[1] IN IN IN THE THE THE HIG HIG HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT WRIT WRIT PETITION PETITION PETITION NO.323 OF 2000 NO.323 OF 2000 NO.323 OF 2000 Godrej & Boyce Manufacturing Company Limited, a company incorporated under the Indian Companies Act 1913, and having its registered office at Phirojshah Nagar, Vikhroli (W), Mumbai-400 079. .... Petitioners - Versus - 1. The State of Maharashtra 2. The Municipal Corporation of Greater Mumbai having its office at Mahapalika Marg, Mumbai-400 001. 3. The Municipal Commissioner, The Municipal Corporation of Greater Mumbai having his office at Mahapalika Marg, Mumbai-400 001. 4. The Executive Engineer, Development Plan, having his office at Municipal Corporation of Greater Mumbai, 4th Floor, Mahapalika Marg, Mumbai - 400 001. .... Respondents Sarvasri Arshad Hidayatullah, Senior Counsel, with Milind Sathe, Ms R. Tandon and Munaf Virjee, Advocates i/b M/s. D.S.K. Legal for the Petitioners. Ms Madhulata Kajale, Asst. Government Pleader, for the Respondent-State. Sarvasri A.Y. Sakhare, Senior Counsel, with Vinod Mahadik, Advocate for the Respondent- Corporation. WITH WITH WITH WRIT WRIT WRIT PETITION PETITION PETITION NO.795 OF 1996 NO.795 OF 1996 NO.795 OF 1996 [2] 1. Mrs. Jyotika B. Patel of Bombay, Indian Inhabitant and a duly constituted Attorney of the 2nd Petitioner, the Indian Hume Pipe Company Ltd., and having his office at 38, Cawasji Patel Street, 17, Kamer Building, 2nd Floor, Fort, Mumbai-400 023. 2. The Indian Hume Pipe Company Ltd., a Company registered under the provisions of the Companies Act, 1913 and deemed to be registered under the provisions of the Companies Act, 1956 and having its registered office at Construction House, 2nd Floor, Ballard Estate, Mumbai-400 023. .... Petitioners - Versus - The Municipal Corporation of Greater Mumbai, a statutory Corporation incorporation under the Bombay Municipal Act, 1888 and having its principal place of business and office at Mahapalika Bhavan, Mahapalika Marg, Mumbai-400 001. .... Respondents Shri Mahendra Ghelani, Advocate i/b M/s. Law Charter for the Petitioners. Sarvasri A.Y. Sakhare, Senior Counsel, with Vinod Mahadik, Advocate for the Respondent- Corporation. WRIT WRIT WRIT PETITION PETITION PETITION NO.381 OF 1998 NO.381 OF 1998 NO.381 OF 1998 1. Khetan Industries (Private) Limited, a company incorpo- rated under the Companies Act, 1956, and having its registered office at Plot No.219, 11th Road, Laalasis, Chembur, Mumbai-400 071. [3] 2. Mr. Mohan T. Kukreja of Mumbai Inhabitant, having his office at Laalasis, Plot No.219, 11th Road, Chembur, Mumbai-400 071. .... Petitioners - Versus - 1. The State of Maharashtra 2. The Municipal Corporation of Greater Mumbai having its office at Mahapalika Marg, Mumbai-400 001. 3. The Municipal Commissioner The Municipal Corporation of Greater Mumbai, having his office at Mahapalika Marg, Mumbai-400 001. 4. Deputy Chief Engineer, Development Plan II, 4th Floor, Annexe Building, Municipal Head Office, Mahapalika Marg, Fort, Mumbai-400 001. .... Respondents Sarvasri Shyam Diwan, Senior Counsel, with Kiran Desai i/b R.D. Suvarna, Advocates for the Petitioners. Ms Madhulata Kajale, Asst. Government Pleader, for the Respondent-State. Sarvasri A.Y. Sakhare, Senior Counsel, with Vinod Mahadik, Advocate for the Respondent- Corporation. WRIT WRIT WRIT PETITION PETITION PETITION NO.845 OF 1998 NO.845 OF 1998 NO.845 OF 1998 1. Godrej & Boyce Manufacturing Company Limited, a company incorporated under the Indian Companies Act 1956, and having its registered office at Phirojshah Nagar, Vikhroli (W), Mumbai-400 079. 2. Mr. Nayan A. Shah, of Mumbai Inhabitant having his office at Santacruz Mansion No.1, Premises No.7, 1st [4] Floor, Near Santacruz Bus Depot, Santacruz (East), Mumbai-400 055. .... Petitioners - Versus - 1. The State of Maharashtra 2. The Municipal Corporation of Greater Mumbai having its office at Mahapalika Marg, Mumbai-400 001. 3. The Municipal Commissioner, The Municipal Corporation of Greater Mumbai having his office at Mahapalika Marg, Mumbai-400 001. 4. The Executive Engineer, Development Plan, having his office at Municipal Corporation of Greater Mumbai, 4th Floor, Mahapalika Marg, Mumbai - 400 001. .... Respondents Sarvasri Arshad Hidayatullah, Senior Counsel, with Milind Sathe, Advocate i/b M/s. Anderson Legal for the Petitioners. Ms Madhulata Kajale, Asst. Government Pleader, for the Respondent-State. Sarvasri A.Y. Sakhare, Senior Counsel, with Vinod Mahadik, Advocate for the Respondent- Corporation. AND AND AND WRIT WRIT WRIT PETITION PETITION PETITION NO.2705 OF 1999 NO.2705 OF 1999 NO.2705 OF 1999 1. Godrej & Boyce Manufacturing Company Limited, a company incorporated under the Indian Companies Act 1956, and having its registered office at Phirojshah Nagar, Vikhroli (W), Mumbai-400 079. 