CHENNAI METROPOLITAN DEVELOPMENT AUTHORITY REPRESENTED BY ITS MEMBER SECRETARY versus D. RAJAN DEV AND OTHERS
[2019] 16 S.C.R. 1095, Supreme Court of India, 2019
Outcome: Appeal(s) allowed (Granted)
Segment: Arguments
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CHENNAI METROPOLITAN DEVELOPMENT
AUTHORITY REPRESENTED BY
ITS MEMBER SECRETARY
v.
D. RAJAN DEV AND OTHERS
(Civil Appeal No. 9336 of 2019)
December 11, 2019
[R. BANUMATHI, A. S. BOPANNA
AND HRISHIKESH ROY, JJ.]
Housing – Residential-cum-Shopping Building – Calculation
of Premium FSI charges – First Respondent, a developer was
carrying on construction activities on basis of a planning
permission granted to him – Thereafter, the State Government
introduced a scheme called ‘Premium FSI Scheme’, wherein the
Government permitted any builder willing to pay FSI charges to
increase FSI above the normally permitted FSI – On 04.05.2011,
the first respondent made an application with revised proposal for
permission to have additional FSI area – The revised plan of the
first respondent was considered and forwarded to the Government
with recommendation for approval – In the meanwhile, the
Registration Department revised and notified the revised guideline
value w.e.f. 01.04.2012 as per which the guideline value was
increased from Rs.1650/- per sq.ft. to Rs.5,000/- per sq.ft. – On
29.05.2012, the Government granted approval to the revised plan
of the first respondent – The premium was levied as Rs.7,61,
40,000/- – The respondent made the representation against the
calculation and also regarding the area, however, the same was
rejected – Writ petition – First Respondent contended that the date
of application should be considered for the purpose of calculating
Premium FSI
charges and not as per the guideline value prevailing
on the date of approval of the plan – The writ petition was
dismissed by the Single Judge of the High Court  –  However, the
Division Bench of the High Court set aside the order of the Single
Judge – On appeal, held: No right accrues to the builder by mere
submission of a plan for construction of a building which has not
been sanctioned by the Competent Authority – The rates prevailing
at the time of granting of permission are the rates which an
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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 – Therefore, the
respondent will have to pay FSI Premium charges based on the
guideline value as existing on the date of grant of approval – When
the Government sanctioned the approval on 29.05.2012, the
Division Bench of the High Court erred in directing the appellant
to calculate the FSI charges as per the guideline value as on
04.05.2011 – The impugned Judgment of the Division Bench of
the High Court, therefore, set aside.
Allowing the appeal, the Court
HELD: 1. In the impugned judgment, the Division Bench
of the High Court has relied upon Union of India and Others v.
Dev Raj Gupta and Others and Union of India and another v.
Mahajan Industries Ltd. and another. 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, there was no delay on the part of the appellant-
CMDA or the Government to consider the first respondent’s
application for approval. [Para 24] [1108-G-H]
2. As submitted by 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
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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 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. [Para
25] [1109-A-E]
3. 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. [Para 26] [1109-E-G]
Usman Gani J. Khatri of Bombay v. Cantonment Board
and Others (1992) 3 SCC 455 : [1992] 3 SCR 1 ;
Chennai Metropolitan Development Authority
represented by its Member-Secretary and another v.
Prestige Estates Project Ltd. (2019) 10 SCALE 78 –
relied on.
Union of India and another v. Mahajan Industries Ltd.
and another (2005) 10 SCC 203 ;  Union of India and
Others v. Dev Raj Gupta and Others (1991) 1 SCC
63 : [1990] 2 Suppl. SCR 300 – held inapplicable.
State of W.B. v. Terra Firma Investments & Trading Pvt.
Ltd. (1995) 1 SCC 125 : [1994] 5 Suppl. SCR  485 –
referred to.
CHENNAI METROPOLITAN DEVELOPMENT AUTH. REP. BY
ITS MEMBER SEC. v. D. RAJAN DEV
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Case Law Reference
(2005) 10 SCC 203
held inapplicable
Para 8, 9, 20
[1992] 3 SCR  1
relied on
Paras 9, 18
[1994] 5 Suppl. SCR 485
referred to
Para 19
(2019) 10 Scale 78
relied on
Paras 9, 22
[1990] 2 Suppl. SCR 300
held inapplicable
Paras 9, 24
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 9336
of 2019.
From the Judgment and Order dated 03.08.2016 of the High
Court of  Judicature at Madras in W.A. No. 2376 of 2013.
