Full Judgment Text
2023:BHC-OS:13168-DB
Prestige Estate Projects Ltd v State of Maharashtra & Ors & Connected Matters
901-oswpl-17993-2023-J+F.doc
Sumedh
REPORTABLE
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (L) NO. 17993 OF 2023
1. Prestige Estate Projects
Ltd,
a company incorporated under the
provisions of the Companies Act, 1956
having its registered office at Falcon
House, No. 1, Main Guard Cross Road,
Bangalore 560 001.
2. Faiz Rezwan,
An adult Indian inhabitant and citizen,
and a shareholder of Petitioner No. 1,
having his office at Falcon House, No.
1, Main Guard Cross Road, Bangalore
560 001. …Petitioners
~ versus ~
1. The State of Maharashtra,
Through the Principal Secretary, Urban
Development Department, Mantralaya,
Mumbai 400 021.
SUMEDH
NAMDEO
SONAWANE
Digitally signed by
SUMEDH NAMDEO
SONAWANE
Date: 2023.11.06
13:32:01 +0530
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2. The Municipal Corporation
of Greater Mumbai,
A municipal corporation constituted
under the provisions of the Mumbai
Municipal Corporation Act, 1888,
having its headquarters at 5,
Mahanagarpalika Road, Fort, Mumbai
400 001.
3. The Commissioner
Municipal Corporation of
Greater Mumbai,
The chief executive officer of
Respondent No. 2 having its office at 5,
Mahanagarpalika Road, Fort, Mumbai
400 001.
4. The Chief Engineer
(Development Plan),
Municipal Corporation of Greater
Mumbai ,
An officer of the Municipal
Corporation of Greater Mumbai, having
his office at 5, Mahanagar Palika Road,
Fort Mumbai, 400001. …Respondents
A PPEARANCES
for the petitioner Dr Milind Sathe, Senior Advocate
with Mr Tushad Cooper,
Senior Advocate , Yash
Momaya, Parag Kabadi,
Falguni Thakkar, Anshita Sethi
i/b DSK Legal.
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for respondent-
MCGM
Mr Aspi Chinoy, Senior Advocate,
with Joel Carlos, Pooja Yadav,
Rupali Adhate i/b Sunil
Sonawane.
for respondent-
State
Mr Abhay Patki, AGP
Present in Person Mr Prashant Lohare, Sub Engineer
(Building & Proposals
Department WS-I).
Mr Avinash Pandge, Mr
Dnyaneshwar Bandgar, Mr
Shahbaz Peerjada, Sub engineer
(Building & Proposals Department
WS-I).
WITH
WRIT PETITION NO. 240 OF 2023
1. Sugee Two Developers LLP,
a Limited Liability Partnership Firm,
constituted under the provisions of the
Limited Liability Partnership Act,
2008, having its office at 3rd Floor,
Nirlon House, Dr Annie Besant Road,
Worli, Mumbai 400 030.
2. Nitin Varadkar,
nominee of Sugee One Developers
Private Limited, a Designated Partner
of the Petitioner No. 1 having his office
at 3rd Floor, Nirlon House, Dr. Annie
Besant Road, Worli, Mumbai 400 030. …Petitioners
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~ versus ~
1. State of Maharashtra,
Through the Principal Secretary Urban
Development Department Mantralaya,
Mumbai 400 032.
2. Brihanmumbai Municipal
Corporation,
a statutory corporation incorporated
under the Mumbai Municipal
Corporation Act, 1888; having its office
at Mahapalika Marg, Mumbai 400 001.
3. Municipal Commissioner,
Brihanmumbai Municipal Corporation,
having his office at Mahapalika Marg,
Mumbai 400 001. …Respondents
A PPEARANCES
for the petitioner Dr Abhinav Chandrachud with
Sanjay Kadam, Sanjeel Kadam,
Nitisha Lad, Sayalee Rajpurkar,
Soham Salvi i/b Kadam & Co.
for respondent -
State
Mr MA Sayed, AGP.
for respondent-
MCGM
Mr Joel Carlos with Pooja Yadav,
Rupali Adhate i/b Sunil
Sonawane.
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WITH
WRIT PETITION NO. 238 OF 2023
1. Sugee Nine Developers LLP,
a Limited Liability Partnership Firm,
constituted under the provisions of the
Limited Liability Partnership Act,
2008, having its office at 3rd Floor,
Nirlon House, Dr Annie Besant Road,
Worli, Mumbai 400 030
2. Jitendra Rawal,
Nominee/Authorized Signatory the
Petitioner No. 1 having his office at 3rd
Floor, Nirlon House, Dr Annie Besant
Road, Worli, Mumbai 400 030.
…Petitioners
~ versus ~
1. State of Maharashtra,
Through the Principal Secretary Urban
Development Department Mantralaya,
Mumbai 400 032.
2. Brihanmumbai Municipal
Corporation,
a statutory corporation incorporated
under the Mumbai Municipal
Corporation Act, 1888; having its office
at Mahapalika Marg, Mumbai 400 001.
3. Municipal Commissioner,
Brihanmumbai Municipal Corporation,
having his office at Mahapalika Marg,
Mumbai 400 001. …Respondents
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PPEARANCES
A
for the petitioner Mr Pranit Kulkarni with Sanjeel
Kadam, Nitisha Lad, Sayalee
Rajpurkar, Soham Salvi i/b
Kadam & Co.
for respondent -
State
Mr Abhay Patki, Addl GP.
for respondent-
MCGM
Mr Joel Carlos ,with Pooja Yadav,
Rupali Adhate i/b Sunil
Sonawane.
WITH
WRIT PETITION NO. 1122 OF 2023
1. Sugee Fifteen Developers
LLP,
a Limited Liability Partnership Firm,
constituted under the provisions of the
Limited Liability Partnership Act,
2008, having its office at 3rd Floor,
Nirlon House, Dr Annie Besant Road,
Worli, Mumbai 400 030
2. Anand B Gandhi,
Nominee/Authorized Signatory the
Designated Partner of the Petitioner
No. 1 having his office at 3rd Floor,
Nirlon House, Dr Annie Besant Road,
Worli, Mumbai 400 030.
…Petitioners
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~ versus ~
1. State of Maharashtra,
Through the Principal Secretary Urban
Development Department Mantralaya,
Mumbai 400 032.
2. Brihanmumbai Municipal
Corporation,
a statutory corporation incorporated
under the Mumbai Municipal
Corporation Act, 1888; having its office
at Mahapalika Marg, Mumbai 400 001.
3. Municipal Commissioner,
Brihanmumbai Municipal Corporation,
having his office at Mahapalika Marg,
Mumbai 400 001.
…Respondents
PPEARANCES
A
for the petitioner Mr Saurish Shetye , with Sanjeel
Kadam, Nitisha Lad, Sayalee
Rajpurkar, Soham Salvi i/b
Kadam & Co.
for respondent -
State
Mr Milind More, AGP.
for respondent-
MCGM
Mr Joel Carlos ,with Pooja Yadav,
Rupali Adhate i/b Sunil
Sonawane.
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WITH
WRIT PETITION (L) NO. 22774 OF 2023
Ankur Premises Developers
LLP,
A Limited Liability Partnership formed
under the provisions of the Limited
Liability Partnership Act, 2008, having
its registered office at 8, Chamunda
Krupa, Cottage Lane, Santacruz
(West), Mumbai 400 054
…Petitioner
~ versus ~
1. Municipal Corporation of
Greater Mumbai, Through
the Municipal
Commissioner,
having office at Brihanmumbai
Mahanagarpalika Headquarters,
Mahapalika Marg, CST, Mumbai 400
001.
2. Municipal Corporation of
Greater Mumbai, Through
Assistant Municipal
Commissioner,
H West Ward having office at
Brihanmumbai Mahanagarpalika
Headquarters, Mahapalika Marg, CST,
Mumbai 400 001.
3. Municipal Corporation of
Greater Mumbai, Through
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Assistant Municipal
Commissioner,
H West Ward having office at
Brihanmumbai Mahanagarpalika
Headquarters, Mahapalika Marg, CST,
Mumbai 400 001.
4. Municipal Corporation Of
Greater Mumbai, Through
Assistant Engineer,
(Building & Proposal), H West Ward,
having office at Brihanmumbai
Mahanagarpalika Headquarters,
Mahapalika Marg, CST, Mumbai 400
001.
5. The State Of Maharashtra,
Through The Secretary,
Urban Development
Department,
Government of Maharashtra,
6th Floor, Mantralaya, Mumbai. …Respondents
PPEARANCES
A
for the petitioner Mr Zubin Behramkamdin, Senior
Advocate , Nitya Shah, Kinnar
Shah i/b Divya Shah Associates.
for respondent -
State
Mr Abhay Patki, Addl GP.
for respondent-
MCGM
Mr Atul Rajadhyaksha, Senior
Counsel , with Joel Carlos,
Pooja Yadav, Rupali Adhate i/b
Sunil Sonawane.
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WITH
WRIT PETITION (L) NO. 23049 OF 2023
1. Relcon Infraprojects ltd,
a company incorporated under the
Companies Act, 1956, having its
registered at 4th Floor, Relcon House
Premises Cooperative Society Ltd, Plot
15/A, M.G. Road, Vile Parle (E),
Mumbai 400 057.
2. Relcon Krisha Realty LLP,
a Limited Liability Partnership
incorporated under the Limited
Liability Partnership Act, 2008 having
its registered office at 4th Floor, Relcon
House Premises Cooperative Society
Ltd, Plot 15/A, M.G. Road, Vile Parle
…Petitioners
(East), Mumbai 400 057.
~ versus ~
1. The State of Maharashtra,
through Urban Development
Department, Government of
Maharashtra, Mantralaya, Madam
Cama Road, Hutatma, Rajguru Square,
Nariman Point, Mumbai 400032.
And through Revenue and Forest
through the Government Pleader, High
Court (O.S.), Mumbai.
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2. Municipal Corporation of
Greater Mumbai,
Building Proposal Department (K East
Ward), Sangam Cooperative Housing
Society Jogeshwari East, Mumbai,
Maharashtra 400093.
3. Ridhi Sidhi Sadan Unit of
Shree Ridhi Sidhi Co-
Operative Housing Society
Ltd,
a society duly registered under Bombay
Co-Operative Societies Act, 1925
having its office at Ridhi Sidhi Sadan
Unit of Shree Ridhi Sidhi CHS Ltd,
Tejpal Scheme Road No. 2, Vile Parle
(East), Mumbai 400 057. …Respondents
PPEARANCES
A
for the petitioner Mr Cyrus Ardeshir , with Aseem
Naphade & Akanksha Mishra
i/b Shriya Mehta.
f or respondent no. 3 Mr Sarosh Bharucha , with Jamshed
Master i/b Rahul Tiwari
for respondent-
MCGM
Mr Aspi Chinoy, Senior Advocate ,
Joel Carlos, Rupali Adhate,
Pooja Yadav i/b Sunil
Sonawane.
For respondent –
State
Mr Abhay Patki, Addl. GP.
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WITH
WRIT PETITION (L) NO. 25945 OF 2023
1. Mayfair Housing Pvt Ltd,
1, Mayfair Meridian, Near St. Blaze
Church, Ceaser Road, Andheri (West)
Mumbai – 400 058.
2. Nayan Arvind Shah,
Director of Mayfair Housing Pvt Ltd
Having office at 1, Mayfair Meridian,
Near St Blaze Church, Ceaser Road,
Andheri (West), Mumbai 400 058. …Petitioners
~ versus ~
1. State of Maharashtra,
Urban Development Department
Through the office of the Government
Pleader (O.S.), High Court, Bombay.
2. Municipal Corporation of
Greater Mumbai,
A statutory Corporation incorporated
under the Provisions of the Mumbai
Municipal Corporation Act, 1888,
having its office at Mahapalika Building,
Mahapalika Marg, Mumbai – 400 001.
3. Executive Engineer,
Building Proposals, ‘K’
West Ward,
Municipal Corporation of Greater
Mumbai, Through Legal Department,
MCGM, Mahapalika Building,
Mahapalika Marg, Mumbai 400 001.
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4. Friendship Co-operative
Housing Society Pvt Ltd,
A Society registered under the
provisions of the Maharashtra Co-
operative Societies’ Act, 1960 Having
its office at “Prashant”, Dawoodbaug
Road, Andheri (West), Mumbai 400
058. …Respondents
PPEARANCES
A
for the petitioner Mr Pravin Samdani , with Mayur
Khandeparkar, Subit
Chakrabarti, Khushnumah
Banerjee i/b Vidhi Partners.
for respondent no. 4 Mr Aditya P Shirke with Vishal P
Shirke.
for respondent-
MCGM
Mr Joel Carlos with Rupali Adhate,
Pooja Yadav i/b Sunil
Sonawane.
for respondent -
State
Mrs Jyoti Chavan, AGP.
WITH
WRIT PETITION (L) NO. 27895 OF 2023
1. Evershine Builders Private
Limited,
A Company incorporated under the
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provisions of the Companies Act, 1956
and being a company within the
meaning of the Companies Act, 2013,
having its registered office at 215, 2nd
Floor, Veena Beena Shopping Centre,
Station Road, Bandra (West), Mumbai
– 400 050.
2. Hira Rajkumar Ludhani,
an adult, Indian Inhabitant, being the
Director and Shareholders of Evershine
Builders Pvt Ltd having his office at
215, 2nd Floor, Veena Beena Shopping
Centre, Station Road, Bandra (West),
Mumbai 400 050. …Petitioners
~ versus ~
1. The State of Maharashtra,
through the Principal Secretary, Urban
Development Department, having its
office at Mantralaya, Fort, Mumbai
400032.
2. Municipal Corporation of
Greater Mumbai,
a statutory corporation, established
under the provisions of the Mumbai
Municipal Corporation Act, 1888,
having its office at Mahapalika Bhavan,
Mahapalika Marg, Mumbai 400 001.
3. Municipal Commissioner,
Municipal Corporation of Greater
Mumbai, Mahapalika Bhavan,
Mahapalika Marg, Mumbai 400 001. …Respondents
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A PPEARANCES
for the petitioner Mr Simil Purohit , with Rubin Vakil,
Manish Doshi i/b Vimadalal &
Co.
for respondent-
MCGM
Ms Rupali Adhate , with Pooja Yadav
i/b Sunil Sonawane.
for respondent -
State
Mr Abhay Patki, Addl. GP.
CORAM : G.S.Patel &
Kamal Khata, JJ.
DATED : 12th, 13th & 16th
October 2023
ORAL JUDGMENT ( Per GS Patel J) :-
1. Rule . There are Affidavits in Reply and Rejoinder and we
have heard counsel in all these Petitions at some length on the
questions of law. By consent, rule returnable forthwith.
2. “What the State Government giveth, the Municipal Corporation
taketh away,” is the complaint of these nine Petitioners, real estate
developers one and all, in one voice claiming that they were terribly
hard-hit by the lockdown during the Covid-19 pandemic. Money is
the developers’ oxygen, and during that unanticipated upheaval,
developers’ oxygen levels plummeted. Perceived the real estate
sector to be thus in dire need of resuscitation, the State Government
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afforded developers a substantial rebate in the premium that they
would otherwise have had to pay for acquiring ‘Additional FSI’. FSI
is a well-established concept in planning law in Maharashtra. It is
now even defined in the Maharashtra Regional & Town Planning
Act, 1966 (“ MRTP Act ”). Simply put, it is the ratio of built area to
plot area. If the plot area is 1000 sq mts, and the FSI is 1.00, a
developer can construct built-up area or BUA of 1000 sq mts. In the
Island City, the FSI is generally 1.33. In the suburbs it is 1.00. But
there are important exclusions from computing what is BUA and,
therefore, ‘free of FSI’ — stairwells, lobbies, lift wells and common
areas are typically not reckoned towards FSI consumption. In
addition, a developer may, under certain statutory provisions,
acquire additional FSI — the right to build further, in addition to the
inherent ‘land FSI’ (of 1.33 or 1.00). This additional FSI can be got
at a premium, and the premium is divided between various statutory
authorities. We refer to this additional-FSI-for-a-premium as
‘Premium FSI’ in this judgment. During the Covid-19 period, the
rebated Premium FSI had to be paid subject to certain conditions
under a formal Government Resolution (“ GR ”). It had to be paid
fully, though instalments were permitted, within the period defined
by that GR. While the GR conferred benefit in the form of a rebate,
it also imposed certain obligations.
3. The Petitioners say that they all held at the time when they
took the benefit and paid the concessional premium the municipal
building permission (always granted in the negative) known as the
Intimation Of Disapproval (“ ”). Those IoDs had (and have) a
IoD
prescribed lifespan of one year. The builders complain that the IoDs
lapsed. When they approached the Municipal Corporation of
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Greater Mumbai (“ MCGM ”) for a revalidation of the IoDs, they
were asked to pay the premium for the additional FSI at the next
year’s current (non-concessional) rates, although they were offered
an adjustment of the amount previously paid.
4. The Petitioners therefore say that this demand for a premium
being paid a second time (albeit with an adjustment) is contrary to
law and wholly defeats the purpose of the relief-oriented and relief-
giving GR in question. Hence these Petitions seeking our
intervention under Article 226 of the Constitution of India.
5. The rival submission by Mr Chinoy for the MCGM is based
on a close reading of the statute. The premium for the additional
FSI is computed on what is called the prevalent ASR or Annual
Standard of Rates. In a city like Mumbai, chronically starved of
space, ASR rates only move in one direction. Historically, they have
never gone down. This means that the premium payable in one year
is undoubtedly going to be less than the premium payable in the next
year.
6. Mr Chinoy puts his case like this. Premium FSI has to be
sought at the time when there is a proposal for development and
which leads to the issuance of an IoD. It is not in any sense a
bankable commodity. No one can simply purchase Premium FSI
without a development or building proposal or building plans and
hold on to it for use at some later time. Premium FSI must be
included in a building or development proposal. The IoD D from
the MCGM is only one level of permission. Another permission is
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required. Though issued by the MCGM, this further permission is
in the MCGM’s capacity as the Planning Authority under the
MRTP Act and that is known as a Commencement Certificate
(“ CC ”) issued under Section 45 of the MRTP Act. The IoD
granted under Section 346 of the Mumbai Municipal Corporation
Act 1888 (“ MMC Act ”) has a lifespan of one year. In the normal
course, a CC has a validity of three years extendable to a fourth,
unless otherwise renewed. CC renewals are subject to compliance
with statutorily mandated conditions.
7. Now what does this concept of ‘time validity’ actually mean?
Mr Chinoy’s explanation is that the IoD simply lapses after a period
of one year. That lapsing has certain consequences in law. We will
consider these statutory provisions a little later in this judgment but
to summarize, his submission is that if the project proponent obtains
an IoD and within the one year lifespan of that IoD he does not
“commence work” (and which could be by the simple issuance of a
CC with nothing more required) then the statute specifically
requires that the IoD must be sought afresh as if it was the first
application for an IoD as per Section 347(2) of the MMC Act. In
other words, an IoD that lapses without commencement of works is
a nothingness. It is obliterated in law. A fresh IoD must be issued. In
the context of the GR, he therefore explains that if the IoD is
accompanied by an application and a payment for premium FSI even
at the concessional rate, should the IoD lapse without there being a
commencement of work, and an entirely de novo IoD be required as
if it is the first IoD, then there is no question of the Premium FSI
surviving the lapse of the IoD. In that scenario, the project
proponent must necessarily seek Premium FSI afresh. But the
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concessional period now having ended, the project proponent must
pay the premium at the prevalent ASR although he will be given
credit for any payment previously made. What the Petitioners seek,
Mr Chinoy contends, is that the benefit having once been obtained
can be literally warehoused in perpetuity irrespective of whether the
IoD lapses (for want of commencement of work) or not. Even if
there is such a lapsing (without commencement of work) and if a
fresh IoD is required under the MMC Act, the Petitioners’ case
seems to be, submits Mr Chinoy, that the Premium FSI will
somehow be de-linked from the IoD. It will be set afloat, as it were,
to be re-anchored to some future IoD and some future CC — and
this will be at that same concessional rate without paying anything
further, even though ASR rates have gone up astronomically. In the
normal course, i.e., without any concession as was offered during
Covid-19 under the GR in question, developers would routinely
have to pay — and do pay — the premium annually for each renewal
of a lapsed IoD. They are given credit for previous premium
payments, but each renewal carries the obligation to pay at the
current ASR. There is no reason, he submits, why a developer who
obtained a rebate under the GR in question should have any special
exemptions or privileges beyond the rebate itself.
8. Thus are the battle lines drawn in this litigation.
9. The facts in each of these cases differ. Consequently, in the
next section of this judgment, and before we proceed to address the
questions of law outlined earlier, we will of necessity have to deal
with the facts and prayers in each case.
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FACTUAL CONSPECTUS —COMMON FACTS:
10. Some facts to this entire saga are common to all. These are
not many. It is better to reference them in the beginning.
11. As everyone knows from March 2020 the world as we knew it
was turned on its head. Nobody expected COVID-19 or the
pandemic or the resultant lockdown. It had many consequences.
One of these the almost complete cessation of all construction
activity almost everywhere. Cash flow was a problem. The lockdown
did not permit attendance on construction sites. Workers at various
sites left to return to their villages. Developers had no manpower to
continue constructions. Ongoing constructions halted. The
Government, mindful of this situation, constituted a special
committee under the chairmanship of Mr Deepak Parekh, an
eminent personality in banking, finance, business and the housing
finance sector. The committee made it recommendations. The
objective was to find ways to promote investment flows and
economic growth in Maharashtra, which had seen a slowdown since
mid–2018, and then to recover from the impact of the Covid-19
outbreak. The Deepak Parekh committee report, a copy of which is
at Exhibit “C” to the Prestige Estate Projects Petition, tells us that
markets in Mumbai had become uncompetitive. It attributes one of
several reasons to high premiums and levies imposed on real estate
developers. A startling statistic was that these premiums and
demands, and associated Government charges for residential real
estate in Mumbai were, and still are, 13 times more expensive for
Mumbai than for Delhi. The situation for commercial real estate is
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even worse; Mumbai is 34 times as expensive Delhi. Mumbai thus
has some of the most expensive real estate in the world. The report
notes that these premiums payable to the Government or the
Planning Authority comprised as much as 33% of the sale price of a
project. These were prohibitively high. They needed to be
1
rationalised.
12. We pause briefly to note the multiplier matrix that operates in
a situation like this. Land prices in Mumbai have always been high.
That is because of the notorious scarcity of buildable real estate.
The premiums that are charged are a percentage of the land prices
at the assessed rates. When the premium is high, the sale price
becomes higher. This ultimately and cyclically adds to the cost of
land itself. and this cost of land keeps rising, thus making the
premium go up, thus making real estate constantly more and more
expensive.
13. On 14th January 2021, the State Government came out with a
resolution. This was under Section 154 of the MRTP Act. A copy of
this in the original in Marathi is at Exhibit “A” at page 51 of the
Prestige Estate Petition. It is annexed to every other Petition as well
but we will take these documents from the Prestige Petition. There
is a translation at Exhibit “A1” from page 55 which we have checked
1 A recent sectoral study claims that the approval cost in Mumbai is a
staggering Rs 54,221 per square metre . It is much lower in other metros. See :
https://timesofindia.indiatimes.com/city/mumbai/developers-in-mumbai-pay-
average-rs-54221-per-square-meter-as-approval-costs-to-
authorities/articleshow/104019439.cms.
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ourselves. It seems to be reasonably accurate. We do not have an
official English translation of that GR.
14. We will need to consider this GR closely. It is the fulcrum of
the Petitioners’ case. So that there is no ambiguity about it at all, we
annex a copy of the translated GR to this order. That will avoid the
need to extract the whole of the GR in the body of this judgment.
15. Instead, we proceed to consider the salient aspects of that
GR. The introduction notes the COVID situation. There is a
reference to the Deepak Parekh Committee. The introduction also
notes that the premium for additional FSI is charged as a percentage
of the rate of the land in question for the year in question in the
annual market value chart put out periodically by the Government.
16. Then follow a series of directions. These are said to be
explicitly under Section 154 of the MRTP Act. The directions run
like this:
i. There is a 50% rebate in respect of premium to be
charged for additional FSI in the area of the Planning
Authority namely the MCGM as well as in Regional
Schemes. The decision regarding the 50% premium is
to be taken by the Planning Authorities subject to
following a procedure that is set out immediately next.
ii. Clause A deals with eligibility criteria and sets out the
projects or parts of projects eligible for the scheme. It is
applicable to current and new projects if the premium
is actually deposited until 31st December 2021.
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Further, the concession is applicable only to various
premiums under the Development Control and
Promotional Regulations (“ DCPR ”). There is no
concession for development charges or other
administrative factors.
iii. Clause B says that any project proponent who avails of
the rebate must, and this is important, pay the entire
stamp duty of persons taking up houses, flats or units
in the economically weaker section, lower income
group, middle income group and higher income group
categories. This is clarified to mean that the stamp duty
obligation on such purchasers is brought down to zero.
This includes those in the higher income group. It is
only developers who thus take on the burden of paying
100% of the stamp duty who are eligible for the
benefits of the additional/premium FSI rebate of 50%.