2. Mr. Nayan A. Shah, of Mumbai Inhabitant having his [5] office at Santacruz Mansion No.1, Premises No.7, 1st Floor, Near Santacruz Bus Depot, Santacruz (East), Mumbai-400 055. .... Petitioners - Versus - 1. The State of Maharashtra 2. The Municipal Corporation of Greater Mumbai having its office at Mahapalika Marg, Mumbai-400 001. 3. The Municipal Commissioner, The Municipal Corporation of Greater Mumbai having his office at Mahapalika Marg, Mumbai-400 001. 4. The Executive Engineer, Development Plan, having his office at Municipal Corporation of Greater Mumbai, 4th Floor, Mahapalika Marg, Mumbai - 400 001. .... Respondents Sarvasri Arshad Hidayatullah, Senior Counsel, with Milind Sathe, Advocate i/b M/s. Anderson Legal for the Petitioners. Ms Madhulata Kajale, Asst. Government Pleader, for the Respondent-State. Sarvasri A.Y. Sakhare, Senior Counsel, with Vinod Mahadik, Advocate for the Respondent- Corporation. CORAM: CORAM: CORAM: R.M.S. KHANDEPARKAR & V.M. KANADE, JJ. DATED: DATED: DATED: OCTOBER 18, 2005 JUDGMENT JUDGMENT JUDGMENT (Per (Per (Per R.M.S.Khandeparkar, J.): R.M.S.Khandeparkar, J.): R.M.S.Khandeparkar, J.): 1. Heard. Perused the records. 2. In all these petitions, common questions of law and [6] facts arise and, therefore, they were heard together and are being disposed of by this common judgment. 3. In all these petitions there is challenge to the circular dated 9-4-1996 issued by the Chief Engineer (Dev.Plan) of the Municipal Corporation of Greater Mumbai in relation to the Floor Space Index (FSI) to be availed under Clause 6 of Appendix VII of the Development Control Regulations For Greater Bombay, 1991, hereinafter called as "the said Regulations" and for consequential reliefs. The challenge to the said circular is two-fold: firstly, that it is beyond the powers of the concerned authority to restrict the entitlement under the said provisions of law to any percentage of the area of construction and, secondly, it cannot be made applicable to the development/construction of amenities approved or constructed in the surrendered plot earlier to the date of issuance of the said circular. 4. A circular dated 9-4-1996 came to be issued by the Chief Engineer (Dev.Plan) on the subject of grant of ADR in lieu of construction of amenity as per the provisions of the Regulation 34 read with Clause 6 of the said Appendix VII of the said Regulations. The said circular prescribed percentage of FSI which would be made available in terms of Clause 6 of the Appendix VII of the said Regulations for different types of amenities in [7] the surrendered plot. It provides for 100% FSI in case of built-up area and amenities like municipal transport garage, general hospital, fire station, auditorium, electrical crematorium, municipal workshop, municipal primary school, municipal retail market, town duty office and office building, provided that such buildings are constructed and the occupancy certificate issued as per the rules and further that such buildings vest in the BMC free of cost subject to other conditions enumerated in the said circular. The circular further provides that in case of open space amenities like garden, playground, R.G. parking, open spaces and burial ground, and in case of construction of D.P. roads, widening of existing roads, etc., the FSI which could be availed under Clause 6 of the Appendix VII of the said Regulations shall be to the extent of maximum of 15% of the area of the amenities and shall be subject to the conditions enumerated under the circular. These clauses restricting the availability of the FSI to 15% in relation to specified amenities is under challenge in the matters in hand. It appears that during the pendency of these petitions, another circular came to be issued increasing the percentage to 25% from 15% in case of said amenities. 5. It is the contention of the petitioners that the right assured to the owner or the developer under Clause 6 of Appendix VII in relation the FSI is "equivalent to [8] the area of construction/development done by the owner or the developer". Though Clause 6 speaks of discretion to the Commissioner in the matter of grant of FSI, it is the discretion coupled with the duty and therefore the word "may" in the said Clause 6 has to be read as "shall" and therefore such a power cannot be whittled down by administrative circulars restricting the availability of FSI to any percentage contrary to the provisions of law itself. The administrative circular which is in the form of public notice can only be in the nature of guidelines and do not enjoy the force of law nor can be enforceable as the law. The Clause 6 does not empower the Commissioner to issue mandatory circulars like the one issued on 9-4-1996. There is no rationale behind restricting 15% of the total area in case of amenities like construction of road or garden and such a discrimination between the construction of the amenities in the form of road from other type of construction like buildings is violative of Article 14 of the