Case: State of Maharashtra &amp; Others Vs. Swan Mills Limited &amp; Others

3.One of the main challenges made by the learned counsel for the(original petitioner no. 1) is that the Municipal Commissioner and the Secretary,es Department, having granted permission to carry out commercial development on C.S. nos. 83, 83/1 to 19, situate at L.B.S. Marg, Kurla, admeasuring 22,204.80 sq. mtr. and thehaving acted on the said permission and altered its position, the said authorities are now estopped from revoking the said permission. The crucial question, therefore, is whether theis entitled to invoke the principle of promissory estoppel and thereby have the impugned order dated 15.2.2001 revoking the permission set aside.4.The property in question consists of open land and was used for storage for the business of theAccording to themanufacture and production of textiles was not carried on the said plot. Textiles were manufactured by them on property bearing C.S.nos. 83, 83/1 to 19 which is separated from the property in question by a public road.5.During the period January, 1989 to December, 1991 thewas sick. The B.I.F.R. vide its order dated 25.2.1994 prescribed measures for revival of thewhich included permission to raise funds by sale of the movable and immovable assets of theis an undisputed position that regulation 58 of the Development Control Regulations for Greater Bombay, 1991 (hereinafter referred to as the "D.C. Regulations") enables the redevelopment of lands of cotton textile mills as a part of package of measures recommended by the Board of Industrial and Financial Reconstruction (BIFR) for the revival/rehabilitation of a potentially viable sick mill. Such permission may be granted under this Regulation to the existing or newlyareas to be utilised for diversified industrial users and commercial purposes specified therein. Regulation 58 also enables the development of land for the purpose of modernisation and where the textile mill is to be shifted outside Greater Mumbai.7.On 23.5.1994 thebeing under the supervision of the B.I.F.R. obtained an intimation of disapproval under section 346 of the Bombay Municipal Corporation Act for development of the property in question as service industry. This I.O.D., inter alia, required the obtaining of commencement certificate under section 45 of the Maharashtra Regional and Town Planning Act, 1966 before the commencement of work. It also required clearance from the competent authority under the Urban Land Ceiling Act, 1976. Thereafter, on 16.6.1994 theobtained commencement certificate issued under section 35 of the Maharashtra Regional and Town Planning Act for the property in question. This commencement certificate was valid for a period of one year. It was issued by theCorporation.8.The property in question has been used partly for the purpose of storage and partly for a residential chawl.According to theno textile manufacturing activity has been carried on it.9.On 25.5.1994 thewrote to the Government of Maharashtra in theand Textiles Department. It contended, inter alia, that there is no textile and/or industrial activity being carried out in the property in question and, therefore, the provisions of the D.C. Regulation 58 are not attracted. It, therefore, contended that the property in question was required to be dealt with under D.C. Regulation nos. 56 and 57 and not under D.C. Regulation 58.10.D.C. Regulation 56 deals with General Industries Zone known asZone and specifies uses permitted in the General Industries Zones.(3) allows existing or newlyarea of unit in the General Industrial Zone, including industrial estates to be utilised for an office of commercial purposes as a part of a package of measures recommended by the BIFR. It, however, excludes utilisation of area of cotton textiles mills for such a purpose.11.D.C. Regulation 57 deals with Special Industries Zone known asZone. It specifies the various things to be set up in anZone and the various industrial purposes for which such land may be used. This regulation also enables the Commissioner to allow the area of this zone, including industrial zones to be utilised for an office or a commercial purpose, excluding however and land of a cotton mill.12.To resume the narration of facts, since thehad applied for utilisation of the property in question for commercial purposes, the Government of Maharashtra wrote to the Chief Engineer of thepointing out the proposal of theIt specifically requested confirmation from the Municipal Corporation if the land in question is outside the purview of regulation 58 since there is no textile activity on the land.13.Thereafter, on 28.4.1995 the Government of Maharashtra in theand Textiles Department again wrote to the Municipal Corporation asking to examine the proposal of thethe meanwhile, on 7.6.1995 the Architects of thewrote to the Secretary in theand Textiles Department asking him to confirm that C.S. nos. 83, 83/1 to 19, i.e. the property in question which was used by thefor storage and residential purpose i.e. for the purpose other than textile activity would be governed by D.C. regulation 57(4)(b). On 22.6.1995 the Government of Maharashtra in theand Textiles Department suggested to the Chief Engineer of thethat the property in question which has been used by thefor storage and residential purpose "will be considered under D.C. Regulation no. 57(4)(b) to be read with 57(4)(d)". It advised theto "examine the proposal of grant of permission for development of lands of Swan Mills Ltd." The Government suggested that the development of the property in question "may be considered under D.C. Regulation No. 57(4)(b)". The Government appears to have, by this letter dated 22.6.1995, communicated to the Architects of thethat since the property in question was used for storage and residential purpose, it would be "governed under D.C. Regulation No. 57(4)(b)".15.After a lapse of time on 30.1.1996 thewrote to thestating that its request for development of the property in question "can be considered for commercial development under sections 57(4)(b) and 57(4)(d) of D.C. Regulations, 1991, since the abovementioned property is not being used for textile use and as clarified by the Government vide their letter dated 22.6.1995 in this respect. They were requested to "submit a regular proposal through registered licenced surveyor (architect) along with the plans proposing Recreation Ground and Amenity Open Space ....." It further stated "on receipt of the same, letter of Intent will be issued."16.In pursuance of this last letter of thethe Architects of theappears to have forwarded nine sets of drawings showing the amenities, open space, etc. as suggested by theas per Development Control Regulation no. 57.17.On 19.3.1996 the Chief Engineer ofwrote a letter stating that the property in question is shown on the accompanying copy of the plan "will be considered as per the Regulation No. 57(4)(b) read with Reg. No. 57(4)(d) of the sanctioned Development Control Regulations for Greater Bombay, 1991, subject