Such developers must make a declaration and complete
a prescribed procedure. That procedure is set out in
Clauses I to V below Clause B. There is an undertaking
required to be submitted to the Planning Authority that
the developer will absorb 100% of the stamp duty
obligation. A certificate of the beneficiary customer
must be submitted that the full expenditure on stamp
duty has in fact been borne by the developer. Then the
developer must publish a list of purchasers for whom
such stamp duty expenditure is made. A list of
participating projects is to be sent to the stamp
registration office and finally the projects that take the
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benefits of this concession must continue the benefit of
stamp duty until the constructed area for which the
benefit has been taken is sold.
iv. Clause C of the GR says that the annual market value
rate charge or the annual statement of rates or ASR
that to be considered as a base for charging the
premium for new power projects or part of new
projects should be that which is applicable on 1st April
2020 or that which is prevalent while depositing the
premium whichever is higher.
17. This provision of going back to an ASR of 1st April 2020 is
made in a GR of 14th January 2021. This tells us that there was very
likely, during that COVID period, a perceived reduction in ASR on
account of COVID and the lockdown. Therefore this provision for
using the previous year’s ASR or the one prevalent at the time of
making the deposit, whichever was higher.
18. There was some discussion in February 2021 between the
State Government and the MCGM about payment in instalments
but no controversy arises in that regard. Instalments were permitted.
It was ultimately clarified that the entirety of the premium had to be
paid during the concessional period, though instalments were
permitted in that time-window.
19. On 22nd February 2021, there came a circular from the
MCGM setting out the modalities to avail of this 50% rebate at
deduction. A copy of this is at Exhibit “B” to the Prestige Estate
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Petition from page 61. This references the GR referred to above as a
directive under Section 154 of the MRTP Act. It notes the
correspondence in regard to the instalment facility. Then as many as
nine separate conditions are imposed. A few of these are important
for our purposes. The first of these is that the circular limits its
applicability only to premium for additional FSI under DCR 30(A),
Table 12; premium for additional FSI under DCR 33; Fungible
Compensatory Area under DCR 31(3); and premium for additional
FSI under analogous provisions of DCR 1991. The second clause
says that the 50% rebate is applicable only to the principal premium
amount. No future instalments are permissible. It is clarified the
development charges, and other premiums/charges are to be
recovered as per the prevailing policy. A clarification is issued in
regard to developments that do not require the payment of stamp
duty. Formats are specified. Finally, there is a discussion on the
request for an extension of the time period. Interestingly, the
MCGM seems to indicate that the concession on the premium was
also available to those who were said to be defaulters in the past.
20. As the extract quoted above shows, the GR was the
Government’s effort to ‘encourage the construction field’ and to
provide Government-level rejuvenation of the real estate market.
21. While we are at this stage, a brief look at Section 154 of the
MRTP Act may be appropriate. It is a short section that confers
controlling power on the State Government to issue periodically
such directions or instructions as it thinks necessary to any Regional
Board, Planning Authority or Development Authority for
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implementing or effecting Central or State Government programs,
policies, projects or for the more efficient administration of the Act
or in the larger public interest. The bodies to whom these directions
are issued are bound to carry out the directions or instructions
within the time if any specified. Sub-clause (2) provides that the
decision of the State Government, should there be any dispute
between the Boards, Authorities and the State Government, shall be
final.
22. On 26th February 2021, the MCGM’s Standing Committee
passed a resolution approving the grant of concessions as per the
GR.
23. It is at this stage that we must note two further exchanges
between the MCGM and the State Government. On 23rd
November 2022, the MCGM’s Chief Engineer raised an issue for
clarification in regard to this concessional GR and the matter of
reissuance of lapsed IoDs. The submission notes that if there is no
material change in the original approval nor any additional
concessions sought, a revalidation could be permitted without
demanding additional premiums but only on recovering further
scrutiny fees. A copy of this is at Exhibit “L” at page 131.
24. On 30th November 2022, the MCGM’s Chief Engineer
wrote to the Under Secretary in the Urban Development
Department. This letter reflects the internal communication and
memo of the MCGM. Now both the internal memo and the letter to
the Urban Development Department notes the submission and
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representation that there were several cases where a
Commencement Certificate or CC could not be issued during the
one year pendency or life of the IoD, often for reasons beyond the
control of the project proponent. This being a concessional
reduction or rebate, and for a limited period of time, and also subject
to various conditions (such as the ones we have seen including
bearing the entire stamp duty burden and making full payment by a
prescribed date), the submission sought a clarification that IoDs
could be revalidated without seeking further premium on additional
FSI.
25. The internal memo also notes that some zonal offices insisted
on the project proponent paying the remaining 50% in accordance
with the prevalent ASR, but in the opinion of the Chief Engineer,
this was not appropriate as the premium was paid for FSI purchased
at the then prevalent rates.
26. The Government replied on 23rd December 2022. It said
that an IoD was valid for one year under the MMC Act. The
MCGM would be required to consider the IoD if a construction
permission was not submitted before the IoD lapsed. The applicable
rules were clear. There was therefore no clarification required. In
other words, the view of the Government was that there was
nothing to clarify.
27. On 16th May 2023, undeterred by the previous response, the
Chief Engineer wrote to the Under Secretary, Urban Development
Department again (Exhibit “Q” at page 199-200). It noted a
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representation from the Practicing Engineers Architects and Town
Planners Association (“ PEATA” , a quite significant lobby group in
matters pertaining to Development Control Regulations). Then it
referenced a representation from a Minister of Parliament addressed
to the Hon’ble the Chief Minister and Deputy Chief Minister
regarding ‘hardship’ faced by project proponents in getting
commencement certificates or CC issued. There was a reference to
the 14th January 2021 GR. The letter mentions that several housing
societies had availed of the concession to make their development
proposals viable and IoDs had been granted to such proposals by
recovering the concessional premium. However, some project
proponents had been unable to apply for a CC within the validity
period of the IoD. There were cases where some members of a
society did not cooperate. There were cases where an existing
building could not be evacuated within the necessary time frame
There were also cases where NOCs from various authorities
themselves did not come in time. The important clarification that
was sought is at page 200. This is actually the heart of the dispute
and we reproduce the contents of this page:
“However, some of the project proponent were not able
to apply for CC within validity period of IoD due to non
compliance of some of the IoD conditions. In some of the
cases of redevelopment projects due to non co-operation
of some members, existing building could not be vacated
within time frame and in some cases, due to delay in
getting NOC’s from various authorities .
It is to mention here that, as per aforesaid Govt..
directions, where the project proponent has opted 50%
concessions in premiums, in such cases stamp duty has
to be paid by developers. As such if IoD issued for such
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cases is not re-issued, the prospective buyers will be
deprived from this benefit. Also, in cases if the project
proponents have taken CC, they are eligible for
premium concession benefit as per Govt. directives. But
it would be unfair to disqualify the project proponent
from premium concession benefit who have not been
able to fulfil some of the IoD conditions even though
they have paid premium as per Govt. directions.
It is pertinent to mention here that direction issued
by State Govt. u/s 154 of MRTP Act for allowing 50%
concession for FCA, Premium FSI, premium for staircase,
lift, lift lobby, OSD was applicable for all Planning
Authorities, Town Planning offices in Maharashtra state.
The benefit permitted under this notification was applicable
for all proposals upto 31.12.2021 irrespective of progress on
site. However, for proposals in BMC limit, as per
provisions of section 346 of MMC Act, IoD’s are issued.
Further, as per provisions of section 347(2) of MMC Act,
IoD is valid for one year, within this validity period
project proponent has to apply to get CC. However, due
to non compliances of some of the IoD conditions,
project proponents are unable to take C.C.
In such cases BMC needs to reissue IoD for projects
who availed benefit of 50% premium concession wherein
project proponent has already paid premiums as per Govt.
directives and where there is no change in the original
approval and not involving additional concessions.
However, this needs concurrence of Govt., since some
premiums are also shared by Govt & other authorities.
In view of above, UDD is requested to give
concurrence to allow BMC to reissue IoD in aforesaid
cases for further period upto 31.12.2023 and continue
50% concession facility as per Govt. directives.
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This letter is issued with the approval of Hon. MC
u/no. MGC/A/374 dtd 16.05.2023”
( Emphasis added )
28. The response to this came on 8th June 2023 from the State
Government. It said that there were two issues: (i) the one-year
validity of the IoD under Section 346 of the MMC Act and, (ii) the
concession under the GR of 14th January 2021 to proposals for
which a Commencement Certificate was not obtained within the
year.
29. So far so good. Those were indeed the two questions. The
answer however from the State Government was that since the
matter of extending the IoD validity period of the IoD was not
within the scope of the GR of 14th January 2021 but was an
administrative matter that fell within the scope and jurisdiction of
the Corporation, it was unclear what clarification was required.
Therefore, the answer from the Under Secretary was that the
Municipal Commissioner should examine the matter and submit a
precise proposal about the need for such concurrence or approval.
In other words, faced with a request for a clarification, the State
Government said then, as Mr Patki says today, that there was
nothing to clarify.
30. No part of our judgment is going to be based on statements
that officers of the MCGM may have made in writing while
processing a particular permission. The reason is straightforward.
Mr Chinoy’s submissions have been entirely based on an
interpretation of the statute and on law and clearly there is no
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possibility of an estoppel against the statute; certainly not because
some officer of the Municipal Corporation took a particular view.
FACTS IN INDIVIDUAL CASES
31. We have been given detailed lists of dates in the different
matters in the group. What follows is an abbreviated summation of
these events since we will be addressing ourselves to the common
questions that arise, and it is only in the Petitions where there are
additional aspects to be considered that we will deal with those
separately.
WRIT PETITION (L) NO. 17993 OF 2023 : PRESTIGE
ESTATE PROJECTS LTD & ANR
32. In the Prestige Estate matter, the facts are largely not
contentious. On 24th March 2021, members of the Pali Hill
Daffodils CHSL (not a party to the Petition) consented to the
appointment of Prestige Estate as a developer for redeveloping the
Society’s premises. These are at Bandra. On 27th August 2021,
certain concessions were granted by the Municipal Commissioner to
the project. A Development Agreement between Prestige Estate and
the Society followed on 30th September 2021. The MCGM issued
its IoD, the first of several permissions on 18th October 2021. While
obtaining the IoD, Prestige Estate had to pay various amounts to the
MCGM, the State Government and other authorities for diverse
benefits such as additional FSI, fungible FSI, a premium for
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staircase lift lobby, deficiency in basements, scrutiny fees and so on.
These details are not important for our purposes today.
33. On 26th November 2021, Prestige Estate obtained permission
to begin shore piling work. This permission was granted by the
MCGM. Then Prestige Estate submitted amended plans and these
were approved with an amended IoD on 14th January 2022. The
amendment contemplated additional floors. At the time of the
amended IoD Prestige Estate again paid additional amounts under
some of the various heads as noted above.
34. Altogether, Prestige Estate says that availing of the benefits
under the GR and the MCGM circular, it has paid a total of
Rs.33,07,34,950/- to the State Government, MCGM and other
Authorities by 31st December 2021. An additional amount of
Rs.6,04,13,700/- has also been paid although this payment was not
covered by the GR and the MCGM circular. The total outlay under
this head is Rs.39,39,11,494/-.
35. In addition, Prestige Estate says that it has spent Rs.248
crores on various items of development such as approvals,
constructions, overheads, cost of land and so on. Besides this,
Prestige Estate has paid Rs. 25 crores until the date of the filing of
the Petition to members of the Society under various heads such as
transit rent, corpus, hardship allowance and so on.
36. By October 2022, the Society’s existing building was
demolished. Some Permanent Alternative Accommodation
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Agreements (“ PAAA ”) were not completed on time. There were
other constraints due to site conditions. On 14th October 2022,
Prestige Estate applied for a plinth CC. On that date, it also told the
MCGM that it had consent for redevelopment from all members of
the Society and, in addition, that it had PAAAs from all but three
members of the Society. The other issue that seems to have arisen at
this time related to an application to dispense with an No Objection
Certificate (“ NOC ”) from the Superintendent of Gardens. Prestige
Estate claimed that there were no trees affected by the proposed
project and had therefore sought an exemption. This was apparently
noted internally by the MCGM, i.e., that not 100% of the PAAAs
were submitted and that the Superintendent of Gardens NOC was
not obtained. Yet, on 17th October 2022, the Superintendent
Engineer of the MCGM approved the issuance of a plinth CC as
sought by Prestige Estate subject to the approval of the Deputy
Chief Engineer in regard to the non-submission of the three PAAAs.
The NOC from the Superintendent of Gardens was dispensed with.
37. A day later, on 18th October 2022 the Executive Engineer of
the MCGM contended that the CC could not be issued. The reason
was that the IoD which had been issued, as we have seen, on 18th
October 2021 had lapsed after the expiry of its one year lifespan on
17th October 2022.
38. On 3rd November 2022, Prestige Estate sought a fresh IoD
and permission to continue the same file number by recovering fresh
scrutiny fees before the issue of the revised IoD.
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39. There was no material change in the original approval. No
additional concessions were being sought. According to Prestige
Estate, an internal note of the MCGM shows that the 50% reduction
was allowed to be retained.
40. Further work continued including boundary demarcation
remarks, demands for scrutiny fees, tree NOC etc. On 24th January
2023, Prestige Estate wrote to the Municipal Commissioner asking
that the IoD be reissued without insisting on an additional premium
over and above the 50% reduction that was availed of.
41. We have on record at Exhibit “P” to this Petition at page 195,
a note sheet of Prestige Estate’s proposal. It records that Prestige
Estate had to pay what is described as the “balance premium”, i.e., a
premium over and about the 50% rebated premium already paid and
this apparently is in view of the so called clarification of the State
Government — a communication which really says that no
clarification is necessary.
42. Then follow the letters of May and June 2023 between the
MCGM and the Government and the present Petition came to be
filed on 3rd July 2023 seeking the following reliefs:
“A. that this Hon’ble Court be pleased to order and
declare that the benefits conferred under the Government
Resolution dated January 14, 2021 and MCGM Circular
dated February 22, 2021 and the clarifications thereto have
irrevocably vested in Petitioner No. 1 upon Petitioner No. 1
submitting its application for CC on October 14, 2022 and
issue a writ of mandamus or a writ in the nature of
mandamus or any other appropriate writ, direction or order
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directing Respondent Nos. 2 to 4 to forthwith issue CC,
and all development permissions for the development of the
Property to Petitioner No. 1 in accordance with
Government Resolution dated January 14, 2021 and
MCGM Circular dated February 22, 2021;
B. that this Hon’ble Court be pleased to issue a writ of
certiorari or a writ in the nature of certiorari or any other
appropriate writ, direction or order under Article 226 of the
Constitution of India calling for the records and
proceedings pertaining to the issuance of letters dated
December 23, 2022 and June 8, 2023 by the State
Government (Exhibit “N” and Exhibit “R” hereto) and
after examining the legality, propriety thereof the same be
quashed and set aside;
C. that this Hon’ble Court be pleased to issue a writ of
mandamus or a writ in the nature of mandamus or any other
appropriate writ, direction or order directing the
Respondents:
(i) to forthwith cancel and/or withdraw the
letters dated December 23, 2022 and June 8,
2023 by the State Government (Exhibit “N”
and Exhibit “R” hereto);
(ii) to forthwith grant to the Petitioner benefit of
50% rebate in respect of all applications for
planning permissions made prior to
December 31, 2021 in respect of which
payments have been made before December
31, 2021 in terms of Government Resolution
dated January 14, 2021 and MCGM Circular
dated February 22, 2021.
D. That this Hon’ble Court be pleased to order and
declare that the benefits conferred under the Government
Resolution dated January 14, 2021 and MCGM Circular
dated February 22, 2021 and the clarifications thereto
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[Exhibits “A”, “B” and “C (colly)”] have vested in
Petitioner No. 1 to the extent the same stand paid for on or
before December 31,2021;
E. Consequently, this Hon’ble Court be pleased to
issue a writ of certiorari or a writ in the nature of certiorari
or any other appropriate writ, order, or direction calling for
the records leading to the demand by MCGM for additional
amount from Petitioner No. 1 on basis of letters dated
December 23, 2022 and June 8, 2023 by the State
Government (Exhibit “N” and Exhibit “R” hereto), and
after considering and examining the validity, propriety, and
legality thereof, quash and set aside the same;
F. Consequently, this Hon’ble Court be pleased to
issue a writ of mandamus or a writ in the nature of
mandamus or any other appropriate writ, order or direction
directing Respondent Nos. 2 to 4 to issue IOD, CC, and all
development permissions for the development of the
Property to Petitioner No. 1 in accordance with
Government Resolution dated January 14, 2021 and
MCGM Circular dated February 22, 2021 and the
clarifications thereto [Exhibits “A”, “B” and “C(colly)”]
to the extent the same stand paid for on or before
December 31,2021;”
43. WRIT PETITION NO. 240 OF 2023: SUGEE TWO
DEVELOPERS LLP
44. In this case, Sugee Two Developers LLP (“Sugee Two” )
owns a property in the Girgaon Division at Bangadwadi. This is
known as the Guru Niwas and the Dadarkar Building. Sugee Two
has undertaken redevelopment of this property under DCR 33(7),
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pertaining to cessed buildings. There are 58 tenants/occupants of
the property. All are to be reaccommodated in the rehab building
rehab wing proposed to be reconstructed.
45. On 6th May 2019, Sugee Two obtained an IoD. The Mumbai
Building Repairs and Reconstruction Board (“ MBRRB ”) approved
the redevelopment scheme and issued its NOC on 10th May 2018
(revised on 2nd August 2019 and later re-validated on 29th
September 2022).
46. Sugee Two submitted amended plans under DCPR 2034 and
a fresh IoD was issued on 12th February 2021. Between 11th August
2021 and 27th December 2021, Sugee Two paid various amounts to
the MCGM at the discounted rates under the GR in question.
Amended plans were submitted and approved sometime in August
2021. A short while later, two Writ Petitions were filed by an
occupant that came to be dismissed by this Court on 14th
September 2021.
47. 11th February 2022 is the date on which Sugee Two’s IoD
lapsed. Then on 16th March 2022, MCGM re-issued the IoD when
Sugee Two applied for a re-validation without changing its amended
plans or seeking any additional concessions. At that time, the
MCGM did not demand any balance premium. By April 2022, the
structures were demolished. On 11th October 2022 Sugee Two
applied for a CC.
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48. This remained pending and on 23rd November 2022 the
Chief Engineer (Development Plan) sought the Commissioner’s
approval to a proposal to re-validate Sugee Two’s lapsed IoD by
recovering only the scrutiny fee. Interestingly this was on the basis
that the recovery should be limited to the scrutiny fee since there
was no material change in approval or the proposed construction
i.e., no additional construction was proposed.
49. On 12th January 2023, Sugee Two filed this Petition in this
Court. An order came to be made on 25th January 2023 issuing
notice to the Respondents. On 9th March 2023 Sugee Two agreed in
writing to pay the additional premium but on a without prejudice
basis. It did so and paid the additional amount of Rs.1,67,54,565/-
but without prejudice to its rights and contentions. On 10th April
2023 this Court allowed the Petition to be amended.
50. The prayers in the Petition as amended are:
“(a) this Hon’ble Court may be pleased to issue a writ of
mandamus or a writ in the nature of mandamus or any other
appropriate writ or direction under Article 226 of the
Constitution of India inter alia ordering and declaring that
the BMC’s policy of levying, demanding and recovering
differential premiums for revalidation or reissuance of
lapsed IoD as mentioned in UD Department’s letter dated
23rd December, 2022 (being Exhibit “F” hereto) does not
apply to the Petitioner’s proposal bearing File No.
CHE/CTY/4245/D/337(NEW)/337/1/Amend; and the
BMC’s demand on the Petitioners for payment of any
balance or differential premium is illegal, unlawful and not
maintainable;
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(b) this Hon’ble Court may be pleased to issue writ of
mandamus or a writ in the nature of mandamus or any other
appropriate writ or direction under Article 226 of the
Constitution of India inter alia ordering and directing the
BMC to grant CC and all further permissions including OC
for the Petitioners’ redevelopment scheme on the property
bearing C.S No. 1278 & 1279 of Girgaon Division situated
at Bangadwadi, Girgaon, Mumbai 400 004 without levying,
demanding and recovering any amount of money towards
the balance 50% amount of premiums as per the current
SDRR rate as a condition precedent for granting CC and
further permissions;
(b-1) this Hon’ble Court may be pleased to issue a writ of
mandamus or a writ in the nature of mandamus or any other
appropriate writ or direction under Article 226 of the
Constitution of India inter alia ordering and directing BMC
to refund to the Petitioner No. 1 a sum of Rs. 1,67,54,565/-
(Rupees One Crore Sixty-Seven Lakh Fifty-Four Thousand
Five Hundred & Sixty-Five Only) paid towards the balance
50% amount of premiums as per the current SDRR rate,
together with simple interest thereon @ 18% p.a.;”
WRIT PETITION NO. 238 OF 2023: SUGEE NINE
DEVELOPERS LLP
51. This pertains to a property known as ‘Sukrut’ at Veer
Savarkar Marg, Dadar (West), Final Plot No. 758 of Town Planning
Scheme (“ TPS ”)-IV of the Mahim Division. Sugee Nine
Developers LLP (“ Sugee Nine ”) owns the property and is
developing it. In April 2018, the MBRRB approved the
redevelopment scheme. It involved re-accommodating twelve
tenants. On 10th August 2021 the MCGM approved Sugee Nine’s
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proposal for the proposed construction and issued an IoD. That IoD
had as many as 54 conditions to be met within a year. Sugee Nine
took advantage of the 50% discount scheme and between August and
December 2021 paid a discounted premium of Rs.84,52,700/-.
52. The IoD that the Sugee Nine held lapsed on 9th August 2022.
It did not have a Commencement Certificate or a CC by this date.
53. In December 2022 Sugee Nine demolished the old building
on the suit property. It then applied for a re-issuance of its IoD
without any changes to its approved plans. It was met with the
MCGM demand for payment of the balance 50% of the premium.
This was an amount computed at Rs.1,45,08,500/. Sugee Nine filed
the Present Petition on 13th January 2023. On 15th March 2023
Sugee Nine by its letter to the Executive Engineer agreed to pay the
balance 50% on a ‘without prejudice basis’, and it did so a day later
by making payment of an amount of Rs.1,45,08,500/- (towards open
space deficiency premium and fungible premium). Today Sugee
Nine holds an IoD and a CC. Its prayers at page 43 of the Petition
include a prayer for refund. That prayer was added by an
amendment. Prayer clauses (a), (b) and (b-1) read as follows:
“(a) this Hon’ble Court may be pleased to issue a writ of
mandamus or a writ in the nature of mandamus or any other
appropriate writ or direction under Article 226 of the
Constitution of India inter alia ordering and declaring that
the BMC’s policy of levying, demanding and recovering
differential premiums for revalidation or reissuance of
lapsed IoD as mentioned in UD Department’s letter dated
23rd December, 2022 (being Exhibit “F” hereto) does not
apply to the Petitioner’s proposal bearing File No.
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CHE/CTY/4176/G/N/337(NEW)1/Amend; and the
BMC’s demand on the Petitioners for payment of any
balance or differential premium is illegal, unlawful and not
maintainable;
(b) this Hon’ble Court may be pleased to issue writ of
mandamus or a writ in the nature of mandamus or any other
appropriate writ or direction under Article 226 of the
Constitution of India inter alia ordering and directing the
BMC to reissue IoD and grant all further permissions
including OC for the Petitioners’ redevelopment scheme
on the property bearing F.P. No. 758 of TPS-IV of Mahim
Division known as “Sukrut” situated at Veer Savarkar
Marg, Dadar (West), Mumbai 400 028 without levying,
demanding and recovering any amount of money towards
the balance 50% amount of premiums as per the current
SDRR rate as a condition precedent for reissuing IoD and
for granting all further permissions including OC;
(b-1) this Hon’ble Court may be pleased to issue a writ of
mandamus or a writ in the nature of mandamus or any other
appropriate writ or direction under Article 226 of the
Constitution of India inter alia ordering and directing the
BMC to refund to the Petitioner No. 1 a sum of Rs.
1,45,08,500/- (Rupees One Crore Forty Five Lakh Eight
Thousand & Five Hundred Only) paid towards the balance
50% amount of premiums as per the current SDRR rate,
together with simple interest thereon @ 18% p.a.;”
WRIT PETITION NO. 1122 OF 2023: SUGEE FIFTEEN
DEVELOPERS LLP:
54. Sugee Fifteen Developers LLP (‘ Sugee Fifteen ’) is
developing a property known as ‘Nabashruti’ on Plot No 166-B of
the CS No 149B/10 of the Dadar Matunga Estate in the Matunga
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Division. This is at Khareghat Road, Hindu Colony, Dadar (East).
This development is also under DCR 33(7) in the context of cessed
buildings and requires the rehabilitation of eight occupants/tenants.
The MBRRB approved the redevelopment scheme on 19th July
2019. Sugee Fifteen obtained an IoD on 8th October 2019. It also
took advantage of the 50% discount scheme.
55. On 3rd May 2021, Sugee Fifteen submitted amended plans
and obtained a fresh IoD. On 28th July 2021 Sugee Fifteen
submitted further amended plans and this was at the time when the
discount scheme was in operation. Sugee Fifteen paid an amount of
Rs. 54,37,800/- towards ‘Fungible Area premium’ in August 2021
and in December 2021 an amount of Rs.15,63,950/- towards ‘Open
Space Deficiency Premium’.