Constitution. It is also the contention on behalf of the petitioners that there is total arbitrariness on the part of the Commissioner in restricting the FSI to 15% in relation to the amenities in question. Though there is no amendment carried out to the petitions, they are also seeking to challenge the subsequent circulars dated 5-4-2003 issued on the same lines but enhancing the percentage to 25% instead of 15% under the earlier circular. According to the [9] petitioners, the word "equivalent" in Clause 6 has to be read as "equal to". Lastly, it is the contention that the legitimate expectation of the owner under Clause 6 of the said Regulations is that if he satisfies the conditions therein, he would be eligible for 100% grant of further DR in the form of FSI equivalent to the area of construction and on such a legitimate expectation having completed the construction of the amenity, pursuant to the approval granted much prior to the issuance of such circular, the same cannot be restricted to 15% or 25% as the respondents are estopped from acting to the detriment of the interest of the petitioners after having carried out the construction of the amenities in terms of the approval granted much prior to the date of issuance of circular. Reliance is sought to be placed in the decisions of State (Delhi State (Delhi State (Delhi Admn.) Admn.) Admn.) v. I.K. Nangia, v. I.K. Nangia, v. I.K. Nangia, reported in (1980) 1 SCC 258 = AIR 1979 Sc 1977, State of the Uttar Pradesh v. State of the Uttar Pradesh v. State of the Uttar Pradesh v. Jogendra Jogendra Jogendra Singh, Singh, Singh, reported in (1964) 2 SCR 197 = AIR 1963 SC 1618, Sardar Govindrao and others v. The State of Sardar Govindrao and others v. The State of Sardar Govindrao and others v. The State of Madhya Madhya Madhya Pradesh, Pradesh, Pradesh, reported in AIR 1965 SC 1222, Gell v. Gell v. Gell v. Taja Taja Taja Noora, Noora, Noora, reported in 27 Indian High Court Reports Bom. 307, Kerala Financial Corporation v. Commissioner Kerala Financial Corporation v. Commissioner Kerala Financial Corporation v. Commissioner of of of Income Tax, Income Tax, Income Tax, reported in (1994) 4 SCC 375, State Bank State Bank State Bank of of of Travancore v. Commissioner of Income Tax, Kerala, Travancore v. Commissioner of Income Tax, Kerala, Travancore v. Commissioner of Income Tax, Kerala, reported in (1986) Vol.158 ITR 102, State of M.P. and State of M.P. and State of M.P. and another another another v. Municipal Corporation, Indore, v. Municipal Corporation, Indore, v. Municipal Corporation, Indore, reported in 1987 (Supp) SCC 748, C.L. Verma v. State of Madhya C.L. Verma v. State of Madhya C.L. Verma v. State of Madhya [10] Pradesh Pradesh Pradesh and another, and another, and another, reported in 1989 Supp (2) SCC 437, Century Century Century Spinning & Manufacturing Co. Ltd. and another Spinning & Manufacturing Co. Ltd. and another Spinning & Manufacturing Co. Ltd. and another v.v.v. The Ulhasnagar Municipal Council and another, The Ulhasnagar Municipal Council and another, The Ulhasnagar Municipal Council and another, reported in AIR 1971 SC 1021, Union of India and others Union of India and others Union of India and others v.v.v. Godfrey Philips India Ltd., Godfrey Philips India Ltd., Godfrey Philips India Ltd., reported in AIR 1986 SC 806, D.R. Nim v. Union of India, D.R. Nim v. Union of India, D.R. Nim v. Union of India, reported in AIR 1967 SC 1301 and Banque Nationale De Paris v. Commissioner Banque Nationale De Paris v. Commissioner Banque Nationale De Paris v. Commissioner of of of Income-Tax, Income-Tax, Income-Tax, reported in 1999 ITR Vol.237 518. 6. On the other hand, it is the contention of the respondents that it is the discretion of the Commissioner or the appropriate authority to grant the development right in the form of FSI for the development or construction in relation to the amenity on the surrendered plot. The term "equivalent to" means equal in value and therefore the petitioners’ insistence for development right in the form of FSI equal to the area of the construction/development is not correct though the petitioners may be entitled for such right equal to the value of the total area of construction/development of the amenity. Such valuation of development right is done by the respondents on the basis of the prevailing rate of construction/development as specified in the affidavit in reply of Shri Balachandran Radhakrishnan, Assistant Engineer, dated 5-9-2005. It is their case that taking into consideration the prevailing rate of construction/development and the other relevant considerations, the respondents have fixed up a [11] percentage of the area of the constructed amenities for which the developer would be entitled to DRC under Regulation 34 r/w Clause 6 of the Appendix VII of the said Regulations. The differentiation between various kinds of amenities has been done on rational