to the following terms and conditions." The said letter stipulated certain terms and conditions which require theto obtain N.O.C. from the competent authority under the Urban Land Ceiling Act; that N.O.C. shall be obtained from the Urban Land Ceiling Authority; and that the commercial development shall be carried out strictly in accordance with the D.C. Regulations. It further stipulated that certain open spaces shall be maintained as per various regulations. The letter ends as followsyour clients are agreeable to the abovesaid terms and conditions, you may approach the Executive Engineer (Building Proposals) (Eastern Suburbs) for approval of Building Plans who is being informed suitably/separately by this office."18.In the meanwhile, on 29.2.1996 the Government of Maharashtra in the Urban Development Department found that the land belonging to cotton textile mills were being developed in a haphazard manner. In order to avoid piecemeal and isolated development and an integrated development plan, it decided to set up a study group and banned thefrom giving any building permission for lands reserved for cotton textile manufacturing. This ban was issued in exercise of powers under D.C. Regulation 62(3) read with section 154 of the Maharashtra Regional and Town Planning Act, 1966. However, on an application made by it, ban was lifted in respect of the land of thehaving regard to the orders made by the B.I.F.R. This ban was lifted by the Government of Maharashtra in the Department of Urban Development by its order dated 15.3.1999. While lifting the ban, however, the Government in the Urban Development Department seems to have taken care to omit the incorporation of any particular regulation under which thewould be allowed to carry on development. On the other hand, the Government cautioned thethat in case of any doubt regarding application of the appropriate regulation, the Government may be approached for interpretation.19.Theon 19.3.1996 stated that the proposed development of the property in question will be considered as per regulation 57(4)(b) and the letter dated 22.6.1995 written by the Government in theand Textiles Department stating that the development of the property in question may be considered for development under D.C. Regulation 57(4)(b) constituting a definite representation that theis entitled to develop the property in question for commercial purpose under regulation no. 57(4)(b).

Court's reasoning:
we find that the two communications of theand the Government of Maharashtra in theand Textiles Department do not hold out a definite promise to which theor the Government should be held.21.In the first place, the letter dated 22.6.1995 is addressed by the Government in theand Textiles Department and not the Urban Development Department to the Chief Engineer of theasking the Municipal Corporation to examine the proposal for grant of permission for development of the property in question under D.C. Regulation 57(4)(b). This, in our view, cannot be considered to be a promise. There was some argument at the bar as to the competence of theand Textiles Department to direct theto consider permission for development of the property under certain Development Control Regulation.According to thelearned counsel appearing for the State, it is only the Urban Development Department which is entitled to address such a communication. However, the internal rules of business which regulates functioning of the various Department were not produced before us. Be that as it may, we find that the letter dated 22.6.1995 does not grant any permission to thefor the actual development and construction of the property in question under regulationa plain reading of the letter dated 19.3.1996 relied upon by theas a permission to develop the property on a commercial basis as per regulation no. 57(4)(b) read with 57(4)(d), we are unable to hold the same to constitute a representation to which theshould be irrevocably held bound. The said letter in terms states that the request of theto allow local commercial development of the property in question will be considered as per regulation no. 57(4)(b) read with regulation no. 57(4)(d). It further states that if theis agreeable to the terms and conditions stipulated therein, it may approach the Executive Engineer for approval of the building plan. It is an admitted position that the learned counsel for thehas not been able to point out any sanction by theunder which the company was permitted to actually commence any construction or the approval of the buildingon a construction of regulation nos. 56 and 57 of the D.C. Regulations, we are clear that these regulations do not enable the Municipal Commissioner of theto grant permission for commercial development of the land of a cotton textile mill. The permission to develop such land can be granted only under regulation 58 upon terms and conditions specified therein and for purposes stated therein. We are, therefore, of the view that assuming for the sake of argument that the letter from thedated 19.3.1996 can be construed to be a final permission on the basis of which theis entitled to start commercial development of the property in question, it cannot be said that the permission has been issued in accordance with law since there is no such provision whereby the land of a cotton textile mill can be permitted to be commercially developed under regulation no.therefore, find that theis not entitled to have the impugned order dated 11.1.2001 revoking the permission set aside on the principle of promissoryregard to our findings above that thehad not given such permission to thethat it could, in fact, commence commercial development of the property. We are unable to agree that thecould be said to have validly acted in pursuance of a firm representation made to it by theSeveral decisions such as A.I.R. 1979 S.C. 621 and (1992) 2 SCC 411  , relied upon by the learned counsel for the appellants in support of the argument of promissory estoppel. We have not dealt with them since the principle of promissory estoppel is by nowand established and also because we have found that the representation made to theis not binding and there is an express power conferred by the statute i.e. the MRTP Act to revoke suchlearned Advocate General made a statement before us that the Government has decided to take appropriate steps to clarify, and if necessary, modify regulation 58 so as to make it applicable to all lands of cotton textile mills irrespective of the zones in the development plan and irrespective of whether the mills are closed, sick, or under rehabilitation or otherwise, whether working or closed, partially or completely. He further states that till such time as the clarifications/modifications are made effective, the Government proposes to issue a direction under section 154 of the Maharashtra Regional and Town Planning Act, 1966 that no plans will be sanctioned except in conformity with regulation 58 as amended. We, therefore, decline to express any view in the matter.