56. Here again Sugee Fifteen was told that it would have to pay
the 50% balance premium aggregating to Rs 1,24,00,450/- since its
re-issued IoD had lapsed.
57. The present Petition was filed on 17th January 2023 for the
following reliefs:
“(a) this Hon’ble Court may be pleased to issue a writ of
mandamus or a writ in the nature of mandamus or any other
appropriate writ or direction under Article 226 of the
Constitution of India inter alia ordering and declaring that
the BMC’s policy of levying, demanding and recovering
differential premiums for revalidation or reissuance of
lapsed IoD as mentioned in UD Department’s letter dated
23rd December, 2022 (being Exhibit “F” hereto) does not
apply to the Petitioner’s proposal bearing File No. P-
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18922/2019/(149B/10)/F/North/337/1/Amend; and the
BMC’s demand on the Petitioners for payment of any
balance or differential premium is illegal, unlawful and not
maintainable;
(b) this Hon’ble Court may be pleased to issue writ of
mandamus or a writ in the nature of mandamus or any other
appropriate writ or direction under Article 226 of the
Constitution of India inter alia ordering and directing the
BMC to reissue IoD and grant all further permissions
including OC for the Petitioners’ redevelopment scheme
on the property bearing . Plot No. 166-B of the Dadar
Matunga Estate, CS No. 149B/10 of Matunga Division
known as “Nabashruti” situated at Khareghat Road, Hindu
Colony, Dadar (East), Mumbai 400 014 without levying,
demanding and recovering any amount of money towards
the balance 50% amount of premiums as per the current
SDRR rate as a condition precedent for reissuing IoD and
for granting all further permissions including OC;”
WRIT PETITION (L) NO. 22774 OF 2023: ANKUR
DEVELOPERS LLP
58. Ankur Premises Developers LLP (‘ Ankur Premises ’) holds
development rights for an approximately 598 sq mts property at
CTS No G/397/3 at Santacruz (West). This is the property of the
Santacruz Prem Sagar CHSL. These development rights were
granted to Ankur Premises on 31st July 2016. It was not until
February 2019 that a supplemental agreement came to be executed.
The consent of one member remained. That was obtained only in
February 2019. On 12th February 2020, a second supplemental
agreement was executed and all members of the society joined in the
execution of that agreement.
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59. Ankur Premises took the benefit of the amnesty scheme and
paid the discounted rate sometime in August 2021.
60. As is not atypical in these matters, there were then further
controversies. Demolition of the existing structure could not
proceed. Ankur Premises had an IoD of 18th August 2021 and this
was clearly valid only until 17th August 2022. Ankur Premises
sought revalidation of its IoD.
61. We will pass over the more intricate details of the
correspondence that went on and note that it was not until October–
November 2022 that members of the Society vacated their premises
and delivered possession.
62. Ankur Premises has been paying or says it has been paying
transit rent since then. Ankur Premises’ IoD has lapsed. For a
revalidation, the MCGM demand is that it must pay the balance
premium computed at current ASR rates.
63. Hence this Petition on 18th August 2023 for the following
reliefs:
“a) This Hon’ble Court be pleased to issue a writ in the
nature of mandamus or any other writ or order or direction
directing the respondents to adhere and implement the
amnesty scheme issued by Respondents vide Circulars
dated 22nd February, 2021 and 5th March, 2021 (Exhibit A
and B);
b) This Hon’ble Court be pleased to issue a writ in the
nature of mandamus or any other writ or order or direction
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directing the Respondents to renew and revalidate the IoD
dated 18th August, 2021 (Exhibit C) on payment of the said
Payments for Revalidation of IoD by the Petitioner without
demanding additional premium amounting to
Rs.2,15,91,065/- (Rupees Two Crores Fifteen Lakhs Ninety
One Thousand and Sixty Five Only);
c) That this Hon’ble Court be pleased to issue a writ of
certiorari or any other writ, order or direction calling for the
records and files of the case and after going into the legality
and validity of the decision conveyed by the Respondent
No.4 vide clarification dated 23rd December, 2022 (Exhibit
K), quash and set aside the decision i.e. demand fresh
premium for renewal/ revalidation of IoD;
d) In the alternative of prayer (c) it may be clarified that
the said clarification letter dated 23rd December, 2022
(Exhibit K) is not applicable to the present case of the
petitioner.
e) That this Hon’ble Court be pleased to issue a writ of
certiorari or any other writ, order or direction calling for the
records and files of the case and after going into the legality
and validity of the decision conveyed by the Respondents
vide Letter dated 28th February, 2023 (Exhibit T) quash
and set aside the communication;”
WRIT PETITION NO. 23049 OF 2023: RELCON
INFRAPROJECTS LTD
64. The Ridhi Sidhi Sadan unit of Shri Ridhi Sidhi CHSL owns
land of 2113.70 sq mts at Tejpal Scheme Road No 2 and 3, Vile Parle
(East). There stood a building of ground plus three floors on this
land with 32 residential flats.
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65. On 11th December 2014, the society and Relcon Infraprojects
Ltd. (‘ Relcon Infraprojects ’) entered into a Development
Agreement. Nothing of significance seems to have happened for our
purposes until the rebate scheme.
66. Relcon Infraprojects’ says that in August 2021 it paid Rs.
2,58,33,500/- to the MCGM as premium under the GR and the
MCGM circular and another amount of Rs. 73,65,500/- to the State
Government towards the premium.
67. Relcon Infraprojects’ IoD is dated 15th August 2021.
68. On 29th November 2021., a supplementary agreement came
to be executed between Relcon Infraprojects, Relcon Krisha Realty
LLP and the society. In December 2021, Relcon Infraprojects sought
to amend its plan by constructing a residential building of four wings
with five common basement parking floors, stilts for stack parking
plus six upper floors.
69. On 22nd December 2021, the MCGM sanctioned these
amended plans. This was still in the amnesty or rebate period and
Relcon Infraprojects therefore paid a premium of Rs. 2,06,19,200/-.
Of this amount, Rs. 20,96,000/- was paid to the State Government
and the remainder to the MCGM.
70. Came 2022, and with it disputes between some dissenting
member of the society and Relcon Infraprojects. This led to the
filing of an Arbitration Petition (L) No. 12317 of 2022. Five minority
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dissenting members obstructed redevelopment. It was not until 15th
July 2022 that an order was passed by this Court compelling these
five members to deliver possession of their respective flats to Relcon
Infraprojects.
71. On 29th July 2022, Relcon Infraprojects made a
representation to the MCGM setting out some of these facts and
requesting the issuance of a fresh IoD since its IoD was about to
expire on 15th August 2022. By another letter of the same date,
Relcon Infraprojects pointed out that it could not obtain the CC
pursuant to the IoD because of these few dissenting members and
for which Relcon Infraprojects had to approach the High Court.
72. There is a reference again here to, two internal note sheets of
8th and 10th August 2022 prepared by MCGM officers. These are
undoubtedly favourable to Relcon Infraprojects. But consistent with
his arguments, Mr Chinoy maintains that they matter not a whit.
73. On 30th August 2022, Relcon Infraprojects paid a scrutiny
fee, and a development cess to MCGM. The total amount paid was
thus Rs. 18,03,000/-. This was for re-validating or re-issuing the
IoD.
74. In the meantime, two of the five minority dissenting members
filed an appeal.
75. Now we come to what Mr Ardeshir for Relcon Infraprojects
says distinguishes his case from all the others. On 3rd October 2022,
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a re-validated IoD was indeed issued by the MCGM to Relcon
Infraprojects. On 6th October 2022, the Appeals Court recorded the
statement of the two dissenting members that they would deliver
possession. That possession was obtained on 14th October 2022.
76. It is in this background that on 19th December 2022, Relcon
Infraprojects’ architect wrote to the MCGM for a CC. On 12th
January 2023, Relcon Infraprojects’ architect wrote to the
Municipal Commissioner pointing out that it had obtained a revised
IoD on 3rd October 2022 by paying the scrutiny fee and
development charges then demanded. Yet the CC had not been
granted. Reference was made to the High Court proceedings. An
identical letter was sent to the Chief Engineer of the MCGM. A
reminder followed on 19th January 2023 and again on 3rd April
2023. Here again there is a reference to an internal note of the
MCGM of 16th May 2023.
77. On 7th July 2023, the MCGM wrote to the Relcon
Infraprojects calling upon it to pay the balance premium for the IoD
that was issued on 3rd October 2023.As far as we are aware, it has
only just recently lapsed again on 3rd October 2023.
78. This Petition came to be filed on 14th August 2023. Mr
Ardeshir’s submission, therefore, is that having once issued or re-
issued the IoD without insisting on payment of what we have
throughout described as the balance premium, it is now not open to
the MCGM to say that this balance premium is required to be paid
against the IoD. There is no concept of payment of a premium
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against the CC. The IoD was in fact issued. A premium is sought
only at the time of issuance of the IoD. If the IoD itself had been re-
issued without a demand, it cannot subsequently be raised.
79. The reliefs in the Relcon Infraprojects Petition are therefore
slightly different from the others. The two principal prayers read
thus:
“a. That this Hon’ble Court be pleased to issue a writ of
mandamus or a writ in the nature of mandamus or any other
writ, order or direction under Article 226 of the
Constitution to hold and declare that (i) the impugned
communication dated 23.12.2022 bearing No. TPB-
4322/Pra.Kra.129/2022/Navi-11 (Exhibit AG hereto), (ii)
the impugned communication dated 08.06.2023 bearing
No. TPB – 4322/Pra.Kra.129/2022/Navi-11 (Exhibit AD
hereto) and (iii) the impugned communication dated
07.07.2023 (Exhibit AE hereto) are arbitrary, illegal,
capricious and bad in law and this Hon’ble Court be
pleased to quash and/or set aside the same;
b. That this Hon’ble Court be pleased to issue a writ of
mandamus or a writ in the nature of Mandamus or any
other writ order or direction under Article 226 of the
Constitution directing Respondent No.2 to continue
processing the file bearing No. P-5761/2020(723 A and 723
B)/P/S Ward/PAHADI GOREGAON-W including
granting Commencement Certificates and all further
approvals, permissions and sanctions to the Petitioners in
respect of the subject land without demanding any payment
towards premium;”
80. We note that there is a typographical error in the file number.
The correct file No is CHE/WS/2051/K/E/337 (New).
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WRIT PETITION (L) NO. 25945 OF 2023: MAYFAIR
HOUSING PVT LTD:
81. On CTS Nos 59 and 63 at Village Andheri on a plot of
approximately 2967 sq mts, there once stood a building known as
‘Prashant’ consisting of two wings and 46 flats. That building was
several decades old. On 6th September 2021, the society, known as
the ‘Friendship Co-operative Housing Society Pvt Ltd’, Respondent
No 4, having previously resolved to redevelop the building,
approved the final offer submitted by Mayfair Housing Pvt Ltd
(‘ Mayfair Housing ’). This proposal was eventually passed in a
general body meeting on 8th December 2021. The vote was
unanimous.
82. On 31st December 2021, Mayfair Housing obtained an IoD
for this redevelopment project. On 22nd October 2022, within the
one year lifespan of the original IoD, Mayfair Housing issued a
notice to the society demanding vacant possession. It did not have it
at that time. The society in turn issued a notice to a solitary
obstructionist.
83. On 18th November 2022, Mayfair Housing obtained an
amended IoD sanctioning modified plans.
84. This also is a case where development was stalled because of
an obstruction, this time by one occupant. This led to Mayfair
Housing filing a Commercial Arbitration Petition (L) No 672 of
2023 on 6th January 2023 before this Court. On 3rd March 2023,
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this Court disposed of the Arbitration Petition directing the
individual dissenter to deliver possession on the schedule indicated
by the Court. It was only on 12th June 2023 that Mayfair Housing
received vacant possession of the project site. The existing buildings
were demolished on 14th August 2023.
85. On 18th August 2023, Mayfair Housing submitted an
application for a CC. This was rejected on 6th September 2023 and
it is this rejection that is impugned in the present Petition filed on
15th September 2023 for the following reliefs:
“a) this Hon’ble Court be pleased to issue a Writ of
Certiorari or any other appropriate writ or order or
direction in the nature of Certiorari under Article 226 of the
Constitution of India, thereby calling for the records and
proceedings in respect of the Impugned Communications
dated 23rd December 2022 and 8th June 2023 issued by the
Respondent No.1 ( at Exhibits E & F-1) and after going
through the legality, validity and propriety thereof, be
pleased to quash and set aside the same;
b) this Hon’ble Court be pleased to issue a Writ of
Certiorari or any other appropriate writ or order or
direction in the nature of Certiorari under Article 226 of the
Constitution of India, thereby calling for the records and
proceedings in respect of the Impugned Rejection dated 6th
September 2023 issued by the Respondent No. 3 ( at Exhibit
V ) and after going through the legality, validity and
propriety thereof, be pleased to quash and set aside the
same;
c) this Hon’ble Court be pleased to issue a Writ of
Mandamus or any other appropriate writ or order or
direction in the nature of Mandamus under Article 226 of
the Constitution of India, thereby directing the Respondent
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Nos.1 to 3, not to insist upon any further payment towards
premiums already paid under the ‘Concession Scheme’ and
issue further building permission in accordance with law;”
WRIT PETITION (L) NO. 27895 OF 2023: EVERSHINE
BUILDERS PVT LTD
86. The Shree Trimurti CHSL owns property at CTS No 625/12
of Village Bandra-G, TPS II. The land is about 1729 sq mts. at South
Avenue, 17th Road, Khar (West). There was a structure on this of
ground and five upper floors with 17 flats. On 6th February 2018,
the society entered into a Development Agreement with Evershine
Builders. In June 2019 Evershine Builders submitted an application
to the MCGM for the construction of a high rise residential tower. It
paid the applicable scrutiny fees, infrastructure, improvement
charges, development charges etc.
87. On 4th January 2020 Evershine Builders obtained an IoD.
88. On 31st August 2020, Evershine Builders had to file Suit No
81 of 2021 against several non-cooperating members of the society
demanding vacant and peaceful possession. On 24th September
2020, these members filed a Counter Suit No 136 of 2021 for a
declaration that the Development Agreement was void and not
binding on them.
89. Evershine Builders’ IoD lapsed on 3rd January 2021.
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90. In June 2021, Evershine Builders submitted an application for
an amended IoD for constructing Wing A and Wing B, basement,
stilts, three podium levels, and the first to 10th floors (and,
presumably, all the other ‘necessities’ of urban life in Mumbai such
as swimming pools, gymnasiums, jogging tracks etc.) Evershine
Builders’ application had several proposals for additional FSI
including fungible FSI and slum TDR.
91. By this time the rebate policy was in place. The MCGM
computed various amounts to be paid and in August 2021,
Evershine Builders paid these amounts which, by a rough reckoning
comes to about Rs 10.75 crores.
92. In accordance with the terms of the GR, Evershine Builders
also submitted an undertaking to continue to bear the entire stamp
duty liability. The fresh IoD was issued on 11th August 2021.
93. On 1st July 2022, MCGM issued a notice seeking eviction of
occupants from the property in question. This notice was
challenged by the non-cooperating members before the Bombay
City Civil Court which granted a stay on 16th July 2022. Ultimately,
the Notice of Motion for stay came to be dismissed by the Bombay
City Civil Court only on 25th November 2022. By this time, the
second IoD had also lapsed. In the meantime, the non-cooperating
members came up in an Appeal from Order No 1098 of 2022 against
the 25th November 2022 order of the Bombay City Civil Court.
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94. That Appeal from Order was ultimately dismissed but only
very recently on 14th September 2023. In the meantime, Evershine
Builders has been told that it must now pay the balance premium if
it wishes a revalidation of its IoD.
95. On 6th October 2023, Evershine Builders filed this Writ
Petition seeking the following reliefs:
“(a) That this Hon’ble Court be pleased to issue a writ of
certiorari or a writ in the nature of certiorari or any other
appropriate writ, order or direction calling for records
pertaining to the impugned letter dated 23rd December
2022 (being Exhibit J hereto) issued by the Respondent No.
1 and after examining the legality and validity thereof be
pleased to quash and set aside the same;
(b) That this Hon’ble Court be pleased to issue a writ of
mandamus or a writ in the nature of mandamus or any other
appropriate writ, order or direction restraining the
Respondents from demanding any amount as premium for
additional FSI of 797.96 sq. mtrs, fungible compensatory
FSI for 820.85 sq. mtrs., Staircase premium area 807.72 sq.
mtrs and open space deficiency of 1052.56 sq. mtrs. in
respect of the said Property being Plot No. K-69/78,
bearing CTS No. 625/ 12 of Village Bandra-G, TPS-II,
admeasuring 1729.10 sq. mtrs, lying, being and situate at
South Avenue, 17th Road, Khar (West), Mumbai 400052,
while reissuing / revalidating the Intimation of Disapproval
dated 11th August 2021.”
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STATUTORY PROVISIONS
96. We will be required to consider three separate statutes namely
the MRTP Act, the MMC Act and the DCPR 2034, a subordinate
legislation under the MRTP Act.
97. For our purposes, we are concerned not with Chapters II or
III of the MRTP Act which deal with Regional Plans and
Development Plans but with Chapter IV that runs from Sections 43
to 58 and deals with the control of development and the use of land
included in Development Plans. Section 43 itself sets out
restrictions on the development of land. Broadly stated, it says that
after the declaration of intention to prepare a Development Plan
(Chapter III, Section 23) or after the date on which a notification
specifying any undeveloped area as a notified area or any area
designated as a site for a new town is published in the Official
Gazette none can institute or change the use of any land, nor carry
out any development of land without the written permission of the
Planning Authority.
98. Immediately, this takes us back to the definition of
“development” in Section 2(7) of the MRTP Act. This is a very
wide and inclusive definition of land and reads as follows:
“2(7) “development” with its grammatical variation
means 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 precinct and includes
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demolition of any existing building structure or erection
or part of such building, structure of erection; and
reclamation, redevelopment and lay-out and sub-
division of any land ; and “to develop” shall be construed
accordingly;”
( Emphasis added )
99. While on this, we note the definition of a ‘Planning
Authority’ under Section 2(19).
“2(19) “Planning Authority” means a local
authority; and includes,—
(a) a Special Planning Authority constituted or
appointed or deemed to have been appointed under
section 40;
(b) in respect of the slum rehabilitation area
declared under section 3C of the Maharashtra Slum
Areas (Improvement, Clearance and
Redevelopment) Act, 1971, the Slum Rehabilitation
Authority appointed under section 3A of the said
Act;”
100. Section 43 deals with restrictions on development of land. It
has a proviso for certain types of works for which no such
permission is necessary.
101. Continuing in this schema, the MRTP Act then tells us in
Section 44 how an application for permission for development is to
be made. Unless otherwise provided by rules made in that regard,
any person who intends to carry out development on any land must
apply in writing to the Planning Authority for permission in a
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prescribed form with such particulars and attaching such documents
as may be stipulated. This restriction or this requirement does not
apply to a Central or State Government or a Local Authority. The
proviso to sub-section 1 tells us that no such permission is necessary
for demolition of an existing structure, erection or building a part
thereof in compliance with a statutory notice from a Planning
Authority or a Housing or Area Development Board, the Repairs
and Reconstruction Board or the Slum Improvement Board. We are
not concerned with sub-section (2).
102. Section 45 then deals with the grant or refusal of permissions.
This is the permission that is commonly known as the CC. It is best
to reproduce Section 45 in its entirety:
“ 45. Grant or refusal of permission
(1) On receipt of an application under section 44 the
Planning Authority may, subject to the provisions of this
Act, by order in writing—
(i) grant the permission, unconditionally;
(ii) grant the permission, subject to such general
or special conditions as it may impose with
the previous approval of the State
Government ; or
(iii) refuse the permission.
(2) Any permission granted under sub-section (1)
with or without conditions shall be contained in a
commencement certificate in the prescribed form.
(3) Every order granting permission subject to
conditions, or refusing permission shall state the grounds
for imposing such conditions or for such refusal.
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(4) Every order under sub-section (1) shall be
communicated to the applicant in the manner prescribed by
regulations.
(5) If the Planning Authority does not communicate its
decision whether to grant or refuse permission to the
applicant within sixty days from the date of receipt of his
application, or within sixty days from the date of receipt of
reply from the applicant in respect of any requisition made
by the Planning Authority, whichever is later, such
permission shall be deemed to have been granted to the
applicant on the date immediately following the date of
expiry of sixty days:
Provided that, the development proposal, for which
the permission was applied for, is strictly in conformity
with the requirements of all the relevant. Development
Control Regulations framed under this Act or bye-laws or
regulations framed in this behalf under any law for the time
being in force and the same in no way violates either the
provisions of any draft or final plan or proposals published
by means of notice, submitted for sanction under this Act:
Provided further that, any development carried out
in pursuance of such deemed permission which is in
contravention of the provisions of the first proviso, shall be
deemed to be an unauthorised development for the
purposes of sections 52 to 57.
(6) The Planning Authority shall, within one month
from the date of issue of commencement certificate,
forward duly authenticated copies of such certificate and
the sanctioned building or development plans to the
Collector concerned.”
( Emphasis added )
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103. The only other Section that we must refer to is the lapsing
provision that is in Section 48. This is necessary because we will
need to juxtapose it with a similar lapsing provision relating to IoDs
under the MRTP Act. Section 48 reads thus:
“ 48. Lapse of permission
Every permission for development granted or deemed to
be granted under section 45 or granted under section 47
shall remain in force for a period of one year from the
date of receipt of such grant, and thereafter it shall
lapse :
Provided that, the Planning Authority, may, on
application made to it extend such period from year to year;
but such extended period shall in no case exceed three
years:
Provided further that, if the development is not
completed up to plinth level or where there is no plinth,
up to upper level of basement or stilt, as the case may
be, within the period of one year or extended period,
under the first proviso, it shall be necessary for the
applicant to make application for fresh permission. ”
( Emphasis added )
104. The second proviso speaks of development up to the plinth or
upper level of basement or stilt. As we shall presently see, there are
allied provisions under the DCPR 2034 regarding commencement
of work in relation to the plinth.
105. The MCGM is undoubtedly the Planning Authority but it
does not operate only under the MRTP Act. It does that as well, but
it is also controlled and regulated by a dedicated statute namely, the
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MMC Act. We are concerned here with Chapter XII captioned
‘Building Regulations’ of the MMC Act.
106. It may be more convenient to proceed here from Section 342
to 347. Section 342 is part of the sub-division of Chapter XII that
deals with notices regarding execution of works not amounting to
the erection of a building. Section 342 also deals with notices to be
given to the Commissioner of intention to make additions etc., or a
change of user to a building. Those details need not detain us at
present. Section 345 tells us when building or work may be
proceeded with. This has reference to Section 342, and Section 337
(notice to be given to the Commissioner of intention to erect a
building), Section 338 (permitting the Commissioner to require
plans and other documents to be furnished), Section 340 (again
regarding additional information) and Section 343 (plans and
additional information).
107. What Section 345 tells us is that there exists a deeming
provision. It works like this. If, within 30 days of the receipt of any
notice under Section 337 or Section 342 or of the plan of other
information called for in Sections 338, 340 and 343, the
Commissioner does not in writing communicate his disapproval of
the building or work proposed, then the project proponent may at
any time but within one year from the date of delivery of the notice
proceed with that building or work. Of course, there is a positive
element too i.e., where the Commissioner approves the work in the
question. But the work being done cannot contravene the provisions
of the Act.
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108. Obviously, Section 345 operates in a particular field i.e., one
of permission to commence work. But Section 347, captioned
‘When work may be commenced’ operates slightly differently. The
captions of the two Sections need to be carefully parsed. Section 347
is central to Mr. Chinoy’s case and we set it out fully below.
“ 347. When work may be commenced
(1) No person shall commence to erect any building or
to execute any such work as is described in section 342—
(a) until he has given notice of his intention as
hereinbefore required to erect such building
or execute such work and the Commissioner
has either intimated his approval of such
building or work or failed to intimate his
disapproval thereof within the period
prescribed in this behalf in section 345 or 346;
(aa) until he has given notice to municipal city
engineer of the proposed date of
commencement. Where the commencement
does not take place within seven clear days of
the date so notified, the notice shall be
deemed not to have been given;
(b) after the expiry of the period of one year
prescribed in sections 345 and 346
respectively, for proceeding with the same.
(2) If a person, who is entitled under section 345 or
346 to proceed with any building or work, fails so to do
within the period of one year prescribed in the said
sections, respectively, for proceeding with the same he
may at any subsequent time give a fresh notice of his
intention to erect such building or execute such work,
and thereupon the provisions hereinbefore contained
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shall apply as if such fresh notice were a first notice of
such person’s intention .
( Emphasis added )
109. Analysing this section Mr Chinoy states that it runs in a
defined time sequence. It begins with a prohibition. None can
commence the construction of any building or execute any work as
described in section 342 unless there is a notice of intention to erect
the building or commence work and the Commissioner has either
intimated his approval or failed to do so under Section 345 that we
have just seen and until that project proponent has given notice to
the Municipal City Engineer of the proposed date of
commencement. Sub-clause (b) of sub-section (1) then says that no
person can commence the erection of any building or the execution
of work after the expiry of one year period prescribed in Section 345
and 346 for proceeding with this.
