Bombay High Court
Amit Maru vs State Of Maharashtra on 10 June, 2010
Author: Ferdino I. Rebello
Bench: Ferdino I. Rebello, A.A. Sayed
1
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IN THE HIGH COURT OF JUDICUATURE AT MUMBAI
ORDINARY ORIGINAL CIVIL JURISDICTION
PUBLIC INTEREST LITIGATION NO. 94 OF 2008
1. Amit Maru,
Structure No. 22, Opp. Block No. 4/5,
Bhanjibhai Rathod Marg,
Tardeo Tulsiwadi, Mumbai 34.
2. Arun Nathuram Gaikwad,
523/7, Fernandes Chawl,
New Mill Road, Kurla West,
Mumbai 400 070. ... Petitioners
Versus
1. State of Maharashtra,
through the Secretary,
Urban Development Department,
Mantralaya, Bombay 400 012.
2. The Commissioner,
Municipal Corporation of Greater Mumbai,
Mahapalika Marg,
Mumbai 400 001. ... Respondents
WITH
WRIT PETITION NO. 2443 OF 2008
1. M/s. D.B.S. Realty,
a registered firm registered under the
provisions of the Indian Partnership
Act, 1932, and having its registered
office at Gen. A.K. Vaidya Marg,
Goregaon, (East), Mumbai.
Versus
1. The State of Maharashtra,
through Government Pleader, 1st Floor,
P.W.D. Building.
2. The Secretary, Government of
Maharashtra, Urban Development Department,
Mantralaya, Mumbai 400 032.
3. Municipal Corporation of Greater
Mumbai having its office at
Mahanagarpalika Building,
::: Downloaded on - 09/06/2013 15:59:47 :::
2
Mumbai 400 001. ... Respondents
Mr. Mukul Rohatgi Sr. Counsel with Mr. Mahesh Agarwal and Mr. Kiran
Bhalerao i/by Mr. K.P. Bhalerao for the petitioners in PIL 94 of 2008.
Mr. D.D. Madon, Sr. Counsel with Mr. C.S. Balsara and Mr. Mohamed
Himayatulla, i/by Negandhi Shah & Himayatulla for Petitioners in W.P. No.
2443 of 2008.
Mr. Ravi Kadam, Advocate General with Mr. D.A. Nalawade, Government
Pleader and Mr. N.P. Deshpande, A.G.P. For State in all matters.
Mr. K.K. Singhvi, Senior Counsel with Ms. S.A. Module for B.M.C. In all
matters.
Mr. Janak Dwarkadas, Senior Counsel with Mr. Pravin Samdani, Senior
Counsel, Mr. Rahul Dwarkadas, Mr. Nevelle Mukherji and Ms. Brigitta John
and Rhea Marshal i/by M/s. Wadia Gandhy & Co. for the intervenor - MCHI
in PIL No. 94 of 2008.
Mr.Yogesh Adhia for Applicant in Ch/s. No. 134 of 2008 in PIL No. 94 of
2008.
Mr. Robert C. Sequeira for Applicant in Ch/s. No. 81/10 in PIL No. 94 of
2008.
Mr. Pravin Samdani, Sr. Counsel, Mr. Nevelle Mukherji i/by M/s. Wadia
Ghandy & Co. for Intervenors - MCHI In W.P. No. 2443 of 2008.
CORAM : FERDINO I. REBELLO &
A.A. SAYED, JJ.
DATED : JUNE 10, 2010 Oral Judgment (Per Ferdino I. Rebello,J.):
Rule in the Petitions. Respondents waive service. With consent of parties and as the pleadings have been completed and as per directions of the Supreme Court, these petitions are being heard and finally disposed of.
2. In both the petitions, there is challenge to the following Notifications.
::: Downloaded on - 09/06/2013 15:59:47 ::: 3Notification dated 10.4.2008 issued under section 37(1) read with Section 154 of the Maharashtra Regional and Town Planning Act, 1966 (hereinafter referred to as MRTP Act) proposing amendments to D.C. Regulation 32 and a direction bringing it into force. The State Government immediately then issued another notification dated 11.7.2008 in purported exercise of its powers under Section 37(1)(A) of the M.R.T.P. Act. Subsequent thereto a notification has been issued on 3.10.2008 sanctioning the modification to Regulation 32 of the Development Control Regulation for Maharashtra 1991 under Section 37(2) which hereinafter shall be referred to as the impugned regulation.
For the purpose of deciding the questions which arise the averments in PIL are being set out. The averments in Writ Petition No. 2443 of 2008 will be referred to the extent that they are not set out in PIL No. 94 of 2008 and are required.
3. The Petitioners in PIL have averred that they are engaged in various social activities and are associated with various social service organizations.
They have in the past undertaken various activities relating to lives of citizens, amenities and infrastructural facilities in Greater Mumbai, functioning of Municipal Corporation of Greater Mumbai, functioning of State Government particularly Urban Development Department and other legal issues. They have ventilated such grievances by various modes including ::: Downloaded on - 09/06/2013 15:59:47 ::: 4 taking recourse to legal measures as provided under law. Issues raised by the Petitioners have been set out. The Petition was originally filed to impugn the notification dated 10.4.2008 by the Government of Maharashtra for increasing the Floor Space Index (FSI) in the suburbs of Mumbai from 1 to 1.33 in the purported exercise of powers under section 37(1) along with section 154 of the M.R.T.P. Act. The Petition was thereafter amended to challenge the notice issued by the State Government under section 37(1)(A) of the M.R.T.P. Act. The petition thereafter was also amended to impugn the notification dated 3.10.2008 under section 37(2) of the M.R.T.P. Act.
4. It is not necessary to consider the challenge to notification dated 10.4.2008 or the purported exercise of powers under section 154 of the M.R.T.P. Act, as apart from the fact that no arguments have been advanced, the State Government has issued notification of 3.10.2008 in exercise of its powers under section 37(2) which brings into force the amendment to D.C. Regulation 32 and that notification is also the subject matter of the challenge in the present petitions.
4. By the impugned notification the Floor Space Index (FSI) in the suburbs and extended suburbs of Mumbai has been increased on the respective plots from 1 to 1.33. It is the case of the Petitioners that FSI is part of the development plan prepared under section 22 of the M.R.T.P. Act. Section 37 provides for only minor modifications. The increase of FSI from 1 to 1.33 amounts to a major modification which can only be done if the entire development plan is prepared afresh. The ::: Downloaded on - 09/06/2013 15:59:47 ::: 5 Petitioners contend that in this process the entire infrastructure in the suburbs shall get crushed. The amendment has been made by State Government to increase FSI on erroneous grounds. FSI and TDR in the suburbs is already 2 because of the provisions of distribution of TDR. Factually FSI in the suburbs is 1 and it can go upto 2, only if TDR is used. The TDR is created primarily on account of surrender of land in open areas, city parks etc. The said TDR generates FSI and simultaneously reduces built up area in another place. Thus there is no gross increase in the built up area. The FSI can go upto 2 provided there is enough TDR.
Even if the entire TDR potential is used, in the suburbs there would be increase just by a small fraction as there is not sufficient TDR to be used. The increase in FSI has been done for revenue consideration which is contrary to the spirit of M.R.T.P. Act. The FSI is part of development plan and the same is not prepared for considerations of earning revenue. The development plan is prepared for town planning, city and civic infrastructure and the exigencies related therewith. As the Town planning scheme is prepared keeping in mind technicalities and the imperatives of urban planning, the element of earning revenue by selling FSI defeats the primary objective of this statutory procedure and provisions with reference to development plan.
6. This court, it is set out, in Janhit Manch Vs. State of Maharashtra 2007 BCR 329, has whilst allowing user of Transferable Development Rights (TDR) in the corridor area of suburbs, which was not previously allowed, has allowed it subject to certain restrictions and with a hope that the process for new Development Plan will commence in 2008 and the plan will come into force by 2011. By way of ::: Downloaded on - 09/06/2013 15:59:47 ::: 6 infrastructure, basic amenities such as roads, recreation grounds, gardens and other civil facilities are the right of every individual in the country which right is enshrined under Article 21 of the Constitution of India. The impugned notifications are violative of the right under Article 21 of the Constitution of India.
7. During the pendency of the petition, a notification was issued dated 11.7.2008 inviting suggestions/objections from the general public within the period of one month from the date of publication in the official gazette. The Deputy Director of Town Planning, Greater Mumbai was appointed Officer under Section 162 of the M.R.T.P. Act to hear suggestions/objections on the notification and submit a report to the Government. The notification states that the Government had issued directions to the Municipal Corporation of Greater Mumbai to initiate modification in Regulation No. 32 of the Development Control Regulations and the Corporation had failed to publish the notice within the stipulated period of 90 days and consequently in purported exercise of powers vested under section 37(1A) of M.R.T.P. Act suggestions/objections were invited from the general Public. The legality and validity of the said notice is also challenged.
8. By a further amendment of the Petition, it is set out that consequent to the notice issued and, suggestions/objections received, such parties were given hearing by the Director of Town Planning, who has submitted his report to the State Government on 12.9.2008 and after considering the said report and on consulting with Director of Town Planning the Government had sanctioned the said amendment with certain modifications as spelt out in the gazette notification of 3.10.2008. It is ::: Downloaded on - 09/06/2013 15:59:47 ::: 7 contended that the notification amounts to changing the character of the development plan and as such could not have been effected under section 37 of the M.R.T.P. Act. The notification is thus ultra vires section 37 of the M.R.T.P. Act.
9. The Notification dated 3.10.2008 it is set out suffers from arbitrariness on the part of the Government inasmuch as the Government inspite of pendency of the petition and inspite of various grounds of challenge to the earlier notification, proceeded further and allowed and permitted modification to the D.C. Regulations in undue hurry. The alarming anxiety and eagerness of the Government to act with undue haste with a pre determined decision and settled mind is also expressly evident from the fact that the publication of the notification dated 11.7.2008 was made immediately on the 91st day of the expiry of the notification dated 10.4.2008. The notification dated 3.10.2008 is violative of Article 14 of the Constitution of India.
Inspite of the Municipal Corporation having not published the notice and various corporators having raised various objections to the notification dated 10.4.2008, the Government issued notification on 3.10.2008 unreasonably and in an arbitrary manner ignoring all objections. The Government ought to have waited for making such wholesale replacement of FSI. The same amounts not only modification to the development plan but also changes the character of development plan. As it does not contemplate to add or reduce that which already existed in the final plan but instead seeks to add something that never existed and hence, outside the scope of section 37.
10. The action of the Government on the eve of expiry of present development plan and D.C. Regulations, when in fact the process of review of the new ::: Downloaded on - 09/06/2013 15:59:47 ::: 8 development plan and the new DC regulations should be started and on face of said interim Order, in fact, is in the nature of attempt of over-reaching this Hon'b le Court and amounts to unreasonable exercise of delegated legislation by the Government under the M.R.T.P. Act and such exercise/abuse of power is also violative of Article 14 of the Constitution of India. The notification totally failed to take into consideration the impact on the environment in the city of Mumbai and thereby affecting the already overburdened infrastructure and consequently has put into jeopardy the life of citizens of Mumbai.
