1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 1874 OF 1998 1. M/s. Buildarch , a Partnership firm registered under the Partnership Act, 1932 and carrying on business at 25, Pearl Centre, Senapati Bapat Marg, Dadar (West), Mumbai 400 028. 2. Mr. Monish Laxmikant Thakoor, of Mumbai Indian Inhabitant and Partner of the Petitioner No. 1 having his office at 25, Pearl Centre, Senapati Bapat Marg, Dadar (West), Mumbai 400 028 ... Petitioners. Versus 1. The Municipal Corporation of Greater Mumbai constituted under the Mumbai Municipal Corporation Act, 1888 and having its office at Mahapalika Marg, Mumbai 400 001. 2. The Municipal Commissioner of the Municipal Corporation of Greater Mumbai having his office at Mahapalika Marg, Mumbai 400 001. 3. The Assistant Engineer, Building Proposal (City) IV, having his office at Sankhali Street, Byculla (West), Mumbai ... Respondents Mr. Sanjay Kadam for Petitioners. Ms. S.A. Module for Respondents. CORAM : FERDINO I. REBELLO & A.A. SAYED, JJ. DATED : JUNE 10, 2010 2 ORAL JUDGMENT (Per Ferdino I. Rebello,J.): Petitioner No. 1 is a partnership firm and Petitioner No. 2 is its partner. By the present petition, the Petitioners challenge the levy/charge/imposition of premium by Respondent No. 1 for the area covered by stair case rooms, lift rooms, above the topmost storey, lift wells and stair cases and passages thereto as set out in Regulation No. 35(2)(c) which can be exempted from computation of FSI under the provisions of the D.C. Rules by special permission of the Commissioner as being without the authority of law. In the alternative, to challenge the legality and validity of the letters/orders bearing No. EB/4415/A dated 2.9.1998 issued to the Petitioners by the Assistant Engineer, Building Proposal (City) IV, (Respondent No. 3) in his capacity as Officer of Respondent No. 1 calling on the petitioners to pay additional/enhanced premium for stair case and lift area and open space deficiencies in respect of the building being constructed on the suit property at the revised land rate of Rs.10,270/- per sq. mtr. which has been increased from Rs. 5870 per sq. mtr. 2. The Petitioners are the owners and developers of an immovable property bearing final plot No. 1245, T.P.S. IV of Mahim Division admeasuring 1217.4 sq. mtrs or thereabouts, situated at Old Prabhadevi Road, Prabhadevi, Mumbai 400 025. The Petitioners wanted to redevelop the property and accordingly submitted plans for redevelopment. They paid various amounts by way of scrutiny fees as also other amounts towards deposits that included transit shed deposit, debris deposit, fraudulent deposit, deposit for transplanting tree etc. According to Petitioners they 3 were called upon wrongly to pay a sum of Rs.8,87,978/- towards staircase and lift area premium for 269.90 sq. mtrs. The said premium was charged at the rate of Rs. 3290/- per sq. mtr and they were informed that it was the applicable rate for the year 1995. On the said date, respondents further called upon the Petitioners to pay a sum of Rs.1,89,010/- towards road premium. According to Petitioners, no material was shown which would reveal the basis for charging the said premium. In order not to jeopardize the project, the Petitioners paid to Respondent a sum of Rs.8,87,978/- on or about 10.11.1995 towards premium for stair case and lift room and a sum of Rs. 1,89,010/- towards road premium, thus aggregating to Rs.10,76,988/-. The Petitioners were then finally issued a commencement certificate dated 17.2.1997 for construction upto plinth. Before issuance of commencement certificate, Respondent No. 3 wrongly directed the Petitioners to pay a sum of Rs.3,26,110/- towards additional premium for stair case and lift area. According to Petitioners no material was shown to indicate the basis on which the premium was claimed. In order to avoid confrontation and delay, the Petitioners paid the said amount on or about 31.1.1997. In the course of the construction and in pursuance to the representations made by the Petitioners, category A was granted to the structure standing on the property under MH & AD Act, 1976. As a result of which the Petitioners became eligible to consume additional FSI in respect of the property under Regulation 33(7) of the .D.C Rules, 1991. Petitioners accordingly submitted amended plans. As per amended plans, FSI of 449.65 sq. mtrs was covered under the stair case and lift as against 269.90 sq. mtrs as per the original plans. The plans were approved by Respondent 4 No. 3. The Petitioners were also called upon to pay sum of Rs.12,14,610/- towards premium for stair case and lift area and Rs.6,04,000/- towards premium for open space deficiency and a sum of Rs.96,000/- towards balcony enclosure charges, thus aggregating to Rs.19,14,610/-. The Petitioners again to avoid confrontation and delay paid the said amount. Petitioners