110. Now Section 347 is the section under which an IoD is issued.
As the name suggests, it is an Intimation Of Disapproval (IoD).
Permissions are granted but always in the negative (and this makes
for very curious reading of that permission). But sub-clause (2) of
Section 347 mentioned above tells us what happens when a person
otherwise entitled to proceed with the building of work does not do
so within that one year. It says that in that situation the project
proponent is entitled to give a fresh notice, the emphasis being on
the word ‘fresh’, of his intention to erect such a building or to
execute such work i.e., the very work for which permission was
granted, which was not done and which permission lapsed after one
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year. Then comes the all important words that Mr Chinoy has been
at some pains to emphasize:
and thereupon the provisions herein before contained shall
apply as if such fresh notice were a ‘first notice’ … .
111. Now Mr Chinoy’s submission is relentlessly and perhaps even
brutally simple. Once the IoD lapses, he submits, a ‘fresh notice’ as
if it was a first notice must be given. The earlier notice is simply
wiped out. It stands obliterated. It is entirely effaced and of no
consequence. The required notice under Section 347 has to be given
de novo as if it is the first ever such notice.
112. Consequently, and following this logic, anything that attaches
to the IoD, whether it be a benefit or otherwise, lapses with the
lapsing of the IoD. There is no concept, Mr Chinoy submits, of a
benefit that can be obtained only with the IoD of being detached, de-
linked or un-anchored from the IoD and somehow set adrift, only to
be brought back to safe harbour at some later stage on a fresh IoD.
113. No other reading is possible, he submits. In particular,
Section 347(2) does not tell us when such a fresh notice (as if it were
a first notice) must be made. It does not have to be made
immediately or within a week or a month or a year. It could even be
made after ten years. It is therefore inconceivable, in his submission,
that a benefit that was obtained in one year could literally be
‘banked’ for later use; kept, so to speak, in a ‘safe deposit FSI vault’
for later deployment and use at some convenient future time.
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114. What the GR thus required was, and he submits this is clear
from the ‘non-clarification clarification’ of the State Government,
that everything that the IoD required had to be done within a year,
had to be done within that year particularly commencement of work.
If work commenced within the one year period i.e., on the obtaining
of a CC, then the benefits that were obtained on the IoD would
obviously continue. The IoD could then be re-issued on payment of
scrutiny fees. Of course if there were other material changes or
additions and additional benefits sought then those would have to be
paid for at the then prevalent rates at the time of the later IoD.
115. Mr Chinoy submits that the GR does not operate to amend
Section 347. It operates within Section 347. It provides a concession.
That concession must be obtained within the year of that GR i.e., by
31st December 2021. But that necessarily posits that everything that
the IoD required had to also be done within the lifespan of the IoD.
116. He clarifies that additional FSI cannot be separately sought
without there being a development proposal i.e., the submission of
building plans and a proposal to show how the additional FSI is to be
used in that project. Further amendments are immaterial. The
premium that is to be paid is for the additional FSI that is to be
incorporated in that proposal. It is thus necessary that within that
period of one year of the IoD lifespan work must be shown to have
commenced.
117. There is no ambiguity about what “ commencement of work ”
means. It is the stand of the MCGM that commencement of work does
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not mean doing a token activity on site such as a ground breaking
ceremony or anything as trivial as that. Read with Sections 43, 44
and 45 of the MRTP Act, it is clear that no work can commence
without a CC issued under Section 45. Therefore, it is the issuance
of a CC that is required within that one year period.
118. While on this aspect of the matter, Mr Chinoy invites our
attention first to some provisions of the DCPR 2034.
Commencement of work is specifically a subject under DCR 10(6).
This says that the development permission/CC shall remain valid
for four years in the aggregate but must be renewed before the
expiring of one year from the date of its issue. This is consistent
with the MRTP Act. Then commencement is defined for the
purpose of this Regulation in a table in DCR 10(6) for different
types of work. For building work including additions and alterations,
commencement means up to plinth level or where there is no plinth
up to the upper level of lower basement or stilt as the case may be.
119. DCR 30 is the first Regulation in Part V of the DCPR 2034.
This deals with the FSI. Sub-regulation 1 sets out the Floor Space
Indices or FSI in residential, commercial and industrial zones across
the city. The definition of FSI and its formula is provided in the
DCPR itself and this is not in controversy either. It is also now
included in the MRTP Act itself. In particular, sub-regulation 6 of
DCR 30 speaks of the premium to be charged on additional FSI on
payment of a premium and there is a reference to Column 5 of Table
12. Table 12 does not actually set out the premium but sets out the
additional FSI. Now the premium under DCR 30(6) is payable for
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the built-up area at the rate of 50% of the land rates as per the ASR
for FSI of 1.
120. DCR 2(61) defines FSI as the quotient of the ratio of the
combined gross floor area of all floors except those exempted under
the regulations to the gross area of the plot. This tells us that if the
FSI is known and the gross plot area is known, the maximum
permissible built-up area can be arithmetically computed. This is
exactly the same definition we find in Section 2(13A) of the MRTP
Act.
121. The premium is to be divvied up between State Government,
MCGM, Maharashtra State Road Development Corporation
Limited (“ MSRDC ”) and the Dharavi Authority equally.
122. The proviso tells us that the utilization of additional FSI on
payment of the premium and TDR is optional. It may be utilized in
a sequential manner subject to the FSI limits in Table 12. It is non-
transferable. Additional FSI on paying of a premium can be granted
only when it is sought i.e., applied for. The payment of a premium
on an application and on payment of the premium. Unlike TDR, the
additional premium is to be used in situ on the plot where the
project is.
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IS ADDITIONAL FSI/PREMIUM FSI ‘PROPERTY’ OR ‘AN
ENTITLEMENT’?
123. Dr Chandrachud among others has contended that once the
premium is paid, the additional FSI is the species of property. It
becomes the ownership of the land owner or the project proponent,
as the case may be. It is true that it has to be paid for but then that is
equally true of any land that is being purchased or of any TDR that
is being purchased. The fact that TDR can, as it were, float across
the city is not a material point of distinction as to the question of the
nature of additional FSI. For all intents and purposes it is ‘property’
and is not a mere ‘entitlement’. It is true, he submits, that the
additional FSI is not inherent in the land. The inherent or basic
zonal FSI is defined by the DCPR, 1.33 in the Island City and 1.00 in
the suburbs. This is additional FSI. A land owner may or may not
chose to avail of it. The fact that the land owner needs to avail of it
at the time of a building proposal also does not alter its character as
property of ownership.
124. Mr Chinoy takes serious exception to this formulation. If it is
property, he submits, it must be marketable and must be tradable.
Additional or premium FSI is not. It has no market value. It can only
be utilized in situ . The premium is not in any sense a purchase price.
It is a fee paid to the MCGM for the grant of an additional FSI
which would otherwise not be available. No other person can utilize
the additional FSI obtained by a developer for a particular plot of
land. Nor can the additional FSI be set free to be utilized on some
other project or some other land. Consequently, in Mr Chinoy’s
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submission, the additional FSI is nothing more than a concession. It
is no different from saying that for a premium the available FSI is
relaxed from 1.33 to let us say 2 or 2.33. This is by no means ‘an
additional property’. On the other hand, TDR is a purchasable and
freely marketable commodity. It usually takes the form of a
Development Rights Certificate. There is no compulsion to use that
TDR. It can simply be sold and monetised.
125. We believe Mr Chinoy is correct in this submission. It does
not appear to us to be reasonable to suggest that the concessional
FSI granted by DCR 30(6) is of the same nature as TDR and is the
property right of the kind that would be protected by Article 300-A
of the Constitution of India.
126. We understand the reason why the argument is canvassed by
some of the Petitioners because the submission is that by refusing to
renew the IoD and to continue the additional FSI obtained at a
premium there is a form of expropriation of property without
compensation. That seems to us to be too extreme a proposition to
accept. TDR is described as a ‘right’. That right is a right to
property. Additional FSI is simply an entitlement or a permission to
load more built-up area on a project and to do so for a fee.
127. In fact, if we look a little more closely at some of the facts that
we have narrated above, it seems that under the DCPR 2034 there is
almost nothing that the MCGM as a Planning Authority will not
allow to be relaxed for a fee. Open space deficiencies can be cured
on payment of a fee, never mind that these open spaces are required
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for general health and well-being of those people for whom these
projects are apparently being undertaken.
128. We cannot accept the argument by Dr Chandrachud.
THE ‘BANKABILITY’ OF ADDITIONAL FSI
129. The reason this argument is taken is because of a formulation
that Dr Sathe for Prestige Estate advanced at the beginning, i.e.,
what he described as the ‘bankability’ of additional FSI. His
submission, as we have understood it, is that the additional FSI is in
no way and in no sense limited in time (even leaving aside any
concessional period). It is, as DCR 30(6) shows, project-specific. It
has to be used for that project on that site. It cannot be marketed,
and it cannot be sold elsewhere. It cannot be traded, but there is no
requirement that a project proponent must use it within the year or
even that he must begin using it within the year. Dr Sathe suggests
that in fact additional FSI need not be obtained at the time of the
initial IoD but can be obtained at any point later when it is proposed
to be used.
130. This is a more than somewhat confusing argument. We
should have thought that, ceteris paribus , if an IoD is obtained, then
presumably work must start within the lifespan of the IoD. Starting
or commencing work means the CC is obtained — because no
development can commence without a CC, and that is axiomatic.
There is no in-built right to amend a plan to then load on additional
FSI at a later stage. Consequently, it must follow that if an
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application for additional FSI is to be made it must be made at the
time when the proposal is submitted.
131. It is true that plans may be amended but there is no guarantee
that every amended plan will necessarily be approved with its
amendments. Indeed, this is why we believe that Dr Sathe’s
submission is not correctly placed.
132. Let us take one example: that of an IoD being obtained and
plans being submitted without additional FSI. Work may or may not
have commenced. At a later stage, an amendment is proposed, this
time with additional FSI. There is absolutely no assurance that the
amended proposal will be accepted or allowed or that the additional
FSI will be allowed to be utilised because it then applies to amended
plans that are themselves subject to further approval. It would be
extremely risky and perhaps even foolhardy for any developer to
proceed on a speculation that a later amended plan with additional
FSI was bound to be allowed. This is why those developers will seek
the additional FSI as indeed every one of these Petitioners before us
has done at the time of applying for the IoDs.
133. We also believe that Mr Chinoy is correct that the word
‘bankability’ is just a nice and glossy word for ‘hoarding’. What
would otherwise happen is that knowing that premium is payable on
ASR, a rate that only keeps increasing, developers would cheerfully
obtain additional FSI in one year and then simply hoard it for use in
a later year when the ASR rate is much higher, thus avoiding a need
to pay an increased premium. The submission that Mr Chinoy
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makes is that any other interpretation would lead to a situation
where developers would simply ‘bank’ premium FSI by paying for it
once and then use it at a time when the ASR rates are much higher
without having to pay the differential in premium.
134. We believe Dr Sathe’s submission is too broadly placed to
merit acceptance. The additional FSI cannot be obtained de hors an
IoD. There is no concept that we can tell of simply going shopping
for premium or additional FSI or of any person without an IoD
purchasing and thus banking additional FSI. If that be so, there is no
question of individual developers not being required to pay the
differential premium on revalidation of the IoD.
135. The argument on bankability of an additional FSI de-linked
from an IoD is therefore not one that we are prepared to accept.
THE GR OF 2021
136. With this, we now return to the GR in question. A few things
are notable about this GR. We may summarise these as follows:
i. the benefit of the GR is a reduction by 50% of the
premium payable.
ii. The GR’s validity is only for one year until 31st
December 2021.
iii. The reduced premium must be paid in full (either as a
one time payment or in instalments) by the end of that
period.
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137. The purpose of the GR was to provide a fillip to the real
estate sector at a time when it was perceived to be in the doldrums.
The GR came not abruptly, but six months after the receipt of an
expert report commissioned by the State Government from the
Deepak Parekh Committee.
138. We do not have the recommendations and we are not
concerned with those but the GR itself makes it clear that it was not
a one sided benefit-only proposal. Tied to this 50% rebate was the
corresponding 100% imposition of the stamp duty liability on the
developers. Submitting an undertaking of that liability was
obligatory . The entire stamp duty for the full range from
economically weaker sections to high income groups had to be borne
100% by the project proponent. The participating projects had to be
so noted with the stamp registration office. Lists of customers for
whom stamp duty obligations had to be taken over were to be
provided.
139. Now this seems to us to make it clear that while on the one
hand there was a benefit to the developers by reducing the
premiums for the premium on additional FSI, there was also an
attempt to ease the burden on consumers i.e., flat purchasers. The
idea does not seem to have been to give developers a one-sided
bonanza in the form of a rebate.
140. We must note that the report itself had found that the rates
for residential properties in Mumbai were uncompetitive. The levies
in Mumbai were 13 times more expensive than Delhi for home
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buyers and 34 times more expensive in commercial real estate.
These premiums accounted for one-third of the sale price. They
were prohibitively high. They needed to be rationalised.
141. We have already looked at the correspondence that ensued
between the MCGM and the State Government. But as Mr Chinoy
correctly points out, that takes us nowhere. Whatever view
individual officers may have had at the level of the MCGM this
cannot affect a question of interpretation of the statute.
142. His submission is that Section 347 and especially Section
347(2) are unambiguous. If the submission of the Petitioners is to be
accepted, it would mean that the GR carves out an exception to
Section 347(1)(b) and specifically to Section 347(2), i.e., for those
projects that participated in the rebate or concession scheme
Section 347(2) would have to be held to be inapplicable.
143. It is correct that without a valid IoD, there can be no CC.
Without a CC, no work can commence. Unless work commences,
there can be no utilisation of the FSI. It necessarily follows
therefore, that part of the terms of the IoD, and this is Mr Chinoy’s
and Mr Rajadhyaksha’s submission, requires the payment of the
differential in additional FSI premium every time the IoD is sought
to be revalidated, the premium is computed as a percentage of the
ASR as prevalent at the time of issuance of the IoD. The percentage
itself may not vary unless there is a revision in the rules. To take a
simple example, if the ASR in Year 1 is Rs 100 and the premium is
chargeable at 10%, then Rs 10 would be the amount payable as the
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premium. If the IoD lapses and is to be revalidated, in the next year,
assuming that the ASR is now Rs 150 and the percentage remains at
10%, the premium payable would be Rs 15. But the developer would
get credit for the Rs 10 already paid and would be required to pay
the differential of Rs 5.
144. Another aspect of the matter that has appeared in these
papers seems to us to be an argument founded in equity. It runs like
this. Very often, developers are unable to obtain CCs entirely for
reasons out of their control. Sometimes, as we have seen in at least
one case, the delay is on the part of the MCGM itself. The MCGM
wears many hats in this development, planning and permission
giving process. It only takes one officer to withhold or delay a
required NOC with a resultant lapsing of an otherwise valid IoD
compelling the developer to pay the differential premium in the
following year. There are other situations with the same effect. For
instance, and our Courts are certainly no strangers to this, projects
are delayed by objections taken by society members or other people
who have a claim. In the factual narrative that we have seen above,
there is at least one case of arbitration proceedings having to be
known, and another or perhaps two more of litigations in this Court
in the form of Writ Petitions or Civil Suits. These have no
predictable time frame to conclusion. They may run into months
and even years and they are completely outside the cyclical renewal
and revalidation of IoDs.
145. It is for this reason that Mr Chinoy submits that what happens
in a ‘normal’ situation i.e., at a time when there is no question of a
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concession must also necessarily apply to the present situation
where there is a concession granted but has to be availed of within
one year.
146. We expect that it would be difficult to formulate a proposition
that could with sufficient accuracy cover every one of the possible
resultant cases where a project is delayed and a CC cannot be
obtained within the one year lifespan of an IoD. But such are the
perils and vicissitudes of development and all real estate projects.
147. The answer that the Petitioners seek is, therefore, not to be
found either in the concept of bankability or in a case-to-case
situation of delays caused by various factors. Indeed, that is not even
the canvas of the Petitions before us. Every single one of these
Petitions seeks only one thing — the implementation of the GR
dated 14th January 2021. It is to that we direct our attention, as we
believe we must. There is no larger principle or proposition that we
are called upon to decide in this matter. The MCGM circular is one
that follows from the GR. It is not independent of it. It cannot
control the GR. Indeed, the correspondence that we have seen
indicates that the MCGM was not seeking a clarification in regard to
its own circular, obviously, but was addressing itself to the import of
the GR of 14th January 2021.
148. There are certain provisions of this GR that merit a re-visit.
We leave aside the impetus behind the GR. For better or for worse,
it is what it is. The GR recognises that the premium for additional
FSI must be charged as a percentage of the annual market value or
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annual statement of rates or ASR as prescribed. It then says that the
Government’s opinion was that, and these words are now
important—
necessary to give a rebate in the premium being charged for
the additional FSI as per the recommendations of the
Deepak Parekh Committee and that this should be done on
an urgent basis.
149. This rebate was not said to be limited in time. Then the GR
goes on to say that the Government has taken a decision about the
rebate rate and pegged it at 50%. After this there are the directions.
The first of these directions, as we have seen, sets out the rebate and
then says it is subject to a procedure that is set out below. Direction
2 only says that the decision is to be taken by the Planning
Authorities. Clause A speaks of eligibility.
150. It is Clause B that now a conditionality to avail of the rebate.
This has been consistently glossed over by the MCGM throughout.
This liability is in relation to the stamp duty. It mandates that any
developer who wishes to avail of the rebate must, as an attached
condition, pay the stamp duty of purchasers of units in various
categories and these range across the full spectrum from
economically weaker sections to high income groups. This is
clarified in Clause B to mean that the stamp duty liability of the
purchasers is brought down to zero. Then Clause B goes on to say
that it is
only those developers who do so i.e., assume the entirety of
the burden of the stamp duty who get the benefit of the
said scheme
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This scheme is the rebate in question.
151. Clauses I, II, III, IV and V are sub-clauses to Clause B. Clause
I requires participating developers to submit an undertaking to the
MCGM to pay the full stamp duty of all purchasers. That is not all.
The developers must then get a certificate from each flat purchaser
confirming that the developer is bearing the stamp duty burden in
full. Even that is not the end of it. The developer must publish a list
of those purchasers for whom the developer has assumed the 100%
liability. There is a further fail-safe provided by the Government.
This full list of the projects in the scheme must go through the
Municipal Commissioners to the stamp registration office for
information and must also be published.
152. Then comes the all important Clause V which we take the
liberty, at the cost of repetition, of setting out again:
“V. The projects taking benefit of these concessions will
have to continue the benefit of stamp duty till the
construction area for which benefit has been taken is
sold. ”
( Emphasis added )
153. Now this is probably the crucial clause for our purposes.
Every single project that benefits from the concessions in the GR in
question must continue to absorb the stamp duty burden until that
area for which the benefit has been obtained has been sold.
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154. The Marathi equivalent is to be found at page 53.
V ;k loyrhapk ykHk ?ks.kk&;k izdYikauk] ykHk ?ksrysY;k
“ .
cka/kdke {ks=kph foØh gksbZi;Zar eqnzkad ‘kqYd loyrhapk YkkHk
pkyw Bsokok ykxsy-
”
The translation is accurate.
155. Now let us consider what happens if Mr Chinoy’s
formulation is to be accepted. After one year, the IoD lapses.
According to him, with it goes the additional FSI benefit until and
unless the IoD is re-validated by paying the premium differential.
156. We posed the question what would happen to the stamp duty
undertaking given and required to be maintained until the
construction for which it was obtained was sold. The answer
suggested was that if the benefit no longer applied then the
condition attached to it would also not be binding.
157. We find nothing in the GR to support this construction or
interpretation. The condition of stamp duty is not itself conditional,
i.e., it is not dependent on any other event happening or not
happening. That liability is absolute and is a pre-condition and an
ongoing condition to obtaining the rebate.
158. Indeed, the answer is logically self-defeating. The rebate is
tied root and branch to the demand that the developer must absorb
the full stamp duty liability. If the stamp duty liability goes, for
whatever reason, then so must the entitlement to the 50% rebate . In
other words, if the stamp duty liability goes, then, logically, so must
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the benefit and the developer ought to have been asked to pay 100%
premium even in the rebate period year. But that is not the case the
MCGM advances before us.
159. Everything points to the contrary. As we have seen, this was a
specific one-off rebate for a limited period of time in certain peculiar
circumstances that obtained country-wide and affected many
sectors, this one being only one of them. The GR does not
contemplate a case merely of conferring a benefit. It also imposes in
parallel a burden. That is of the assumption by the developer of the
entirety of the stamp duty. That is clearly, under conditions B-I to B-
V literally locked in for all time to come till the end of the project .
Indeed it would be difficult to conceive of a situation where, having
given an undertaking, obtained a certificate from a flat purchaser or
a unit purchaser, submitted a list to the Government, that project
being included in a list in the stamp office and condition B-V being
in operation, a developer could conceivably go and tell a flat
purchaser that since the IoD had lapsed the developer was no longer
bound by the commitment to bear the entire stamp duty. That could
never be.
160. To read it as Mr Chinoy suggests would be to read out the
provisions of Clause B-V of the GR entirely. Indeed, it would mean
that Clauses B-I to B-V would have to be read as non-existent and
would have to be deleted.
161. We believe the concerns of the MCGM that this would open a
Pandora’s box and that in year after year people would simply refuse
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to pay their additional premium is entirely misplaced. The
concession is a one-off concession. It applies only to projects, and
we are not really bothered whether there was one project or several
hundred, which being eligible, obtained the benefit by paying the full
amount of the premium of the rebated premium in that year and also
undertook to absorb the stamp duty liability. The rebate granted
cannot possibly be made illusory.
162. If the argument by the MCGM is to be accepted, then the
resultant situation would be that the so called rebate would be all but
wiped out and in addition the developers would necessarily have to
continue to bear 100% of the stamp duty burden. That could not
have been the intention of the GR at all.
163. It follows, therefore, that the additional FSI by paying the
rebated premium would necessarily have to continue without being
required to pay additional premium until completion of the project
so long as the undertaking to pay stamp duty continued. The two go
hand in hand. They cannot be separated. This applies only to those
projects that took the benefit of the GR and abided by its conditions.
164. This is the only method we have of harmonising the
requirements of Section 347 and the GR which, as we have noted, is
not merely the conferment of a benefit but is a benefit with a
corresponding or mirroring obligation at the same time.
165. It is of no consequence when, for instance under the RERA
law, a flat may legitimately be sold. The only question to be decided
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is whether the IoD is liable to be revalidated without insisting on
payment of additional premium for those developers who, being
eligible, participated in the rebate scheme.
166. We hold, in the facts and circumstances that have been set out
above, and on a correct interpretation of the GR that these IoDs are
liable to be revalidated and Commencement Certificates may in the
normal course be issued without a requirement to pay an additional
or differential premium provided the conditions in the GR are fully
met (including payment of the full amount of the premium within
the time stipulated, submission of the undertakings etc.).
167. To conclude, we may consider once again the 8th June 2023
communication from the Maharashtra Government. It seems to us
that the Government has correctly set out that the 14th June 2021
GR had already lapsed and there was no question of continuing its
benefit in successive years. But this only meant that its rebate policy
was confined to that year in question. It is for this reason that the
Government concluded by saying that it was unclear as to under
which provisions any concession was sought to be continued. The
State Government asked for a more precise proposal.
168. Correctly read, the Government communication did not seek
to extend the 14th January 2021 circular beyond its expiry date of
31st December 2021. But this necessarily meant that within that
period the GR was valid and subsisting and all its conditions had to
be met for its benefits to be availed of.
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169. Consequently, the only fair reading of this GR is, while
insisting on the fulfilment of the conditions, to maintain the
continuance of the benefit that it confers. Any other reading of the
GR would render it entirely illusory and even meaningless especially
in the long run. No such concession is available after the period of
the GR. It is not being suggested that in the normal course
revalidated or renewed IoDs will be exempt from payment of the
differential premiums or premium if any.
170. We dispose of all these Petitions by directing the MCGM to
revalidate or renew the IoDs in question without insisting upon
payment of an additional or differential premium but only in respect
of those developers/projects that have met the conditions of the
14th January 2021 GR.
171. The Petitions are disposed off in these terms. There will be
no order as to costs.
172. Mr Chinoy requests for a stay of this order on the basis that
there are others who have paid the differential premium although
they were participants in the rebate scheme. That is not a ground to
stay the operation of this order. Any stay would result in a further
delay in revalidation. Apart from the impact on developers, a delay
in revalidation affects third party flat purchasers and, perhaps most
importantly, those awaiting rehabilitation because without a
revalidated IoD, there can be no CC and no further work on site.
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173. In any case, the fact that the MCGM has to make a refund is
immaterial to the question of interpretation of the GR and the
relevant statutes. It is hardly plausible to suggest that just because
the MCGM will have to make significant refunds, therefore the GR
should be interpreted in an incorrect manner.
174. The application is refused.
175. In all cases where the application for a CC has been rejected
on this ground i.e., for demand for additional premium, the MCGM
is directed to issue the CC subject to other compliances.
176. In Sugee Two Developers LLP and Sugee Nine Developers
LLP, the developers have paid the amount, as we have noted, on a
without prejudice basis. In view of our decision, they are entitled to
a refund.
177. At Mr Chinoy’s request, this order for a refund is stayed for
the period of six weeks from the date this order is uploaded (and
which may take a little while given its length).
