1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 2934 OF 1999 WITH WRIT PETITION NO. 1969 OF 1999 WRIT PETITION NO. 2934 OF 1999 MUNICIPAL CORPORATION OF GREATER ) MUMBAI, Mahapalika Marg, Fort, ) Mumbai 400 001. )..PETITIONER VERSUS 1. MINISTER FOR URBAN DEVELOPMENT) State of Maharashtra. 2. STATE OF MAHARASHTRA ) 3. GAJANAN GOVIND KANTHI ) 4. SMT. SUNANDA CHANDRAKANT ) GOVIND KANTHI ) 5. ANIL GOVIND KANTHI ) 6. SUBHASH GOVIND KANTHI ) 7. AVINASH GOVIND KANTHI ) 8. SMT. VASUDHA D/o. LATE GOVIND ) KANTHI W/o. SHRI VASANTRAO ) KARULKAR ) 9. MRS. ARUNA D/o. LATE GOVIND ) 2 KANTHI W/o. ANIL RATNAPARKHI, ) All of Mumbai, Indian Inhabitants, ) having office at C/o. Ravi N. Jain ) (Architect), Room No.60, 3rd floor, ) Podar Chambers, 109, S.A.Brelvi Road, ) Fort, Mumbai 400 001. ).. Respondents Mr. A.Y.Sakhare, Senior Counsel, a/w Mrs. Shobha Ajitkumar, Advocate, for the peitoner. Mr. Aspi Chinoy, Senior Counsel a/w Mr. Pravin Samdhani, Senior Counsel, with Mr. R.D.Suvarna, Advocate for the respoondents. WITH WRIT PETITION NO. 1969 OF 1999 1. Gajanan Govind Kanthi ) 2. Smt. Sunanda Chandrakant Govind Kanthi ) 3. Anil Govind Kanthi ) 4. Subhash Govind Kanthi ) 5. Avinash Govind Kanthi ) 6. Smt. Vasudha d/o Late Govind Kanthi ) w/o Shri Vasantrao Karulkar. ) 7. Mrs. Aruna d/o Late Govind Kanthi ) w/o. Anil Ratnaparkhi ) All of Mumbai, Indian Inhabitants, ) haviig office at C/o. Ravi N. Jain ) (Architect) Room No.60, 3rd floor, ) Podar Chambers, 109, S.A.Brelvi Road, ) Fort, Mumbai 400 001. ).. Petitioners Versus 3 1. The Municipal Commissioner ) 2. The Chief Engineer, (Development Plan) ) 3. The Municipal Corporation of Greater ) Bombay, Defendants No. 1 to 3 having ) their offices at Mahapalika Marg, V.T. ) Mumbai 400 001. ).. Respondents Mr. Aspi Chnoy, Senior Counsel a/w Mr. Pravin Samdhani, Senior Counsel i/b. Mr. R.D.Suvarna, Mr. Vijay Tamhane, Advocates, for the petitioners. Mr. A.Y.Sakhare, Senior Counsel a/w Mrs.S.A.Module, advocate, for the respondents. CORAM: F.I.REBELLO AND J.H.BHATIA, JJ. JUDGMENT RESERVED ON: 09.02.2010. JUDGMENT PRONOUNCED ON:25.02.2010. JUDGMENT (PER J.H.BHATIA,J.) 1. In the Writ Petition No.2934/1999, the Municipal Corporation of Greater Mumbai (the Corporation in brief), seeks to quash and set aside the order dated 29.4.1998 passed by the minister of State for Urban Department, directing the petitioner to grant Transferable Development Rights (TDR) in lieu of the reservation clamped on the Final Plot No.286, Town Planning Scheme IV for Mahim Division. 4 2. To state in brief, according to the Corporation, on 25.6.1951, there was a declaration of intention to formulate Draft Town Planning Scheme IV for Mahim Division by the Corporation as Local Authority. The formal sanction to the Draft of the Scheme was accorded on 3.1.1955. One Mr. G.J.Desai was appointed as an Arbitrator to pass an award for granting the final plot to as well as for fixation of the compensation to be paid to the parties, whose land would vest in the Local Authority. On 20.5.1963, the notification was issued declaring the award passed by the Arbitrator. On 15.8.1963, the Final Town Planning Scheme IV came to be sanctioned and all the lands required by the Corporation, vested in it absolutely free from all encumbrances under Section 53 of the Bombay Town Planning Act, 1954. The original plot No.289 admeasuring 6385 sq. yards situated within the limits of the said Town Planning Scheme IV, Mahim, originally belonged to Tarachand Kalyanji and seven others. Under the said Scheme, two final plots, bearing No.288 admeasuring 562 sq. yards and No.355 admeasuring 516 sq. yards were allotted to the owners of the original plot No.289. Remaining land includig final plot No.286 vested in the Local Authority for which the Arbitrator had fixed amount of Rs.1,25,433/- as compensation to be paid tothe original owners. Final Plot No.286 admeassuring 2900 sq. yards was earmarked for the purpose of market. Later on, the reservation was changed from market to primary school and finally in 1992 the reservation was changed to “Parking” and 5 “Housing for Dishoused”. The dispute is about Final Plot No.286. According to the Corporation, this land vested in it free from all encumbrances on sanctioning of the Final Town Planning Scheme by virtue of the provisions of Section 53 of the Bombay Town Planning Act, 1954. It is contended that the owners of the original plot did not claim compensation amount even though it was sanctioned as per the award passed by the Arbitrator. 