Case: THE CHENNAI METROPOLITAN DEVELOPMENT AUTHORITY REP. BY ITS MEMBER SECRETARY Vs. D. RAJAN DEV

an applicant accrues when the permission has been granted. Further, as a corollary, it can be said that the rates prevailing at the time of granting of permission are the rates which an applicant has to pay. The respondent/applicant cannot claim the benefit of the earlier guideline value existing prior to the date when approval was granted by the government. In our considered view, the respondent will have to pay FSI Premium charges based on the guideline value as existing on the date of grant of approval. 22. Learned Senior counsel for the appellant has placed reliance upon Chennai Municipal Development Authority v. Prestige Estates Projects Limited 2019 (10) Scale 78 . In Prestige Estates, despite the payment having been made by the builder on 28.03.2012, the Supreme Court held that the developer is liable to pay Premium FSI charges based on the revised guideline value which are applicable post 01.04.2012. In Prestige Estates, after referring to Usman Gani and other judgments, the Supreme Court held that the demand on account of Premium FSI charges arises only upon the grant of approval by the Government to avail Premium FSI. The ratio of the decision in Prestige Estates is squarely applicable to the present case. In the present case, since the sanction for revised plan was granted by the Government on 29.05.2012, the first respondent in the present case is liable to pay the Premium FSI charges based on the revised guideline value which came into force w.e.f. 01.04.2012. 23. Learned Senior counsel for the first respondent inter-alia contended that there was inordinate delay on the part of appellant- CMDA in processing the application and the first respondent cannot be burdened with extra charges on account of delay caused by the appellant. Learned Senior counsel further submitted that the application of the first respondent dated 04.05.2011 for revised proposal was returned after nine months on 10.02.2012 and the respondent cannot be blamed for the delay caused by the appellant in processing the application of the first respondent. This contention does not merit acceptance. The appellant-CMDA is a body entrusted with the task of examination and approval of multitude of building applications throughout the planning area. That apart, the appellant-CMDA is a single window system and it has to verify various documents with the connected Departments at various levels. The application was processed at various levels and it was sent to the departments like police, Fire, etc. for clearance. Considering the fact that different departments and agencies are involved with the process of approval, we feel that, there was no undue delay on the part of the appellant-CMDA or the State Government. As rightly pointed out by the learned Single Judge, the first respondent submitted the application after rectification of defects only on 24.02.2012 and within a period of one month, the application was placed before the meeting. Therefore, it cannot be said that there was undue delay on the part of the appellant-CMDA or Government to consider the first respondent?s application for approval of the revised plan. 24. In the impugned judgment, the Division Bench has relied upon Union of India and Others v. Dev Raj Gupta and Others (1991) 1 SCC 63 and Mahajan Industries Limited. The ratio of those decisions is not applicable to the case in hand as those decisions relate to application for conversion of the land and not building permission application. That apart, in those cases, there was a delay of more than three years in deciding the application. In the present case, as discussed above, there was no delay on the part of the appellant-CMDA or the Government to consider the first respondent?s application for approval. 25. As submitted by the learned Senior counsel for the appellant- CMDA, the conduct of the first respondent is also to be taken note of. After the levy of Premium FSI charges calling upon the first respondent to pay a sum of Rs.7,61,40,000/-, the first respondent submitted a representation on 19.07.2012 requesting to revise the Premium FSI charges by considering the guideline value prevailing as on the date of the application i.e. 04.05.2011. The said representation was rejected by the appellant-CMDA by its letter dated 31.08.2012 and the first respondent was directed to make payment of Premium FSI Charges. The first respondent was also informed that if the payment was not made within sixty days, the application will be returned. The first respondent?s further representation dated 14.12.2012 also came to be rejected. Thereafter, by letters dated 23.05.2013 and 14.06.2013, the first respondent had prayed for thirty days? time for remitting the Premium FSI charges as demanded by the appellant-CMDA. By communication dated 19.06.2013, the first respondent was granted time upto 15.07.2013 to pay Premium FSI charges. After so getting extension of time, the first respondent filed writ petition before the High Court challenging the order of CMDA dated 31.08.2012 and prayed for quashing the demand. It is to be pointed out that the learned Single Judge also commented on the conduct of first respondent in obtaining extension of time to remit the Premium FSI charges and thereafter, filing the writ petition before the High Court challenging the demand. 