11. It is submitted that giving hearing to the public and inviting suggestions/objections is not an empty formality. The invitation for suggestions/objections and particularly of such far reaching changes of final plan ought to have been given wide publicity and the Government would also be liable to give sound and cogent reasons for not considering the objections raised and must satisfy the court that there has been due application of mind and substantial grounds to reject the suggestions/objections. The impact on the environment in the city of Mumbai by way of environmental analysis ought to have been considered by an Environment Impact Study undertaken by the Government before considering the modifications. The manner in which action has been undertaken by the Government by allowing the modification and such modification allowed in a summary manner without Environment Impact Study or Analysis by the Government, appears to be an empty formality and an eye wash. The notifications are for financial consideration and receiving premium as largesse to Developers and Builders and calculated at highly discounted rates for the proposed 0.33% increase in the FSI. The contention ::: Downloaded on - 09/06/2013 15:59:47 ::: 9 that premium is to be collected ostensibly for infrastructure development is not substantiated by mode of distribution contemplated in the schedule. Even assuming that the same is considered, still allowing wholesale change in the character of development plan would be arbitrary. The notification also suffers from being violative of Article 21 of the Constitution of India as it has effect on the right to quality life and proper infrastructure.
12. In W.P. No. 2443 of 2008 similar challenges have been raised. The Petitioners in that petition when was first filed, had raised objection that the State Government under Section 154 of the M.R.T.P. Act has no power to impose any tax or premium including by amending D.C. Regulations, 1991 by charging premium for sale of 0.33 FSI and any such direction was illegal and ultra vires the provisions of M.R.T.P. Act, 1996. Pursuant to the notification of 3.10.2008 it is sought to be contended that the notification of 3.10.2008 is ultra vires M.R.T.P. Act and powers vested therein. It was also set out that the notifications are issued with a view to generate funds by sale of 0.33 FSI but without power vested in them. No impact assessment was carried out nor environment and other requirements in the matter of infrastructure were taken into consideration.
In the Petition as originally filed it was set out that the amendment permitted higher FSI in the Eastern and Western suburbs on payment of highly discounted premium, thereby rendering the said secured market for sale of slum TDR, FSI diluted or taken away from such owners/developers who had already transfered their property to the SRA and/or by constructing Slum Rehabilitation tenements at ::: Downloaded on - 09/06/2013 15:59:47 ::: 10 huge costs by availing benefit of FSI in lieu thereof for sale in the open market. The developers of Slum Rehabilitation schemes had come forward and undertaken redevelopment projects which State was unable to do, relying on the policy of respondent No. 1 and its assurances that the TDR generated from such redevelopment will be utilized by other property owners/developers in the Eastern and Western suburbans on account of the scheme of D.C.R. 1991. The scheme is valid till 2010. By the impugned notification respondent No. 1 state has not only resiled from the aforesaid promises and assurances and statutory commitments to the slum developers, but in fact, intends to become "dealer" or "trader" of FSI and make profits by driving TDR holders out of the market and take over such business from them.
13. The challenges raised by the Petitioners can be summarized as under :
(1) The amendment amounts to change in the character of the plan and therefore, could not have been sanctioned under Section 37 of M.R.T.P. Act.
(2) Due procedure was not followed in carrying out the amendment considering the provisions of section 37 of the M.R.T.P. Act. It was not open to the State Government to bypass the Planning authority whose opinion is essential and mandatory in making alterations in the development plan.
(3) The development plan could not have been amended without infrastructure assessment considering the effect it has on the infrastructural facilities thereby affecting the quality of life and consequently are ultra vires Article
14 and 21 of the Constitution.
::: Downloaded on - 09/06/2013 15:59:47 ::: 11(4) Whether an amendment can be done in the development plan only to augment financial resources and whether the State Government has legal authority to charge premium for the sale of 0.33 FSI without such action being sanctioned by authority of law and whether such amendment is ultra vires to the provisions of M.R.T.P. Act.
14. Replies have been filed on behalf of the Corporation which is the Planning Authority and the State Government. On behalf of the Corporation, an affidavit has been filed by Mr. Ashok T. Shintre before the notification of 3.10.2008. It however, deals with various aspects of the issue. It is contended that PIL Petition appears to have been filed at the behest of cartel of builders/developers as public interest Litigation with mala fide intention as it is only this group whose interest will be affected by the impugned notification. The cartel of builders/developers are today holding around 48% of the Slum TDR which is exorbitant. The existence of cartel is reflected in the difference in the price on one hand of slum TDR and road/reservation TDR on the other hand. The increase in the FSI in suburbs and extended suburbs will reduce the prices of the Slum TDR, thereby the prices of the flats will also automatically be reduced. The Notification is in fact in the interest of common man.
In terms of Regulation No. 32, in the suburbs and extended suburbs of Greater Mumbai including Gaothan and excluding the area mentioned in the Table, the permissible FSI in residential and commercial zone is 1.00. As per the provision of Appendix VIIA under regulation 34 of the said Regulations, the FSI of receiving plot shall be allowed to be exceeded by not more than 0.8 earned either by way of T.D.R. in respect of reserved plots or by way of land surrendered for road widening or ::: Downloaded on - 09/06/2013 15:59:47 ::: 12 construction of new road. As per the provisions of Appendix VIIB in respect of Regulation No. 33(10) and 33(14) TDR receiving plot shall be eligible for not more than 100% additional FSI in whichever combination, provided at least 20% of FSI shall be mandatorily kept for use of TDR generated as surplus from Slum Rehabilitation scheme. Additional 0.33 FSI is optional and non transferable.
Corporation has placed reliance on the chart showing the total TDR generated from 25.3.1991 to 20.5.2008 in respect of roads other reservations and slums. It is also pointed out that 180 proposals were received, out of which 84 proposals have been approved and the Corporation have received 150 Crores paid by owners/developers and 150 Crores paid to the State with Government. At the hearing of the arguments figures were made available which show that TDR generated upto the end of 2009 was 3132 900.12 sq. mtrs. The TDR utilized was 2,99,1021.87 sq. mtrs. The balance TDR as per these figures works out to 1,41,938.25 sq. mtrs. The summary of TDRs was made available which shows DRC issued for an area of 86076088.968 sq. mts.
utilized was 81,32,091.144 sq. mtrs. leaving balance area of 5,37,192.41 sq. mtrs.
In terms of the notification it is set out that the land that may be available for utilization of FSI of 0.33 is 2,31,28,345. sq. mtrs. Assuming 50% is actually used additional FSI works out to 3816177.39 sq. mtrs.
15. On behalf of the State Government various affidavits have been filed. The first such affidavit dated 30.4.2008 was filed by Mr. Sudhakar Baburao Nangaure, Deputy Secretary, Urban Development department. It is contended that the PIL petition is neither bona fide nor in public interest and is in fact clearly opposed to and contrary to the interest of large sections of the people in the city of Mumbai. The ::: Downloaded on - 09/06/2013 15:59:47 ::: 13 Government it is contended has reason to believe that the transferable Development Rights in Mumbai are concentrated in a few hands. Such persons have virtually formed a cartel as a result of which the prices of TDR have sky-rocketed to astronomical proportions. Apart from FSI of 1.00 which is available for development of the plot in the suburbs and extended suburbs, the plot can be alloted user of additional FSI by way of TDR upto 1.00. Thus the total FSI that can be consumed on a plot in the suburbs and extended suburbs is 2.00. By D.C.R. 34, additional FSI of 1.00 TDR of which 0.8 can be used out of general TDR, i.e. TDR generated out of any plot, that is, reservations etc. while the remaining 0.2 FSI can only be out of slum redevelopment. Consequently the price of TDR is in the range of Rs.4000 to 5000/-
respectively per sq. ft. that is, far more than the prevalent rate of land itself, particularly in the areas like Borivali, Dahisar and certain parts of eastern suburbs like Bhandup, Mulund etc. This high price of TDR results in prices of flats being correspondingly higher and as a result, the supply of affordable housing in the hands of vast majority of people is hopefully inadequate. As a pragmatic economic policy decision, the Government decided to make available additional 0.33 FSI, by way of raising the FSI in the suburbs to 1.33 by bringing it on par with the provisional FSI in the Island city. This will immediately impact the TDR prices inasmuch as, the prices at which the Government will make 0.33 FSI available will be substantially lower than the prevailing TDR prices. This will have an immediate impact on the cost of construction and consequently and inevitably on the price of flats and apartments.
Also charging premium on additional FSI being granted by the Corporation will generate funds, which will go to the special Fund "Escrow Account" and which will be utilized for development of infrastructures in the city. It is therefore, set out that ::: Downloaded on - 09/06/2013 15:59:47 ::: 14 there is no real change in using of additional FSI. In the additional affidavits filed on 2.7.2008, dealing with the notification it was set out that the amendment does not change the character of the Development Plan and it is part of regulatory regime.
The affidavit of 2.7.2008 deals with the notice of 11.7.2008 inviting public objections. In the affidavit of 28.8.2008, the reason for issuance of notice under section 37(1A) has been set out which arose on account of failure by the Planning Authority to comply with the directions issued by the State Government under D.C. Regulation 37. It is also pointed out that the notification will not increase stress on infrastructure as additional 0.33 FSI is within the overall FSI cap of 2, and there will not be additional burden on the infrastructure. Reference is made to the judgment of Janhit Manch Vs. State of Maharashtra 2007 (1) B.C.R. 329. where the challenge to D.C.R. 34 as manifestly arbitrary and unreasonable and ultra vires was rejected. The state by their affidavit in that petition had filed affidavit disclosing that the infrastructure in the suburbs is sufficient to bear utilization of TDR.
Reference is made to various projects initiated by the State for improving the infrastructure. The last affidavit is dated 4.12.2009. It is set out therein that the suggestions/objections received by the public were heard by the Deputy Director of Town Planning, Greater Mumbai, the officer authorized under Section 162 of the M.R.T.P. Act. The officer after hearing the objections submitted a report to the Government. On receipt of the report and after consulting the Director of Town Planning and considering suggestions/objections received, the Government exercised its powers under section 37(2) sanctioning the modification. The notification does not change the character of the plan and is permissible under the Act and is an exercise in subordinate legislation. The notification is not a wholesale replacement of the D.C. ::: Downloaded on - 09/06/2013 15:59:47 ::: 15 Plan. It is an alternate source of 0.33 FSI within the overall cap of 2.00 FSI which already prevails. It is also set out that the carrying out environment impact study by involving experts is not a sine qua non for modification under Section 37 of the said Act. Adequate resources are available for providing public amenities and maintenance and improvement of area. There is a provision of additional FSI for educational, medical and hotel building subject to payment of premium which is shared equally between Government and the Planning Authority. It was felt necessary to levy premium on extra FSI in suburbs also. It is shared between Government of Maharashtra and Municipal Corporation of Greater Mumbai on 50-50 basis. The Municipal Corporation of Greater Mumbai can utilize the amount for implementation of Development plan and infrastructure.
16. Various interveners were allowed to intervene amongst them are the Maharashtra Chamber of Housing Industries, a representative body of the Developers engaged in housing real estate development in the city of Mumbai. Its members it is set out are accountable for setting up 80 to 90% of the houses/flats in the city of Mumbai and its vicinity. The objections have been set out. The PIL it is set out is a motivated litigation seeking to serve their own private interest and of certain other persons which can only be persons dealing in TDR which TDR had been cartelized till now. The concept/principle for the introduction of the impugned notification by Respondent Nos. 1 and 2 is to charge a premium for 0.33 FSI which premium is to be utilized exclusively for the effective implementation of the development plan by the Planning Authorities in the State of Maharashtra as well as the city of Mumbai. This will reduce the financial burden of Respondent No. 2 who ::: Downloaded on - 09/06/2013 15:59:47 ::: 16 would otherwise be required to pay cash from its own coffers for implementation of the Development plan and other such vital infrastructure projects. By the notification Respondent No. 1 expects to collect approximately Rs.4,000 Crore this year itself, which will provide a huge boost to the infrastructure in the city. The impact of the impugned notification will result in reduction of the prices of flats, ease the process of construction, increase the pace of construction and consequently the availability of flats in Mumbai and implementation of the several development plans and infrastructure projects in the city.