(Kamal Khata, J) (G. S. Patel, J)
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Sumedh
REPORTABLE
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (L) NO. 17993 OF 2023
1. Prestige Estate Projects
Ltd,
a company incorporated under the
provisions of the Companies Act, 1956
having its registered office at Falcon
House, No. 1, Main Guard Cross Road,
Bangalore 560 001.
2. Faiz Rezwan,
An adult Indian inhabitant and citizen,
and a shareholder of Petitioner No. 1,
having his office at Falcon House, No.
1, Main Guard Cross Road, Bangalore
560 001. …Petitioners
~ versus ~
1. The State of Maharashtra,
Through the Principal Secretary, Urban
Development Department, Mantralaya,
Mumbai 400 021.
SUMEDH
NAMDEO
SONAWANE
Digitally signed by
SUMEDH NAMDEO
SONAWANE
Date: 2023.11.06
13:32:01 +0530
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2. The Municipal Corporation
of Greater Mumbai,
A municipal corporation constituted
under the provisions of the Mumbai
Municipal Corporation Act, 1888,
having its headquarters at 5,
Mahanagarpalika Road, Fort, Mumbai
400 001.
3. The Commissioner
Municipal Corporation of
Greater Mumbai,
The chief executive officer of
Respondent No. 2 having its office at 5,
Mahanagarpalika Road, Fort, Mumbai
400 001.
4. The Chief Engineer
(Development Plan),
Municipal Corporation of Greater
Mumbai ,
An officer of the Municipal
Corporation of Greater Mumbai, having
his office at 5, Mahanagar Palika Road,
Fort Mumbai, 400001. …Respondents
A PPEARANCES
for the petitioner Dr Milind Sathe, Senior Advocate
with Mr Tushad Cooper,
Senior Advocate , Yash
Momaya, Parag Kabadi,
Falguni Thakkar, Anshita Sethi
i/b DSK Legal.
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for respondent-
MCGM
Mr Aspi Chinoy, Senior Advocate,
with Joel Carlos, Pooja Yadav,
Rupali Adhate i/b Sunil
Sonawane.
for respondent-
State
Mr Abhay Patki, AGP
Present in Person Mr Prashant Lohare, Sub Engineer
(Building & Proposals
Department WS-I).
Mr Avinash Pandge, Mr
Dnyaneshwar Bandgar, Mr
Shahbaz Peerjada, Sub engineer
(Building & Proposals Department
WS-I).
WITH
WRIT PETITION NO. 240 OF 2023
1. Sugee Two Developers LLP,
a Limited Liability Partnership Firm,
constituted under the provisions of the
Limited Liability Partnership Act,
2008, having its office at 3rd Floor,
Nirlon House, Dr Annie Besant Road,
Worli, Mumbai 400 030.
2. Nitin Varadkar,
nominee of Sugee One Developers
Private Limited, a Designated Partner
of the Petitioner No. 1 having his office
at 3rd Floor, Nirlon House, Dr. Annie
Besant Road, Worli, Mumbai 400 030. …Petitioners
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~ versus ~
1. State of Maharashtra,
Through the Principal Secretary Urban
Development Department Mantralaya,
Mumbai 400 032.
2. Brihanmumbai Municipal
Corporation,
a statutory corporation incorporated
under the Mumbai Municipal
Corporation Act, 1888; having its office
at Mahapalika Marg, Mumbai 400 001.
3. Municipal Commissioner,
Brihanmumbai Municipal Corporation,
having his office at Mahapalika Marg,
Mumbai 400 001. …Respondents
A PPEARANCES
for the petitioner Dr Abhinav Chandrachud with
Sanjay Kadam, Sanjeel Kadam,
Nitisha Lad, Sayalee Rajpurkar,
Soham Salvi i/b Kadam & Co.
for respondent -
State
Mr MA Sayed, AGP.
for respondent-
MCGM
Mr Joel Carlos with Pooja Yadav,
Rupali Adhate i/b Sunil
Sonawane.
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WITH
WRIT PETITION NO. 238 OF 2023
1. Sugee Nine Developers LLP,
a Limited Liability Partnership Firm,
constituted under the provisions of the
Limited Liability Partnership Act,
2008, having its office at 3rd Floor,
Nirlon House, Dr Annie Besant Road,
Worli, Mumbai 400 030
2. Jitendra Rawal,
Nominee/Authorized Signatory the
Petitioner No. 1 having his office at 3rd
Floor, Nirlon House, Dr Annie Besant
Road, Worli, Mumbai 400 030.
…Petitioners
~ versus ~
1. State of Maharashtra,
Through the Principal Secretary Urban
Development Department Mantralaya,
Mumbai 400 032.
2. Brihanmumbai Municipal
Corporation,
a statutory corporation incorporated
under the Mumbai Municipal
Corporation Act, 1888; having its office
at Mahapalika Marg, Mumbai 400 001.
3. Municipal Commissioner,
Brihanmumbai Municipal Corporation,
having his office at Mahapalika Marg,
Mumbai 400 001. …Respondents
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PPEARANCES
A
for the petitioner Mr Pranit Kulkarni with Sanjeel
Kadam, Nitisha Lad, Sayalee
Rajpurkar, Soham Salvi i/b
Kadam & Co.
for respondent -
State
Mr Abhay Patki, Addl GP.
for respondent-
MCGM
Mr Joel Carlos ,with Pooja Yadav,
Rupali Adhate i/b Sunil
Sonawane.
WITH
WRIT PETITION NO. 1122 OF 2023
1. Sugee Fifteen Developers
LLP,
a Limited Liability Partnership Firm,
constituted under the provisions of the
Limited Liability Partnership Act,
2008, having its office at 3rd Floor,
Nirlon House, Dr Annie Besant Road,
Worli, Mumbai 400 030
2. Anand B Gandhi,
Nominee/Authorized Signatory the
Designated Partner of the Petitioner
No. 1 having his office at 3rd Floor,
Nirlon House, Dr Annie Besant Road,
Worli, Mumbai 400 030.
…Petitioners
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~ versus ~
1. State of Maharashtra,
Through the Principal Secretary Urban
Development Department Mantralaya,
Mumbai 400 032.
2. Brihanmumbai Municipal
Corporation,
a statutory corporation incorporated
under the Mumbai Municipal
Corporation Act, 1888; having its office
at Mahapalika Marg, Mumbai 400 001.
3. Municipal Commissioner,
Brihanmumbai Municipal Corporation,
having his office at Mahapalika Marg,
Mumbai 400 001.
…Respondents
PPEARANCES
A
for the petitioner Mr Saurish Shetye , with Sanjeel
Kadam, Nitisha Lad, Sayalee
Rajpurkar, Soham Salvi i/b
Kadam & Co.
for respondent -
State
Mr Milind More, AGP.
for respondent-
MCGM
Mr Joel Carlos ,with Pooja Yadav,
Rupali Adhate i/b Sunil
Sonawane.
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WITH
WRIT PETITION (L) NO. 22774 OF 2023
Ankur Premises Developers
LLP,
A Limited Liability Partnership formed
under the provisions of the Limited
Liability Partnership Act, 2008, having
its registered office at 8, Chamunda
Krupa, Cottage Lane, Santacruz
(West), Mumbai 400 054
…Petitioner
~ versus ~
1. Municipal Corporation of
Greater Mumbai, Through
the Municipal
Commissioner,
having office at Brihanmumbai
Mahanagarpalika Headquarters,
Mahapalika Marg, CST, Mumbai 400
001.
2. Municipal Corporation of
Greater Mumbai, Through
Assistant Municipal
Commissioner,
H West Ward having office at
Brihanmumbai Mahanagarpalika
Headquarters, Mahapalika Marg, CST,
Mumbai 400 001.
3. Municipal Corporation of
Greater Mumbai, Through
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Assistant Municipal
Commissioner,
H West Ward having office at
Brihanmumbai Mahanagarpalika
Headquarters, Mahapalika Marg, CST,
Mumbai 400 001.
4. Municipal Corporation Of
Greater Mumbai, Through
Assistant Engineer,
(Building & Proposal), H West Ward,
having office at Brihanmumbai
Mahanagarpalika Headquarters,
Mahapalika Marg, CST, Mumbai 400
001.
5. The State Of Maharashtra,
Through The Secretary,
Urban Development
Department,
Government of Maharashtra,
6th Floor, Mantralaya, Mumbai. …Respondents
PPEARANCES
A
for the petitioner Mr Zubin Behramkamdin, Senior
Advocate , Nitya Shah, Kinnar
Shah i/b Divya Shah Associates.
for respondent -
State
Mr Abhay Patki, Addl GP.
for respondent-
MCGM
Mr Atul Rajadhyaksha, Senior
Counsel , with Joel Carlos,
Pooja Yadav, Rupali Adhate i/b
Sunil Sonawane.
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WITH
WRIT PETITION (L) NO. 23049 OF 2023
1. Relcon Infraprojects ltd,
a company incorporated under the
Companies Act, 1956, having its
registered at 4th Floor, Relcon House
Premises Cooperative Society Ltd, Plot
15/A, M.G. Road, Vile Parle (E),
Mumbai 400 057.
2. Relcon Krisha Realty LLP,
a Limited Liability Partnership
incorporated under the Limited
Liability Partnership Act, 2008 having
its registered office at 4th Floor, Relcon
House Premises Cooperative Society
Ltd, Plot 15/A, M.G. Road, Vile Parle
…Petitioners
(East), Mumbai 400 057.
~ versus ~
1. The State of Maharashtra,
through Urban Development
Department, Government of
Maharashtra, Mantralaya, Madam
Cama Road, Hutatma, Rajguru Square,
Nariman Point, Mumbai 400032.
And through Revenue and Forest
through the Government Pleader, High
Court (O.S.), Mumbai.
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2. Municipal Corporation of
Greater Mumbai,
Building Proposal Department (K East
Ward), Sangam Cooperative Housing
Society Jogeshwari East, Mumbai,
Maharashtra 400093.
3. Ridhi Sidhi Sadan Unit of
Shree Ridhi Sidhi Co-
Operative Housing Society
Ltd,
a society duly registered under Bombay
Co-Operative Societies Act, 1925
having its office at Ridhi Sidhi Sadan
Unit of Shree Ridhi Sidhi CHS Ltd,
Tejpal Scheme Road No. 2, Vile Parle
(East), Mumbai 400 057. …Respondents
PPEARANCES
A
for the petitioner Mr Cyrus Ardeshir , with Aseem
Naphade & Akanksha Mishra
i/b Shriya Mehta.
f or respondent no. 3 Mr Sarosh Bharucha , with Jamshed
Master i/b Rahul Tiwari
for respondent-
MCGM
Mr Aspi Chinoy, Senior Advocate ,
Joel Carlos, Rupali Adhate,
Pooja Yadav i/b Sunil
Sonawane.
For respondent –
State
Mr Abhay Patki, Addl. GP.
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WITH
WRIT PETITION (L) NO. 25945 OF 2023
1. Mayfair Housing Pvt Ltd,
1, Mayfair Meridian, Near St. Blaze
Church, Ceaser Road, Andheri (West)
Mumbai – 400 058.
2. Nayan Arvind Shah,
Director of Mayfair Housing Pvt Ltd
Having office at 1, Mayfair Meridian,
Near St Blaze Church, Ceaser Road,
Andheri (West), Mumbai 400 058. …Petitioners
~ versus ~
1. State of Maharashtra,
Urban Development Department
Through the office of the Government
Pleader (O.S.), High Court, Bombay.
2. Municipal Corporation of
Greater Mumbai,
A statutory Corporation incorporated
under the Provisions of the Mumbai
Municipal Corporation Act, 1888,
having its office at Mahapalika Building,
Mahapalika Marg, Mumbai – 400 001.
3. Executive Engineer,
Building Proposals, ‘K’
West Ward,
Municipal Corporation of Greater
Mumbai, Through Legal Department,
MCGM, Mahapalika Building,
Mahapalika Marg, Mumbai 400 001.
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4. Friendship Co-operative
Housing Society Pvt Ltd,
A Society registered under the
provisions of the Maharashtra Co-
operative Societies’ Act, 1960 Having
its office at “Prashant”, Dawoodbaug
Road, Andheri (West), Mumbai 400
058. …Respondents
PPEARANCES
A
for the petitioner Mr Pravin Samdani , with Mayur
Khandeparkar, Subit
Chakrabarti, Khushnumah
Banerjee i/b Vidhi Partners.
for respondent no. 4 Mr Aditya P Shirke with Vishal P
Shirke.
for respondent-
MCGM
Mr Joel Carlos with Rupali Adhate,
Pooja Yadav i/b Sunil
Sonawane.
for respondent -
State
Mrs Jyoti Chavan, AGP.
WITH
WRIT PETITION (L) NO. 27895 OF 2023
1. Evershine Builders Private
Limited,
A Company incorporated under the
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provisions of the Companies Act, 1956
and being a company within the
meaning of the Companies Act, 2013,
having its registered office at 215, 2nd
Floor, Veena Beena Shopping Centre,
Station Road, Bandra (West), Mumbai
– 400 050.
2. Hira Rajkumar Ludhani,
an adult, Indian Inhabitant, being the
Director and Shareholders of Evershine
Builders Pvt Ltd having his office at
215, 2nd Floor, Veena Beena Shopping
Centre, Station Road, Bandra (West),
Mumbai 400 050. …Petitioners
~ versus ~
1. The State of Maharashtra,
through the Principal Secretary, Urban
Development Department, having its
office at Mantralaya, Fort, Mumbai
400032.
2. Municipal Corporation of
Greater Mumbai,
a statutory corporation, established
under the provisions of the Mumbai
Municipal Corporation Act, 1888,
having its office at Mahapalika Bhavan,
Mahapalika Marg, Mumbai 400 001.
3. Municipal Commissioner,
Municipal Corporation of Greater
Mumbai, Mahapalika Bhavan,
Mahapalika Marg, Mumbai 400 001. …Respondents
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A PPEARANCES
for the petitioner Mr Simil Purohit , with Rubin Vakil,
Manish Doshi i/b Vimadalal &
Co.
for respondent-
MCGM
Ms Rupali Adhate , with Pooja Yadav
i/b Sunil Sonawane.
for respondent -
State
Mr Abhay Patki, Addl. GP.
CORAM : G.S.Patel &
Kamal Khata, JJ.
DATED : 12th, 13th & 16th
October 2023
ORAL JUDGMENT ( Per GS Patel J) :-
1. Rule . There are Affidavits in Reply and Rejoinder and we
have heard counsel in all these Petitions at some length on the
questions of law. By consent, rule returnable forthwith.
2. “What the State Government giveth, the Municipal Corporation
taketh away,” is the complaint of these nine Petitioners, real estate
developers one and all, in one voice claiming that they were terribly
hard-hit by the lockdown during the Covid-19 pandemic. Money is
the developers’ oxygen, and during that unanticipated upheaval,
developers’ oxygen levels plummeted. Perceived the real estate
sector to be thus in dire need of resuscitation, the State Government
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afforded developers a substantial rebate in the premium that they
would otherwise have had to pay for acquiring ‘Additional FSI’. FSI
is a well-established concept in planning law in Maharashtra. It is
now even defined in the Maharashtra Regional & Town Planning
Act, 1966 (“ MRTP Act ”). Simply put, it is the ratio of built area to
plot area. If the plot area is 1000 sq mts, and the FSI is 1.00, a
developer can construct built-up area or BUA of 1000 sq mts. In the
Island City, the FSI is generally 1.33. In the suburbs it is 1.00. But
there are important exclusions from computing what is BUA and,
therefore, ‘free of FSI’ — stairwells, lobbies, lift wells and common
areas are typically not reckoned towards FSI consumption. In
addition, a developer may, under certain statutory provisions,
acquire additional FSI — the right to build further, in addition to the
inherent ‘land FSI’ (of 1.33 or 1.00). This additional FSI can be got
at a premium, and the premium is divided between various statutory
authorities. We refer to this additional-FSI-for-a-premium as
‘Premium FSI’ in this judgment. During the Covid-19 period, the
rebated Premium FSI had to be paid subject to certain conditions
under a formal Government Resolution (“ GR ”). It had to be paid
fully, though instalments were permitted, within the period defined
by that GR. While the GR conferred benefit in the form of a rebate,
it also imposed certain obligations.
3. The Petitioners say that they all held at the time when they
took the benefit and paid the concessional premium the municipal
building permission (always granted in the negative) known as the
Intimation Of Disapproval (“ ”). Those IoDs had (and have) a
IoD
prescribed lifespan of one year. The builders complain that the IoDs
lapsed. When they approached the Municipal Corporation of
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Greater Mumbai (“ MCGM ”) for a revalidation of the IoDs, they
were asked to pay the premium for the additional FSI at the next
year’s current (non-concessional) rates, although they were offered
an adjustment of the amount previously paid.
4. The Petitioners therefore say that this demand for a premium
being paid a second time (albeit with an adjustment) is contrary to
law and wholly defeats the purpose of the relief-oriented and relief-
giving GR in question. Hence these Petitions seeking our
intervention under Article 226 of the Constitution of India.
5. The rival submission by Mr Chinoy for the MCGM is based
on a close reading of the statute. The premium for the additional
FSI is computed on what is called the prevalent ASR or Annual
Standard of Rates. In a city like Mumbai, chronically starved of
space, ASR rates only move in one direction. Historically, they have
never gone down. This means that the premium payable in one year
is undoubtedly going to be less than the premium payable in the next
year.
6. Mr Chinoy puts his case like this. Premium FSI has to be
sought at the time when there is a proposal for development and
which leads to the issuance of an IoD. It is not in any sense a
bankable commodity. No one can simply purchase Premium FSI
without a development or building proposal or building plans and
hold on to it for use at some later time. Premium FSI must be
included in a building or development proposal. The IoD D from
the MCGM is only one level of permission. Another permission is
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required. Though issued by the MCGM, this further permission is
in the MCGM’s capacity as the Planning Authority under the
MRTP Act and that is known as a Commencement Certificate
(“ CC ”) issued under Section 45 of the MRTP Act. The IoD
granted under Section 346 of the Mumbai Municipal Corporation
Act 1888 (“ MMC Act ”) has a lifespan of one year. In the normal
course, a CC has a validity of three years extendable to a fourth,
unless otherwise renewed. CC renewals are subject to compliance
with statutorily mandated conditions.
7. Now what does this concept of ‘time validity’ actually mean?
Mr Chinoy’s explanation is that the IoD simply lapses after a period
of one year. That lapsing has certain consequences in law. We will
consider these statutory provisions a little later in this judgment but
to summarize, his submission is that if the project proponent obtains
an IoD and within the one year lifespan of that IoD he does not
“commence work” (and which could be by the simple issuance of a
CC with nothing more required) then the statute specifically
requires that the IoD must be sought afresh as if it was the first
application for an IoD as per Section 347(2) of the MMC Act. In
other words, an IoD that lapses without commencement of works is
a nothingness. It is obliterated in law. A fresh IoD must be issued. In
the context of the GR, he therefore explains that if the IoD is
accompanied by an application and a payment for premium FSI even
at the concessional rate, should the IoD lapse without there being a
commencement of work, and an entirely de novo IoD be required as
if it is the first IoD, then there is no question of the Premium FSI
surviving the lapse of the IoD. In that scenario, the project
proponent must necessarily seek Premium FSI afresh. But the
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concessional period now having ended, the project proponent must
pay the premium at the prevalent ASR although he will be given
credit for any payment previously made. What the Petitioners seek,
Mr Chinoy contends, is that the benefit having once been obtained
can be literally warehoused in perpetuity irrespective of whether the
IoD lapses (for want of commencement of work) or not. Even if
there is such a lapsing (without commencement of work) and if a
fresh IoD is required under the MMC Act, the Petitioners’ case
seems to be, submits Mr Chinoy, that the Premium FSI will
somehow be de-linked from the IoD. It will be set afloat, as it were,
to be re-anchored to some future IoD and some future CC — and
this will be at that same concessional rate without paying anything
further, even though ASR rates have gone up astronomically. In the
normal course, i.e., without any concession as was offered during
Covid-19 under the GR in question, developers would routinely
have to pay — and do pay — the premium annually for each renewal
of a lapsed IoD. They are given credit for previous premium
payments, but each renewal carries the obligation to pay at the
current ASR. There is no reason, he submits, why a developer who
obtained a rebate under the GR in question should have any special
exemptions or privileges beyond the rebate itself.
8. Thus are the battle lines drawn in this litigation.
9. The facts in each of these cases differ. Consequently, in the
next section of this judgment, and before we proceed to address the
questions of law outlined earlier, we will of necessity have to deal
with the facts and prayers in each case.
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FACTUAL CONSPECTUS —COMMON FACTS:
10. Some facts to this entire saga are common to all. These are
not many. It is better to reference them in the beginning.
11. As everyone knows from March 2020 the world as we knew it
was turned on its head. Nobody expected COVID-19 or the
pandemic or the resultant lockdown. It had many consequences.
One of these the almost complete cessation of all construction
activity almost everywhere. Cash flow was a problem. The lockdown
did not permit attendance on construction sites. Workers at various
sites left to return to their villages. Developers had no manpower to
continue constructions. Ongoing constructions halted. The
Government, mindful of this situation, constituted a special
committee under the chairmanship of Mr Deepak Parekh, an
eminent personality in banking, finance, business and the housing
finance sector. The committee made it recommendations. The
objective was to find ways to promote investment flows and
economic growth in Maharashtra, which had seen a slowdown since
mid–2018, and then to recover from the impact of the Covid-19
outbreak. The Deepak Parekh committee report, a copy of which is
at Exhibit “C” to the Prestige Estate Projects Petition, tells us that
markets in Mumbai had become uncompetitive. It attributes one of
several reasons to high premiums and levies imposed on real estate
developers. A startling statistic was that these premiums and
demands, and associated Government charges for residential real
estate in Mumbai were, and still are, 13 times more expensive for
Mumbai than for Delhi. The situation for commercial real estate is
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even worse; Mumbai is 34 times as expensive Delhi. Mumbai thus
has some of the most expensive real estate in the world. The report
notes that these premiums payable to the Government or the
Planning Authority comprised as much as 33% of the sale price of a
project. These were prohibitively high. They needed to be
1
rationalised.
12. We pause briefly to note the multiplier matrix that operates in
a situation like this. Land prices in Mumbai have always been high.
That is because of the notorious scarcity of buildable real estate.
The premiums that are charged are a percentage of the land prices
at the assessed rates. When the premium is high, the sale price
becomes higher. This ultimately and cyclically adds to the cost of
land itself. and this cost of land keeps rising, thus making the
premium go up, thus making real estate constantly more and more
expensive.
13. On 14th January 2021, the State Government came out with a
resolution. This was under Section 154 of the MRTP Act. A copy of
this in the original in Marathi is at Exhibit “A” at page 51 of the
Prestige Estate Petition. It is annexed to every other Petition as well
but we will take these documents from the Prestige Petition. There
is a translation at Exhibit “A1” from page 55 which we have checked
1 A recent sectoral study claims that the approval cost in Mumbai is a
staggering Rs 54,221 per square metre . It is much lower in other metros. See :
https://timesofindia.indiatimes.com/city/mumbai/developers-in-mumbai-pay-
average-rs-54221-per-square-meter-as-approval-costs-to-
authorities/articleshow/104019439.cms.
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ourselves. It seems to be reasonably accurate. We do not have an
official English translation of that GR.
14. We will need to consider this GR closely. It is the fulcrum of
the Petitioners’ case. So that there is no ambiguity about it at all, we
annex a copy of the translated GR to this order. That will avoid the
need to extract the whole of the GR in the body of this judgment.
15. Instead, we proceed to consider the salient aspects of that
GR. The introduction notes the COVID situation. There is a
reference to the Deepak Parekh Committee. The introduction also
notes that the premium for additional FSI is charged as a percentage
of the rate of the land in question for the year in question in the
annual market value chart put out periodically by the Government.
16. Then follow a series of directions. These are said to be
explicitly under Section 154 of the MRTP Act. The directions run
like this:
i. There is a 50% rebate in respect of premium to be
charged for additional FSI in the area of the Planning
Authority namely the MCGM as well as in Regional
Schemes. The decision regarding the 50% premium is
to be taken by the Planning Authorities subject to
following a procedure that is set out immediately next.
ii. Clause A deals with eligibility criteria and sets out the
projects or parts of projects eligible for the scheme. It is
applicable to current and new projects if the premium
is actually deposited until 31st December 2021.
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Further, the concession is applicable only to various
premiums under the Development Control and
Promotional Regulations (“ DCPR ”). There is no
concession for development charges or other
administrative factors.
iii. Clause B says that any project proponent who avails of
the rebate must, and this is important, pay the entire
stamp duty of persons taking up houses, flats or units
in the economically weaker section, lower income
group, middle income group and higher income group
categories. This is clarified to mean that the stamp duty
obligation on such purchasers is brought down to zero.
This includes those in the higher income group. It is
only developers who thus take on the burden of paying
100% of the stamp duty who are eligible for the
benefits of the additional/premium FSI rebate of 50%.