26. The Division Bench did not keep in view the well settled principle that no right accrued to the applicant-builder by mere filing of application for approval and the right accrues only after approval is granted by the Government/concerned authorities. The impugned judgment is contrary to the well settled principle that the applicant does not acquire any right under law till his application is considered and sanctioned. Regulation 36 clearly provides that the Premium FSI shall be allowed in specific areas only with the approval of the Government. Unless and until the Government grants approval, no right accrued to the first respondent. When the Government sanctioned the approval on 29.05.2012, the Division Bench erred in directing the appellant to calculate the FSI charges as per the guideline value as on 04.05.2011. The impugned judgment is therefore liable to be set aside.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]By reading of the above, it is seen that it is only forwarding of the proposal to the Government with recommendation for approval of the revised plan which is as per the procedure involved. Such forwarding of the proposal to the Government with recommendation for approval, does not create any right in favour of the respondent. In terms of Regulation 36, Premium FSI shall be allowed in specific areas as notified subject to guidelines with the approval of the Government and on collection of charges at the rates as may be prescribed by the authority. Thus, for the award of Premium FSI, inter-alia the conditions?collection of charges at the rates as may be prescribed by the authority?and ?approval of the Government?, are mandatory. The collection of FSI Premium charges is subject to the guidelines. The revised guideline came into force w.e.f. 01.04.2012. Be it noted that the first respondent?s application was considered and finally approval was granted by the Government on 29.05.2012 only after revised guideline came into force. At the time of granting approval by the Government on 29.05.2012, when the revised guideline was in force, the High Court ought not to have held that the guideline value as on 04.05.2011, that is, the date of application of the first respondent, should be considered for the purpose of calculating Premium FSI charges. The right would accrue to the first respondent only after the Government grants approval to the revised plan sanctioning the Premium FSI. Thus, the date on which the approval was granted by the Government i.e. 29.05.2012 ought to have been taken into consideration for calculating the Premium FSI charges17. It is well settled that no right accrues to an applicant until the application for approval is considered and sanctioned. The first respondent has given the proposal for revised building plan under Regulation 36 with a view to avail the benefit of Premium FSI. As pointed out earlier, the process of grant of Premium FSI is completed only after the grant of approval by the Government. Regulation 36 clearly provides that the Premium FSI shall be allowed in specific areas with the approval of the Government and the approval of the Government therefore is mandatory. Only when the Government grants approval, the right would accrue to the builder and not before that. Therefore, the date of approval is the crucial dateWe find merit in the submission of the appellant that the decision in Mahajan Industries is not applicable to the facts of the present case. Though the application was filed on 04.05.2011 and resubmitted after rectification of defects on 24.02.2012, the Government approved the revised proposal only on 29.05.2012. In the meanwhile, the revised guideline value was introduced for implementation w.e.f. 01.04.2012. As rightly held by the learned Single Judge that the first respondent/builder does not acquire any legal right until the plan is sanctioned21. Mere pendency of the application for planning permission does not create a vested right in an applicant. Right accrues only when the permission/sanction is granted by the Government/concerned authorities. This is because planning permission is accorded on the basis of scrutiny of application form and the concerned documents. There is always possibility of an application not meeting the requisite criteria for carrying out the proposed development and being rejected. Until and unless an application complete in all respect is approved, it remains a mere application and no right can be claimed on the basis of such an application. A proposal cannot be equated with an approval, otherwise the later will lose all significance. The obvious logical conclusion is that the right to an applicant accrues when the permission has been granted. Further, as a corollary, it can be said that the rates prevailing at the time of granting of permission are the rates which an applicant has to pay. The respondent/applicant cannot claim the benefit of the earlier guideline value existing prior to the date when approval was granted by the government. In our considered view, the respondent will have to pay FSI Premium charges based on the guideline value as existing on the date of grant of approvalIn Prestige Estates, despite the payment having been made by the builder on 28.03.2012, the Supreme Court held that the developer is liable to pay Premium