request for issuance for further certificate was pending when they were called upon to pay additional premium on account of revised land rate of Rs.10.270/- per sq. mtrs applicable for the period of 01.01.1998 to 31.12.1997 as against Rs.5870/- per sq. mtrs. Petitioners were called upon to pay sum of Rs.9,10,960/- towards premium for stair case and lift area and a sum of Rs. 4,53,000/- towards premium for open space deficiency, thus aggregating to Rs. 13,63,960/-. The Petitioners have set out various amounts paid by them totaling to Rs.36,28,970/- which included the sum of Rs.24,28,700/- towards stair case and Lift premium. On receipt of the letter dated 2.9.1998, they made enquiries and were informed that the letter was issued based on the internal survey by Respondent No. 2 whereby he had caused to enhance the land rates. According to Petitioners, they called upon the officers to disclose to them the Act/Rules/Policy norms under which the premium was being charged and rates determined/enhanced. Respondent No. 2 declined to furnish any such information to the Petitioners and they were also advised to pay the amount. The Petitioners by letter of 3.9.1998 raised various objections and to review this exorbitant levy/imposition of premium. 3. According to Petitioners, neither the B.M.C. Act nor the M.R.T.P., Act or D.C. Regulations empower and or authorise Respondent No.1 to charge any premium for the areas that can be exempted from computation of F.S.I., by the 5 Commissioner. Under D.C. Regulation 35(2)(c) F.S.I. Can be excluded in the island cities, suburbs and extended suburbs with the special permission of the Commissioner. The word premium reasonably denotes additional charge made for something and or demand made for something. On the areas that can be exempted there is no power to make a demand for exercise of discretion and therefore, the demand is illegal. To single out areas under stair case and lift for charging premium on the basis of the notional land area is illegal and or arbitrary. The demand therefore, by the Respondents is ultra vires, illegal and unauthorized. The Petitioners have prayed for a declaration that Respondents do not have any power and authority to claim or charge or demand or levy in respect of development of properties any premium by whatever name called for the areas exempted from computation of F.S.I. under D.C. Regulation 35(2)(c). 4. By an amendment it is specifically prayed that the Respondent do not have any power or authority in law to levy, charge, demand and collect any premium or amounts by whatever name under the D.C. Regulation 35(2)(c) for exclusion of area specified therein for computation of F.S.I. Further prayer clause is to quash and set aside the communication dated 6.7.2009. 5. It may be mentioned that an order came to be issued on 8.7.2009 by way of clarification by the Under Secretary to Government holding that the term “with special permission of the Commissioner” as stipulated in regulation 35(2)(c) entitles the Municipal Commissioner to impose necessary conditions as he may deem fit for allowing such exclusions including the condition for charging of premium. This was 6 issued in view of the various writ petitions that had been filed in this court challenging the charging of premium by the Corporation for grant of special permission of Municipal Commission on lift, stair case room etc. under Regulation 35(2)(c) of D.C.R. 1991. 6. A reply has been filed on behalf of the Corporation. It is set out that the Municipal Commissioner is empowered to condone the deficiencies in stair case and open spaces. These deficiencies can be condoned by the Municipal Commissioner by levying premium as developer is getting free area of FSI. According to Respondents petitioners had also given undertaking to pay difference in premium, if any due to revision of rates. 7. An additional reply has been filed on 23.11.2009. It is set out that the premium was charged not for the entire area covered by the stair case etc. of which exclusion was sought by the builder, premium is sought only of additional area of stair case etc. The concept of charging premium is well recognized by the D.C.R. The State Government has also issued clarification dated 6.7.2009 in pursuance to the powers of the State Government under Regulation No. 62(3) of the D.C.R. The power to approve, sanction, reject building proposals, it is set out flows from M.M.C. Act. Reference is made to various provisions of the M.M.C. Act. For the purpose of approving sanction for building proposals, notice has to be given to the Commissioner under the provisions of Section 337 of the M.M.C. Act. Correspondingly Commissioner under section 338 may call upon the person who has 7 issued notice under section 337 to furnish plans and other documents to the Corporation. Reference is also made to sections 345, 346, 