17. In the various replies and rejoinders filed by the Petitioners in the PIL, they have dealt with the various contentions and have also made specific reference to the Budget speech of the Finance Minister for the year 2008-09. It is further set out that the additional outlay amounting to Rs.1400 crore as mentioned earlier in the budget proposal would be met through premium on account of additional FSI of 0.33 in Mumbai Suburban District, better tax collection and administration as well as through additional resource mobilization proposal to which we will revert. Para No. 137.3 comes under the heading "Creation of the Minority Development Department in the State Government and in Para 137.2 it is then set out that an outlay of Rs.100 crore has been proposed for the minority welfare schemes for the year 2008-09.
18. We may refer to some of the provisions of M.R.T.P. Act. Under Section 2(2) amenity has been defined and reads as under :
"amenity" means roads, streets, open spaces, parks, recreational grounds, play grounds, sports complex, ::: Downloaded on - 09/06/2013 15:59:47 ::: 17 parade grounds, gardens, markets, parking lots, primary and secondary schools and colleges and polytechnics, clinics, dispensaries and hospitals, water supply, electricity supply, street lighting, sewerage, drainage, public works and includes other utilities, services and conveniences."
Development right has been defined in section 2(9A) and which reads as under :
"Development right" means right to carry out development or to develop the land or building or both and shall include the transferable development right in the form of right to utilise the Floor Space Index of land utilisable either on the remainder of the land or partially reserved for a public purpose or elsewhere, as the final Development Control Regulations in this behalf provide."
Section 37(1) with sub sections 37(1A) and 37(2) read as under :
"37. Modification of Final Development Plan. (1) Where a modification of any part of or any proposal made in a final Development Plan is of such a nature that it will not change the character of such ::: Downloaded on - 09/06/2013 15:59:47 ::: 18 Development plan, the Planning Authority may, or when so directed by the State Government shall, within ninety days from the date of such direction, publish a notice in the Official Gazette and in such other manner as may be determined by it, inviting objections and suggestions from any person with respect to the proposed modification not later than one month from the person with respect to the proposed modification and not later than one month from the date of such notice, ig and shall also serve notice on all persons affected by the proposed modification and after giving a hearing to any such persons, submit the proposed modification (with amendments, if any), to the State Government for sanction.
(1A) If the Planning Authority fails to issue the notice as directed by the State Government, the State Government shall issue the notice, and thereupon, the provisions of sub section (1) shall apply as they apply in relation to a notice to be published by a Planning Authority.
..................................................................................
(2) The State Government may, make such enquiry as it may consider necessary and after consulting the Director of Town Planning by notification in the ::: Downloaded on - 09/06/2013 15:59:47 ::: 19 Official Gazette, sanction the modification with or without such changes, and subject to such conditions as it may deem fit, or refuse to accord sanction. If a modification is sanctioned, the final Development Plans shall be deemed to have been modified accordingly."
Thus under Section 37, power has been conferred on the Planning authority or on direction by the State Government to commence the process of modification of the final development plan, which will not change the character of such development Plan. In the event the Planning authority fails to comply with the directions issued by the State Government then under section 37(1A) the State Government can issue notice and thereupon provisions of section 38(1) will apply as they apply in relation to the notice to be published by the Planning authority.
Thereafter under section 37(2) the State Government after making such enquiry and after consulting the Director of Town Planning by notification in the official gazette sanction the modification with or without such changes and subject to such conditions as it may deem fit.
19. Under Section 162, on the Development authority failing to exercise or perform the duty imposed, under any of the provisions of the Act, the State Government or person or persons appointed in this behalf by the State Government may exercise such powers and perform such duties. Section 158 is the power to make rules for the purpose of the Act. Section 159 is the power to frame regulations.
::: Downloaded on - 09/06/2013 15:59:47 ::: 20Chapter VIA was inserted by Maharashtra Act 16 of 1992. Section 124A provides for levy of development charge or use or change of use of any land or building or development of any land or building, for which permission is required under the Act, at the rates specified by or under provisions of this Chapter. Under Section 124B for the purpose of assessing the development charge, the user of the land and building shall be classified under various categories. Under Section 124J a development fund has to be set up for development and all moneys received by the authority as development charge together with interest thereof, if any, under this chapter shall be credited to the Development fund. The moneys credited, from time to time, to the said fund shall be applied only for the purposes of providing public amenities in the area and maintenance and improvement of the area under the jurisdiction of the said authority.
20. With that background, we may now consider the various contentions raised.
Before that the preliminary objections raised on behalf of the State Government can be dealt with. It is submitted that the PIL Petitioners have made out no case whatsoever in public interest. There are no averments much less material placed by the Petitioner to enable the court to go into the issue sought to be raised. It is based on bald averments and lacking in material particulars and the pleas ought not to be examined in the absence of detailed facts and figures. PIL can be filed only by a third party which is an aggrieved party. The Petitioners has set out and challenged constitutional validity of the modifications. The Supreme Court it is submitted in Guruvayoor Vs. C.K. Rajan 2003 (7) SCC 546 has held that. In so far as Writ Petition No. 1831 of 2008 the Petitioners are not at all affected, warranting ::: Downloaded on - 09/06/2013 15:59:47 ::: 21 interference by this court under Article 226 of the Constitution. The provisions relating to TDR has not been affected in any way. The Government it is set out never promised that till entire slum TDR is exhausted the Government would not or planning authority would not increase the FSI. Similarly providing another source of FSI without effecting the provisions relating to TDR in any way cannot give any cause of action to the Petitioner. The Petitioner it is set out is ex facie a representative of the holders of the slum TDR. PIL Petition is therefore, not bona fide and further the Petitioners do not disclose any cause of action warranting interference under Article 226.
21. In so far as the PIL Petition is concerned, various contentions have been raised including violation of Articles 14 and 21 of the Constitution of India by the proposed notification which amends D.C. Regulation 34. Apart from that, in writ petition No. 2443 of 2008, it is contended on behalf of the Petitioners that they are a partnership firm of M/s. Real Street Developers Pvt. Ltd. DB Reality and Sumer. It is in the process of undertaking slum rehabilitation scheme on the property at Chandivali and has invested substantial amounts. The Petitioners have also raised a ground that before carrying out amendment, the impact assessment ought to have been carried out in respect of the increase of FSI of 0.33% or environment requirement in the nature of infrastructure. The notification it is set out is with a view to generate funds by sale of 0.33 FSI which amounts to abuse of powers. At any rate it is ultra vires the M.R.T.P. Act and powers vested therein. The Petitioners originally in ground (K) had set out that under section 154 of the M.R.T.P. Act, 1966 the State has no power to impose any tax, fee or premium including to amend ::: Downloaded on - 09/06/2013 15:59:47 ::: 22 DC Regulations 1991 by proposing charging of premium for sale of 0.33 FSI and any such direction it was contended is illegal and ultra vires the provisions of M.R.T.P. Act, 1966. Article 14 has also been invoked on several grounds.
We may gainfully refer to some of the observations in the Judgment in Bombay Dyeing Co. Ltd. Vs. Bombay Environmental Action Group (2006) 3 SCC 434 :
"63. While entertaining a public interest litigation of this nature several aspects of public interest being involved, the Court should find out as to how greater public interest should be subserved and for the said purpose a balance should be struck and harmony should be maintained between several interests such as
(a) consideration of ecology; (b) interest of workers (c) interest of public sector institution, other financial institutions, priority claimed due to workers; (d) advancement of public interest in general and not only a particular aspect of public interest; (e) interest and rights of owners; (f) the interest of a sick and closed industry; and (g) schemes framed by BIFR for revival of the company.
64. The courts in doing so would have to take into consideration a large number of factors, some of which ::: Downloaded on - 09/06/2013 15:59:47 ::: 23 may be found to be competing with each other. It may not be proper to give undue importance to one at the cost of the other which may ultimately be found to be vital and give effect to the intent and purport for which the legislation was made.
65. Scope of Public Interest Litigations in view of several decisions of this Court has its own limitations.
We would hereinafter notice a few of them.
66. In Raunaq International Ltd. v. I.V.R. Constructions Ltd. & Ors. [(1999) 1 SCC 492], this Court highlighted that the public interest litigation should not be a mere cloak. The court must be satisfied that there is some element of public interest involved in entertaining such a petition. The court also cautioned that before entertaining a writ petition and passing an interim order overwhelming public interest should be taken into consideration therefor. It was further observed :
" It is important to bear in mind that by court intervention, the proposed project may be considerably delayed thus escalating the cost far more than any saving which the court would ultimately effect in ::: Downloaded on - 09/06/2013 15:59:47 ::: 24 public money by deciding the dispute in favour of one tenderer or the other tenderer. Therefore, unless the court is satisfied that there is a substantial amount of public interest, or the transaction is entered into mala fide, the court should not intervene under Article 226 in disputes between two rival tenderers."
67. In Ashok Lanka v. Rishi Dixit [(2005) 5 SCC 598], this Court opined:
" It is well settled that even in a case where a petitioner might have moved the Court in his private interest and for redressal of personal grievances, the Court in furtherance of the public interest may treat it necessary to enquire into the state of affairs of the subject of litigation in the interest of justice."
68. This was also the view taken in Guruvayoor Devaswom Managing Committee v. C.K. Rajan [(2003) 7 SCC 546 at para 50], Shivajirao Nilangekar Patil v. Dr. Mahesh Madhav Gosavi [(1987) 1 SCC 227] and Chairman & MD, BPL Ltd. v. S.P. Gururaja and Others, (2003) 8 SCC 567.
::: Downloaded on - 09/06/2013 15:59:47 ::: 2569. In K.K. Bhalla v. State of M.P. & Ors. [2006 (1) SCALE 238], it was stated:
"The Appellant has brought to the notice of the High Court that a malady has been prevailing in the department of the State of Madhya Pradesh and the JDA. It may be true that the Appellant did not file any application questioning similar allotments but it is well-settled if an illegality is brought to the notice of the court, it can in certain situations exercise its power of judicial review suo motu"
70. This Court times without number, however, has laid down the law as regard limited scope of public interest litigation. It sounded note of caution for entertaining public interest litigation in service matters [See Dr. B. Singh v. Union of India and Others, (2004) 3 SCC 363], in questioning the validity or otherwise of a statute or when a statute is enacted in violation of the direction of a superior court [See Ashok Kumar Thakur v. State of Bihar & Ors. [(1995) 5 SCC 403]. But, we cannot also shut our eyes to the fact that this Court has entertained a large number of public interest litigations for protection of environmental and/ or ecology.
::: Downloaded on - 09/06/2013 15:59:47 ::: 26[See .M.C. Mehta group of cases and T.N. Godavarman Thirumulpad v. Union of India and Others, (2006) 1 SCC 1]
71. Public interest litigations, thus, have been entertained more frequently where a question of violation of the provisions of the statutes governing the environmental or ecology of the country has been brought to its notice in the matter of depletion of forest areas and/ or when the executive while exercising its administrative functions or making subordinate legislations has interfered with the ecological balance with impunity. The High Court of Bombay, therefore, cannot be faulted with for entertaining the writ petition as a public interest litigation."