Jayanth Muthuraj, Sr. Adv., Ms. A. Jaswathi, K. V. Vijayakumar,
Advs. for the Appellant.
K.V. Viswanathan, Sr. Adv., Gagan Gupta, K.V. Dhanapalan,
Vinodh Kanna B., Lenin Rajasehar, Advs. for the Respondents.
The Judgment of the Court was delivered by
R. BANUMATHI, J.
1. Leave granted.
2. This appeal arises out of the impugned judgment dated
03.08.2016 passed by the Division Bench of the High Court of Madras
in W.A. No. 2376 of 2013 filed by the first respondent in and by which
the Division Bench set aside the order of Single Judge and allowed the
writ appeal thereby directing the appellant Chennai Metropolitan
Development Authority (CMDA) to calculate the Premium FSI charges
at the rate prevalent as on the date of filing of application by the first
respondent Rajan Dev.
3. Respondent No.1 is a developer carrying on construction
activities under the name and style of M/s. Ben Foundation. He
submitted an application dated 07.05.2009 for planning permission to
construct a residential-cum-shopping building
at Survey Nos. 223, 224
and 225, Padi Village, Padi Kuppam Road, Chennai for 196 dwelling
units. He proposed construction of Block A – Stilt floor(part) + GF(part)
+ 6 floors + 7th floor part; Block B and C – Stilt + 6 floors and Block
D – Stilt + 7 floors with floor area of 14082.26 sq.mt. and height of
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22.80 mt. The planning permission was granted by the appellant CMDA
on 01.07.2009. Initially, the sanction was mistakenly accorded for 14889
sq.mts. (1.84 FSI) instead of 14164 sq.mts. (1.75 FSI). The excess area
for which sanction was wrongly granted is 725 sq.mts. While the
construction was in progress, on 09.09.2009 vide G.O.Ms.No.163-
Housing and Urban Development, respondent No.2-Government of
Tamil Nadu introduced a scheme called “Premium FSI Scheme”,
wherein the Government permitted any builder willing to pay FSI
charges to increase FSI above the normally permitted FSI.  Additional
benefit by way of Premium FSI accrued to the developer is related to
the proportionate land extent.  As per the guidelines for Premium FSI,
the amount payable by the applicant towards the Premium FSI charge
shall be equivalent to the cost of the proportionate land as per the
Guideline value of the Registration Department. On 04.05.2011, the first
respondent made an application along with revised proposal for
permission to have additional FSI area of 11,860 sq.ft. (= 1102 sq. mt.)
under the “Premium FSI Scheme” for extra fourteen dwelling units i.e.
one floor each in two blocks. The said application was returned by the
appellant on 10.02.2012 with the direction to furnish revised plan for
rectifying sixteen defects as pointed out by the appellant. The first
respondent submitted revised plans on 24.02.2012. The appellant-CMDA
vide its letter dated 30.03.2012 forwarded the
revised plan to the
Government seeking to accord approval to the recommendation of the
Multi-storeyed building panel and for issue of planning permission. In
the meantime, the State Government revised the guideline value of the
land w.e.f. 01.04.2012.
4. While the application of the first respondent for revised
proposal was pending, the guideline value of the land was revised w.e.f.
01.04.2012 from Rs.1,650/- per sq.ft. to Rs.5,000/- per sq.ft. for the
area which the first respondent has put up construction.  After inspection
of the site and recommendation of the multi-storeyed building panel,
on 29.05.2012, the Government granted approval for the Premium FSI.
Pursuant to the sanction granted by the Government, the appellant-
CMDA vide letter dated 02.07.2012 called upon the first respondent to
remit “Premium FSI Charges” quantified at Rs.7,96,50,000/- for 1479.81
sq.mts. of the land area based on the revised guideline value of the
property as revised w.e.f. 01.04.2012 by the Government and as
provided at the time of the approval for the proposed construction.
CHENNAI METROPOLITAN DEVELOPMENT AUTH. REP. BY
ITS MEMBER SEC. v. D. RAJAN DEV [R. BANUMATHI, J.]