3. The respondent Nos. 3 to 9 claimed to have purchased certain property, including the land covered under the Final Plot No.286 from the original owners under the sale deed dated 12.3.1964. The said property was attached by the Income Tax Department for recovery of certain taxes from the original owner Kalyanji. The sale had taken place in favour of the respondent Nos. 3 to 9 with permission of the Income Tax authorities. The respondent nos. 3 to 9 made an application to the petitioner under Section 44 of the Maharashtra Regional & Town Planning Act, 1966 (MRTP Act) seeking permission for development of the Final Plot No.286. However, that request was turned down by the Corporation on the ground that the said land was absolutely vested in the Corporation and the original owners or their successors-in-title could not claim any right of development of the said land. The respondent Nos. 3 to 9 preferred an appeal under Section 47 of the MRTP Act, which was heard by the respondent No.1 – 6 Minister of State, Urban Development Department, Government of Maharashtra. After hearing the parties, the learned Minister came to conclusion that the request seeking permission for development could not be accepted, however, as the compensation was not paid to the owners in view of a Circular dated 8.3.1995 issued by the Government of Maharashtra, Urban Development Department, the respondent Nos. 3 to 9 could be granted TDR in lieu of reservation clamped on Final Plot No.286 and the learned Minister directed the petitioner to grant TDR accordingly by the impugned order. 4. Heard the learned Counsel for the parties and perused the relevant documents, circular and the impugned order. 5. It is contended by the learned Counsel for the Corporation that the Town Planning Scheme IV, Mahim, was sanctioned way back in 1963 when the Bombay Town Planning Act, 1954 was in force. Under the provisions of Section 53 of that Act, the land vested in the Local Authority absolutely free from all encumbrances and compensation for that was sanctioned as per the award passed by the Arbitrator. That award had become final and the owners of the original plot could claim only compensation amount as per the provisions of the said Act and nothing more. It is further contended that the circular dated 8.3.1995 purporting 7 to have been issued under Regulation 62(3) of the Development Control Regulations for Greater Mumbai, 1991 has no application to the Town Planning Scheme IV, Mahim, which had become final in 1963. There is no provision under the Bombay Town Planning Act or under the said Scheme to grant any TDR. The concept of granting TDR came for the first time when the Development Control Regulations 1991 were sanctioned. It is contended that the learned Minister had wrongly invoked the said circular in the present case. It is further contended that the impugned order directing the petitioner to grant TDR is beyond the scope of appellate powers under Section 47 of the MRTP Act. 6. On behalf of the respondent Nos. 3 to 9, it is vehemently contended that the Government has powers to issue circular under Regulation 62(3) of the Development Control Regulation 1991 and such circular or directions are final and binding on all the parties. It is contended that as the compensation was not paid, in terms of the said circular dated 8.3.1995, the TDR should have been granted if the right to develop the land is refused. It is contended that even though the impugned direction may be beyond the scope of appeal under Section 47 if interpreted strictly,still the order is equitable and fair because the land of the respondent Nos. 3 to 9 is allegedly reserved for public purpose and the development rights have been refused to the owners. It is contended that the 8 Government had issued the circular dated 8.3.1995 taking into consideration the financial difficulties which the Corporation may find in making payment of the huge compensation and, therefore, the learned Minister only followed that circular while passing the impugned order. 7. The only point which arises for consideration is whether the respondents nos. 3 to 9 would be entitled to TDR in lieu of the land covered in final plot no.286 when the Town Planning Scheme was already sanctioned and had become final in 1963. 