In our opinion, in order to entertain a petition, the answer is not whether the petition ultimately succeeds. The question that this court is called upon to answer is whether the issues raised by the Petitioners have prima facie to be considered.
Once we hold that there are issues which have to be answered, and in our opinion, Petitioners in both the Petitions have raised issues involving both Articles 14, 21 and also the power of the State Government and or the Planning Authority to charge a premium for sanctioning 0.33 additional FSI in the suburbs and extended suburbs.
Merely because the petitions in the PIL Petition may be to an extent espousing the ::: Downloaded on - 09/06/2013 15:59:47 ::: 27 cause of the holders of slum T.D.R. that by itself can be no ground to hold that the Petitioners in PIL Petition lack bona fides. The Petitioners in the other Petition are aggrieved since they have invested moneys in a S.R.A. Scheme and legitimately expected to make profit from it. They are entitled to contend that the action of the Government to charge F.S.I. and thereby profit itself is ultra vires the Act. The Petitioner in both the Petitions have locus standi. Apart from that PIL being non-
adversial litigation public interest must prevail. Mere absence of some pleadings or some grounds will not prevent a constitutional court from examining the real issues in controversy at the instance of public spirited citizens. See Janhit Manch (supra).
22. We have heard the learned counsel for the parties and Interveners. We have referred to the pleadings to the extent that they are necessary for disposing of the controversy arising in these petitions. A large number of judgments have been cited before us. Oral arguments have been canvassed and written submissions submitted.
We propose to consider the judgments to the extent necessary for deciding the controversy which has arisen in these two petitions.
23. The first question that arises is whether the notification amending Regulation 32, to increase FSI on the plot from 1 to 1.33 can be said to change the character of the development plan.
On behalf of the State Government it was sought to be contended that while considering notification under section 37, section 22A cannot be considered as section 22A applies while considering section 29 which is modification made after ::: Downloaded on - 09/06/2013 15:59:47 ::: 28 preparing and publishing notice of the draft development plan and section 31 on sanctioning a draft development plan. Section 22A arises when modification is of a substantial nature. In our opinion, however, that issue may not be any longer res integra considering the observations by the Supreme Court in Bombay Dyeing (supra) where the Supreme Court observed as under :
"It is axiomatic that for the said purpose section 37 of the M.R.T.P. Act must be read in the context of Section 22A which provide for substantial changes".
Our attention is invited to Section 22A (f) wherein it is set out that alterations in the Floor Space Index beyond ten per cent of the floor space index prescribed in the Development Control Regulations prepared and published under Section 26 or published with modifications under section 29 or 31, as the case may be. It is sought to be pointed out that the effect of granting additional 0.33 FSI will result in increase of 33% and this would directly amount to substantial change and consequently change the character of the plan. From the affidavits filed by the Planning Authority and the State Government, it is clear that in the suburbs and extended suburbs apart from FSI of 1.00 which is available on the plot, the said plot can be burdened/loaded with additional FSI of 1.00 in the form of TDR. TDR certificates are issued under various provisions of D.C. Regulations like Slum TDR, Road TDR, Reservation TDR, Heritage TDR and the like. However, out of the additional FSI of 1.00 it is mandatory to use 0.2 from Slum TDR. It is open to the developer/builder also to use the entire TDR from slum rehabilitation. In other words, though ::: Downloaded on - 09/06/2013 15:59:47 ::: 29 considering section 22A (f) technically though the amendment which provides for increase of 0.33% FSI may amount to amendment of substantial nature, however considering the expression "change the character of the plan", as additional FSI of 1 in form of TDR was available before the modification, to be used on the plot, in our opinion, it cannot be said that the same amounts to change of character of the plan.
The Supreme court while interpreting words "change in character of the plan" in Bombay Dyeing (supra) observed that the question would be as to whether the change in character is referable to alteration of the entire plan. Change in character would necessarily mean that change in the basic feature thereof of the entire plan and the same has to be read in totality. The question is whether a radical transformation has taken place to its basic features resulting in the plan losing its original identity. Reference was also made to the judgment in Sadanand Varde and Ors. Vs. State of Maharashtra 2007 BCR 1 810 to contend that in that case validity was upheld as the court arrived at the finding that granting additional FSI to specific building/plots cannot be said to change character of the plan. The plan before the present modification had already been modified permitting use of additional FSI of 1 by way of T.D.R. Those modifications to the plans were not challenged or if challenged, the challenge was rejected. The only change by the present modification is that the FSI is generated on the same plot instead of the plot being loaded with FSI generated on another plot. There is therefore, no wholesale replacement in the character of the plan. In our opinion, therefore, this argument will have to be rejected.
24. It is next submitted that while carrying out the amendment, Respondents ::: Downloaded on - 09/06/2013 15:59:47 ::: 30 failed to comply with the requirements of Section 37 of the M.R.T.P. Act. This notification of 3.10.2008 therefore, is ultra vires. The argument proceeds on the following contentions which are summarized.
1. The State Government merely on failure by the planning authority to issue notice in terms of directions under section 37(1) could not have excluded the Planning authority from hearing the objections and submitting the report which has to be submitted by the Planning Authority alone with their suggestions or the objections to the modifications.
2. While issuing notice under Section 37(1A) the Government would not have powers to alter or amend any direction as given in order dated 10.4.2008. The notification issued on 11.7.2008 is different from the notification dated 10.4.2008 and this is contrary to Section 37(1A) of the Act.
In the alternative, if it is the case of the Government that the 12.5.2008 clarification as well as 5.6.2008 instructions to include further items 11 to 13 in notice of 11.7.2008, to invite suggestions/objections are also directions and thereby 10.4.2008 directions are modified, then in that event, powers of section 37(1A) could not have been exercised prior to expiry of 90 days therefrom i.e. 90 days from 5.6.2008, which was available to M.C.G.M. from the date of direction.
3. The fact that immediately on expiry of 90 days from 10.4.2008 new ::: Downloaded on - 09/06/2013 15:59:47 ::: 31 notification was issued also confirms that the entire exercise was an after thought and Government even did not wait to see whether M.C.G.M. is acting on its directions or not. Considering section 37, it would be clear that the Planning Authority is an expert on the subject. Its views being relevant, bypassing that authority would again disclose arbitrariness. The Municipal Corporation it is submitted is the local body which has special knowledge of the local infrastructure and facilities. It consists of elected members and it is in better position to understand the problem or objection and or impact of the notification. The statutory role of the Corporation could not have been dispensed with. When the Statute requires certain procedure to be followed, the said must act strictly in accordance with the manner prescribed and not in other manner.
Reliance for that purpose has been placed on several judgments. We may gainfully reproduce the following paragraphs from State of Punjab Versus Surjeet Singh Grewal 2007 (6) SCC 292 :
"39. The next important finding recorded by the High Court is that the provisions of the Act of 1995 were not followed in specifying and declaring the site for new town for which the land was sought to be acquired. We have earlier considered the various provisions of the Act of 1995 and we concur with the finding of the High Court that in specifying and declaring the planning area, namely the site for a new town, the various provisions of the Act were not ::: Downloaded on - 09/06/2013 15:59:47 ::: 32 complied with.
44. The argument that the Government is the final authority and was not bound to consult the Board cannot be countenanced since that is in the teeth of the mandatory provisions of Section 56 of the Act. The Legislature having enacted a statute and expressly provided a procedure for declaration of a planning area, which involved consideration of objections and suggestions from the public and publication of the declaration in the Official Gazette, the State could not have adopted a different procedure in breach of express provisions, completely ignoring the existence of the Board, the apex authority under the Act, and obliterating the provision for public participation in the matter of declaring a planning area.
45. We have, therefore, no hesitation in holding that the declaration of the planning area, a site for a new town, was never validly made by the competent authority after following the prescribed procedure and, therefore, there was in law no validly selected site for a new town, nor a validly declared planning area.
Consequently, there was no justification for acquisition of land to set up a new town. The public purpose stated in the impugned Notifications was non-existent ::: Downloaded on - 09/06/2013 15:59:48 ::: 33 in view of the fact that there was no planning area validly declared by the competent authority for the development of which any land was required. Section 42 which provided for acquisition of land under the provisions of the Land Acquisition Act could not, therefore, be invoked, since Section 42 came into operation only when land was required for the purposes of the authority under the Act of 1995, and not for any other purpose. "
In Nazir Ahmed Vs. King Emperor LXIII Indian Appeals 372, it has been observed therein as under :
"The rule which applies is a different and not less well recognized rule-namely that where a power is given to do a certain thing in a certain way the thing must be done in that way or not at all. Other methods of performance are necessarily forbidden."
Reference was also made to Meera Sahni Vs. Lt. Governor of Delhi (2008) 9 SCC 177 and the following observations made therein :
"35. It is by now a certain law that an action to be taken in a particular manner as provided by a statue, must be taken, done or performed in the manner ::: Downloaded on - 09/06/2013 15:59:48 ::: 34 prescribed and in no other manner. In this connection we may appropriately refer to the decision of this Court in Babu Verghese v. Bar Council of Kerala, (1999) 3 SCC 422, wherein it was held as under:
"31. It is the basic principle of law long settled that if the manner of doing a particular act is prescribed under any statute, the act must be done in that ig manner or not at all. The origin of this rule is traceable to the decision in Taylor v. Taylor (1875) 1 Ch D 426 which was followed by Lord Roche in Nazir Ahmad v. King Emperor AIR 1936 PC 253 who stated as under:
"Where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all."
32. This rule has since been approved by this Court in Rao Shiv Bahadur Singh v. State of V.P. AIR 1954 SC 322 and again in Deep Chand v. State of Rajasthan AIR 1961 SC 1527. These cases were considered by a three-
::: Downloaded on - 09/06/2013 15:59:48 ::: 35Judge Bench of this Court in State of U.P. v. Singhara Singh AIR 1964 SC 358 and the rule laid down in Nazir Ahmad case (supra) was again upheld. This rule has since been applied to the exercise of jurisdiction by courts and has also been recognized as a salutary principle of administrative law.
36. The Registering Officer who is required to register a document whereby the land is purported to be transferred by sale, mortgage, gift, lease or otherwise was statutorily under an obligation not to register any such document unless the person seeking to transfer the land produces before such registering officer a legal, valid and statutory permission in writing of the competent authority for such transfer.
The aforesaid exception provided in the Delhi Lands Act for grant of permission despite acquisition is a statutory exception and should be construed strictly in the light of the said provisions, namely, in the light of provisions of Sections 5 and 8 of the Delhi Lands Act.
37. In the sale deeds referred to and relied upon by the appellants it was stipulated and mentioned that no notifications under Sections 4 and 6 of the Land ::: Downloaded on - 09/06/2013 15:59:48 ::: 36 Acquisition Act have been issued in relation to the land in question prior to the said alleged transfer. The said transfer is on a wrong representation of material facts and in fact on a misrepresentation. In the present case the registering officer appears to have registered the sale deeds illegally and without jurisdiction, as in our considered opinion, none of the pre-requisite conditions laid down under Sections 4, 5 and 8 of the Act, which are required to be strictly complied with for obtaining permission to sell or transfer and also for registering the said documents was complied with, as is required to be done.