basis as any contrary decision would lead to anomalous and discriminatory situation whereby a person constructing a road would seek to avail the same FSI as a person constructing a building over the equal area but has made a much higher investment in comparison to the investment by the person constructing the road over the equal area. They have also drawn attention to the decision of the Apex Court in the matter of Pune Municipal Corporation Pune Municipal Corporation Pune Municipal Corporation and and and another v. Promoters and Builders Association and another v. Promoters and Builders Association and another v. Promoters and Builders Association and another, another, another, reported in (2004) 10 SCC 796. According to the respondents, there is neither arbitrariness nor unreasonableness in fixing such different percentage for availing the FSI under Clause 6 of the said Appendix VII of the said Regulations depending upon the investment by the owner or developer in relation to the amenities provided in the surrendered plot. 7. Upon hearing the learned Advocates for the parties, two points which arise for consideration are as under:- "(i) Whether the Commissioner or the competent authority is empowered under Clause 6 of Appendix VII of the said [12] Regulations to restrict the availability of the FSI to 15% or 25% or to any other percentage in relation to certain amenities as against 100% FSI for the amenities like buildings, hospitals, etc.? (ii) Whether the circular in question and the restriction of percentage regarding the availability of FSI in relation to the development or construction of amenity in surrendered plot would apply to such development which was completed or is carried out pursuant to the permission granted for the same, prior to issuance of the said circular? 8. The Maharashtra Regional and Town Planning Act, 1966 was brought into force to make provisions for planning and development and use of the land in the regions identified for that purpose and to ensure that the town planning schemes are made in proper manner and effectively executed and for that purpose to make necessary provision for acquisition of the land wherever required for public purposes in relation to the plans and matters connected with the implementation of the said Act and the schemes thereunder. [13] 9. In exercise of the powers conferred under Section 31(1) read with Section 22(m) of the said Act, the Government sanctioned the said Regulations and the same came into force with effect from 25-3-1991. 10. With the idea of reducing the financial burden upon the local authority in exercise of their obligations and duties pertaining to construction and maintenance of the road, including the matters pertaining to the road widening, it was provided under Regulation 33(1) that the Commissioner may permit additional floor space index on the area required for road widening or for construction of new roads proposed under the development plan or those proposed under the Bombay Municipal Corporation Act, 1888, if the owner of such land surrenders such land for road widening or new road construction without claiming any compensation in lieu thereof and hands over the same to the Corporation free of encumbrances to the satisfaction of the Commissioner. 11. With a view to acquire the plots of land which are reserved for the public purposes in the development plan free of cost from the owners, the said Regulations have provided for separation of development potential of such plots of land and to make the same available for utilisation thereof by awarding TDR in the form of FSI to the owner who surrenders such land to the planning [14] authority and such right is available to the extent and as per the conditions set out in Regulation 34 read with Appendix VII of the said Regulations. 12. The Appendix VII of the said Regulations which deals with the Regulations for grant of the TDRs to the owners/developers comprises of different clauses and the clauses relevant for the decision in the matter in hand read thus:- "1. The owner (or lessee) of a plot of land which is reserved for a public purpose in the development plan and for additional amenities deemed to be reservations provided in accordance with these Regulations, excepting in the case of an existing or retention user or to any required compulsory or recreational open space, shall be eligible for the award of Transferable Development Rights (TDRs) in the form of Floor Space Index (FSI) to the extent and on the conditions set out below. Such award will entitle the owner of the land to FSI in the form of a Development Right, Certificate (DRC) which he may use himself or transfer to any other person. [15] 2. Subject to the Regulation 1 above, where a plot of land is reserved for any purpose specified in section 22 of Maharashtra Regional and Town Planning Act, 1966, the owner will be eligible for Development Rights (DRs) to the extent stipulated in Regulations 5 and 6 in this Appendix had the land been not so reserved, after the said land is surrendered free of cost as stipulated in Regulation 5 in this Appendix, and after completion of the development or construction as in Regulation in this Appendix if he undertakes the same. 3. ...... 