Such developers must make a declaration and complete
a prescribed procedure. That procedure is set out in
Clauses I to V below Clause B. There is an undertaking
required to be submitted to the Planning Authority that
the developer will absorb 100% of the stamp duty
obligation. A certificate of the beneficiary customer
must be submitted that the full expenditure on stamp
duty has in fact been borne by the developer. Then the
developer must publish a list of purchasers for whom
such stamp duty expenditure is made. A list of
participating projects is to be sent to the stamp
registration office and finally the projects that take the
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benefits of this concession must continue the benefit of
stamp duty until the constructed area for which the
benefit has been taken is sold.
iv. Clause C of the GR says that the annual market value
rate charge or the annual statement of rates or ASR
that to be considered as a base for charging the
premium for new power projects or part of new
projects should be that which is applicable on 1st April
2020 or that which is prevalent while depositing the
premium whichever is higher.
17. This provision of going back to an ASR of 1st April 2020 is
made in a GR of 14th January 2021. This tells us that there was very
likely, during that COVID period, a perceived reduction in ASR on
account of COVID and the lockdown. Therefore this provision for
using the previous year’s ASR or the one prevalent at the time of
making the deposit, whichever was higher.
18. There was some discussion in February 2021 between the
State Government and the MCGM about payment in instalments
but no controversy arises in that regard. Instalments were permitted.
It was ultimately clarified that the entirety of the premium had to be
paid during the concessional period, though instalments were
permitted in that time-window.
19. On 22nd February 2021, there came a circular from the
MCGM setting out the modalities to avail of this 50% rebate at
deduction. A copy of this is at Exhibit “B” to the Prestige Estate
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Petition from page 61. This references the GR referred to above as a
directive under Section 154 of the MRTP Act. It notes the
correspondence in regard to the instalment facility. Then as many as
nine separate conditions are imposed. A few of these are important
for our purposes. The first of these is that the circular limits its
applicability only to premium for additional FSI under DCR 30(A),
Table 12; premium for additional FSI under DCR 33; Fungible
Compensatory Area under DCR 31(3); and premium for additional
FSI under analogous provisions of DCR 1991. The second clause
says that the 50% rebate is applicable only to the principal premium
amount. No future instalments are permissible. It is clarified the
development charges, and other premiums/charges are to be
recovered as per the prevailing policy. A clarification is issued in
regard to developments that do not require the payment of stamp
duty. Formats are specified. Finally, there is a discussion on the
request for an extension of the time period. Interestingly, the
MCGM seems to indicate that the concession on the premium was
also available to those who were said to be defaulters in the past.
20. As the extract quoted above shows, the GR was the
Government’s effort to ‘encourage the construction field’ and to
provide Government-level rejuvenation of the real estate market.
21. While we are at this stage, a brief look at Section 154 of the
MRTP Act may be appropriate. It is a short section that confers
controlling power on the State Government to issue periodically
such directions or instructions as it thinks necessary to any Regional
Board, Planning Authority or Development Authority for
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implementing or effecting Central or State Government programs,
policies, projects or for the more efficient administration of the Act
or in the larger public interest. The bodies to whom these directions
are issued are bound to carry out the directions or instructions
within the time if any specified. Sub-clause (2) provides that the
decision of the State Government, should there be any dispute
between the Boards, Authorities and the State Government, shall be
final.
22. On 26th February 2021, the MCGM’s Standing Committee
passed a resolution approving the grant of concessions as per the
GR.
23. It is at this stage that we must note two further exchanges
between the MCGM and the State Government. On 23rd
November 2022, the MCGM’s Chief Engineer raised an issue for
clarification in regard to this concessional GR and the matter of
reissuance of lapsed IoDs. The submission notes that if there is no
material change in the original approval nor any additional
concessions sought, a revalidation could be permitted without
demanding additional premiums but only on recovering further
scrutiny fees. A copy of this is at Exhibit “L” at page 131.
24. On 30th November 2022, the MCGM’s Chief Engineer
wrote to the Under Secretary in the Urban Development
Department. This letter reflects the internal communication and
memo of the MCGM. Now both the internal memo and the letter to
the Urban Development Department notes the submission and
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representation that there were several cases where a
Commencement Certificate or CC could not be issued during the
one year pendency or life of the IoD, often for reasons beyond the
control of the project proponent. This being a concessional
reduction or rebate, and for a limited period of time, and also subject
to various conditions (such as the ones we have seen including
bearing the entire stamp duty burden and making full payment by a
prescribed date), the submission sought a clarification that IoDs
could be revalidated without seeking further premium on additional
FSI.
25. The internal memo also notes that some zonal offices insisted
on the project proponent paying the remaining 50% in accordance
with the prevalent ASR, but in the opinion of the Chief Engineer,
this was not appropriate as the premium was paid for FSI purchased
at the then prevalent rates.
26. The Government replied on 23rd December 2022. It said
that an IoD was valid for one year under the MMC Act. The
MCGM would be required to consider the IoD if a construction
permission was not submitted before the IoD lapsed. The applicable
rules were clear. There was therefore no clarification required. In
other words, the view of the Government was that there was
nothing to clarify.
27. On 16th May 2023, undeterred by the previous response, the
Chief Engineer wrote to the Under Secretary, Urban Development
Department again (Exhibit “Q” at page 199-200). It noted a
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representation from the Practicing Engineers Architects and Town
Planners Association (“ PEATA” , a quite significant lobby group in
matters pertaining to Development Control Regulations). Then it
referenced a representation from a Minister of Parliament addressed
to the Hon’ble the Chief Minister and Deputy Chief Minister
regarding ‘hardship’ faced by project proponents in getting
commencement certificates or CC issued. There was a reference to
the 14th January 2021 GR. The letter mentions that several housing
societies had availed of the concession to make their development
proposals viable and IoDs had been granted to such proposals by
recovering the concessional premium. However, some project
proponents had been unable to apply for a CC within the validity
period of the IoD. There were cases where some members of a
society did not cooperate. There were cases where an existing
building could not be evacuated within the necessary time frame
There were also cases where NOCs from various authorities
themselves did not come in time. The important clarification that
was sought is at page 200. This is actually the heart of the dispute
and we reproduce the contents of this page:
“However, some of the project proponent were not able
to apply for CC within validity period of IoD due to non
compliance of some of the IoD conditions. In some of the
cases of redevelopment projects due to non co-operation
of some members, existing building could not be vacated
within time frame and in some cases, due to delay in
getting NOC’s from various authorities .
It is to mention here that, as per aforesaid Govt..
directions, where the project proponent has opted 50%
concessions in premiums, in such cases stamp duty has
to be paid by developers. As such if IoD issued for such
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cases is not re-issued, the prospective buyers will be
deprived from this benefit. Also, in cases if the project
proponents have taken CC, they are eligible for
premium concession benefit as per Govt. directives. But
it would be unfair to disqualify the project proponent
from premium concession benefit who have not been
able to fulfil some of the IoD conditions even though
they have paid premium as per Govt. directions.
It is pertinent to mention here that direction issued
by State Govt. u/s 154 of MRTP Act for allowing 50%
concession for FCA, Premium FSI, premium for staircase,
lift, lift lobby, OSD was applicable for all Planning
Authorities, Town Planning offices in Maharashtra state.
The benefit permitted under this notification was applicable
for all proposals upto 31.12.2021 irrespective of progress on
site. However, for proposals in BMC limit, as per
provisions of section 346 of MMC Act, IoD’s are issued.
Further, as per provisions of section 347(2) of MMC Act,
IoD is valid for one year, within this validity period
project proponent has to apply to get CC. However, due
to non compliances of some of the IoD conditions,
project proponents are unable to take C.C.
In such cases BMC needs to reissue IoD for projects
who availed benefit of 50% premium concession wherein
project proponent has already paid premiums as per Govt.
directives and where there is no change in the original
approval and not involving additional concessions.
However, this needs concurrence of Govt., since some
premiums are also shared by Govt & other authorities.
In view of above, UDD is requested to give
concurrence to allow BMC to reissue IoD in aforesaid
cases for further period upto 31.12.2023 and continue
50% concession facility as per Govt. directives.
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This letter is issued with the approval of Hon. MC
u/no. MGC/A/374 dtd 16.05.2023”
( Emphasis added )
28. The response to this came on 8th June 2023 from the State
Government. It said that there were two issues: (i) the one-year
validity of the IoD under Section 346 of the MMC Act and, (ii) the
concession under the GR of 14th January 2021 to proposals for
which a Commencement Certificate was not obtained within the
year.
29. So far so good. Those were indeed the two questions. The
answer however from the State Government was that since the
matter of extending the IoD validity period of the IoD was not
within the scope of the GR of 14th January 2021 but was an
administrative matter that fell within the scope and jurisdiction of
the Corporation, it was unclear what clarification was required.
Therefore, the answer from the Under Secretary was that the
Municipal Commissioner should examine the matter and submit a
precise proposal about the need for such concurrence or approval.
In other words, faced with a request for a clarification, the State
Government said then, as Mr Patki says today, that there was
nothing to clarify.
30. No part of our judgment is going to be based on statements
that officers of the MCGM may have made in writing while
processing a particular permission. The reason is straightforward.
Mr Chinoy’s submissions have been entirely based on an
interpretation of the statute and on law and clearly there is no
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possibility of an estoppel against the statute; certainly not because
some officer of the Municipal Corporation took a particular view.
FACTS IN INDIVIDUAL CASES
31. We have been given detailed lists of dates in the different
matters in the group. What follows is an abbreviated summation of
these events since we will be addressing ourselves to the common
questions that arise, and it is only in the Petitions where there are
additional aspects to be considered that we will deal with those
separately.
WRIT PETITION (L) NO. 17993 OF 2023 : PRESTIGE
ESTATE PROJECTS LTD & ANR
32. In the Prestige Estate matter, the facts are largely not
contentious. On 24th March 2021, members of the Pali Hill
Daffodils CHSL (not a party to the Petition) consented to the
appointment of Prestige Estate as a developer for redeveloping the
Society’s premises. These are at Bandra. On 27th August 2021,
certain concessions were granted by the Municipal Commissioner to
the project. A Development Agreement between Prestige Estate and
the Society followed on 30th September 2021. The MCGM issued
its IoD, the first of several permissions on 18th October 2021. While
obtaining the IoD, Prestige Estate had to pay various amounts to the
MCGM, the State Government and other authorities for diverse
benefits such as additional FSI, fungible FSI, a premium for
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staircase lift lobby, deficiency in basements, scrutiny fees and so on.
These details are not important for our purposes today.
33. On 26th November 2021, Prestige Estate obtained permission
to begin shore piling work. This permission was granted by the
MCGM. Then Prestige Estate submitted amended plans and these
were approved with an amended IoD on 14th January 2022. The
amendment contemplated additional floors. At the time of the
amended IoD Prestige Estate again paid additional amounts under
some of the various heads as noted above.
34. Altogether, Prestige Estate says that availing of the benefits
under the GR and the MCGM circular, it has paid a total of
Rs.33,07,34,950/- to the State Government, MCGM and other
Authorities by 31st December 2021. An additional amount of
Rs.6,04,13,700/- has also been paid although this payment was not
covered by the GR and the MCGM circular. The total outlay under
this head is Rs.39,39,11,494/-.
35. In addition, Prestige Estate says that it has spent Rs.248
crores on various items of development such as approvals,
constructions, overheads, cost of land and so on. Besides this,
Prestige Estate has paid Rs. 25 crores until the date of the filing of
the Petition to members of the Society under various heads such as
transit rent, corpus, hardship allowance and so on.
36. By October 2022, the Society’s existing building was
demolished. Some Permanent Alternative Accommodation
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Agreements (“ PAAA ”) were not completed on time. There were
other constraints due to site conditions. On 14th October 2022,
Prestige Estate applied for a plinth CC. On that date, it also told the
MCGM that it had consent for redevelopment from all members of
the Society and, in addition, that it had PAAAs from all but three
members of the Society. The other issue that seems to have arisen at
this time related to an application to dispense with an No Objection
Certificate (“ NOC ”) from the Superintendent of Gardens. Prestige
Estate claimed that there were no trees affected by the proposed
project and had therefore sought an exemption. This was apparently
noted internally by the MCGM, i.e., that not 100% of the PAAAs
were submitted and that the Superintendent of Gardens NOC was
not obtained. Yet, on 17th October 2022, the Superintendent
Engineer of the MCGM approved the issuance of a plinth CC as
sought by Prestige Estate subject to the approval of the Deputy
Chief Engineer in regard to the non-submission of the three PAAAs.
The NOC from the Superintendent of Gardens was dispensed with.
37. A day later, on 18th October 2022 the Executive Engineer of
the MCGM contended that the CC could not be issued. The reason
was that the IoD which had been issued, as we have seen, on 18th
October 2021 had lapsed after the expiry of its one year lifespan on
17th October 2022.
38. On 3rd November 2022, Prestige Estate sought a fresh IoD
and permission to continue the same file number by recovering fresh
scrutiny fees before the issue of the revised IoD.
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39. There was no material change in the original approval. No
additional concessions were being sought. According to Prestige
Estate, an internal note of the MCGM shows that the 50% reduction
was allowed to be retained.
40. Further work continued including boundary demarcation
remarks, demands for scrutiny fees, tree NOC etc. On 24th January
2023, Prestige Estate wrote to the Municipal Commissioner asking
that the IoD be reissued without insisting on an additional premium
over and above the 50% reduction that was availed of.
41. We have on record at Exhibit “P” to this Petition at page 195,
a note sheet of Prestige Estate’s proposal. It records that Prestige
Estate had to pay what is described as the “balance premium”, i.e., a
premium over and about the 50% rebated premium already paid and
this apparently is in view of the so called clarification of the State
Government — a communication which really says that no
clarification is necessary.
42. Then follow the letters of May and June 2023 between the
MCGM and the Government and the present Petition came to be
filed on 3rd July 2023 seeking the following reliefs:
“A. that this Hon’ble Court be pleased to order and
declare that the benefits conferred under the Government
Resolution dated January 14, 2021 and MCGM Circular
dated February 22, 2021 and the clarifications thereto have
irrevocably vested in Petitioner No. 1 upon Petitioner No. 1
submitting its application for CC on October 14, 2022 and
issue a writ of mandamus or a writ in the nature of
mandamus or any other appropriate writ, direction or order
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directing Respondent Nos. 2 to 4 to forthwith issue CC,
and all development permissions for the development of the
Property to Petitioner No. 1 in accordance with
Government Resolution dated January 14, 2021 and
MCGM Circular dated February 22, 2021;
B. that this Hon’ble Court be pleased to issue a writ of
certiorari or a writ in the nature of certiorari or any other
appropriate writ, direction or order under Article 226 of the
Constitution of India calling for the records and
proceedings pertaining to the issuance of letters dated
December 23, 2022 and June 8, 2023 by the State
Government (Exhibit “N” and Exhibit “R” hereto) and
after examining the legality, propriety thereof the same be
quashed and set aside;
C. that this Hon’ble Court be pleased to issue a writ of
mandamus or a writ in the nature of mandamus or any other
appropriate writ, direction or order directing the
Respondents:
(i) to forthwith cancel and/or withdraw the
letters dated December 23, 2022 and June 8,
2023 by the State Government (Exhibit “N”
and Exhibit “R” hereto);
(ii) to forthwith grant to the Petitioner benefit of
50% rebate in respect of all applications for
planning permissions made prior to
December 31, 2021 in respect of which
payments have been made before December
31, 2021 in terms of Government Resolution
dated January 14, 2021 and MCGM Circular
dated February 22, 2021.
D. That this Hon’ble Court be pleased to order and
declare that the benefits conferred under the Government
Resolution dated January 14, 2021 and MCGM Circular
dated February 22, 2021 and the clarifications thereto
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[Exhibits “A”, “B” and “C (colly)”] have vested in
Petitioner No. 1 to the extent the same stand paid for on or
before December 31,2021;
E. Consequently, this Hon’ble Court be pleased to
issue a writ of certiorari or a writ in the nature of certiorari
or any other appropriate writ, order, or direction calling for
the records leading to the demand by MCGM for additional
amount from Petitioner No. 1 on basis of letters dated
December 23, 2022 and June 8, 2023 by the State
Government (Exhibit “N” and Exhibit “R” hereto), and
after considering and examining the validity, propriety, and
legality thereof, quash and set aside the same;
F. Consequently, this Hon’ble Court be pleased to
issue a writ of mandamus or a writ in the nature of
mandamus or any other appropriate writ, order or direction
directing Respondent Nos. 2 to 4 to issue IOD, CC, and all
development permissions for the development of the
Property to Petitioner No. 1 in accordance with
Government Resolution dated January 14, 2021 and
MCGM Circular dated February 22, 2021 and the
clarifications thereto [Exhibits “A”, “B” and “C(colly)”]
to the extent the same stand paid for on or before
December 31,2021;”
43. WRIT PETITION NO. 240 OF 2023: SUGEE TWO
DEVELOPERS LLP
44. In this case, Sugee Two Developers LLP (“Sugee Two” )
owns a property in the Girgaon Division at Bangadwadi. This is
known as the Guru Niwas and the Dadarkar Building. Sugee Two
has undertaken redevelopment of this property under DCR 33(7),
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pertaining to cessed buildings. There are 58 tenants/occupants of
the property. All are to be reaccommodated in the rehab building
rehab wing proposed to be reconstructed.
45. On 6th May 2019, Sugee Two obtained an IoD. The Mumbai
Building Repairs and Reconstruction Board (“ MBRRB ”) approved
the redevelopment scheme and issued its NOC on 10th May 2018
(revised on 2nd August 2019 and later re-validated on 29th
September 2022).
46. Sugee Two submitted amended plans under DCPR 2034 and
a fresh IoD was issued on 12th February 2021. Between 11th August
2021 and 27th December 2021, Sugee Two paid various amounts to
the MCGM at the discounted rates under the GR in question.
Amended plans were submitted and approved sometime in August
2021. A short while later, two Writ Petitions were filed by an
occupant that came to be dismissed by this Court on 14th
September 2021.
47. 11th February 2022 is the date on which Sugee Two’s IoD
lapsed. Then on 16th March 2022, MCGM re-issued the IoD when
Sugee Two applied for a re-validation without changing its amended
plans or seeking any additional concessions. At that time, the
MCGM did not demand any balance premium. By April 2022, the
structures were demolished. On 11th October 2022 Sugee Two
applied for a CC.
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48. This remained pending and on 23rd November 2022 the
Chief Engineer (Development Plan) sought the Commissioner’s
approval to a proposal to re-validate Sugee Two’s lapsed IoD by
recovering only the scrutiny fee. Interestingly this was on the basis
that the recovery should be limited to the scrutiny fee since there
was no material change in approval or the proposed construction
i.e., no additional construction was proposed.
49. On 12th January 2023, Sugee Two filed this Petition in this
Court. An order came to be made on 25th January 2023 issuing
notice to the Respondents. On 9th March 2023 Sugee Two agreed in
writing to pay the additional premium but on a without prejudice
basis. It did so and paid the additional amount of Rs.1,67,54,565/-
but without prejudice to its rights and contentions. On 10th April
2023 this Court allowed the Petition to be amended.
50. The prayers in the Petition as amended are:
“(a) this Hon’ble Court may be pleased to issue a writ of
mandamus or a writ in the nature of mandamus or any other
appropriate writ or direction under Article 226 of the
Constitution of India inter alia ordering and declaring that
the BMC’s policy of levying, demanding and recovering
differential premiums for revalidation or reissuance of
lapsed IoD as mentioned in UD Department’s letter dated
23rd December, 2022 (being Exhibit “F” hereto) does not
apply to the Petitioner’s proposal bearing File No.
CHE/CTY/4245/D/337(NEW)/337/1/Amend; and the
BMC’s demand on the Petitioners for payment of any
balance or differential premium is illegal, unlawful and not
maintainable;
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(b) this Hon’ble Court may be pleased to issue writ of
mandamus or a writ in the nature of mandamus or any other
appropriate writ or direction under Article 226 of the
Constitution of India inter alia ordering and directing the
BMC to grant CC and all further permissions including OC
for the Petitioners’ redevelopment scheme on the property
bearing C.S No. 1278 & 1279 of Girgaon Division situated
at Bangadwadi, Girgaon, Mumbai 400 004 without levying,
demanding and recovering any amount of money towards
the balance 50% amount of premiums as per the current
SDRR rate as a condition precedent for granting CC and
further permissions;
(b-1) this Hon’ble Court may be pleased to issue a writ of
mandamus or a writ in the nature of mandamus or any other
appropriate writ or direction under Article 226 of the
Constitution of India inter alia ordering and directing BMC
to refund to the Petitioner No. 1 a sum of Rs. 1,67,54,565/-
(Rupees One Crore Sixty-Seven Lakh Fifty-Four Thousand
Five Hundred & Sixty-Five Only) paid towards the balance
50% amount of premiums as per the current SDRR rate,
together with simple interest thereon @ 18% p.a.;”
WRIT PETITION NO. 238 OF 2023: SUGEE NINE
DEVELOPERS LLP
51. This pertains to a property known as ‘Sukrut’ at Veer
Savarkar Marg, Dadar (West), Final Plot No. 758 of Town Planning
Scheme (“ TPS ”)-IV of the Mahim Division. Sugee Nine
Developers LLP (“ Sugee Nine ”) owns the property and is
developing it. In April 2018, the MBRRB approved the
redevelopment scheme. It involved re-accommodating twelve
tenants. On 10th August 2021 the MCGM approved Sugee Nine’s
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proposal for the proposed construction and issued an IoD. That IoD
had as many as 54 conditions to be met within a year. Sugee Nine
took advantage of the 50% discount scheme and between August and
December 2021 paid a discounted premium of Rs.84,52,700/-.
52. The IoD that the Sugee Nine held lapsed on 9th August 2022.
It did not have a Commencement Certificate or a CC by this date.
53. In December 2022 Sugee Nine demolished the old building
on the suit property. It then applied for a re-issuance of its IoD
without any changes to its approved plans. It was met with the
MCGM demand for payment of the balance 50% of the premium.
This was an amount computed at Rs.1,45,08,500/. Sugee Nine filed
the Present Petition on 13th January 2023. On 15th March 2023
Sugee Nine by its letter to the Executive Engineer agreed to pay the
balance 50% on a ‘without prejudice basis’, and it did so a day later
by making payment of an amount of Rs.1,45,08,500/- (towards open
space deficiency premium and fungible premium). Today Sugee
Nine holds an IoD and a CC. Its prayers at page 43 of the Petition
include a prayer for refund. That prayer was added by an
amendment. Prayer clauses (a), (b) and (b-1) read as follows:
“(a) this Hon’ble Court may be pleased to issue a writ of
mandamus or a writ in the nature of mandamus or any other
appropriate writ or direction under Article 226 of the
Constitution of India inter alia ordering and declaring that
the BMC’s policy of levying, demanding and recovering
differential premiums for revalidation or reissuance of
lapsed IoD as mentioned in UD Department’s letter dated
23rd December, 2022 (being Exhibit “F” hereto) does not
apply to the Petitioner’s proposal bearing File No.
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CHE/CTY/4176/G/N/337(NEW)1/Amend; and the
BMC’s demand on the Petitioners for payment of any
balance or differential premium is illegal, unlawful and not
maintainable;
(b) this Hon’ble Court may be pleased to issue writ of
mandamus or a writ in the nature of mandamus or any other
appropriate writ or direction under Article 226 of the
Constitution of India inter alia ordering and directing the
BMC to reissue IoD and grant all further permissions
including OC for the Petitioners’ redevelopment scheme
on the property bearing F.P. No. 758 of TPS-IV of Mahim
Division known as “Sukrut” situated at Veer Savarkar
Marg, Dadar (West), Mumbai 400 028 without levying,
demanding and recovering any amount of money towards
the balance 50% amount of premiums as per the current
SDRR rate as a condition precedent for reissuing IoD and
for granting all further permissions including OC;
(b-1) this Hon’ble Court may be pleased to issue a writ of
mandamus or a writ in the nature of mandamus or any other
appropriate writ or direction under Article 226 of the
Constitution of India inter alia ordering and directing the
BMC to refund to the Petitioner No. 1 a sum of Rs.
1,45,08,500/- (Rupees One Crore Forty Five Lakh Eight
Thousand & Five Hundred Only) paid towards the balance
50% amount of premiums as per the current SDRR rate,
together with simple interest thereon @ 18% p.a.;”
WRIT PETITION NO. 1122 OF 2023: SUGEE FIFTEEN
DEVELOPERS LLP:
54. Sugee Fifteen Developers LLP (‘ Sugee Fifteen ’) is
developing a property known as ‘Nabashruti’ on Plot No 166-B of
the CS No 149B/10 of the Dadar Matunga Estate in the Matunga
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Division. This is at Khareghat Road, Hindu Colony, Dadar (East).
This development is also under DCR 33(7) in the context of cessed
buildings and requires the rehabilitation of eight occupants/tenants.
The MBRRB approved the redevelopment scheme on 19th July
2019. Sugee Fifteen obtained an IoD on 8th October 2019. It also
took advantage of the 50% discount scheme.
55. On 3rd May 2021, Sugee Fifteen submitted amended plans
and obtained a fresh IoD. On 28th July 2021 Sugee Fifteen
submitted further amended plans and this was at the time when the
discount scheme was in operation. Sugee Fifteen paid an amount of
Rs. 54,37,800/- towards ‘Fungible Area premium’ in August 2021
and in December 2021 an amount of Rs.15,63,950/- towards ‘Open
Space Deficiency Premium’.