348, 349, 349(b), 349(d), 350 and other provisions. Next reference is made to Chapter IX of the M.M.C. Act which deals with the procedure and licences. Reference then is made to section 479 which sets out licences or written permission may be given for any purpose and for granting such licnece under section 479(2) a fee may be charged at such rate time to time may be fixed by the Commissioner with the sanction of the Corporation. Relying on this, it was sought to be pointed out levying of premium for excluding of area of staircase from F.S.I. Is part and parcel of the permission granted by the Commissioner for construction of the buildings. This it is contended demonstrates that not only Respondents have the power to charge premium under the D.C.R. but also under the M.M.C. Act. At this stage, it may be mentioned that the issue is not charging premium under the M.M.C. Act but under the D.C. Regulations as framed under the M.R.T.P. Act. Levying of premium for exclusion of area of stair case etc. from the FSI is a power specially granted to the Commissioner for exclusion of F.S.I. The nature of FSI is then explained. It is contended that there is a long standing practice of excluding certain areas from FSI by charging premium for the same. Reliance is placed on various documents. These documents show that premium charged from time to time by various circulars. It is also pointed out that Resolution was passed on 14.9.1995 by the Corporation pursuant to the provisions of section 479(2) of the Municipal Corporation Act. 8 8. The resolution fixing rates for exclusion of the areas for calculation of FSI and levying of premium have been approved by the Improvement Committee on October, 2009. Subsequent documents would show that the Standing Committee on 2.12.2009 recommended to approve the administrative decision taken in the larger municipal interest of charging premium for grant of special permission on Municipal Commissioner of stair case, etc. free of FSI under Regulation 35(2)(c) of D.C.R. 1991 and to approve circular issued by the Municipal Commissioner from time to time and to empower the Municipal Commissioner to fix scale of premium from time to time to be recovered. The resolution further held that the resolution shall be put forth in any ensuing meeting of the Corporation as urgent business. The Corporation passed the resolution on 14.01.2010. 9. Certain communications received from the Government may now be referred to. The first of such communication is the letter dated 14.5.1992 from Urban Development Department addressed to the Municipal Commissioner pointing out that it had been represented to the Government that the areas of lift wells, stair cases area for FSI computation are specifically exempted under D.C. Regulations with special permission of the Commissioner, and as such the question of charging any premium by the B.M.C. should not arise and the Commissioner was requested to ensure that no premium be charged since the Regulation has specifically provided for the same. This was followed by another letter dated 10.6.1992 to the same effect. The Municipal Commissioner on 25.5.1992 addressed a communication to the Secretary, Urban Development Department Government of Maharashtra with a request to look into the matter personally and arrange to withdraw the letter of Mr. 9 N.S. Kulkarni, Under Secretary to the State Government. The Government ultimately on 6.7.2009, which is also one of the interim orders noted the exclusion of FSI with special permission of the Commissioner for computing the total FSI under Regulation 35(2)(c) and the fact of the Municipal Commissioner was charging premium. Various petitions had been filed and the Corporation had sought clarification from the Government with respect to interpretation of the term “special permission of the Corporation”. In these circumstances, it was set out that the letters dated 13.5.1992 and 10.6.1992 have been withdrawn and clarification of the said regulation is issued. By the clarification it is set out that term “with special permission of the Commissioner” as stipulated in sub regulation (2)(c) entitles the Municipal Commissioner to impose necessary conditions as he may think fit for allowing such exclusions including condition for charging of premium. 