4. ...... 5. The built-up area for the purpose of FSI credit in the form of a DRC shall be equal to the gross area of the reserved plot to be surrendered and will proportionately increase or decrease according to the permissible FSI of the zone where from the TDR has originated. 6. When an owner or lessee also develops or constructs the amenity on [16] the surrendered plot at his own cost subject to such stipulation as may be prescribed by the Commissioner or the appropriate authority, as the case may be and to their satisfaction and hands over the said developed/constructed amenity to the Commissioner/appropriate authority, free of cost, he may be granted by the Commissioner a further DR in the form of FSI equivalent to the area of the construction/development done by him, utilisation of which etc. will be subject to the Regulations contained in this Appendix. 7 to 14 ...... 15. DRs will be granted and DRCs issued only after the reserved land is surrendered to the Corporation, where it is Appropriate Authority, otherwise to the State Government, as the case may be, free of cost and free of encumbrances, after the owner or lessee has levelled the land to the surrendering ground level and after he has constructed a 1.5m. high compound wall (or at a height stipulated by the [17] Commissioner) with a gate at the cost of the owner, and to the satisfaction of the Commissioner, or the State Government (where the Corporation is not the appropriate authority). The cost of any transaction involved shall be borne by the owner or lessee. 16. With an application for development permission, where an owner seeks utilisation of DRs, he shall submit the DRC to the Commissioner who shall endorse thereon in writing, in figures and words, the quantum of the DRC proposed to be utilised, before granting development permission, and when the development is complete, the Commissioner shall endorse on the DRC in writing, in figures and words, the quantum of DRs actually utilised and the balance remaining thereafter, if any, before issue of occupation certificate. 17. ...... 18. The surrendered reserved land for which a DRC is to be issued shall vest in the Corporation or the State [18] Government, if the appropriate authority is other than the Corporation, and such land shall be transferred in the City Survey Records in the name of the Corporation or the State Government, as the case may be, and shall vest absolutely in the Corporation or the State Government. The surrendered land, so transferred to the State Government in respect of which the Corporation is not the appropriate authority, may, on application, thereafter be allotted by the State Government in favour of the concerned authority, which may be a State or Central Government Department, authority or organisation on appropriate terms as may be decided by the State Government. 19. ......" 13. The Regulation 2 of the said Regulations defines the various terms and expressions used in the said Regulations. The Regulation 2(7) defines the term "Amenity" to mean roads, streets, open spaces, parks, recreational grounds, playgrounds, gardens, water supply, electric supply, street lighting, sewerage, drainage, public works and other utilities, services and [19] conveniences. 14. The Regulation 63 of the said Regulations deals with the subject of delegation of powers and provides that except where the Commissioner’s special permission is expressly stipulated, the powers or functions vested in him by the said Regulations may be delegated to any municipal official under his control, subject to his revision if necessary and to such conditions and limitations, if any, as he may prescribe and in each of the said Regulations, the word "Commissioner" shall, to the extent to which any municipal official is so empowered, be deemed to include such official. The powers exercisable by the Commissioner under the various clauses of Regulation 34 are delegated to the Chief Engineer (Dev.Plan). 15. The Regulation 64 of the said Regulations deals with the subject of discretionary powers and it reads thus:- "(a) In conformity with the intent and spirit of these Regulations, the Commissioner may:- (i) decide on matters where it is alleged that there is an error in any order, requirement, decision, determination made by any municipal officer under delegation of powers in Regulation or interpretation in [20] the application of these Regulations; (ii) interpret the provisions of these Regulations where a street layout actually on the ground varies from the street layout shown on the development plan; (iii) modify the limit of a zone where