8. Chapters III and IV of the Bombay Town Planning Act, 1954 provided for making and finalization of the Town Planning Scheme. Under Section 22 the Local Authority could declare and publish its intention to make Town Planning Scheme in respect of whole or part of the land. Under Section 24, State Government could also direct the Local Authority to make Town Planing Scheme and submit for sanction of State Government. After the declaration of intention to make Town Planning Scheme, there would be restrictions on developments of the land in terms of Section 29. Under Section 28, the State Government had the power to sanction the draft Town Planning Scheme Section 32 provided for the duties of the Town Planning Officer, including the fixation of 9 the compensation to be paid to the parties whose lands would be used, allotted or reserved for a public purpose or for the purpose of local authority. He would also decide the increment, which would be required to be paid by the owner of the land to whom the final plots would be allotted. Against the orders passed by the Town Planning Officer, including about the compensation, an appeal could be preferred before the Board of Appeal under Section 34. The decision of the Board of Appeal was tol be final and conclusive and binding on all persons under Section 40(2). Section 53 provided that on the day on which the final scheme comes into force, all lands required by the local authority shall, unless otherwise determined in such Scheme, vest absolutely in the local authority free from all encumbrances and all rights in the original plots which had been re-constituted shall determine and the re-constituted plots shall be subject to the rights settled by the Town Planning Officer. Section 54 provided that on and after the day on which the final scheme comes into force any person continuing to occupy any land, which he is not entitled to occupy under the final scheme, may, in accordance with the prescribed procedure, be summarily evicted by the local authority. Section 55 gave powers to local authority to enforce the final scheme. 9. Admittedly, the Town Planning Scheme IV Mahim was finally sanctioned and came into force on 15.8.1963. In the present case, the original 10 final plot no.289 was re-constituted into different plots which were given the final plot numbers. As per the award notified on 20.5.1963, final plot nos. 287 and 355, admeasuring 562 and 516 sq.yards respectively, were allotted to the original owners Kalyanji Devji and others. By virtue of the provisions of Section 53, the remaining land, including Final Plt No.286 absolutely vested in the Municipal Corporation, being the local authority free from all encumbrances. Therefore, from 15.8.1963, the original owner of land being original plot No.289 lost all right, interest or title in the final plot No.286 and the Corporation had become the absolute owner of that property. Only right which the original owner had against the Municipal Corporation was to claim compensation awarded by the Arbitrator. Record reveals that the Arbitrator had fixed the compensation for the land acquired under the Scheme at Rs.1,32,675 and in respect of the two final plots bearing Nos. 287 and 355 allotted to the original owners, they were required to pay amount of Rs.7,242/-, being 50% of the estimated increment, as per the provisions of Sections 65 and 66 of the Act. After adjustment of the amount to be recovered from the original owners as their contribution of increment, amount of Rs.1,25,433/- was to be paid as net compensation to the original owners for the area of the land from original plot no.289 acquired or reserved by the Municipal Corporation under the final Scheme. Undisputedly, the said amount of compensation was never claimed by the original owners or their successors-in- 11 title and the amount has not been paid so far. 10. Maharashtra Regional Town Planning Act, 1966 came into force on 11.1.1967 and thereby the Bombay Town Planning Act, 1954 was repealed and all acts done under the repealed Act would be deemed to have been done or the steps would be deemed to have been taken under the corresponding provisions of the MRTP Act. In respect of finalisation and sanctioning of the Town Planning Schemes, reservation and acquisition of lands for the public purpose and payment of compensation to the owners of the lands whose lands are taken over for the public purpose under the scheme, the provisions in the Bombay Town Planning Act and MRTP Act are almost similar. Under Section 88 of the MRTP Act, on and after the day on which a final scheme comes into force, all lands required by the Planing Authority shall vest in it absolutely free from all encumbrances. Under Section 89 of the MRTP Act, the Planning Authority has power to evict summarily the person who may be in occupation of the land which he is not entitled to occupy under the final scheme. Under section 85, the owner of the land, which is required by the Planning Authority under the final scheme, is entitled to compensation as determined by the arbitrator with interest at the rate of 4% per annum from the date on which such possession is taken till the date on which the amount of compensation is paid to him. 12 11. The Bombay Town Planning Act also made provisions in Chapter II about the development plans. Section 11 empowers the local authority to acquire any land designated in the development plan for the purpose specified in clauses (b), (c),(d) and (e) of Section 7. It provided that if the land is acquired under the Land Acquisition Act, provisions of that Act, as amended by the Bombay Town Planing act, shall apply to the determination of compensation for acquisition of the land. It also provided that if the designated land is not acquired by agreement within ten years from the date specified under section 10(3) or if no proceedings are commenced under the Land Acquisition Act within such period, the owner or person interested in the land may serve notice to the local authority and if within six months from the date of service of such notice, land is not acquired or no steps are taken for acquisition, the designation shall be deemed to have lapsed. Similar provisions are to be found in Sections 126 and 127 of the MRTP Act. 12. The State Government, in exercise of its power under Section 31(3) of the MRTP Act, made regulations known as “Development Control regulations for Greater Bombay, 1991” which came into force on 25.3.1991. Regulation 34 provides that in certain circumstances, the development potential of a plot of land may be separated from the land itself and may be made available to the owner of 13 the land in the form of Transferable Development Rights (TDR) which may be transferred as well as used elsewhere. Admittedly, this concept of TDR was introduced for the first time in Development Control Regulations for Greater Bombay 1991. Regulation 62(3) provides that if any question or dispute arises with regard to interpretation of any of these Regulations, the matter shall be referred to the State Government which, after considering the matter and, if necessary, after giving hearing to the parties, shall give a decision on the interpretation of the provisions of these Regulations. It also provides that the decision of the Government on the interpretation of these Regulations shall be final and binding on the concerned parties. The Government of Maharashtra in the Urban Development Department, issued a circular dated 8.3.1995 in the form of a clarification under Regulation 62(3) of the Development Control Regulations,1991. The last paragraph of the circular, which is relevant, reads as follows :- “It is, therefore, clarified under the powers vested under Regulation 62(3) of the Development Control Regulations that TDR should be granted, if possession of the land has been delivered by the owner where he has not received part or full compensation under either MRTP Act, BMC Act, private negotiations or under any Act time being in force within 12 years prior to 14.12.1989. This decision of the Government 14 shall be final and shall be binding both on BMC and the applicant parties.” 13. Mr. Sakhare, learned Senior Counsel for the Corporation, contended that Regulation 62(3) only empowers the Government to interpret the provisions of the Regulations if any dispute arises, but it cannot issue any direction or circular. However, Mr. Chinoy,learned Senior Counsel pointed out that the Supreme Court has observed in para 49 in Laxminarayan R. Bhattad and Ors. vs. State of Maharashtra & Anr. AIR 2003 SC 3502 that the power of the State to issue such directions is undisputed. Therefore, the learned Counsel contended that it is not necessary to enter into the question whether the State Government could or could not issue such circulars or directions under Regulation 62(3). 14. Section 31(1) of the MRTP Act provides that the State Government may issue directions to the Planning Authority in respect of Development Plans and Section 154(1) provides that every Regional Board, Planning Authority and Development Authority shall carry out such directions or instructions as may be issued from time to time by the State Government for the efficient administration of the Act. This is repository of the powers of the State Government to issue necessary directions from time to time. However, Mr. Sakhare, learned Senior 15 Counsel for the petitioner vehemently contended that even if the State Government had powers to issue the circular, it could not have any application to the facts of the present case because the land had already vested in the Local or Planning Authority and the rights of the original owner were determined by the award of the Arbitrator passed in 1963 whereby the original owners could claim only two final plots and the compensation and nothing more. The two final plots were already allotted to them and the compensation amount was not claimed by them. Therefore, in lieu of that, compensation amount which was not claimed by them they could not claim any TDR on the basis of the said circular. On perusal of the said circular also, it becomes clear that it was not intended to make it applicable to the matters which had attained