38. It is, thus, established from the record placed before us that neither any proper application was made either by the predecessors in-interest of the appellants or by the appellants themselves, as envisaged under Sections 4 and 5 of the Delhi Lands Act, nor any valid and legal permission was granted to the appellants by the competent authority under the provisions of the aforesaid Act. The transfers made in favour of the appellants by the original land holders by execution of the sale deed, therefor are illegal and without jurisdiction. We have no hesitation in our mind in ::: Downloaded on - 09/06/2013 15:59:48 ::: 37 holding that no title could be conveyed or could pass to the appellants on the basis of such transfer and also that consequential mutation in favour of the appellants for the above reasons is found and held to be without jurisdiction."
4. It is not open to the State Government to reject the objections without giving reasons.
5. There was undue hurry and that would disclose non application of mind and a pre-determined result. All the contentions, it is submitted will attract Article 14 of the Constitution of India for failure to comply with the procedure set out in Article 14.
25. The scope of Section 37 came up for consideration in PMC Versus Promoters and Builders Association and Another (2004) 10 Supreme Court Cases 796. In Para 5 it is observed as under:
"Making of DCR or amendment thereof are legislative functions. Therefore, section 37 has to be viewed as repository of legislative powers for effecting amendments to DCR. That legislative power of amending DCR is delegated to State Government. As we have already pointed out, the true interpretation of section 37(2) permits the ::: Downloaded on - 09/06/2013 15:59:48 ::: 38 State government to make necessary modifications or put conditions while granting sanction. In section 37(2), the legislature has not intended to provide for a public hearing before according sanction. The procedure for making such amendment is provided in section 37. Delegated legislation cannot be questioned for violating principles of natural justice in its making except when the statute itself provides for that requirement. Where the legislature has not chosen to provide for any notice or hearing, no one can insist upon it and it is not permissible to read natural justice into such legislative activity.
Moreover, a provision for 'such inquiry as it may consider necessary' by a subordinate legislating body is generally an enabling provision to facilitate the subordinate legislating body to obtain relevant information from any source and it is not intended to vest any right in anybody. (Union of India and Anr. v. Cynamide India Ltd and Anr.
(1987) 2 SCC 720 paragraphs 5 and 27. See generally HSSK Niyami and Anr. v. Union of India and Anr. (1990) 4 SCC 516 and Canara Bank v.::: Downloaded on - 09/06/2013 15:59:48 ::: 39
Debasis Das (2003) 4 SCC 557). While exercising legislative functions, unless unreasonableness or arbitrariness is pointed out, it is not open for the Court to interfere. (See generally ONGC v. Assn. of Natural Gas Consuming Industries of Gujarat 1990 (Supp) SCC 397) Therefore, the view adopted by the High Court does not appear to be correct. "
From the above judgment it is clear that making of DCR or amendment thereof are legislative functions which power is delegated to the State Government. The enquiry contemplated is an enabling provision to facilitate the subordinate legislating body to obtain relevant information from any source and it is not intended to vest any right in anybody. As observed in Indian Express (Bombay) Pvt. Ltd. And Others Vs. Union of India and Ors, 1985(1) SCC 641 wherein the court held that subordinate legislation cannot be questioned on the ground of violation of principles of natural justice or on the ground that certain matter was not taken in to consideration. The court then observed as under :
"A distinction must be made between delegation of a legislative function in the case of which the question of reasonableness cannot be enquired into and the investment by statute to exercise particular discretionary power. In the latter case ::: Downloaded on - 09/06/2013 15:59:48 ::: 40 the question may be considered on all grounds on which administrative action may be questioned, such as, non-application of mind, taking irrelevant matters into consideration, failure to take relevant matters into consideration, etc. etc. On the facts and circumstances of a case, a subordinate legislation may be struck down as arbitrary or contrary to statute if it fails to take into account very vital facts which either expressly or by necessary implication are required to be taken into consideration by the statute or, say, the Constitution. This can only be done on the ground that it does not conform to the statutory or constitutional requirements or that it offends Article 14 or Article 19 (1)
(a) of the Constitution. It cannot, no doubt, be done merely on the ground that it is not reasonable or that it has not taken into account relevant circumstances which the Court considers relevant."
The challenge to delegated legislation, we may reiterate, can only be on the ground of manifest arbitrariness, unreasonableness,ultra vires or being ::: Downloaded on - 09/06/2013 15:59:48 ::: 41 violative of the fundamental rights.
26. In the context of Section 37, we may now examine the contentions as raised on behalf of the Petitioners. Before that we may advert to the objects and reasons clause by which amendment was affected and section 37(1A) was introduced. Clause 3 therein sets out that it was done so that some time limit is prescribed, within which the Planning Authority may publish notice and to provide that the State Government itself shall take action, if the planning authority fails to publish notice as directed to do by the Government. There is no dispute that the Corporation (Planning Authority) failed to comply with the directions issued under section 37 of the Act. Once there being failure the State Government itself can issue notice. It is not open to contend that because the subordinate legislative body exercised its powers, which it could do on failure by the Planning authority, that it discloses a pre-planned decision to modify the plan. Once the Legislature has provided a time frame and the planning authority failed to comply with the directions, within the time frame, the State Government, could exercise its powers and no motive can be accorded for exercising these powers. The planning authority on the State Government issuing notice is divested of its powers to serve notice of the proposed modification and also of hearing the parties who file their objections and submit a report considering section 37(1A). The power to make subordinate legislation under section 37 is not in the Planning Authority but in the State Government. Is it open to the Petitioners to contend when the ::: Downloaded on - 09/06/2013 15:59:48 ::: 42 Planning authority has not raised any objections, to contend that the Planning Authority had to hear the objections and submit report. In the instant case, the planning authority itself has not raised any objection. Our attention was invited to section 37(1A)(B) to contend the role of Planning authority. In our opinion, once the planning authority fails to comply with the directions, it indicates that it does not propose to issue direction. In these circumstances, the State Government is not left helpless. The legislation under Section 162 of the M.R.T.P. Act has conferred power on the Government on failure by the Planning authority to perform its duty either itself to perform duty or get it performed through any other person. In the instant case the duty was performed through an officer appointed by the State Government. The report submitted by the officer is not binding on the State Government. Under Section 37(2) it can make enquiry as it thinks necessary and after consulting the director of Town Planning, sanction the notification as set out therein. The duty under section 37 is basically to collect material and to submit report to the Government on failure by the planning authority. The officer concerned, steps into the shoes of the Planning Authority to discharge the duties of that authority. In our opinion, therefore, it cannot be said that there has been failure to comply with the requirement under section 37(1) of the Act.
27. It was also sought to be contended that on direction issued after 1st notice there being changes in the second notice it was not within the time ::: Downloaded on - 09/06/2013 15:59:48 ::: 43 contemplated under section 37 for the State Government to exercise powres under Section 37(1A). In our opinion, such challenge must also fail. The said challenge is based merely on the period within which notice can be issued.
Petitioners in such case must show the prejudice occasioned to them. This is not the case where the court on failure to comply with the procedure would hold that the entire action is ultra vires. We may for that purpose gainfully refer to the judgment in the State of U.P. Vs. Harendra Arora and Ors. 2001 (6) SCC 392. Reference may be made to Para 13 which reads as under :
" The matter may be examined from
another view point. There may be cases
where there are infractions of statutory provisions, rules and regulations. Can it be said that every such infraction would make the consequent action void and/or invalid? The statute may contain certain substantive provisions, e.g., who is the competent authority to impose a particular punishment on a particular employee. Such provision must be strictly complied with as in these cases the theory of substantial compliance may not be available. For example, where a rule specifically provides that the delinquent officer shall be given an opportunity to produce evidence in support of his case after the close of the ::: Downloaded on - 09/06/2013 15:59:48 ::: 44 evidence of the other side and if no such opportunity is given, it would not be possible to say that the inquiry was not vitiated. But in respect of many procedural provisions, it would be possible to apply the theory of substantial compliance or the test of prejudice, as the case may be. Even amongst procedural provisions, there may be some provisions of a fundamental nature which have to be complied with and in whose case the theory of substantial compliance may not be available, but the question of prejudice may be material. In respect of procedural provisions other than of a fundamental nature, the theory of substantial compliance would be available and in such cases objections on this score have to be judged on the touchstone of prejudice. The test would be, whether the delinquent officer had or did not have a fair hearing. In the case of Russel vs. Duke of Norfolk & Ors., 1949 (1) All E.R. 109, it was laid down by the Court of Appeal that the principle of natural justice cannot be reduced to any hard and fast formulae and the same cannot ::: Downloaded on - 09/06/2013 15:59:48 ::: 45 be put in a straitjacket as its applicability depends upon the context and the facts and circumstances of each case."
It would thus be clear that where there has to be compliance of procedural provisions, what is to be applied is the principle of substantial compliance or prejudice. In the instant case, petitioners have been unable to show any prejudice that has been occasioned to them.
Apart from that the Act itself takes care in case of such failure to comply under Section 150 of the Act. Section 150 (d) and (e) provide for any act done or proceedings taken under the Act shall not be questioned on the ground merely of failure to serve notice on any person where no substantial injustice has resulted from such failure or any omission, defect or irregularity not affecting the merits of the case. This court had occasion to consider that issue under Section 150(d) in the case of Bharat Petroleum Vs. State of Maharashtra 2009 (4) Bom.C.R. 616. In that case, it was contended that there was no notice served on the persons affected by the proposed modifications.
The court held that though the person affected by the proposed modification was entitled to individual notice, failure to serve notice would not vitiate the entire action unless such person satisfies the court that it has resulted in substantial injustice. In the instant case, no such plea has been raised. In our opinion, therefore, the contention on this ground will also have have to be ::: Downloaded on - 09/06/2013 15:59:48 ::: 46 rejected.
28. We are also not impressed with the argument based on Article 243W read with Article 243 ZF. Article 243W itself states that subject to the provisions of the Constitution. The M.R.T.P. Act is an economic and social legislation falling in item 20 of List III. See Maneklal Chotalal Vs. M.C. Makwala AIR 1967 SC 373. Under Section 37, the subordinate legislative body is the State Government considering section 37(2). Under Section 37(i) the planning authority can move to amend the notification, gather material and submit its report to the State Government. Section 37 devolves power on the municipalities which is also the planning authority. Therefore, section 37 is in conformity with the constitutional mandate. Trying to read Section 37(1) and 37(1A) by looking at the provisions of section 37(1AA) would be of no assistance. What has to be considered is the legislative scheme. Although the M.R.T.P. Act has conferred power to commence the preparation on the Planning authority to prepare the D.C. Plan, ultimately it is the State Government which has been conferred the power to sanction the plan or modify the plan. If the act itself provide for situations, when the planning authority fails to carry out the directions, it cannot be contended that the "unwilling horse" should still be part of the consultation process. On failure to exercise power and comply with its duties, the legislature has created an alternative mechanism for performance of that duty. That argument has also therefore, to be rejected.