10. At the outset we make it clear that the power to charge fee under the M.M.C. Act as a licencing Authority is different than the power to charge premium by the Planning Authority under M.R.T.P. Act. It may be that authority under the M.M.C. Act, may also happen to be the Development Authority under the M.R.T.P. Act. The scope and purpose of two Acts however, is different. Though both the legislations are State legislations, there is no incorporation of the provisos of the M.M.C. Act into the M.R.T.P. Act and vice versa and on the contrary section 124(L) (2) of M.R.T.P. Act makes it clear that subject to the provisions of sub section (1) which states that the provisions of the chapter shall have effect notwithstanding anything inconsistent therewith contained in this Act or any other law for the time being in force, the provisions of Chapter 6A shall be in addition to and not in derogation of any of the 10 provisions of that Act or any law relating to Municipal Corporation, Municipal Council or any local authority of any urban area. Thus the M.R.T.P. Act itself makes it clear that the provisions of M.R.T.P. Act in the matter of development charges will have to be read in conjunction with the B.M.C. Act. Further as noted earlier, there is no incorporation or incorporation by reference and on the contrary, fees/charges payable under the two Acts are independent of each other and payable when a party seeks to put up construction/buildings and seeks permission under each of the Act, though for convenience, the Respondent No. 1 as the licensing authority under the M.M.C. Act and authority for granting development permission under hte M.R.T.P. Act may have prepared a common form for application. as it is the authority under both the Acts. 11. Having set out the facts, we now proceed to consider the arguments advanced. On behalf of the Petitioner, their main submission is that the power conferred on the Commissioner under D.C. Regulation 35(2)(c) to exempt areas set out therein with special permission of the Commissioner does not confer power on the Commissioner to charge premium or fee. The M.R.T.P. Act and or D.C. Regulations has not conferred any express power on Respondent No. 2 to charge any fee by way of premium for exempting FSI under D.C.R. 35(2)(c). The expression “with permission of the Commissioner” at the best can be read to mean that the Commissioner cannot grant permission or disallow it, if that would result or found to be inconsistent with the provisions of D.C. Rules. D.C. Regulation 35(2)(c) which empowers the Commissioner to exclude FSI 11 by special permission does not contemplate charging of premium. At any rate it is submitted that there is no power conferred on the Commissioner to levy premium either under the provisions of the M.R.T.P. Act, rules or D.C. Regulations. Reliance for that purpose is placed in the judgment of the Supreme Court in Ahmedabad Urban Development Authority Vs. Sharadkumar Jay Antikumar Pasawalla and others (1992) 3 S.C.C. 285 and the judgment in Bharti Tele-Ventures Ltd. And another Vs. State of Maharashtra and another, 2007 (4) Mh. L.J. 105. It is also submitted in the alternatively that the premium charged is exhorbitant and even if premium can be charged what would be applicable is the rate applicable in the year 1995 when the plans were submitted and I.O.D. issued by Respondents. 12. On the other hand on behalf of the Respondent Corporation it is submitted that clarification has been issued by the State Government dated 6.7.2009. The expression “with special permission of the Commissioner” has been clarified that sub regulation 2(c) of Regulation 35 empowers the Commissioner to impose necessary conditions as he may deem fit. This would clearly show that the Commissioner has the power to charge premium under the development control regulations. Apart from that it is set out that the power to approve, sanction, reject flows primarily from the M.M.C. Act, various provisions of the M.M.C. Act have been brought to our attention. In the course of considering the application for permission to grant permission for construction of the building, the Commissioner has to take into consideration FSI sought to be consumed. In that context, it is set out that section 479 in clear terms states that any other licence and permission granted 12 under the M.M.C. Act for any purpose, fee may be charged at such rates as from time to time be fixed by the Commissioner with sanction of the Corporation. Thus levy of premium for excluded area for stair case etc. from FSI is a part and parcel of the permission granted by the Commissioner for the construction of the building. Reliance is placed on the sample copy of the application and permission granted. It is next submitted that excluding certain areas from calculation of FSI upon charging premium has been a long standing practice followed by the first respondent Corporation. The documents referred to demonstrate long standing practice. It is pointed out that since 1973 the first respondent has been exempting stair case lift wells from ground floor onwards from computation of FSI. The resolution of first respondent has been relied upon as also the circulars. Reliance is placed on circular dated 10.7.1974 issued by the first respondent which demonstrates that as far back as 1974, premium was being charged for excluding the area of stair case, lift wells from computation of FSI. Various other