finality under the Bombay Town Planning act. From the directions given in the said circular as quoted above, it would be clear that the TDR should be granted if possession of the land has been delivered by the owner where he has not received part of the full compensation under either MRTP Act, the BMC Act, private negotiations or under any Act time being in force within 12 years prior to 14.12.1989. The learned Counsel pointed out that 14.12.1989 is the date when the draft Development Control Rules were notified. However, by the said circular, the Government fixed the cut-off date being 12 years prior to 14.12.1989. It shows that if the possession was delivered and compensation was not paid or received within 12 years prior to 14.12.1989, 16 the TDR could be granted to the original owner. If any transaction was finalised prior to 14.12.1989, this circular could not have been applicable. Secondly, it is material to note that it was never the claim of respondent Nos. 3 to 9 that they had delivered possession of the land within 12 years prior to 14.12.1989. In fact, they had made an application under Section 44 of MRTP Act seeking permission for development of the said land and that application was rejected by the Municipal Corporation under Section 45 of the said Act. Therefore, they had preferred an appeal before the Government under Section 47. Thus, it is the case of the respondents Nos. 3 to 9 that they are still in possession of the said land and, therefore, they cannot claim benefit of the TDR as per the said circular. 15. In Laxminarayan R.Bhattad & Ors. (supra), the question before the Supreme Court was as to whether the appellant therein could claim benefit of land potential in view of the compensation awarded in its favour by the Arbitrator. That case pertained to the Town Planning Scheme about a different area within the City of Bombay. In that case also, the Arbitrator had under the provisions of the MRTP Act awarded compensation and the land vested in the Planning Authority i.e. The Municipal Corporation. The Supreme Court considered the various provisions of the MRTP Act as well as the Development Control Regulations and the scheme itself. Sub-section (2) of Regulation 1 of the 17 Development Control Regulations For Greater Mumbai 1991 deals with “jurisdiction”. It reads as follows :- “(2) Jurisdiction – These Regulations apply to building activity and development work in areas under the entire jurisdiction of the Municipal Corporation of Greater Bombay (hereinafter called “the Corporation”). If there is a conflict between the requirements of thee Regulations and those of any other rules or bye-laws, these Regulations shall prevail: Provided, however, that in respect of areas included in a finally sanctioned Town Planning Scheme, the Scheme regulations shall prevail, if there is a conflict between the requirements of these Regulations and the scheme regulations.” In view of the proviso, in respect of the areas included in a finally sanctioned Town Planning Scheme, the scheme regulations shall prevail if there is a conflict between the requirements of the Development Control Regulations and the scheme regulations. It was noted in para 39 of the Judgment that as per the Special Regulation No.8 of the Town Planning Scheme requires no FSI benefit (TDR) could be granted in lieu of compensation in respect of any area of the original plot. In para 62, Their Lordships observed that a legal right to have an additional FSI or TDR can be claimed only in terms of statute or statutory regulations and not otherwise. In para 72, Their Lordships observed as follows :- 18 “72. It is now well settled that when there is a conflict between law and equity and former shall prevail. The legal right of the petitioners, if any,as o the day of filing of the Writ Petition having been lost in view of the subsequent event, namely, sanctioning of the Scheme by the State Government; the award of the Arbitrator as also the order of the Tribunal became final and conclusive and binding on all parties including the planning authority in terms of Section 73 and sub-section (2) of Section 79. Once a Scheme is approved, no deviation therefrom can be made for purposes other than referred to in the Scheme itself unless the same is amended or modified by the State Government in accordance with law.” Having considered the legal provisions and the Scheme, Their Lordships came to conclusion that the Scheme will prevail over any policy decision taken by the Corporation or by the State. The appeal preferred against the rejection of the claim to TDR by the original owner was dismissed accordingly. 16. As pointed out earlier, the concept of TDR was brought for the first time in the Development Control Regulations For