28A. The argument that the reasons had to be given, why the ::: Downloaded on - 09/06/2013 15:59:48 ::: 47 objections were rejected in our opinion, is devoid of merits. A legislative body does not have to disclose reasons as to why the law has been enacted. That is an exercise of its sovereign power, exercised by itself or through the delegate. An exercise in subordinate legislation more so in socio economic planning, no doubt has to have a clean nexus with the civic amenities. We have also to bear in mind that it is the Legislative that has to exercise its wisdom. If the delegate was of the opinion that the price of flats was rising because of a cartel of T.D.R. Holders, charging exorbitantly, it is not for the courts to examine that wisdom. All that the court whilst examining such legislature will examine is whether it is manifestly arbitrary, unreasonable, ultra vires, the parent Act or violative of the Fundamental Rights. While examining the concept of unreasonableness it must be understood not in a sense of it not being reasonable but in a sense that it is manifestly arbitrary.
29. The next issue which we have to consider is whether the amendment to the extent and as contended on behalf of the petitioners that there has been no environmental study undertaken to assess the impact which will arise on account of the huge FSI which would become available and therefore such amendment is violative of ::: Downloaded on - 09/06/2013 15:59:48 ::: 48 Article 14 and 21 of the Constitution of India. Considering the material set out in Janhit Manch (Supra), it was contended that there would be complete break down of sanitation, water requirement, electricity and acute traffic problem. The Supreme Court in Bombay Dyeing has held that any modification or amendment under Section 37 must address the environmental consequences. In the instant case the procedure for modification has been followed. The modification does not suffer from any manifest arbitrariness or violative of Articles 14 and 21. Further in our opinion, it is not necessary to consider the various judgments cited at Bar on behalf of the petitioner. This is not a case where additional FSI more than what is already available for development in the suburbs and extended suburbs is being sanctioned by modification. In the suburbs and extended suburbs on a plot apart from FSI of 1(one), could by way of TDR load the plot with what is equivalent to additional FSI of 1(one). The modification to the plan and amendments to the regulation which provided for the additional FSI of 1 are not the subject matter of a challenge in these petitions.
We may, only, note that this aspect had been considered in Janhit Manch (Supra) , where this Court noted that the suburbs have a FSI CAP of 1.00. The additional FSI of 1.00 can only be from Heritage TDR, Road TDR, and slum TDR. The form or colour of TDR does not ::: Downloaded on - 09/06/2013 15:59:48 ::: 49 matter What is relevant is the grant/use of additional FSI by way of TDR. The challenge on that ground was rejected. This Court noted that the Courts must presume that the authorities who went into the issue of framing the development plan and/or modifications thereto, were guided by the provisions of the Act and have taken into consideration the principles as contained in MRTP Act while making subordinate legislation including environmental consultation. We have earlier quoted the figure which would result in the 0.33 % additional FSI assuming only 50% could be used. This land, however, could have already been loaded with additional FSI of 1.00. That sufficient TDR may not be available based on the material placed is no ground to hold that Article 21 is infracted. On the contrary, a prudent owner, developer, builder, if such a person can avail of FSI of 2 will not be in a hurry to construct by using FSI of 1.33, thereby depriving himself of more profits. For these reasons we do not propose to address ourselves to the judgments cited. If there is failure by the legislature or abuse or arbitrariness on the part of the Executive, Courts, as sentinels of the Constitution are bound to protect the environment. In this case there is no failure or abuse. The only material produced are the figures regarding generation of TDR, use of TDR and the extra FSI which will be released on the ground of ::: Downloaded on - 09/06/2013 15:59:48 ::: 50 the modification. To answer the argument, we have to presume that all buildings will be re-developed or plots not built upon building activities will commence immediately. There is no such material. The Court in such cases must give judicial deference to legislative judgment more so in the case of economic regulation then in other areas where fundamental rights are involved. In so far as the Impact Assessment Report on Environment is concerned, if there be any project which falls under the notification or the Rules, then that project will have to get the necessary approvals under the provisions of the Environment Act and the Rules framed thereunder.
30. The next submission to be considered is whether the impugned Notification dated 3rd October, 2008 is illegal and ultra vires the MRTP Act and Section 124-A thereof, in as much as it purports to charge a premium ranging from Rs.7,000/- to Rs.23,000/- per sq. mtr. as a condition for such increased FSI.
The Finance Minister of the State of Maharashtra while presenting the Budget Estimates for the year 2008-2009 proposed increase in FSI in Mumbai Suburban District and sought to bring it on par with FSI permissible in the island city. The budget speech further ::: Downloaded on - 09/06/2013 15:59:48 ::: 51 states that for the additional 0.33 FSI, premium would be required to be paid on the basis of market value as per the ready reckoner. (We may at this stage point out, that in so far as the island city is concerned, for the FSI of more than 1, i.e. balance 0.33 no premium is being charged.) Under the heading creation of the Minority Development Department in the State Government, there is an outlay of Rs. 1000 crores for minority welfare under paragraph 137.3, it is set out that the additional outlay amounting to Rs.1,400 crore for the year 2008-2009 will be met through the premium on account of additional FSI of 0.33 in Mumbai Suburban District, better tax collection, etc. Subsequent to the budget speech, a notification came to be issued on 10th April, 2008 increasing the FSI in Mumbai Suburban District from 1.00 to 1.33 subject to payment of premium thereof and that was sought to be put into effect immediately in exercise of powers under Section 154 of the MRTP Act.
A notice thereafter came to be issued on 11th July, 2008 on failure by the Planning Authority to publish the notice regarding the proposed modification. The Deputy Director of Town Planning was appointed as the Officer under Section 37(1) read with Section 162 of the Act.
31. Then came the impugned notification of 3rd October, 2008 sanctioning the modification proposed with some changes as described ::: Downloaded on - 09/06/2013 15:59:48 ::: 52 in the Schedule. We may only reproduce the following portion:
"Provided that FSI may be permitted to exceeded upto 1.33 subject to following conditions:
1) Additional 0.33 FSI is optional and non-transferable. It is to be granted as on application and to be used on the same plot.
2) The total maximum permissible FSI, with 1.33 FSI, Road FSI and TDR shall be restricted to 2.00.
3) As per concept of TDR, additional FSI shall be permissible on gross plot area.
4) Additional FSI available as per Regulation 33, shall be related to basic FSI of 1.00 only.
5) Premium shall be charged for additional 0.33 FSI, as per the rates mentioned in Annexure. However, the Government may revise these rates from time to time."
32. On behalf of the petitioners, it is submitted that the premium or charge/levied/recovered under the Development Control Regulation 32 which constitutes subordinate legislation for the increased FSI from 1.00 to 1.33 is not a payment under a contract or a voluntary payment.
The statutory Development Control Regulation 32 makes the use of increased FSI conditional on the payment of premium as stipulated in the Schedule. The Government's contention that the charge of such premium does not constitute recovery of a tax or fee as payment is not compulsory and the premium is payable only if the citizen/plot holder chooses to use the extra FSI, is ex facie incorrect in law.
Only because citizen/plot holder is required to pay the premium ::: Downloaded on - 09/06/2013 15:59:48 ::: 53 if he uses the additional FSI, does not make the payment/stipulation of levy of premium, optional, or a voluntary payment. Any statutory regulation which makes any development of land by a plot holder subject to payment of development charges or a statutory regulation which permitted a cellular telephony company to erect a cellular tower/receiving and transmitting station on roof tops, on payment of premium and provided for a compulsory exaction by way of a fee or a tax and requires authority in law for its levy/charge/recovery. Reliance is placed in the case of Ahmedabad Urban Development Authority v/s Sharadkumar Pasawalla & Ors., (1992) 3 SCC 285 and Bharati Televentures v/s State of Maharashtra, in (2007) 4 Mh.L.J. 105. It cannot be contended that such a premium charged from the citizen under a statutory regulation, is not a fee or a tax as the citizen has an option/choice whether to develop his land or whether to erect a cellular tower/base station on a rooftop. The fee is generally payable by a citizen who avails of services rendered or who gets some special benefit.
The contention by the State that no such plea has been raised/taken in the writ petition is not correct. In the objections filed before the Government by the petitioner's Advocate's letter dated 8th August, 2008, ( W.P, No.2443 of 2008) it has been specifically contended that the Government had no power to charge such premium by placing reliance ::: Downloaded on - 09/06/2013 15:59:48 ::: 54 on the decision in Bharati Televentures v/s State of Maharashtra (supra). Ground (k) of the petition, it is submitted, does not restrict itself to section 154 but specifically raises an issue that the amendment effected to the Development Control Regulations proposing to charge premium for such FSI was illegal and ultra vires the MRTP Act.
Similarly an additional ground is raised by (ff). In addition, it is further submitted that there is no power vested in the Government under the MRTP Act to levy a premium or charge to the owner for his own property, namely FSI. The only power is Section 124A of the MRTP Act.
33. On the other hand, on behalf of the State Government, it is submitted that neither the public interest litigation petitioner nor the writ petitioner can be a person aggrieved by the premium. The public interest litigation petitioner has a public interest at least and hence wants a total ban of 0.33 FSI. If it is otherwise valid, the public interest would be in favour of charge of premium which will be used to augment infrastructure. Hence, petitioners have no locus to challenge the charging of premium as they have not suffered any legal injury on account of the premium. Reliance is placed on several judgments. Apart from that, it is submitted that the ground (ff)has not been raised in either of the petitions. In so far as the ground in Writ Petition No. 2443 ::: Downloaded on - 09/06/2013 15:59:48 ::: 55 of 2008 is concerned, it is submitted that it is a general ground with no reference whatsoever to charging of the premium. The premium charged is traceable to the State power to improve conditions as part of its town planning function and can be traced to Section 22(m) of the Act. Reliance is placed on Trishal Industries Vs. State of Haryana (2006) 144 PLT 222.
34. On behalf of the Municipal Corporation of Greater Mumbai, it is submitted that clause (m) of Section 22 of the Act, empowers the State Government to regulate the grant of FSI for economic and social planning of the City. It is submitted that the learned Counsel for the writ petitioner has conceded that the State Government has the power to regulate the grant of FSI but has contended that the charge for regulating must be for the administration/administering the Regulation.
The petitioner has nowhere stated that the charge exceeds the costs of administering the Regulation. Judicial notice can be taken of the fact that thousands of crores of rupees are spent by the Planning Authority and the State Government to provide infrastructure such as water, drainage, roads, parks, parking places, gardens, schools, etc. The concept of taking premium by giving extra concessions to the developers already exists in the DC Regulations.
::: Downloaded on - 09/06/2013 15:59:48 ::: 5635. On behalf of the Maharashtra Chamber of Housing Industry -
Intervenor and other Intervenors, it is submitted that under Entry 20 of List III, the relevant entry is "Economic and Social Planning" and it is competent for the State Legislature to make a law. The premium sought to be charged for 0.33 FSI is a fee. This power of the State and the Planning Authority under the MRTP Act, are the powers which are of a regulatory nature and akin to police power and therefore include the power to levy fee. The manner in which the use of any land falling within the area of any Planning Authority is to be regulated by a development plan is contemplated by Section 22 of the MRTP Act. By virtue of Section 22(m), it would include a power to charge a fee considering that it is a part of supervisory and/or regulatory function flowing out of the police power of the State. It is submitted that the fee/premium that is sought to be charged is not in the nature of a development charge as contemplated under Section 124-A but a regulatory fee in order to regulate the use of 0.33 FSI which flows out of the regulatory power conferred under Section 22(m) of the Act. The Regulation itself contemplates charging of fees by the Planning Authority for varied and different purposes in exercise of its regulatory power. The DCR are part of delegated legislation and as such levy is ::: Downloaded on - 09/06/2013 15:59:48 ::: 57 duly authorized by law. In the alternative, it is submitted that if the Court comes to the conclusion that levy/premium is bad or without authority, in such an event, that part of the amendment becomes bad and not the impugned notification in its entirety.