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5. Vide letter dated 19.07.2012, the first respondent raised
objections to the aforesaid calculation and also as regards the area. The
first respondent submitted that the first respondent originally proposed
to construct 14,889 sq.mts. of built up area of an extent of land of
8093.64 sq.mts.  It was stated that the projected FSI at 1.74 by adopting
the total built up area was calculated as 14089 sq.mts. as against 14,889
sq.mts. and the same was a human error and the same led to all the
confusion. The first respondent has also raised objection stating that
he made the application during May, 2011 itself and that he may be
allowed to make payment of “Premium FSI Charges” by adopting the
guideline value existed on both the dates of their application (04.05.2011)
and the approval by the CMDA panel (30.03.2012). In the
representation, the first respondent stated that they are ready to pay
the “Premium FSI Charges” for both the projected built up area of 800
sq.mt. in the already approved plan and for the proposed built up area
of 1102 sq.mts. (proposed extra FSI of 0.24) by adopting the guideline
value existed on the date of their application i.e. 04.05.2011. The said
representation was rejected by the CMDA vide letter dated 31.08.2012.
The appellant by its letter dated 19.07.2012 modified the revised
“Premium FSI Charges” for 1479.81 sq.mts. of the land area from
Rs.7,96,50,000/- to Rs.7,61,40,000/-. By the time the
plan was
sanctioned, the guideline value had increased from Rs.1,650/- per sq.ft.
to Rs.5,000/- per sq.ft.  As per the revised guideline, the Premium FSI
charges were calculated at the rate of Rs.5,000/- per sq.ft. and the
same was quantified at Rs.7,61,05,480/-.
6. The first respondent made further representation dated
14.12.2012 requesting the appellant-CMDA to calculate the “Premium
FSI Charges” taking into account the guideline value prevailing as on
the date on which the application was submitted and not to levy
“Premium FSI Charges” as per the revised guideline value.  The first
respondent also requested to deduct all balcony and duct wall area
which is within the limit of 10% allowance. The representation made
by the first respondent requesting for reduction of “Premium FSI
Charges” was rejected by the appellant-CMDA by order dated
19.04.2013, affirming its earlier order dated 31.08.2012.  By its letters
dated 23.05.2013 and 14.06.2013, first respondent sought for further
thirty days’ time for remitting the Premium FSI charges as demanded
by the appellant. By communication dated 19.06.2013, the appellant-
CMDA granted time till 15.07.2013 to pay Premium FSI charges.
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7. After so taking time, the first respondent filed the writ petition
in WP No.18238 of 2013 before the Madras High Court.  During the
pendency of the writ petition, construction of 196 dwelling units was
completed and a partial completion certificate dated 17.06.2013 was
granted.  The learned Single Judge dismissed the writ petition by holding
that the first respondent is liable to pay the “Premium FSI Charges”
as per the guideline value prevailing on the date of approval of the plan.
The learned Single Judge held that the builder would not acquire any
right by merely submitting application for building plan and the right to
the builder would accrue only after the approval of the plan.  The
learned Single Judge also held that there was no undue delay on the
part of CMDA or the second respondent-Government in disposing of
the application of the first respondent.
8. Being aggrieved by the dismissal of the writ petition, the first
respondent preferred the writ appeal before the Division Bench which
came to be allowed by the impugned judgment.  Relying upon Union
of India and another v. Mahajan Industries Ltd. and another
(2005) 10 SCC 203, the Division Bench held that the appellant-CMDA
is entitled to calculate levy of “Premium FSI Charges” taking into
account the guideline value prevalent as on the date of the application
for approval of the additional construction and not from the date on
which the approval is being granted. During the pendency of the
writ
appeal, an amount of Rs.3,80,00,000/- was deposited by the first
respondent pursuant to the order dated 17.02.2014 passed by the
Division Bench.  A provisional completion certificate dated 16.10.2014
was granted for a total of 210 dwelling units.  Being aggrieved, the
appellant-CMDA has preferred this appeal.
9. Mr. Jayanth Muthuraj, learned Senior counsel appearing for
the appellant-CMDA submitted that under the “Premium FSI Scheme”,
the application was returned for rectification of defects on 10.02.2012
and the first respondent resubmitted the application on 25.02.2012.
Placing reliance upon Chennai Metropolitan Development Authority
represented by its Member-Secretary and another v. Prestige Estates
Project Ltd. 2019 (10) SCALE 78, it was submitted that the crucial
date for determining the applicable rate for Premium FSI Charges is
the date on which the authority grants planning permission. It was
submitted that mere pendency of the application or any payment made
does not create any right under law in favour of the applicant till his
application is considered and sanction is granted as laid down by the
CHENNAI METROPOLITAN DEVELOPMENT AUTH. REP. BY
ITS MEMBER SEC. v. D. RAJAN DEV [R. BANUMATHI, J.]