56. Here again Sugee Fifteen was told that it would have to pay
the 50% balance premium aggregating to Rs 1,24,00,450/- since its
re-issued IoD had lapsed.
57. The present Petition was filed on 17th January 2023 for the
following reliefs:
“(a) this Hon’ble Court may be pleased to issue a writ of
mandamus or a writ in the nature of mandamus or any other
appropriate writ or direction under Article 226 of the
Constitution of India inter alia ordering and declaring that
the BMC’s policy of levying, demanding and recovering
differential premiums for revalidation or reissuance of
lapsed IoD as mentioned in UD Department’s letter dated
23rd December, 2022 (being Exhibit “F” hereto) does not
apply to the Petitioner’s proposal bearing File No. P-
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18922/2019/(149B/10)/F/North/337/1/Amend; and the
BMC’s demand on the Petitioners for payment of any
balance or differential premium is illegal, unlawful and not
maintainable;
(b) this Hon’ble Court may be pleased to issue writ of
mandamus or a writ in the nature of mandamus or any other
appropriate writ or direction under Article 226 of the
Constitution of India inter alia ordering and directing the
BMC to reissue IoD and grant all further permissions
including OC for the Petitioners’ redevelopment scheme
on the property bearing . Plot No. 166-B of the Dadar
Matunga Estate, CS No. 149B/10 of Matunga Division
known as “Nabashruti” situated at Khareghat Road, Hindu
Colony, Dadar (East), Mumbai 400 014 without levying,
demanding and recovering any amount of money towards
the balance 50% amount of premiums as per the current
SDRR rate as a condition precedent for reissuing IoD and
for granting all further permissions including OC;”
WRIT PETITION (L) NO. 22774 OF 2023: ANKUR
DEVELOPERS LLP
58. Ankur Premises Developers LLP (‘ Ankur Premises ’) holds
development rights for an approximately 598 sq mts property at
CTS No G/397/3 at Santacruz (West). This is the property of the
Santacruz Prem Sagar CHSL. These development rights were
granted to Ankur Premises on 31st July 2016. It was not until
February 2019 that a supplemental agreement came to be executed.
The consent of one member remained. That was obtained only in
February 2019. On 12th February 2020, a second supplemental
agreement was executed and all members of the society joined in the
execution of that agreement.
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59. Ankur Premises took the benefit of the amnesty scheme and
paid the discounted rate sometime in August 2021.
60. As is not atypical in these matters, there were then further
controversies. Demolition of the existing structure could not
proceed. Ankur Premises had an IoD of 18th August 2021 and this
was clearly valid only until 17th August 2022. Ankur Premises
sought revalidation of its IoD.
61. We will pass over the more intricate details of the
correspondence that went on and note that it was not until October–
November 2022 that members of the Society vacated their premises
and delivered possession.
62. Ankur Premises has been paying or says it has been paying
transit rent since then. Ankur Premises’ IoD has lapsed. For a
revalidation, the MCGM demand is that it must pay the balance
premium computed at current ASR rates.
63. Hence this Petition on 18th August 2023 for the following
reliefs:
“a) This Hon’ble Court be pleased to issue a writ in the
nature of mandamus or any other writ or order or direction
directing the respondents to adhere and implement the
amnesty scheme issued by Respondents vide Circulars
dated 22nd February, 2021 and 5th March, 2021 (Exhibit A
and B);
b) This Hon’ble Court be pleased to issue a writ in the
nature of mandamus or any other writ or order or direction
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directing the Respondents to renew and revalidate the IoD
dated 18th August, 2021 (Exhibit C) on payment of the said
Payments for Revalidation of IoD by the Petitioner without
demanding additional premium amounting to
Rs.2,15,91,065/- (Rupees Two Crores Fifteen Lakhs Ninety
One Thousand and Sixty Five Only);
c) That this Hon’ble Court be pleased to issue a writ of
certiorari or any other writ, order or direction calling for the
records and files of the case and after going into the legality
and validity of the decision conveyed by the Respondent
No.4 vide clarification dated 23rd December, 2022 (Exhibit
K), quash and set aside the decision i.e. demand fresh
premium for renewal/ revalidation of IoD;
d) In the alternative of prayer (c) it may be clarified that
the said clarification letter dated 23rd December, 2022
(Exhibit K) is not applicable to the present case of the
petitioner.
e) That this Hon’ble Court be pleased to issue a writ of
certiorari or any other writ, order or direction calling for the
records and files of the case and after going into the legality
and validity of the decision conveyed by the Respondents
vide Letter dated 28th February, 2023 (Exhibit T) quash
and set aside the communication;”
WRIT PETITION NO. 23049 OF 2023: RELCON
INFRAPROJECTS LTD
64. The Ridhi Sidhi Sadan unit of Shri Ridhi Sidhi CHSL owns
land of 2113.70 sq mts at Tejpal Scheme Road No 2 and 3, Vile Parle
(East). There stood a building of ground plus three floors on this
land with 32 residential flats.
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65. On 11th December 2014, the society and Relcon Infraprojects
Ltd. (‘ Relcon Infraprojects ’) entered into a Development
Agreement. Nothing of significance seems to have happened for our
purposes until the rebate scheme.
66. Relcon Infraprojects’ says that in August 2021 it paid Rs.
2,58,33,500/- to the MCGM as premium under the GR and the
MCGM circular and another amount of Rs. 73,65,500/- to the State
Government towards the premium.
67. Relcon Infraprojects’ IoD is dated 15th August 2021.
68. On 29th November 2021., a supplementary agreement came
to be executed between Relcon Infraprojects, Relcon Krisha Realty
LLP and the society. In December 2021, Relcon Infraprojects sought
to amend its plan by constructing a residential building of four wings
with five common basement parking floors, stilts for stack parking
plus six upper floors.
69. On 22nd December 2021, the MCGM sanctioned these
amended plans. This was still in the amnesty or rebate period and
Relcon Infraprojects therefore paid a premium of Rs. 2,06,19,200/-.
Of this amount, Rs. 20,96,000/- was paid to the State Government
and the remainder to the MCGM.
70. Came 2022, and with it disputes between some dissenting
member of the society and Relcon Infraprojects. This led to the
filing of an Arbitration Petition (L) No. 12317 of 2022. Five minority
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dissenting members obstructed redevelopment. It was not until 15th
July 2022 that an order was passed by this Court compelling these
five members to deliver possession of their respective flats to Relcon
Infraprojects.
71. On 29th July 2022, Relcon Infraprojects made a
representation to the MCGM setting out some of these facts and
requesting the issuance of a fresh IoD since its IoD was about to
expire on 15th August 2022. By another letter of the same date,
Relcon Infraprojects pointed out that it could not obtain the CC
pursuant to the IoD because of these few dissenting members and
for which Relcon Infraprojects had to approach the High Court.
72. There is a reference again here to, two internal note sheets of
8th and 10th August 2022 prepared by MCGM officers. These are
undoubtedly favourable to Relcon Infraprojects. But consistent with
his arguments, Mr Chinoy maintains that they matter not a whit.
73. On 30th August 2022, Relcon Infraprojects paid a scrutiny
fee, and a development cess to MCGM. The total amount paid was
thus Rs. 18,03,000/-. This was for re-validating or re-issuing the
IoD.
74. In the meantime, two of the five minority dissenting members
filed an appeal.
75. Now we come to what Mr Ardeshir for Relcon Infraprojects
says distinguishes his case from all the others. On 3rd October 2022,
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a re-validated IoD was indeed issued by the MCGM to Relcon
Infraprojects. On 6th October 2022, the Appeals Court recorded the
statement of the two dissenting members that they would deliver
possession. That possession was obtained on 14th October 2022.
76. It is in this background that on 19th December 2022, Relcon
Infraprojects’ architect wrote to the MCGM for a CC. On 12th
January 2023, Relcon Infraprojects’ architect wrote to the
Municipal Commissioner pointing out that it had obtained a revised
IoD on 3rd October 2022 by paying the scrutiny fee and
development charges then demanded. Yet the CC had not been
granted. Reference was made to the High Court proceedings. An
identical letter was sent to the Chief Engineer of the MCGM. A
reminder followed on 19th January 2023 and again on 3rd April
2023. Here again there is a reference to an internal note of the
MCGM of 16th May 2023.
77. On 7th July 2023, the MCGM wrote to the Relcon
Infraprojects calling upon it to pay the balance premium for the IoD
that was issued on 3rd October 2023.As far as we are aware, it has
only just recently lapsed again on 3rd October 2023.
78. This Petition came to be filed on 14th August 2023. Mr
Ardeshir’s submission, therefore, is that having once issued or re-
issued the IoD without insisting on payment of what we have
throughout described as the balance premium, it is now not open to
the MCGM to say that this balance premium is required to be paid
against the IoD. There is no concept of payment of a premium
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against the CC. The IoD was in fact issued. A premium is sought
only at the time of issuance of the IoD. If the IoD itself had been re-
issued without a demand, it cannot subsequently be raised.
79. The reliefs in the Relcon Infraprojects Petition are therefore
slightly different from the others. The two principal prayers read
thus:
“a. That this Hon’ble Court be pleased to issue a writ of
mandamus or a writ in the nature of mandamus or any other
writ, order or direction under Article 226 of the
Constitution to hold and declare that (i) the impugned
communication dated 23.12.2022 bearing No. TPB-
4322/Pra.Kra.129/2022/Navi-11 (Exhibit AG hereto), (ii)
the impugned communication dated 08.06.2023 bearing
No. TPB – 4322/Pra.Kra.129/2022/Navi-11 (Exhibit AD
hereto) and (iii) the impugned communication dated
07.07.2023 (Exhibit AE hereto) are arbitrary, illegal,
capricious and bad in law and this Hon’ble Court be
pleased to quash and/or set aside the same;
b. That this Hon’ble Court be pleased to issue a writ of
mandamus or a writ in the nature of Mandamus or any
other writ order or direction under Article 226 of the
Constitution directing Respondent No.2 to continue
processing the file bearing No. P-5761/2020(723 A and 723
B)/P/S Ward/PAHADI GOREGAON-W including
granting Commencement Certificates and all further
approvals, permissions and sanctions to the Petitioners in
respect of the subject land without demanding any payment
towards premium;”
80. We note that there is a typographical error in the file number.
The correct file No is CHE/WS/2051/K/E/337 (New).
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WRIT PETITION (L) NO. 25945 OF 2023: MAYFAIR
HOUSING PVT LTD:
81. On CTS Nos 59 and 63 at Village Andheri on a plot of
approximately 2967 sq mts, there once stood a building known as
‘Prashant’ consisting of two wings and 46 flats. That building was
several decades old. On 6th September 2021, the society, known as
the ‘Friendship Co-operative Housing Society Pvt Ltd’, Respondent
No 4, having previously resolved to redevelop the building,
approved the final offer submitted by Mayfair Housing Pvt Ltd
(‘ Mayfair Housing ’). This proposal was eventually passed in a
general body meeting on 8th December 2021. The vote was
unanimous.
82. On 31st December 2021, Mayfair Housing obtained an IoD
for this redevelopment project. On 22nd October 2022, within the
one year lifespan of the original IoD, Mayfair Housing issued a
notice to the society demanding vacant possession. It did not have it
at that time. The society in turn issued a notice to a solitary
obstructionist.
83. On 18th November 2022, Mayfair Housing obtained an
amended IoD sanctioning modified plans.
84. This also is a case where development was stalled because of
an obstruction, this time by one occupant. This led to Mayfair
Housing filing a Commercial Arbitration Petition (L) No 672 of
2023 on 6th January 2023 before this Court. On 3rd March 2023,
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this Court disposed of the Arbitration Petition directing the
individual dissenter to deliver possession on the schedule indicated
by the Court. It was only on 12th June 2023 that Mayfair Housing
received vacant possession of the project site. The existing buildings
were demolished on 14th August 2023.
85. On 18th August 2023, Mayfair Housing submitted an
application for a CC. This was rejected on 6th September 2023 and
it is this rejection that is impugned in the present Petition filed on
15th September 2023 for the following reliefs:
“a) this Hon’ble Court be pleased to issue a Writ of
Certiorari or any other appropriate writ or order or
direction in the nature of Certiorari under Article 226 of the
Constitution of India, thereby calling for the records and
proceedings in respect of the Impugned Communications
dated 23rd December 2022 and 8th June 2023 issued by the
Respondent No.1 ( at Exhibits E & F-1) and after going
through the legality, validity and propriety thereof, be
pleased to quash and set aside the same;
b) this Hon’ble Court be pleased to issue a Writ of
Certiorari or any other appropriate writ or order or
direction in the nature of Certiorari under Article 226 of the
Constitution of India, thereby calling for the records and
proceedings in respect of the Impugned Rejection dated 6th
September 2023 issued by the Respondent No. 3 ( at Exhibit
V ) and after going through the legality, validity and
propriety thereof, be pleased to quash and set aside the
same;
c) this Hon’ble Court be pleased to issue a Writ of
Mandamus or any other appropriate writ or order or
direction in the nature of Mandamus under Article 226 of
the Constitution of India, thereby directing the Respondent
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Nos.1 to 3, not to insist upon any further payment towards
premiums already paid under the ‘Concession Scheme’ and
issue further building permission in accordance with law;”
WRIT PETITION (L) NO. 27895 OF 2023: EVERSHINE
BUILDERS PVT LTD
86. The Shree Trimurti CHSL owns property at CTS No 625/12
of Village Bandra-G, TPS II. The land is about 1729 sq mts. at South
Avenue, 17th Road, Khar (West). There was a structure on this of
ground and five upper floors with 17 flats. On 6th February 2018,
the society entered into a Development Agreement with Evershine
Builders. In June 2019 Evershine Builders submitted an application
to the MCGM for the construction of a high rise residential tower. It
paid the applicable scrutiny fees, infrastructure, improvement
charges, development charges etc.
87. On 4th January 2020 Evershine Builders obtained an IoD.
88. On 31st August 2020, Evershine Builders had to file Suit No
81 of 2021 against several non-cooperating members of the society
demanding vacant and peaceful possession. On 24th September
2020, these members filed a Counter Suit No 136 of 2021 for a
declaration that the Development Agreement was void and not
binding on them.
89. Evershine Builders’ IoD lapsed on 3rd January 2021.
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90. In June 2021, Evershine Builders submitted an application for
an amended IoD for constructing Wing A and Wing B, basement,
stilts, three podium levels, and the first to 10th floors (and,
presumably, all the other ‘necessities’ of urban life in Mumbai such
as swimming pools, gymnasiums, jogging tracks etc.) Evershine
Builders’ application had several proposals for additional FSI
including fungible FSI and slum TDR.
91. By this time the rebate policy was in place. The MCGM
computed various amounts to be paid and in August 2021,
Evershine Builders paid these amounts which, by a rough reckoning
comes to about Rs 10.75 crores.
92. In accordance with the terms of the GR, Evershine Builders
also submitted an undertaking to continue to bear the entire stamp
duty liability. The fresh IoD was issued on 11th August 2021.
93. On 1st July 2022, MCGM issued a notice seeking eviction of
occupants from the property in question. This notice was
challenged by the non-cooperating members before the Bombay
City Civil Court which granted a stay on 16th July 2022. Ultimately,
the Notice of Motion for stay came to be dismissed by the Bombay
City Civil Court only on 25th November 2022. By this time, the
second IoD had also lapsed. In the meantime, the non-cooperating
members came up in an Appeal from Order No 1098 of 2022 against
the 25th November 2022 order of the Bombay City Civil Court.
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94. That Appeal from Order was ultimately dismissed but only
very recently on 14th September 2023. In the meantime, Evershine
Builders has been told that it must now pay the balance premium if
it wishes a revalidation of its IoD.
95. On 6th October 2023, Evershine Builders filed this Writ
Petition seeking the following reliefs:
“(a) That this Hon’ble Court be pleased to issue a writ of
certiorari or a writ in the nature of certiorari or any other
appropriate writ, order or direction calling for records
pertaining to the impugned letter dated 23rd December
2022 (being Exhibit J hereto) issued by the Respondent No.
1 and after examining the legality and validity thereof be
pleased to quash and set aside the same;
(b) That this Hon’ble Court be pleased to issue a writ of
mandamus or a writ in the nature of mandamus or any other
appropriate writ, order or direction restraining the
Respondents from demanding any amount as premium for
additional FSI of 797.96 sq. mtrs, fungible compensatory
FSI for 820.85 sq. mtrs., Staircase premium area 807.72 sq.
mtrs and open space deficiency of 1052.56 sq. mtrs. in
respect of the said Property being Plot No. K-69/78,
bearing CTS No. 625/ 12 of Village Bandra-G, TPS-II,
admeasuring 1729.10 sq. mtrs, lying, being and situate at
South Avenue, 17th Road, Khar (West), Mumbai 400052,
while reissuing / revalidating the Intimation of Disapproval
dated 11th August 2021.”
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STATUTORY PROVISIONS
96. We will be required to consider three separate statutes namely
the MRTP Act, the MMC Act and the DCPR 2034, a subordinate
legislation under the MRTP Act.
97. For our purposes, we are concerned not with Chapters II or
III of the MRTP Act which deal with Regional Plans and
Development Plans but with Chapter IV that runs from Sections 43
to 58 and deals with the control of development and the use of land
included in Development Plans. Section 43 itself sets out
restrictions on the development of land. Broadly stated, it says that
after the declaration of intention to prepare a Development Plan
(Chapter III, Section 23) or after the date on which a notification
specifying any undeveloped area as a notified area or any area
designated as a site for a new town is published in the Official
Gazette none can institute or change the use of any land, nor carry
out any development of land without the written permission of the
Planning Authority.
98. Immediately, this takes us back to the definition of
“development” in Section 2(7) of the MRTP Act. This is a very
wide and inclusive definition of land and reads as follows:
“2(7) “development” with its grammatical variation
means 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 precinct and includes
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demolition of any existing building structure or erection
or part of such building, structure of erection; and
reclamation, redevelopment and lay-out and sub-
division of any land ; and “to develop” shall be construed
accordingly;”
( Emphasis added )
99. While on this, we note the definition of a ‘Planning
Authority’ under Section 2(19).
“2(19) “Planning Authority” means a local
authority; and includes,—
(a) a Special Planning Authority constituted or
appointed or deemed to have been appointed under
section 40;
(b) in respect of the slum rehabilitation area
declared under section 3C of the Maharashtra Slum
Areas (Improvement, Clearance and
Redevelopment) Act, 1971, the Slum Rehabilitation
Authority appointed under section 3A of the said
Act;”
100. Section 43 deals with restrictions on development of land. It
has a proviso for certain types of works for which no such
permission is necessary.
101. Continuing in this schema, the MRTP Act then tells us in
Section 44 how an application for permission for development is to
be made. Unless otherwise provided by rules made in that regard,
any person who intends to carry out development on any land must
apply in writing to the Planning Authority for permission in a
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prescribed form with such particulars and attaching such documents
as may be stipulated. This restriction or this requirement does not
apply to a Central or State Government or a Local Authority. The
proviso to sub-section 1 tells us that no such permission is necessary
for demolition of an existing structure, erection or building a part
thereof in compliance with a statutory notice from a Planning
Authority or a Housing or Area Development Board, the Repairs
and Reconstruction Board or the Slum Improvement Board. We are
not concerned with sub-section (2).
102. Section 45 then deals with the grant or refusal of permissions.
This is the permission that is commonly known as the CC. It is best
to reproduce Section 45 in its entirety:
“ 45. Grant or refusal of permission
(1) On receipt of an application under section 44 the
Planning Authority may, subject to the provisions of this
Act, by order in writing—
(i) grant the permission, unconditionally;
(ii) grant the permission, subject to such general
or special conditions as it may impose with
the previous approval of the State
Government ; or
(iii) refuse the permission.
(2) Any permission granted under sub-section (1)
with or without conditions shall be contained in a
commencement certificate in the prescribed form.
(3) Every order granting permission subject to
conditions, or refusing permission shall state the grounds
for imposing such conditions or for such refusal.
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(4) Every order under sub-section (1) shall be
communicated to the applicant in the manner prescribed by
regulations.
(5) If the Planning Authority does not communicate its
decision whether to grant or refuse permission to the
applicant within sixty days from the date of receipt of his
application, or within sixty days from the date of receipt of
reply from the applicant in respect of any requisition made
by the Planning Authority, whichever is later, such
permission shall be deemed to have been granted to the
applicant on the date immediately following the date of
expiry of sixty days:
Provided that, the development proposal, for which
the permission was applied for, is strictly in conformity
with the requirements of all the relevant. Development
Control Regulations framed under this Act or bye-laws or
regulations framed in this behalf under any law for the time
being in force and the same in no way violates either the
provisions of any draft or final plan or proposals published
by means of notice, submitted for sanction under this Act:
Provided further that, any development carried out
in pursuance of such deemed permission which is in
contravention of the provisions of the first proviso, shall be
deemed to be an unauthorised development for the
purposes of sections 52 to 57.
(6) The Planning Authority shall, within one month
from the date of issue of commencement certificate,
forward duly authenticated copies of such certificate and
the sanctioned building or development plans to the
Collector concerned.”
( Emphasis added )
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103. The only other Section that we must refer to is the lapsing
provision that is in Section 48. This is necessary because we will
need to juxtapose it with a similar lapsing provision relating to IoDs
under the MRTP Act. Section 48 reads thus:
“ 48. Lapse of permission
Every permission for development granted or deemed to
be granted under section 45 or granted under section 47
shall remain in force for a period of one year from the
date of receipt of such grant, and thereafter it shall
lapse :
Provided that, the Planning Authority, may, on
application made to it extend such period from year to year;
but such extended period shall in no case exceed three
years:
Provided further that, if the development is not
completed up to plinth level or where there is no plinth,
up to upper level of basement or stilt, as the case may
be, within the period of one year or extended period,
under the first proviso, it shall be necessary for the
applicant to make application for fresh permission. ”
( Emphasis added )
104. The second proviso speaks of development up to the plinth or
upper level of basement or stilt. As we shall presently see, there are
allied provisions under the DCPR 2034 regarding commencement
of work in relation to the plinth.
105. The MCGM is undoubtedly the Planning Authority but it
does not operate only under the MRTP Act. It does that as well, but
it is also controlled and regulated by a dedicated statute namely, the
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MMC Act. We are concerned here with Chapter XII captioned
‘Building Regulations’ of the MMC Act.
106. It may be more convenient to proceed here from Section 342
to 347. Section 342 is part of the sub-division of Chapter XII that
deals with notices regarding execution of works not amounting to
the erection of a building. Section 342 also deals with notices to be
given to the Commissioner of intention to make additions etc., or a
change of user to a building. Those details need not detain us at
present. Section 345 tells us when building or work may be
proceeded with. This has reference to Section 342, and Section 337
(notice to be given to the Commissioner of intention to erect a
building), Section 338 (permitting the Commissioner to require
plans and other documents to be furnished), Section 340 (again
regarding additional information) and Section 343 (plans and
additional information).
107. What Section 345 tells us is that there exists a deeming
provision. It works like this. If, within 30 days of the receipt of any
notice under Section 337 or Section 342 or of the plan of other
information called for in Sections 338, 340 and 343, the
Commissioner does not in writing communicate his disapproval of
the building or work proposed, then the project proponent may at
any time but within one year from the date of delivery of the notice
proceed with that building or work. Of course, there is a positive
element too i.e., where the Commissioner approves the work in the
question. But the work being done cannot contravene the provisions
of the Act.
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108. Obviously, Section 345 operates in a particular field i.e., one
of permission to commence work. But Section 347, captioned
‘When work may be commenced’ operates slightly differently. The
captions of the two Sections need to be carefully parsed. Section 347
is central to Mr. Chinoy’s case and we set it out fully below.
“ 347. When work may be commenced
(1) No person shall commence to erect any building or
to execute any such work as is described in section 342—
(a) until he has given notice of his intention as
hereinbefore required to erect such building
or execute such work and the Commissioner
has either intimated his approval of such
building or work or failed to intimate his
disapproval thereof within the period
prescribed in this behalf in section 345 or 346;
(aa) until he has given notice to municipal city
engineer of the proposed date of
commencement. Where the commencement
does not take place within seven clear days of
the date so notified, the notice shall be
deemed not to have been given;
(b) after the expiry of the period of one year
prescribed in sections 345 and 346
respectively, for proceeding with the same.
(2) If a person, who is entitled under section 345 or
346 to proceed with any building or work, fails so to do
within the period of one year prescribed in the said
sections, respectively, for proceeding with the same he
may at any subsequent time give a fresh notice of his
intention to erect such building or execute such work,
and thereupon the provisions hereinbefore contained
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shall apply as if such fresh notice were a first notice of
such person’s intention .
( Emphasis added )
109. Analysing this section Mr Chinoy states that it runs in a
defined time sequence. It begins with a prohibition. None can
commence the construction of any building or execute any work as
described in section 342 unless there is a notice of intention to erect
the building or commence work and the Commissioner has either
intimated his approval or failed to do so under Section 345 that we
have just seen and until that project proponent has given notice to
the Municipal City Engineer of the proposed date of
commencement. Sub-clause (b) of sub-section (1) then says that no
person can commence the erection of any building or the execution
of work after the expiry of one year period prescribed in Section 345
and 346 for proceeding with this.
110. Now Section 347 is the section under which an IoD is issued.
As the name suggests, it is an Intimation Of Disapproval (IoD).