36. Before dealing with the argument, at the outset, we may point out that we are not impressed with the contention that the petitioners have not raised the plea to challenge the imposing of the fee. In the public interest litigation petition there are specific grounds and considering that the petitioner in the writ petition has also filed objections and have also raised plea which has been understood and dealt with by the respondents as being a challenge to the levy of fee, this technical objection in our opinion is devoid of merits. If the delegated authorities have no power in the exercise of subordinate legislation to levy a fee then technical pleas, to throw the rider of the saddle as now raised will not prevent a writ Court in public interest, going into the issue. The issue of locus has been dealt earlier and also in Janhit Manch v/s State of Maharashtra and others (supra). We adopt the same and even otherwise we have rejected the preliminary objection.
::: Downloaded on - 09/06/2013 15:59:48 ::: 5837. Under the provisions of MRTP Act certain powers have been conferred on the State Government as also the Development Authority.
Under Section 158, powers have been conferred on the State Government to make rules. Under Section 158(ii), in particular there is power under sub-Sections (xiii), (xv), (xxxi-a) and (xxxi-b) to charge fee/development charge. Under Section 159 there is a power to make regulations.
38. Under Section 130 of Chapter VIII, there is a provision for creation of a fund. Under 130(2) the fund shall be applied towards meeting:-
(a) the expenditure incurred in the administration of this Act;
(b) the cost of acquisition of land in the area of the authority concerned incurred for purpose of development;
(c) the expenditure for any development of land in the area of the Authority concerned undertaken by such authority.
The fund consists of :
(a) all moneys received by such Board or Authority from the State Government by way of grants, loans, advance or otherwise;
(b) all fees or charges received by such Board or Authority ::: Downloaded on - 09/06/2013 15:59:48 ::: 59 under this Act or Rules or Regulations thereunder;
(c) all moneys from any other sources.
This would indicate the fund can include also fee or charge levied under the Regulation. But under Section 132 this fund can only be applied apart from the expenditure incurred in the administration of the Act, for development of land. "Development" has been defined under Section 2(7) of the Act, with its grammatical variations as to mean the carrying out of buildings, engineering, mining or other operations in, or over, or under, land or the making of any material change, in any building or land or in the use of any building or land or any material or structural change in any heritage; building or its precincts and includes demolition of any existing building structure or erection or part of such building, structure or erection, etc. All this has reference to only development of land and the expression has to be construed accordingly. In other words even if fees are charged, then the fees from the fund cannot be used only towards administration, costs of acquisition of land and expenditure for development of land and for no other purpose.
Chapter VI-A was introduced by Maharashtra 16 of 1992. Under Section 124A power has been conferred on the Authority to levy a development charge or use or change of use of any land or building or ::: Downloaded on - 09/06/2013 15:59:48 ::: 60 development of any land or building for which permission is required.
Under Section 124J "Development Fund" has to be established of moneys received by the Authority as development charge together with interest thereon, which shall be credited to the development fund which is deducted from the "Fund" under section 130. The moneys credited to this fund, shall be applied only for the purpose of providing amenities in the area and maintenance and improvement of the area under the jurisdiction of the said Authority. Section 2(2) defines "amenity" to mean roads, streets, open spaces, parks, recreational grounds, play grounds, sports complex, parade grounds, gardens, markets, parking lots, primary and secondary schools and colleges and polytechnics, clinics, dispensaries and hospitals, water supply, electricity supply, street lighting, sewerage, drainage, public works and includes other utilities, services and conveniences. It would thus be clear that it is only from the moneys in the development fund, which can pursuant to Section 124A be used for amenities. These amenities include what may be described as infrastructure. Section 124B provide the rates which can be charged and they are set out in the Second Schedule. The amounts from the fund under section 130 cannot be used in so far as amenities are concerned. Considering Section 124-A and 130, administrative committee include proposal of infrastructure as it falls within amenities.
::: Downloaded on - 09/06/2013 15:59:49 ::: 61Therefore, these fees/charges under the Act, Rules or Regulations other than under Section 124A can only be used for purposes set out in section 130 and in so far as amenities are concerned, it is the amount that can only be expended in terms of Section 124A read with Section 124J. Section 124L, further, makes it clear that the provisions of Chapter VIA shall have effect, notwithstanding anything inconsistent therewith contained in this Act or any other law for the time being in force. Sub-Section (2) of Section 124L sets out that the provisions of the chapter shall be in addition to, and not in derogation of, any other provisions of this Act or any law relating to municipal corporation, municipal council or other local authority or any urban area. The very object whether the funds are sought to be raised as reflected in the budget speech for for minority development or general development as shared between the State and the Corporation is alien to the purpose of this Act.
39. We shall now examine whether under Section 22(m) of the MRTP Act there is any power to levy a fee. Section 22(m) reads as under:
"Section 22 : Contents of Development Plan - A Development Plan shall generally indicate the manner in which the use of land in the area of the Planning Authority shall be ::: Downloaded on - 09/06/2013 15:59:49 ::: 62 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 mattes, that is to say,
- . . . .. . . . . . . . . . . .
(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 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 area 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."::: Downloaded on - 09/06/2013 15:59:49 ::: 63
Under our Constitution it is open to the State Legislature pursuant to Entry 66 of list II to levy fees in respect of any of the matters in the list, but does not include fees taken in any court. The State Legislature therefore has power to levy fees, which is co-extensive with its powers to legislate with respect to substantive matters and it may levy a fee with reference to the services that would be rendered by the State under such law. The State may also delegate such power to a local authority. The important question however is whether the power to levy a fee has been conferred on the authority or in the instant case in the State Government and if not conferred, the same has to be declared as ultra vires. Section 22 falls in Chapter III, under Development Plan. The entire chapter deals with proposition of a development plan and the contents of the plan. Section 22(m) therefore provides for provisions to be made for granting permission, the controlling and regulating development of land. In the matter of charging for development of land the Legislature has provided Section 124A. Therefore, the provisions of what should be contained in the Development Plan and the provisions for controlling and regulating the development of land cannot be said to be an extra power to tax or levy a fee or a charge or premium. Under D.C. Regulation 37(2), the power ::: Downloaded on - 09/06/2013 15:59:49 ::: 64 to modify the development plan is of the State Government.
40. A fee is a payment levied by an authority in respect of services performed by it for the benefit of the fee payer unlike a tax which is payable for the common benefits conferred by the authority on all tax payers. A fee is a payment made for some special benefit enjoyed by the payer and the payment is proportional to such benefit. Money raised by fee is appropriated for the performance of the service and does not merge in the general revenue. While there is no quid pro quo between a tax payer and the authority in case of a tax, there is a necessary co-
relation between fee collected and the service intended to be rendered.
The quid pro quo need not be understood in mathematical equivalence but only in a fair correspondence between the two. Broad co-
relationship is all that is necessary. See Srikrishna Das v/s Town Area Committee, Chirgaon, (1990) 3 SCC 645.
In Gupta Modern Breweries v/s State of J & K, (2007) 6 SCC 317, the Supreme Court observed as under:
"It is now well settled principle of law that the regulatory powers are generally to be widely construed. However, empowering the State Government to impose taxes, fees or duties ::: Downloaded on - 09/06/2013 15:59:49 ::: 65 and such demands must be authorised by the Statute and must contain sufficient guidelines."
From these judgments, it will be clear that there must be specific provision under which the State Government or the Local Authority acting as a delegate can charge a fee or make a demand. A fee may be compensatory or regulatory. In case of compensatory fee, there need be a quid pro quo which is not necessary in case of a regulatory fee. In the instant case considering the arguments advanced that the premium if charged for regulation it has to be a fee if not a tax. In CCF V/s Chhata Sugar Co. Ltd., (2004) 3 SCC 466, the Court observed " The expression "regulatory Fee is not defined. Fee, therefore, may be held to be a fee if a service is rendered . While in so far as a regulatory fee although the extent of quid .pro quo was understood in common parlance may not exact but it trifle that regulatory fee may be in effect and substance a tax. Generally speaking taxes are burdens of a pecuniary nature imposed for defraying the costs of Governmental functions whereas charges are fees when they are imposed upon a person to defray the cost of particular services rendered to his account.
41. The Development Control Regulations form part of the ::: Downloaded on - 09/06/2013 15:59:49 ::: 66 Development Plan and are made by the Planning Authority with the previous approval of the State Government under Section 22 read with sec 159(ii) of the MRTP Act. It is well settled that a tax or fee can only be imposed/ charged by a delegated authority if there is an express provision in the statute authorizing such charge/ levy.
Neither Section 22(m), nor Section 159 (ii) or section 154 confer any express power on the Planning Authority to make Development Control Regulation levying a premium of Rs.4900/- to Rs.23000/-
per sq. meter and more as fixed vide above Notification and that too with a discretion to alter or modify which discretion is reserved in the State Government.
In Ahmedabad Urban Dev Auth vs S.J.Pasawalia, (supra), the Supreme Court upheld a Gujarat High Court judgment where it had been held that in the absence of any express/specific provision in the Gujarat Town Planning & Urban Development Act authorizing the levy of a development charge on plot holders who carried out any development/ construction regulations framed by the Ahmedabad Urban Development Authority purporting to levy a development charge were illegal. Both the High Court and the Supreme Court negated the contention that even in the absence of ::: Downloaded on - 09/06/2013 15:59:49 ::: 67 any specific provision, a power to recover a fee for the purpose of development of the area in question & for implementing schemes of development, could be implied in the Act as being incidental or ancillary to carrying on the functions for which the Development Authority had been constituted under the Town Planning Act. The Supreme Court held "in a fiscal matter it will not be proper to hold that even in the absence of express provision, a delegated authority can impose a fee or a tax. In our view, such power of imposition of tax and/or a fee by a delegated authority must be very specific and there is no scope for implied authority for imposition of such tax or fee. It appears to us that the delegated authority must act strictly within the parameters of the authority delegated to it under the Act and it will 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."
"It has been constantly held by this Court that whenever there is compulsory exoction of any money, there should be specific provision for the same and there is no room for intendment. Nothing is to be read and nothing is to be implied and one should look fairly ::: Downloaded on - 09/06/2013 15:59:49 ::: 68 to the language used"
41. In fact in the MRTP Act 1966 Chapter VIA : Sections 124A to 124L, were introduced by Amendment Act 16 of 1992 providing for Levy and recovery of developments charges at the rate specified in the second schedule i.e. at rates ranging from a minimum of Rs.40/- to a maximum of Rs.250/- per sq. meters in Mumbai. The Statement of Objects and reasons for the 1992 Act state "The MRTP Act 1966 has been enacted to provide for planned development in urban areas, by providing inter alia for constitution of Regional Planning Boards. for preparation of Development Plans and creation of new towns by means of constitution of Special Planning & Development Authorities. All these plans and schemes being capital intensive, the said authorities have not been able to achieve the desired results, mainly on account of lack of adequate funds for effective implementation of such development plans or Town Planning Schemes. It has therefore become imperative to mobilize additional resources for being placed at the disposal of Planning or Special Planning or Development Authority constituted under the Act for effective implementation of the provisions of the Act and to provide for proper amenities and facilities for the healthy growth of these cities and ::: Downloaded on - 09/06/2013 15:59:49 ::: 69 towns. The existing provisions of the do not contain any , MRTP Act provisions for levy and collection of development charges by such . It is therefore decided to suitably amend the said Act to provide Auth ority for levy assessment and recovery of development charge by such authority on institution of change of use of any land or building or development of any land or building, for which permission is required under the Act .