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Supreme Court in Usman Gani J. Khatri of Bombay v. Cantonment
Board and others (1992) 3 SCC 455.  The learned Senior counsel
submitted that the judgments relied upon by the Division Bench viz.
Union of India and others v. Dev Raj Gupta and others (1991) 1
SCC 63 and Union of India and another v. Mahajan Industries
Ltd. and another (2005) 10 SCC 203 are not applicable to the case
in hand as both the judgments deal with the application for conversion
and not application for building permission.  The learned Senior counsel
further submitted that the first respondent being an experienced builder
with for more than three decades experience, is well aware of the
procedure to be followed in making an application seeking planning
permission, but had deliberately filed a defective application and
therefore, the first respondent is not right in contending that there was
delay on the part of the appellant-CMDA in processing the application.
10. Per contra, reiterating the findings of the Division Bench, Mr.
K.V. Vishwanathan, learned Senior counsel appearing for the first
respondent submitted that as rightly held by the Division Bench that
the crucial date for determining Premium FSI has to be the date of
receipt of the application by the first respondent.  It was submitted that
the first respondent has submitted the application for permission to have
additional FSI under the “Premium FSI Scheme” way back on
04.05.2011 and the
same was returned on 10.02.2012 by the appellant
for rectifying the defects nearly after a delay of nine months.  It was
further submitted that the application of the first respondent was pending
consideration for quite some time with the appellant-CMDA and the
Multi-Storeyed Building Panel discussed the application of the first
respondent and forwarded the proposal to the Government with
recommendation for approval even on 30.03.2012.  The learned Senior
counsel further submitted that the Division Bench of the High Court
rightly held that the FSI charges is payable on the date of filing of the
application for conversion and not on the date of the approval and the
impugned judgment warrants no interference.
11. We have considered the submissions and carefully perused
the impugned judgment and other materials on record. The point falling
for consideration is whether the High Court was right in holding that
the Premium FSI charges are payable only as per the pre-revised
guideline value as on 04.05.2011 i.e. the date of filing of application
with revised plan, by the first respondent?
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12. On 07.05.2009, the first respondent submitted an application
for construction of residential-cum-shopping complex at Padi Village,
Padi Kuppam Road, Chennai. The planning permission was granted for
the original plan by the appellant-CMDA on 01.07.2009. When the
construction was in progress, the Government of Tamil Nadu introduced
the “Premium FSI (Floor space Index) Scheme” vide G.O.Ms.No.163,
Housing and Urban Development (UD-I) dated 09.09.2009 as per
which the Government permitted willing builders to increase FSI above
the normally permitted FSI subject to a maximum of one relating the
same to the road width parameters by paying premium FSI charges.
13. Regulation 36 deals with “Premium FSI”, which reads as
under:-
“36. Premium FSI:- The Authority may allow Premium FSI over
and above the normally allowable FSI subject to a maximum of
1 (one) relating the same to the road width parameters as
follows:-
Serial
Road width
Premium FSI
Number
(% of normally
allowable FSI)
(i)
18 meters and above
40%
(60’ and above)
(ii)
12 meters – below
30%
18 meters(40’ – below 60’)
(iii)
9 meters – below 12 meters
(30’ – below 40’)
20%
The premium FSI shall be allowed in specific areas as may be
notified, subject to Guidelines and on collection of charge at the rates
as may be prescribed by the Authority with the approval of the
Government. The amount so collected towards the award of Premium
FSI shall be remitted into the Government account to be allotted
separately
for the purpose for utilizing it for infrastructure development
in that area as may be directed by the Government.”
14. The first respondent sought to avail the benefits of Premium
FSI and submitted an application on 04.05.2011 seeking approval of
additional FSI under the Premium FSI Scheme. The said application
was returned by the appellant-CMDA on 10.02.2012 for rectification
CHENNAI METROPOLITAN DEVELOPMENT AUTH. REP. BY
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of defects. Thereafter, on 24.02.2012, first respondent submitted the
revised plan after rectification of the defects.
15. The Multi-Storeyed Building Panel considered the revised
plan of the first respondent and the appellant-CMDA by its letter dated
30.03.2012 forwarded the proposal to the Government with
recommendation for approval subject to the conditions indicated thereon.