circulars have been referred to including resolution of 14.9.1995 passed by the Corporation approving revised fees pursuant to provisions of section 479(2) of the M.M.C. Act. If two interpretations are possible, the court should be reluctant to accept that interpretation which would upset and reverse the long standing practice. Reliance is placed in the judgment of the Supreme Court in Dr. Umakant Vs. Dr. Bhikalal Jain and other (1992) 1 SCC 105 as also in M/s. Jetha Bai and Sons, Jew Town, Cochin and Others Vs. M/s. Sunderdas Rathjenai and Others, (1988) 1 SCC 722. It is next submitted that the letter dated 10.6.1992 by the State Government is not clarification from the State Government rather the letter is a clarification under D.C. Regulations. 13 It is further submitted that premium charged by the respondent is in the nature of regulatory fee and hence the concept of quid pro quo does not apply in the strict sense. The use of the word premium does not necessarily mean a fee in return of services. The levy of premium is to defray the costs of administration and to increase the general fee of the Corporation. Reliance is placed in the judgment of the Supreme Court in Sona Chandi Oal Committee and Others Vs. State of Maharashtra (2005) 2 S.C.C. 345 and Vam Organics Vs. State of U.P. (1997) 2 SCC 715. In the alternative it is submitted that premium levied by excluding certain areas from computation of FSI is in respect of the various services provided by the Corporation and substantial expenses incurred in respect of the same. Reference is made to the provisions of section 337 to 350 of M.M.C. Act with regard to receiving applications for consideration, approval, appliance etc. Lastly it is submitted that only in the alternative if this court is not inclined to accept the earlier submissions, the premium charged is within the limits set out under section 124A read with schedule II of the M.R.T.P. Act and would be justified. It is set out that no development charge is made by the Corporation when sanctioning building plans in respect of the areas excluded from FSI calculations. 13. After hearing the parties and their counsel and considering the various judgments cited at the bar, the following questions will emerge for our 14 consideration : (1) Considering the language of D.C. Regulation 35(2)(c), can the Commissioner charge premium for granting special permission to exclude from computation of F.S.I., areas set out therein? (2) Was the Respondent Corporation authorized to pass a resolution to levy premium for exercise of the powers by the Commissioner under D.C. Regulations 35(2)(c) when the regulations confer powers specifically on the Commissioner and not on the Corporation? (3) Can the premium charged be said to be a regulatory fee, and if so can it be charged without there being any specific provision under the provisions of the M.R.T.P. Act. (4) Does Section 479 of the M.M.C Act which confers powers to grant licence and also provides for charging fees by the Commissioner, can be said, to be the power to charge premium for granting special permission by the Commissioner under D.C. Regulation 35(2)(c). In other words, is the power to levy premium referable to the provisions of the M.M.C. Act. (5) Considering the long standing practice and the fact that the premium is being charged from 10.7.1974, can it be submitted that it is not open to an applicant who applies for special permission to the Commissioner to challenge the charging of premium and in that context if two views are possible should this court accept the interpretation which would result in not upsetting the long standing practice. (6) Is the premium referable to any services performed by the Corporation. 15 And in the alternative : (7) Is the premium within the limits set out under section 124A read with Schedule II of the M.R.TP. Act as no development charge is levied by the Corporation for sanctioning, building plans in respect of the areas not excluded from FSI restrictions. 14. D.C. Regulation 35(2)(c) reads as under : “35. Floor Space Index Computation (1) ...................................... (2)Exclusion from FSI computation.- The following shall not be counted towards FSI : (a)............. (b) ............ (c) Areas covered by stair-case rooms, lift rooms above the topmost storey, lift-wells and stair-cases and passages thereto, architectural features, chimneys and elevated tanks of permissible dimensions in respect of buildings in the Island City, Suburbs and extended suburbs with the special permission of the Commissioner : Provided that in the wards of the Island City such exclusion from FSI computation will be available in respect of buildings to be constructed or reconstructed only, the same being not available for existing buildings or proposals decided by the Corporation prior to the coming into the force