FSI charges based on the revised guideline value which are applicable post 01.04.2012. In Prestige Estates, after referring to Usman Gani and other judgments, the Supreme Court held that the demand on account of Premium FSI charges arises only upon the grant of approval by the Government to avail Premium FSI. The ratio of the decision in Prestige Estates is squarely applicable to the present case. In the present case, since the sanction for revised plan was granted by the Government on 29.05.2012, the first respondent in the present case is liable to pay the Premium FSI charges based on the revised guideline value which came into force w.e.f. 01.04.201223. Learned Senior counsel for the first respondent inter-alia contended that there was inordinate delay on the part of appellant- CMDA in processing the application and the first respondent cannot be burdened with extra charges on account of delay caused by the appellant. Learned Senior counsel further submitted that the application of the first respondent dated 04.05.2011 for revised proposal was returned after nine months on 10.02.2012 and the respondent cannot be blamed for the delay caused by the appellant in processing the application of the first respondent. This contention does not merit acceptance. The appellant-CMDA is a body entrusted with the task of examination and approval of multitude of building applications throughout the planning area. That apart, the appellant-CMDA is a single window system and it has to verify various documents with the connected Departments at various levels. The application was processed at various levels and it was sent to the departments like police, Fire, etc. for clearance. Considering the fact that different departments and agencies are involved with the process of approval, we feel that, there was no undue delay on the part of the appellant-CMDA or the State Government. As rightly pointed out by the learned Single Judge, the first respondent submitted the application after rectification of defects only on 24.02.2012 and within a period of one month, the application was placed before the meeting. Therefore, it cannot be said that there was undue delay on the part of the appellant-CMDA or Government to consider the first respondent?s application for approval of the revised plan24. In the impugned judgment, the Division Bench has relied upon Union of India and Others v. Dev Raj Gupta and Others (1991) 1 SCC 63     and Mahajan Industries Limited. The ratio of those decisions is not applicable to the case in hand as those decisions relate to application for conversion of the land and not building permission application. That apart, in those cases, there was a delay of more than three years in deciding the application. In the present case, as discussed above, there was no delay on the part of the appellant-CMDA or the Government to consider the first respondent?s application for approval25. As submitted by the learned Senior counsel for the appellant- CMDA, the conduct of the first respondent is also to be taken note of. After the levy of Premium FSI charges calling upon the first respondent to pay a sum of Rs.7,61,40,000/-, the first respondent submitted a representation on 19.07.2012 requesting to revise the Premium FSI charges by considering the guideline value prevailing as on the date of the application i.e. 04.05.2011. The said representation was rejected by the appellant-CMDA by its letter dated 31.08.2012 and the first respondent was directed to make payment of Premium FSI Charges. The first respondent was also informed that if the payment was not made within sixty days, the application will be returned. The first respondent?s further representation dated 14.12.2012 also came to be rejected. Thereafter, by letters dated 23.05.2013 and 14.06.2013, the first respondent had prayed for thirty days? time for remitting the Premium FSI charges as demanded by the appellant-CMDA. By communication dated 19.06.2013, the first respondent was granted time upto 15.07.2013 to pay Premium FSI charges. After so getting extension of time, the first respondent filed writ petition before the High Court challenging the order of CMDA dated 31.08.2012 and prayed for quashing the demand. It is to be pointed out that the learned Single Judge also commented on the conduct of first respondent in obtaining extension of time to remit the Premium FSI charges and thereafter, filing the writ petition before the High Court challenging the demand26. The Division Bench did not keep in view the well settled principle that no right accrued to the applicant-builder by mere filing of application for approval and the right accrues only after approval is granted by the Government/concerned authorities. The impugned judgment is contrary to the well settled principle that the applicant does not acquire any right under law till his application is considered and sanctioned. Regulation 36 clearly provides that the Premium FSI shall be allowed in specific areas only with the approval of the Government. Unless and until the Government grants approval, no right accrued to the first respondent. When the Government sanctioned the approval on 29.05.2012, the Division Bench erred in directing the appellant to calculate the FSI charges as per the guideline value as on 04.05.2011. The impugned judgment is therefore liable to be set aside.