Permissions are granted but always in the negative (and this makes
for very curious reading of that permission). But sub-clause (2) of
Section 347 mentioned above tells us what happens when a person
otherwise entitled to proceed with the building of work does not do
so within that one year. It says that in that situation the project
proponent is entitled to give a fresh notice, the emphasis being on
the word ‘fresh’, of his intention to erect such a building or to
execute such work i.e., the very work for which permission was
granted, which was not done and which permission lapsed after one
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year. Then comes the all important words that Mr Chinoy has been
at some pains to emphasize:
and thereupon the provisions herein before contained shall
apply as if such fresh notice were a ‘first notice’ … .
111. Now Mr Chinoy’s submission is relentlessly and perhaps even
brutally simple. Once the IoD lapses, he submits, a ‘fresh notice’ as
if it was a first notice must be given. The earlier notice is simply
wiped out. It stands obliterated. It is entirely effaced and of no
consequence. The required notice under Section 347 has to be given
de novo as if it is the first ever such notice.
112. Consequently, and following this logic, anything that attaches
to the IoD, whether it be a benefit or otherwise, lapses with the
lapsing of the IoD. There is no concept, Mr Chinoy submits, of a
benefit that can be obtained only with the IoD of being detached, de-
linked or un-anchored from the IoD and somehow set adrift, only to
be brought back to safe harbour at some later stage on a fresh IoD.
113. No other reading is possible, he submits. In particular,
Section 347(2) does not tell us when such a fresh notice (as if it were
a first notice) must be made. It does not have to be made
immediately or within a week or a month or a year. It could even be
made after ten years. It is therefore inconceivable, in his submission,
that a benefit that was obtained in one year could literally be
‘banked’ for later use; kept, so to speak, in a ‘safe deposit FSI vault’
for later deployment and use at some convenient future time.
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114. What the GR thus required was, and he submits this is clear
from the ‘non-clarification clarification’ of the State Government,
that everything that the IoD required had to be done within a year,
had to be done within that year particularly commencement of work.
If work commenced within the one year period i.e., on the obtaining
of a CC, then the benefits that were obtained on the IoD would
obviously continue. The IoD could then be re-issued on payment of
scrutiny fees. Of course if there were other material changes or
additions and additional benefits sought then those would have to be
paid for at the then prevalent rates at the time of the later IoD.
115. Mr Chinoy submits that the GR does not operate to amend
Section 347. It operates within Section 347. It provides a concession.
That concession must be obtained within the year of that GR i.e., by
31st December 2021. But that necessarily posits that everything that
the IoD required had to also be done within the lifespan of the IoD.
116. He clarifies that additional FSI cannot be separately sought
without there being a development proposal i.e., the submission of
building plans and a proposal to show how the additional FSI is to be
used in that project. Further amendments are immaterial. The
premium that is to be paid is for the additional FSI that is to be
incorporated in that proposal. It is thus necessary that within that
period of one year of the IoD lifespan work must be shown to have
commenced.
117. There is no ambiguity about what “ commencement of work ”
means. It is the stand of the MCGM that commencement of work does
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not mean doing a token activity on site such as a ground breaking
ceremony or anything as trivial as that. Read with Sections 43, 44
and 45 of the MRTP Act, it is clear that no work can commence
without a CC issued under Section 45. Therefore, it is the issuance
of a CC that is required within that one year period.
118. While on this aspect of the matter, Mr Chinoy invites our
attention first to some provisions of the DCPR 2034.
Commencement of work is specifically a subject under DCR 10(6).
This says that the development permission/CC shall remain valid
for four years in the aggregate but must be renewed before the
expiring of one year from the date of its issue. This is consistent
with the MRTP Act. Then commencement is defined for the
purpose of this Regulation in a table in DCR 10(6) for different
types of work. For building work including additions and alterations,
commencement means up to plinth level or where there is no plinth
up to the upper level of lower basement or stilt as the case may be.
119. DCR 30 is the first Regulation in Part V of the DCPR 2034.
This deals with the FSI. Sub-regulation 1 sets out the Floor Space
Indices or FSI in residential, commercial and industrial zones across
the city. The definition of FSI and its formula is provided in the
DCPR itself and this is not in controversy either. It is also now
included in the MRTP Act itself. In particular, sub-regulation 6 of
DCR 30 speaks of the premium to be charged on additional FSI on
payment of a premium and there is a reference to Column 5 of Table
12. Table 12 does not actually set out the premium but sets out the
additional FSI. Now the premium under DCR 30(6) is payable for
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the built-up area at the rate of 50% of the land rates as per the ASR
for FSI of 1.
120. DCR 2(61) defines FSI as the quotient of the ratio of the
combined gross floor area of all floors except those exempted under
the regulations to the gross area of the plot. This tells us that if the
FSI is known and the gross plot area is known, the maximum
permissible built-up area can be arithmetically computed. This is
exactly the same definition we find in Section 2(13A) of the MRTP
Act.
121. The premium is to be divvied up between State Government,
MCGM, Maharashtra State Road Development Corporation
Limited (“ MSRDC ”) and the Dharavi Authority equally.
122. The proviso tells us that the utilization of additional FSI on
payment of the premium and TDR is optional. It may be utilized in
a sequential manner subject to the FSI limits in Table 12. It is non-
transferable. Additional FSI on paying of a premium can be granted
only when it is sought i.e., applied for. The payment of a premium
on an application and on payment of the premium. Unlike TDR, the
additional premium is to be used in situ on the plot where the
project is.
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IS ADDITIONAL FSI/PREMIUM FSI ‘PROPERTY’ OR ‘AN
ENTITLEMENT’?
123. Dr Chandrachud among others has contended that once the
premium is paid, the additional FSI is the species of property. It
becomes the ownership of the land owner or the project proponent,
as the case may be. It is true that it has to be paid for but then that is
equally true of any land that is being purchased or of any TDR that
is being purchased. The fact that TDR can, as it were, float across
the city is not a material point of distinction as to the question of the
nature of additional FSI. For all intents and purposes it is ‘property’
and is not a mere ‘entitlement’. It is true, he submits, that the
additional FSI is not inherent in the land. The inherent or basic
zonal FSI is defined by the DCPR, 1.33 in the Island City and 1.00 in
the suburbs. This is additional FSI. A land owner may or may not
chose to avail of it. The fact that the land owner needs to avail of it
at the time of a building proposal also does not alter its character as
property of ownership.
124. Mr Chinoy takes serious exception to this formulation. If it is
property, he submits, it must be marketable and must be tradable.
Additional or premium FSI is not. It has no market value. It can only
be utilized in situ . The premium is not in any sense a purchase price.
It is a fee paid to the MCGM for the grant of an additional FSI
which would otherwise not be available. No other person can utilize
the additional FSI obtained by a developer for a particular plot of
land. Nor can the additional FSI be set free to be utilized on some
other project or some other land. Consequently, in Mr Chinoy’s
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submission, the additional FSI is nothing more than a concession. It
is no different from saying that for a premium the available FSI is
relaxed from 1.33 to let us say 2 or 2.33. This is by no means ‘an
additional property’. On the other hand, TDR is a purchasable and
freely marketable commodity. It usually takes the form of a
Development Rights Certificate. There is no compulsion to use that
TDR. It can simply be sold and monetised.
125. We believe Mr Chinoy is correct in this submission. It does
not appear to us to be reasonable to suggest that the concessional
FSI granted by DCR 30(6) is of the same nature as TDR and is the
property right of the kind that would be protected by Article 300-A
of the Constitution of India.
126. We understand the reason why the argument is canvassed by
some of the Petitioners because the submission is that by refusing to
renew the IoD and to continue the additional FSI obtained at a
premium there is a form of expropriation of property without
compensation. That seems to us to be too extreme a proposition to
accept. TDR is described as a ‘right’. That right is a right to
property. Additional FSI is simply an entitlement or a permission to
load more built-up area on a project and to do so for a fee.
127. In fact, if we look a little more closely at some of the facts that
we have narrated above, it seems that under the DCPR 2034 there is
almost nothing that the MCGM as a Planning Authority will not
allow to be relaxed for a fee. Open space deficiencies can be cured
on payment of a fee, never mind that these open spaces are required
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for general health and well-being of those people for whom these
projects are apparently being undertaken.
128. We cannot accept the argument by Dr Chandrachud.
THE ‘BANKABILITY’ OF ADDITIONAL FSI
129. The reason this argument is taken is because of a formulation
that Dr Sathe for Prestige Estate advanced at the beginning, i.e.,
what he described as the ‘bankability’ of additional FSI. His
submission, as we have understood it, is that the additional FSI is in
no way and in no sense limited in time (even leaving aside any
concessional period). It is, as DCR 30(6) shows, project-specific. It
has to be used for that project on that site. It cannot be marketed,
and it cannot be sold elsewhere. It cannot be traded, but there is no
requirement that a project proponent must use it within the year or
even that he must begin using it within the year. Dr Sathe suggests
that in fact additional FSI need not be obtained at the time of the
initial IoD but can be obtained at any point later when it is proposed
to be used.
130. This is a more than somewhat confusing argument. We
should have thought that, ceteris paribus , if an IoD is obtained, then
presumably work must start within the lifespan of the IoD. Starting
or commencing work means the CC is obtained — because no
development can commence without a CC, and that is axiomatic.
There is no in-built right to amend a plan to then load on additional
FSI at a later stage. Consequently, it must follow that if an
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application for additional FSI is to be made it must be made at the
time when the proposal is submitted.
131. It is true that plans may be amended but there is no guarantee
that every amended plan will necessarily be approved with its
amendments. Indeed, this is why we believe that Dr Sathe’s
submission is not correctly placed.
132. Let us take one example: that of an IoD being obtained and
plans being submitted without additional FSI. Work may or may not
have commenced. At a later stage, an amendment is proposed, this
time with additional FSI. There is absolutely no assurance that the
amended proposal will be accepted or allowed or that the additional
FSI will be allowed to be utilised because it then applies to amended
plans that are themselves subject to further approval. It would be
extremely risky and perhaps even foolhardy for any developer to
proceed on a speculation that a later amended plan with additional
FSI was bound to be allowed. This is why those developers will seek
the additional FSI as indeed every one of these Petitioners before us
has done at the time of applying for the IoDs.
133. We also believe that Mr Chinoy is correct that the word
‘bankability’ is just a nice and glossy word for ‘hoarding’. What
would otherwise happen is that knowing that premium is payable on
ASR, a rate that only keeps increasing, developers would cheerfully
obtain additional FSI in one year and then simply hoard it for use in
a later year when the ASR rate is much higher, thus avoiding a need
to pay an increased premium. The submission that Mr Chinoy
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makes is that any other interpretation would lead to a situation
where developers would simply ‘bank’ premium FSI by paying for it
once and then use it at a time when the ASR rates are much higher
without having to pay the differential in premium.
134. We believe Dr Sathe’s submission is too broadly placed to
merit acceptance. The additional FSI cannot be obtained de hors an
IoD. There is no concept that we can tell of simply going shopping
for premium or additional FSI or of any person without an IoD
purchasing and thus banking additional FSI. If that be so, there is no
question of individual developers not being required to pay the
differential premium on revalidation of the IoD.
135. The argument on bankability of an additional FSI de-linked
from an IoD is therefore not one that we are prepared to accept.
THE GR OF 2021
136. With this, we now return to the GR in question. A few things
are notable about this GR. We may summarise these as follows:
i. the benefit of the GR is a reduction by 50% of the
premium payable.
ii. The GR’s validity is only for one year until 31st
December 2021.
iii. The reduced premium must be paid in full (either as a
one time payment or in instalments) by the end of that
period.
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137. The purpose of the GR was to provide a fillip to the real
estate sector at a time when it was perceived to be in the doldrums.
The GR came not abruptly, but six months after the receipt of an
expert report commissioned by the State Government from the
Deepak Parekh Committee.
138. We do not have the recommendations and we are not
concerned with those but the GR itself makes it clear that it was not
a one sided benefit-only proposal. Tied to this 50% rebate was the
corresponding 100% imposition of the stamp duty liability on the
developers. Submitting an undertaking of that liability was
obligatory . The entire stamp duty for the full range from
economically weaker sections to high income groups had to be borne
100% by the project proponent. The participating projects had to be
so noted with the stamp registration office. Lists of customers for
whom stamp duty obligations had to be taken over were to be
provided.
139. Now this seems to us to make it clear that while on the one
hand there was a benefit to the developers by reducing the
premiums for the premium on additional FSI, there was also an
attempt to ease the burden on consumers i.e., flat purchasers. The
idea does not seem to have been to give developers a one-sided
bonanza in the form of a rebate.
140. We must note that the report itself had found that the rates
for residential properties in Mumbai were uncompetitive. The levies
in Mumbai were 13 times more expensive than Delhi for home
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buyers and 34 times more expensive in commercial real estate.
These premiums accounted for one-third of the sale price. They
were prohibitively high. They needed to be rationalised.
141. We have already looked at the correspondence that ensued
between the MCGM and the State Government. But as Mr Chinoy
correctly points out, that takes us nowhere. Whatever view
individual officers may have had at the level of the MCGM this
cannot affect a question of interpretation of the statute.
142. His submission is that Section 347 and especially Section
347(2) are unambiguous. If the submission of the Petitioners is to be
accepted, it would mean that the GR carves out an exception to
Section 347(1)(b) and specifically to Section 347(2), i.e., for those
projects that participated in the rebate or concession scheme
Section 347(2) would have to be held to be inapplicable.
143. It is correct that without a valid IoD, there can be no CC.
Without a CC, no work can commence. Unless work commences,
there can be no utilisation of the FSI. It necessarily follows
therefore, that part of the terms of the IoD, and this is Mr Chinoy’s
and Mr Rajadhyaksha’s submission, requires the payment of the
differential in additional FSI premium every time the IoD is sought
to be revalidated, the premium is computed as a percentage of the
ASR as prevalent at the time of issuance of the IoD. The percentage
itself may not vary unless there is a revision in the rules. To take a
simple example, if the ASR in Year 1 is Rs 100 and the premium is
chargeable at 10%, then Rs 10 would be the amount payable as the
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premium. If the IoD lapses and is to be revalidated, in the next year,
assuming that the ASR is now Rs 150 and the percentage remains at
10%, the premium payable would be Rs 15. But the developer would
get credit for the Rs 10 already paid and would be required to pay
the differential of Rs 5.
144. Another aspect of the matter that has appeared in these
papers seems to us to be an argument founded in equity. It runs like
this. Very often, developers are unable to obtain CCs entirely for
reasons out of their control. Sometimes, as we have seen in at least
one case, the delay is on the part of the MCGM itself. The MCGM
wears many hats in this development, planning and permission
giving process. It only takes one officer to withhold or delay a
required NOC with a resultant lapsing of an otherwise valid IoD
compelling the developer to pay the differential premium in the
following year. There are other situations with the same effect. For
instance, and our Courts are certainly no strangers to this, projects
are delayed by objections taken by society members or other people
who have a claim. In the factual narrative that we have seen above,
there is at least one case of arbitration proceedings having to be
known, and another or perhaps two more of litigations in this Court
in the form of Writ Petitions or Civil Suits. These have no
predictable time frame to conclusion. They may run into months
and even years and they are completely outside the cyclical renewal
and revalidation of IoDs.
145. It is for this reason that Mr Chinoy submits that what happens
in a ‘normal’ situation i.e., at a time when there is no question of a
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concession must also necessarily apply to the present situation
where there is a concession granted but has to be availed of within
one year.
146. We expect that it would be difficult to formulate a proposition
that could with sufficient accuracy cover every one of the possible
resultant cases where a project is delayed and a CC cannot be
obtained within the one year lifespan of an IoD. But such are the
perils and vicissitudes of development and all real estate projects.
147. The answer that the Petitioners seek is, therefore, not to be
found either in the concept of bankability or in a case-to-case
situation of delays caused by various factors. Indeed, that is not even
the canvas of the Petitions before us. Every single one of these
Petitions seeks only one thing — the implementation of the GR
dated 14th January 2021. It is to that we direct our attention, as we
believe we must. There is no larger principle or proposition that we
are called upon to decide in this matter. The MCGM circular is one
that follows from the GR. It is not independent of it. It cannot
control the GR. Indeed, the correspondence that we have seen
indicates that the MCGM was not seeking a clarification in regard to
its own circular, obviously, but was addressing itself to the import of
the GR of 14th January 2021.
148. There are certain provisions of this GR that merit a re-visit.
We leave aside the impetus behind the GR. For better or for worse,
it is what it is. The GR recognises that the premium for additional
FSI must be charged as a percentage of the annual market value or
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annual statement of rates or ASR as prescribed. It then says that the
Government’s opinion was that, and these words are now
important—
necessary to give a rebate in the premium being charged for
the additional FSI as per the recommendations of the
Deepak Parekh Committee and that this should be done on
an urgent basis.
149. This rebate was not said to be limited in time. Then the GR
goes on to say that the Government has taken a decision about the
rebate rate and pegged it at 50%. After this there are the directions.
The first of these directions, as we have seen, sets out the rebate and
then says it is subject to a procedure that is set out below. Direction
2 only says that the decision is to be taken by the Planning
Authorities. Clause A speaks of eligibility.
150. It is Clause B that now a conditionality to avail of the rebate.
This has been consistently glossed over by the MCGM throughout.
This liability is in relation to the stamp duty. It mandates that any
developer who wishes to avail of the rebate must, as an attached
condition, pay the stamp duty of purchasers of units in various
categories and these range across the full spectrum from
economically weaker sections to high income groups. This is
clarified in Clause B to mean that the stamp duty liability of the
purchasers is brought down to zero. Then Clause B goes on to say
that it is
only those developers who do so i.e., assume the entirety of
the burden of the stamp duty who get the benefit of the
said scheme
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This scheme is the rebate in question.
151. Clauses I, II, III, IV and V are sub-clauses to Clause B. Clause
I requires participating developers to submit an undertaking to the
MCGM to pay the full stamp duty of all purchasers. That is not all.
The developers must then get a certificate from each flat purchaser
confirming that the developer is bearing the stamp duty burden in
full. Even that is not the end of it. The developer must publish a list
of those purchasers for whom the developer has assumed the 100%
liability. There is a further fail-safe provided by the Government.
This full list of the projects in the scheme must go through the
Municipal Commissioners to the stamp registration office for
information and must also be published.
152. Then comes the all important Clause V which we take the
liberty, at the cost of repetition, of setting out again:
“V. The projects taking benefit of these concessions will
have to continue the benefit of stamp duty till the
construction area for which benefit has been taken is
sold. ”
( Emphasis added )
153. Now this is probably the crucial clause for our purposes.
Every single project that benefits from the concessions in the GR in
question must continue to absorb the stamp duty burden until that
area for which the benefit has been obtained has been sold.
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154. The Marathi equivalent is to be found at page 53.
V ;k loyrhapk ykHk ?ks.kk&;k izdYikauk] ykHk ?ksrysY;k
“ .
cka/kdke {ks=kph foØh gksbZi;Zar eqnzkad ‘kqYd loyrhapk YkkHk
pkyw Bsokok ykxsy-
”
The translation is accurate.
155. Now let us consider what happens if Mr Chinoy’s
formulation is to be accepted. After one year, the IoD lapses.
According to him, with it goes the additional FSI benefit until and
unless the IoD is re-validated by paying the premium differential.
156. We posed the question what would happen to the stamp duty
undertaking given and required to be maintained until the
construction for which it was obtained was sold. The answer
suggested was that if the benefit no longer applied then the
condition attached to it would also not be binding.
157. We find nothing in the GR to support this construction or
interpretation. The condition of stamp duty is not itself conditional,
i.e., it is not dependent on any other event happening or not
happening. That liability is absolute and is a pre-condition and an
ongoing condition to obtaining the rebate.
158. Indeed, the answer is logically self-defeating. The rebate is
tied root and branch to the demand that the developer must absorb
the full stamp duty liability. If the stamp duty liability goes, for
whatever reason, then so must the entitlement to the 50% rebate . In
other words, if the stamp duty liability goes, then, logically, so must
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the benefit and the developer ought to have been asked to pay 100%
premium even in the rebate period year. But that is not the case the
MCGM advances before us.
159. Everything points to the contrary. As we have seen, this was a
specific one-off rebate for a limited period of time in certain peculiar
circumstances that obtained country-wide and affected many
sectors, this one being only one of them. The GR does not
contemplate a case merely of conferring a benefit. It also imposes in
parallel a burden. That is of the assumption by the developer of the
entirety of the stamp duty. That is clearly, under conditions B-I to B-
V literally locked in for all time to come till the end of the project .
Indeed it would be difficult to conceive of a situation where, having
given an undertaking, obtained a certificate from a flat purchaser or
a unit purchaser, submitted a list to the Government, that project
being included in a list in the stamp office and condition B-V being
in operation, a developer could conceivably go and tell a flat
purchaser that since the IoD had lapsed the developer was no longer
bound by the commitment to bear the entire stamp duty. That could
never be.
160. To read it as Mr Chinoy suggests would be to read out the
provisions of Clause B-V of the GR entirely. Indeed, it would mean
that Clauses B-I to B-V would have to be read as non-existent and
would have to be deleted.
161. We believe the concerns of the MCGM that this would open a
Pandora’s box and that in year after year people would simply refuse
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to pay their additional premium is entirely misplaced. The
concession is a one-off concession. It applies only to projects, and
we are not really bothered whether there was one project or several
hundred, which being eligible, obtained the benefit by paying the full
amount of the premium of the rebated premium in that year and also
undertook to absorb the stamp duty liability. The rebate granted
cannot possibly be made illusory.
162. If the argument by the MCGM is to be accepted, then the
resultant situation would be that the so called rebate would be all but
wiped out and in addition the developers would necessarily have to
continue to bear 100% of the stamp duty burden. That could not
have been the intention of the GR at all.
163. It follows, therefore, that the additional FSI by paying the
rebated premium would necessarily have to continue without being
required to pay additional premium until completion of the project
so long as the undertaking to pay stamp duty continued. The two go
hand in hand. They cannot be separated. This applies only to those
projects that took the benefit of the GR and abided by its conditions.
164. This is the only method we have of harmonising the
requirements of Section 347 and the GR which, as we have noted, is
not merely the conferment of a benefit but is a benefit with a
corresponding or mirroring obligation at the same time.
165. It is of no consequence when, for instance under the RERA
law, a flat may legitimately be sold. The only question to be decided
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is whether the IoD is liable to be revalidated without insisting on
payment of additional premium for those developers who, being
eligible, participated in the rebate scheme.
166. We hold, in the facts and circumstances that have been set out
above, and on a correct interpretation of the GR that these IoDs are
liable to be revalidated and Commencement Certificates may in the
normal course be issued without a requirement to pay an additional
or differential premium provided the conditions in the GR are fully
met (including payment of the full amount of the premium within
the time stipulated, submission of the undertakings etc.).
167. To conclude, we may consider once again the 8th June 2023
communication from the Maharashtra Government. It seems to us
that the Government has correctly set out that the 14th June 2021
GR had already lapsed and there was no question of continuing its
benefit in successive years. But this only meant that its rebate policy
was confined to that year in question. It is for this reason that the
Government concluded by saying that it was unclear as to under
which provisions any concession was sought to be continued. The
State Government asked for a more precise proposal.
168. Correctly read, the Government communication did not seek
to extend the 14th January 2021 circular beyond its expiry date of
31st December 2021. But this necessarily meant that within that
period the GR was valid and subsisting and all its conditions had to
be met for its benefits to be availed of.
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169. Consequently, the only fair reading of this GR is, while
insisting on the fulfilment of the conditions, to maintain the
continuance of the benefit that it confers. Any other reading of the
GR would render it entirely illusory and even meaningless especially
in the long run. No such concession is available after the period of
the GR. It is not being suggested that in the normal course
revalidated or renewed IoDs will be exempt from payment of the
differential premiums or premium if any.
170. We dispose of all these Petitions by directing the MCGM to
revalidate or renew the IoDs in question without insisting upon
payment of an additional or differential premium but only in respect
of those developers/projects that have met the conditions of the
14th January 2021 GR.
171. The Petitions are disposed off in these terms. There will be
no order as to costs.
172. Mr Chinoy requests for a stay of this order on the basis that
there are others who have paid the differential premium although
they were participants in the rebate scheme. That is not a ground to
stay the operation of this order. Any stay would result in a further
delay in revalidation. Apart from the impact on developers, a delay
in revalidation affects third party flat purchasers and, perhaps most
importantly, those awaiting rehabilitation because without a
revalidated IoD, there can be no CC and no further work on site.
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173. In any case, the fact that the MCGM has to make a refund is
immaterial to the question of interpretation of the GR and the
relevant statutes. It is hardly plausible to suggest that just because
the MCGM will have to make significant refunds, therefore the GR
should be interpreted in an incorrect manner.
174. The application is refused.
175. In all cases where the application for a CC has been rejected
on this ground i.e., for demand for additional premium, the MCGM
is directed to issue the CC subject to other compliances.
176. In Sugee Two Developers LLP and Sugee Nine Developers
LLP, the developers have paid the amount, as we have noted, on a
without prejudice basis. In view of our decision, they are entitled to
a refund.
177. At Mr Chinoy’s request, this order for a refund is stayed for
the period of six weeks from the date this order is uploaded (and
which may take a little while given its length).
(Kamal Khata, J) (G. S. Patel, J)
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