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It is stated by Sri K. Janardhana Rao the learned Standing Counsel for the Municipal Corporation - and not disputed by the counsel for the petitioners - that the Municipal Corporation of Hyderabad has been constituted as the Authority for the purposes of the Act, as contemplated by cl.(b) of S.2.

Under the A.P.Urban Areas (Development) Act, Zoning Regulations have been made, which are called "Zoning Regulations of Hyderabad Development Area, 1981". Regulation 1,3 provides that these Regulations shall be read with the Building Bye-Laws issued under the Hyderabad Municipal Corporation Act, 1955 and that, all Regulations and Bye-Laws issued under the Hyderabad Municipal Corporation Act, 1955 and that, all Regulations and Bye-Laws made under the H.M.C.Act, in so far as they are in conflict with these Regulations, shall be invalid to that extent with effect from the date of coming into force of the Regulations. The expression 'development' is again defined by these Regulations, in the following words:-

2. If we read the provisions in the H.M.C. Act relating to sanction of layout, along with the Layout Rules , 1965, the following facts emerge: the application for sanction of layout has to be made by the "owner of a land" (See Appendix 'A' read with R.3). Indeed, R.4 expressly provides that the "application shall bear the signature of the owner of the land." Further, R.9 provides that the owner/applicant shall enclose to the application a non-encumbrance certificate from the Registration Department, in respect of the land covered by the layout, together with a true copy of the title-deed, attested by a Gazetted Officer. While making an application for sanction of layout in the form prescribed in Appendix 'A'. the applicant is also bound to make a declaration that he is enclosing a non-encumbrance certificate from the Registration Department, to his application, in support of his 'free title on the land' together with a true copy of the sale deed certified by a Gazetted Officer. Similarly, the Zoning Regulations, which too are of a statutory character, provide that an application for development permit has to be made in the form prescribed in Appendix 'A' thereof. The form prescribed by Appendix 'A' shows that the application has to be made by the owner of the land; he is also obliged to enclose to his application, documents in proof of his "ownership title". The expression "owner" is also defined by the Regulations. A perusal of the definition of "owner" in the Zoning Regulations made it clear that, the emphasis is upon the person in effective control and possession of the land, which is evident from the fact that persons entitled to receive the rent for the land, an agent, trustee, Receiver, executor , administrator, or manager appointed by a competent Court, as also a mortgagee or a lessee, are included within the definition. Same is the situation under the Building Bye-Laws, though, it is true, the said bye-laws come into play at a stage subsequent to the sanction of layout. It is thus clear from the several provisions referred to above that, an application for sanction of layout has to be made by the owner of the and; the statutory provisions also require that he should enclose to the application his title-deeds and a non-encumbrance certificate in proof of his title, and a free title at that. The expression "owner" is also defined. In such a situation, it must be held that the authority competent to sanction the layout has to be satisfied, before sanctioning, that the applicant for sanction of layout is the owner of the land . That satisfaction has to be arrived at on the basis of the title-deed or documents as the case may be, produced by him, and the non-encumbrance certificate. The necessarily means and implies that, if another person comes and says that the applicant is not the owner, the authority has to look into that aspect and decide whether the applicant is the owner, or not, so that the layout applied for by him can be sanction, in case his application is found to be otherwise in order. It is true that, any determination made by the authority or any finding, if it can be called that, of the authority on the said question is not conclusive, and it is always open to the aggrieved person to approach the appropriate Court for vindicating or establishing his ownership but, the said determination/finding of the authority is good for the limited purpose of the Act and the Rules, i.e. for the purpose of the sanction of layout. Any decision or decree obtained by a person concerned would certainly be binding upon the authority, and would override any determination/finding of the authority.

As explained by the Supreme Court, the Rule is in two parts. The first part deals with an applicant for licence who is the owner of the site, building and equipment, while the second part deals with an applicant who is not such an owner. It was observed "even if the applicant for licence is the owner of the property, he has to produce before the licensing authority the necessary records not only relating to his ownership but also regarding his possession. It is implicit that the owner having a title to the property, if he can satisfy the licensing authority with regard to his possession also, will indeed be in 'lawful possession', although the word 'lawful' is not used in the first part....If , however, the applicant for the licence is not the owner, there is no question of his showing title to the property and the only requirement of the law is to produce to the satisfaction of the authority documentary evidence with regard to his lawful possession of the property...........". In that case, both the lessor and the lessee applied for a licence; while the lessor applied for a fresh licence, the lessee applied for renewal of the licence. After considering the claims and contentions of both the parties, the licensing authority granted renewal of licence in favour of the lessee, which matter ultimately went up to the Supreme Court,. The relevance of this decision in the facts of the present case is this: First part of R.13 of the Madras Rules is practically on the same lines as the Layout Rules and the Zoning Regulations, referred to above. Both are regulatory powers. The decision of the Supreme Court recognizes that, where the Rules require the applicant for licence to satisfy the licensing authority that he is the owner and in possession of the property, and if a rival person comes forward and either disputes the owner's claim or puts forward a rival claim for licence, the licensing authority has the necessary and implied power to enquire into their rival claims and contentions, and decide as to who is entitled to the grant/renewal of licence. Taking the same analogy it must be held herein also that, when the Rules speak of an application being made by the owner and his producing title-deeds and the documents in support of his title - a free - title - it could not have been without a purpose and that, incase of a dispute, the appropriate authority does have the necessary and implied power to enquire into this aspect and determine whether the applicant or, if there be more than once applicant, who among them is entitled to the sanction of layout. In this view of the matter it would be too simplistic to say that the authorities under H.M.C. Act, or the Zoning Regulations, do not have the power to decide question of title. As explained above, while they cannot decide question of title, they can determine, for their own purposes, whether an applicant for licence satisfies the requirements of all the Rules, which, inter alia, include the satisfaction that the applicant is the owner of the land. Since both the Layout Rules and the Zoning Regulations have to be read together in the matter of sanction of layout, the definition of "owner" in the Zoning Regulations must also be kept in view in determining the said aspect.

6. The quashing of the said Circular does not, however, mean that the Corporation has no power to take cognizance of the letter of the Collector, or her objection. The Corporation shall keep in mind the said general objection while sanctioning the layouts with respect to lands in Banjara Hills area (Shaikpet village) including the plan referred to in the Collector's letter, if an when communicated and in each such case, satisfy itself that the applicant for sanction of layout is the owner of the land, as contemplated by the Layout rules and the Zoning Regulations; it shall sanction the layout only if it is satisfied in that behalf, after making such enquiry as it thinks appropriate. The Corporation shall also have the power, in such a situation, to call upon the Collector to submit his specific objections, if any, and any other documents which the Collector may wish to produce in support of his objection. It is, however, for the corporation, or the appropriate authority of the Corporation, as the case may be (authority competent to sanction the layout under the Layout Rules and the Zoning Regulations), to look into the matter and determine whether the applicant is the owner of the land, or not. Any finding or conclusion arrived at by the authority in this behalf shall, of course, be subject to the decision of a Court. It is reiterated that the determination of the authority on the above aspect shall be valid only for the purpose of the sanction of layout, and nothing more.