In the meanwhile, the Registration Department revised and notified the
revised guideline value w.e.f. 01.04.2012 as per which the guideline value
of Padi Kuppam Road was increased from Rs.1,650/- per sq.ft. to
Rs.5,000/- per sq.ft.  On 29.05.2012, the Government granted approval
to the revised plan of the first respondent. Based upon the revised
guideline value, the appellant-CMDA by its letter dated 02.07.2012
informed the first respondent that the Premium FSI has been levied at
Rs.7,96,50,000/-. The same was later modified as Rs.7,61,40,000/-.
16. Learned Senior counsel for the respondent contended that
only the date of application for revised building plan has to be taken
into consideration and the first respondent cannot be levied with the
revised FSI Premium charges because of the time taken by CMDA in
processing the application. The learned Senior counsel mainly relied upon
the recommendation made by the appellant-CMDA to content that pre-
revised guideline would only be applicable for calculation of the Premium
FSI charges. The
forwarding of the revised proposal by the appellant-
CMDA to the Government reads as under:-
“AGENDA ITEM NO:2/203  FILE NO: C3(N)/6476/2011
Sub: CMDA – APU – MSB (North) Division – Planning
Permission Application for the revised approval for the
construction of Block A: Stilt/GF (Shop cum Parking) + 7 Floors;
Block-B, C and D: Stilt + 7 Floors Commercial cum Residential
building with 210 dwelling units at T.S.No.113/2, Block No.65,
Ward I, Old S.No.224/1 (part) of Padi Village, Padikuppam
Road, Mogappair, Chennai – Applied by Thiru. D. Rajan Dev
– Recommended for Approval – Reg
The MSB Panel discussed the subject in detail and recommended
to forward the proposal to the Government recommending for
approval subject to the following conditions:
i) undertaking accepting conditions of NOCs to be obtained
before issue of Planning Permission; and
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ii) undertaking to furnish IAF NOC before issue of
completion certificate to be obtained before issue of
Planning Permission.
Sd.XXXX
30.3.2012
MEMBER SECRETARY”
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 charges.
17. 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
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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 date.
18. Learned Senior counsel for the appellant has submitted that
the builder would not acquire any legal right by merely submitting an
application for approval of the building plan and the right would accrue
only after sanction of the revised plan by the Government. In this regard,
we may usefully refer to Usman Gani J. Khatri of Bombay v.
Cantonment Board and Others (1992) 3 SCC 455 which has been
referred to by the learned Single Judge in the order passed in the writ
petition wherein, the Supreme Court held as under:-
“24. …….The petitioners did not acquire any legal right in
respect of building plans until the same were sanctioned in their
favour after having paid the total amount of conversion charges
in lump sum or in terms of sanctioned instalments and getting
conversion of their land in freehold tenure…….”.
19. As pointed out by the learned Single Judge, in Usman Gani,
the Supreme Court in order to explain the unsustainability of the claim
made by the builders has also explained a reverse case as under:-
“24. ……..If we consider a reverse case where building
regulations are amended more favourably to the builders before
sanctioning of building plans already submitted, the builders would
certainly claim and get the advantage
of the regulations amended
to their benefit.”
Learned Single Judge has also referred to State of W.B. v. Terra
Firma Investments & Trading Pvt. Ltd. (1995) 1 SCC 125 and other
judgments wherein, the Supreme Court held that no right accrues to
the builder by mere submission of a plan for construction of a building
which has not been sanctioned by the competent authority.
20. In the impugned judgment, the High Court relied upon the
decision in Union of India and Another v. Mahajan Industries Ltd.
And Another (2005) 10 SCC 203 wherein, the Supreme Court had
followed the decision of the Delhi High Court in the case of Ansal &
Saigal Properties (P) Lts. bs. L & DO, holding that the crucial date
for calculating the conversion charges has to be the date of receipt of
application for conversion of land use. It is the submission of the
appellant that the decision in the said case is not applicable to the case
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in hand as the said judgment deals with application for conversion of
land and not the application for building permission. Apart from that,
there was delay of more than three years in deciding the said application.
We 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 sanctioned.
21. 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 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
CHENNAI METROPOLITAN DEVELOPMENT AUTH. REP. BY
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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.
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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.
27. In the result, the impugned judgment dated 03.08.2016 passed
by the High Court of Madras in W.A. No.2376 of 2013 is set aside
and this appeal is allowed. The appellant-CMDA is at liberty to recover
CHENNAI METROPOLITAN DEVELOPMENT AUTH. REP. BY
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the balance Premium FSI charges from the first respondent in
accordance with its regulations and rules. No costs.
Ankit Gyan
Appeal allowed.