Accordingly a new chapter VIA is being inserted containing appropriate provisions .. .. .." (emphasis supplied ).
Sections 158(2)(xxxi-a) and 158(2)(xxxi-b) were also inserted by the said Maharashtra Act 16 of 1992 enabling the Government to make Rules for the assessment of development charges payable on development of land.
In Bharti Televentures Ltd vs State of Maharashtra, (2007) 4 Mh.L.J. 105, a Division Bench of Hon'ble Court quashed recovery of "premium" levied by a Development Control Regulation, as a condition for grant of permission to place/erect a cellular tower on a rooftop of a building. In that case the Development Control Regulation required "premium" to be paid, computed on the height of the cellular tower (per running meter) ::: Downloaded on - 09/06/2013 15:59:49 ::: 70 and the "premium" levied was far in excess of the development charges stipulated by Chapter V1A.
The levy of premium was challenged on the ground that the "the DCR's are, framed and approved under section 22(m) of the MRTP Act which does not confer any power to recover any lax/premium related to the area or height of the structure as a condition for granting development/planning permission. This Court upheld the challenge,
44. Section 22(m) of the MRTP Act deals with the "contents of a development plan" and stipulates that a development plan shall contain "provisions for permission to be granted for controlling and regulating the use and development of land within the jurisdiction of a local authority." Intervenors (MCHI) has contended as although Section 22(m) does not specifically authorize the levy or collection of " premium" the levy/ recovery of "premium" was permissible in law as a regulatory fee. Reliance is placed on the decision of the Supreme Court in "State of West Bengal vs Kesoram Industries "
(2004) 10 SCC 201.::: Downloaded on - 09/06/2013 15:59:49 ::: 71
In State of West Bengal vs Kesoram Industries (supra) it is stated that it is well settled that the power to regulate & control is separate and distinct from the power to tax. The issue before the Supreme Court was in fact the powers of the State to levy tax on 'land' and power of the Union to regulate and control industries.
Although a "regulatory fee" can be levied in exercise of the power to regulate, it is well settled that " in the garb of exercising the power to regulate, any fee or levy which has no connection with the cost of or expenses of administering the regulation cannot he imposed". See State of West Bengal vs Kesoram Industries: This position has been reiterated in the decision in the case of State of Uttar Pradesh Vs Yarn Organic Chemicals, AIR 2003 SC 4650. In that case the Supreme Court considered the earlier decisions including in BSE B rokers Forum Vs SEBI, (2001) 3 SCC 482 - which has been relied on by the Intervenors, and then reiterated - that a regulatory fee " is required to be justified with reference to the cost of such regulation."
45. The Premium levied is ex facie not a "regulatory fee".
The premium is not for the purpose of meeting the cost or ::: Downloaded on - 09/06/2013 15:59:49 ::: 72 expenses of administering the regulation. We have earlier dealt with Sections 124A and 124J. The Government has in its affidavits contended that it is to meet the costs of infrastructure. The Premium levied is linked to the Ready Reckoner value of the FSI and ranges from Rs.4,900/- per sq. meters in Manori / Gorai to Rs.
23,000/- per sq. meters and more in Bandra. The costs or expenses of administering regulation cannot vary according to the value of the land / location. As per the impugned Notification the premium is not for meeting the costs of or expenses of administering the regulation. The amount recovered by way of premium is to be shared 50:50 between the State Government and the MCGM. The MCGM is to utilize its 50% for implementation of the Development Plan & infrastructure".
Charging a premium to raise funds for implementation of the Development Plan and for creating Infrastructure, is clearly beyond the permissible scope/ purpose of a regulatory fee i.e. to meet the costs & expenses of administering the regulation, if that can be urged. Moreover the 50% collected by Government is not earmarked for any specific purpose on the contrary the whole intent is to garner resources for extraneous purposes of Minority Welfare Fund and other general ::: Downloaded on - 09/06/2013 15:59:49 ::: 73 expenses to meet the budgetary deficit.
46. As already noted by Maharashtra Act 16 of 1992 Chapter VI-A was inserted to provide for the levy of a Development Charge to enable local authorities to raise funds "for effective implementation of the provisions of the Act and to provide for proper amenities and facilities for the healthy growth of these cities and town . ' as the MRTP Act did no t c on t ai n an y p r ov i si on s fo r l ev y a n d c o ll ec ti o n o f development charges by such Authority.
Under Chapter VI (A) of the Act read with the 2nd Schedule thereto, the permissible levy of Development charges ranges only from Rs.40/- - Rs.250/- per sq meters in Mumbai.
47. We may once again refer to the judgment in the case of State of West Bengal v/s Kesoram Industries Ltd. (supra) to understand its true impact. In paragraph 104 and 106 of the said Judgment, it is set out as under :
"104. There is nothing like an implied power to tax. The source of power which does not specifically speak of taxation cannot be so interpreted by expanding its width as to include ::: Downloaded on - 09/06/2013 15:59:49 ::: 74 therein the power to tax by implication or by necessary inference. States Cooly in Taxation (Vol. 1, 4th Edn.) "There is no such thing as taxation by implication.
The burden is always upon the taxing authority to point to the act of assembly which authorizes the imposition of the tax claimed."
"106. The judicial opinion of binding authority flowing from several pronouncements of this Court has settled these principles; (i) in interpreting a taxing statute, equitable considerations are entirely out of place. Taxing statues cannot be interpreted on any presumption or assumption. A taxing statute has to be interpreted in the light of what is clearly expressed; it cannot imply anything which is not expressed; it cannot import provisions in the statute so as to supply any deficiency; (ii) before taxing any person it must be shown that he falls within the ambit of the charging section by clear words used in the section; and (iii) if the words are ambiguous and open to two interpretations, the benefit of interpretation is given to the subject. There is nothing unjust in the taxpayer escaping if the letter of the law fails to catch him on account of ::: Downloaded on - 09/06/2013 15:59:49 ::: 75 the legislature's failure to express itself clearly."
In Kesoram Industries Ltd. (supra), the issue was whether the State under the garb of legislation can impose a tax on land in respect of a matter that the Central Government had exercised its power to regulate and control. While considering the expression "Power to regulate and control and power to tax", the Court observed that the primary purpose of taxation is to collect revenue. Power to tax may be exercised for the purpose of regulating an industry, commerce or any other activity; the purpose of levying such tax, an impost to be more correct, is the exercise of sovereign power for the purpose of effectuating regulation though incidentally the levy may contribute to the revenue. Thereafter, referring to Cooley on taxation, the learned Court quoted as under:
"So-called license taxes are of two kinds. The one is a tax for the purpose of revenue. The other, which is, strictly speaking, not a tax at all but merely an exercise of the police power, is a fee imposed for the purpose of regulation."
The Court then noted that the Seven-Judge Bench in Synthetics and Chemicals Ltd. v/s State of U.P., (1990) 1 SCC 109, had agreed ::: Downloaded on - 09/06/2013 15:59:49 ::: 76 that regulation is a necessary concomitant of the police power of the State. However, it was an American doctrine and in the opinion of the Court it was not perhaps applicable as such in India. The Court recognized the power to regulate as a part of the sovereign power of the State exercisable by the competent legislature. The Court accepted the position that the State has the power to regulate.
However, in the garb of exercising the power to regulate, any fee or levy which has no connection with the cost or expenses of administering the regulation, cannot be imposed. Only such levy can be justified as can be treated as part of regulatory measure. Thus, the State's power to regulate perhaps not as emanation of police power but as an expression of the sovereign power of the state has its limitation. The Court then held that these observations of the Court found support to the view formed that a power to regulate, develop or control would not include within its ken a power to levy tax or fee except when it is only regulatory. Power to tax or levy for augmenting revenue shall continue to be exercisable by the legislature in whom it vests i.e. the State Legislature in spite of regulation or control having been assumed by another legislature i.e. the Union. It is in that context that the Supreme Court was looking at the expression "Power to regulate and control".
::: Downloaded on - 09/06/2013 15:59:49 ::: 7748. We then consider the judgment in State of Punjab and another v/s Devans Modern Breweries Ltd. & Anr. (supra). We will advert only to the majority judgment. In para 102, two points for consideration were framed, which were: (a) Whether the import fee levied is the price for parting with the privilege given to the respondent to import liquor into the State and, therefore, the same is within the competence of the State to impose import fee; and (b) Whether the imposition of import fee does not, in any way, restrict trade, commerce and intercourse among the States.
The Court, in so far as the first question is concerned, observed that the amount charged is not a fee nor a tax but is in the nature of price of a privilege which the purchaser has to pay whilst trading and closing business in noxious article/goods. The collection of such amount in the shape of import fee does not form part of the general revenue of the State. It is one of the terms and conditions of the excise policy applicable to all L-1 holders. The Court then noted that the Court in several judgments has held that the State Government has unfettered powers to regulate the export/import/sale of intoxicants and in exercise of is regulatory powers, the import fee has ::: Downloaded on - 09/06/2013 15:59:49 ::: 78 been incorporated as one of the terms of the excise policy on yearly basis. In so far as question (b) is concerned, the Court observed that Articles 301 and 304(a) of the Constitution are not attracted to the present case as the imposition of import fee does not, in any way, restrict trade, commerce and intercourse among the States and the permissive privilege to deal in liquor is not a "right" at all. The levy charged for parting with that privilege is neither a tax nor a fee.
49. In our opinion, therefore, Section 22 which falls under Chapter III and which requires what must be the contents of the development plan, does not expressly confer any power on the State Government or the Planning Authority to make a provision for imposing a fee whether regulatory or compensatory. Modification under Section 37, is modification of the plan. Providing for imposition of a premium which is nothing but a fee, will have to be held to be ultra vires, the provisions of the MRTP Act. Once the legislature has provided for development charge under Section 124A, which charge has to be kept in a separate fund to be used for providing amenities, it is not open for the State or the Planning Authority to contend that under the guise of giving grant of additional FSI of 0.33 they are entitled to a charge or a fee for the purpose of providing amenities.
::: Downloaded on - 09/06/2013 15:59:49 ::: 7950. The Respondents/State Government has not been able to show any provision in the MRTP Act expressly/specifically authorizing the levy of such premium based on the Ready Reckoner value of land per sq. meter and ranging from Rs.7000/- to Rs.
23000/- sq. meter in different areas and localities of suburbs and extended suburbs.
51. The question is, whether it is possible to severe the notification from grant of additional FSI and charge of premium. In our opinion, it is not possible to do so. The exercise of grant of additional FSI is only on payment of premium. The object behind amending the D.C. Regulations and for granting additional FSI is reflected in the budget speech. Even otherwise the regulation is for raising of revenue. In the light of that, we have to hold that the entire notification dated 3rd October, 2008 is ultra vires the MRTP Act and consequently the notification on that point has to be struck down.
52. For the aforesaid reasons, the petitions have to be allowed. Rule made absolute to the extent that the impugned notification dated 3 rd October, 2008 is ultra vires the provisions of the MRTP Act and hence ::: Downloaded on - 09/06/2013 15:59:49 ::: 80 declared null and void.
In the circumstances of the case, each party to bear their own costs.
(A. A. SAYED, J.) (F. I. REBELLO, J.)
ig
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