition of tax and/or fee, by delegated authority must be very specific and there was no scope of implied authority in imposition of such tax or fee and that the delegated authority must act strictly within the parameters of authority delegated to it under the Act. It was further observed that it would not be proper to bring the theory of implied intent or the concept of incidental and ancillary power in the matter of exercise of fiscal power. In the operative part of the decision, it was specifically declared that in the absence of any express provisions in the Act or regulations, the respondents in the case before the Division Bench, had no power and/or authority to levy, charge, demand or collect any premium or amounts by whatever name under the concerned DCR, for grant of special permission by the Commissioner.
24. In the case in hand before us, the respondents could not show any express authority conferred on the Metropolitan Commissioner to charge premium for enclosure of balconies 17 / 23 18 wp-2737-15.odt though there is a reference to delegation of administrative powers to the Metropolitan Commissioner. The reasoning and conclusion in the case of Buildarch, Mumbai (supra) is squarely applicable to the instant case.
25. Shri.Sathe also relied on the decision of this Court in M/s. Cosmos Realtors (supra). The Division Bench in that case considered the effect of a condition in the agreement vis-a-vis the provisions in the Statute. One of the conditions in the agreement was that the developer had to hand over amenity plot to the Thane Municipal Corporation and the amenity was to be developed free of cost. In the Commencement Certificate a condition was laid down by the Thane Municipal Corporation that the developer had to develop the amenity on the amenity space, as directed by the Corporation, free of cost and it was to be handed over to the Corporation. The developer had submitted an undertaking, which mentioned that, the developer undertook to develop the amenity as Senior Citizen's Club and Park as per the plans submitted and to hand it over to the Thane Municipal Corporation free of costs but in lieu of TDR. Thane Municipal Corporation, in that case, 18 / 23 19 wp-2737-15.odt contended that in view of the permission granted for development, the Petitioner was not entitled to claim the TDR. It was held by this Court that the right to claim the additional FSI or Transferable Development Rights in terms of Section 126(1)(b) of MRTP Act was a distinct right and it could not have been defeated merely by imposing conditions while granting Commencement Certificate or by an agreement. Thus, the Division Bench had given effect to the statutory provisions.
26. In any case, in the instant case, the Petitioner had never agreed specifically for making payment at the rate of Rs.20,000/- per balcony enclosure. The undertaking to that effect was clearly worded that the difference in the charges would be paid as per the law.
27. Ms. Bhagalia, on the other hand, strenuously urged that the Petitioner could not back away from their contractual obligation. For this purpose, she relied on the judgment of Food Corporation of India (supra). In that case, an employee of Food Corporation of India (for short, 'FCI') had made an application for conditional voluntary retirement on medical grounds, subject to 19 / 23 20 wp-2737-15.odt appointment of his son in his place. The application specifically stated that he desired to go on retirement on medical ground if his son was provided employment in his place. Hon'ble Supreme Court held that once the FCI unconditionally accepted the offer, it could not avoid performance of the condition subject to which the offer was made particularly when nothing prevented FCI from rejecting the application of the employee outright or refusing to accept the condition.
28. Ms. Bhagalia, therefore, submitted that once having accepted the condition to make the payment of difference in the rates, the Petitioner can not refuse to fulfill that condition. For a similar proposition, she relied on the judgment in the case of Illa Roy Chowdhury (supra).
29. We have carefully considered her submissions on this issue. However, in the undertaking dated 20.7.2011, the Petitioner had nowhere accepted the rate of Rs.20,000/- per enclosure of balcony. It was specifically mentioned that the Petitioner undertook to pay the difference in the charges, if any, required to be paid as per the law. Therefore, in the instant case, the 20 / 23 21 wp-2737-15.odt respondents have not crossed the first hurdle to show as to how the Metropolitan Commissioner of MMRDA was empowered to charge any premium, and in particular, premium @ Rs.20,000/- per balcony.
30. Ms. Bhagalia submitted that after having taken advantage of the Commencement Certificate and the condition mentioned therein, the Petitioner cannot say that they will not abide by this condition. In this context, it is important to note that the Petitioner, at the first instance has accepted to make the payment @ Rs.2,000/-. In the petition, the Petitioner is not claiming the refund of the charges paid by them at that rate. The Petitioner's objection is to the enhanced rate at Rs.20,000/- per balcony. This specific condition of payment at Rs.20,000/- per balcony enclosure was neither imposed on nor was accepted by the Petitioner specifically when the Commencement Certificate was granted and, therefore, it cannot be said that the Petitioner has taken wrong advantage of the Commencement Certificate.
31. Ms. Bhagalia also relied on the judgment in the case of R.N. Gosain (supra). In the said judgment, it is held that a person 21 / 23 22 wp-2737-15.odt is not permitted to both approbate and reprobate. It is held that a person cannot say at one time that a transaction is valid and thereby obtain some advantage, to which he could only be entitled on the footing that it is valid, and then turn round and say that it is void for the purpose of securing some other advantage. In the instant case, however, the Petitioner has not taken contradictory stands at different points of time. The petitioner's consistent case was that they were willing to pay the difference in rates if it was in accordance with the law. Shri Sathe has emphasized that the Petitioner had not asked for refund of the amount which was deposited @ Rs.2,000/- per balcony. Therefore, the Petitioner has not gone to the extent of saying that acceptance of the amount @ Rs.2,000/- per balcony was void.
32. Based on the above discussion, we are of the considered view that this Petition deserves to be allowed as mentioned in following operative part. Though the Petitioner has also prayed for quashing and setting aside the internal note dated 27.8.2007 whereby enhanced fees for enclosure of the balcony was proposed, for the purpose of deciding the present Petition it is not necessary 22 / 23 23 wp-2737-15.odt to pass any order in respect of the said internal note. Hence, the following order :
(i) The impugned order dated 23.12.2014 passed by Respondent No.3 and the demand notice dated 24.6.2015 issued by Respondent No.5, as mentioned in prayer clause
(a), are quashed and set aside.
(ii) Rule is made absolute in the aforesaid terms.
(iii) No order as to costs.
(SARANG V. KOTWAL, J.) (K.K. TATED, J.) Pradeepkumar P. Deshmane Digitally signed by Pradeepkumar P. Deshmane Date: 2020.01.07 14:37:08 +0530 Deshmane (PS) 23 / 23