Case Note & Summary
The group of writ petitions before the Bombay High Court challenged the constitutional validity of clause 4 of Appendix III to Regulation 33(7) of the Development Control Regulations for Greater Mumbai, 1991. This clause mandated that in reconstruction or redevelopment of cessed buildings in the Island City of Mumbai, the developer must surrender a prescribed percentage of the surplus built-up area generated by the incentive Floor Space Index (FSI) to the Mumbai Building Repairs and Reconstruction Board, a unit of the Maharashtra Housing and Area Development Authority (MHADA). The surrendered area was to be used for accommodating occupants in transit camps or for occupants of cessed buildings that could not be reconstructed. The developer was to receive payment of an amount as may be prescribed under the MHADA Act, 1976. The lead petition was filed by a partnership firm owning land in Mazgaon Division, Mumbai. The firm had obtained a No Objection Certificate from the Board in 2002 for reconstruction under DCR 33(7), agreeing to comply with the condition to surrender surplus area. After completing the rehabilitation component of the building with a built-up area of 6,018 sq. meters, the petitioner applied for an occupation certificate in 2006. The Board demanded surrender of 833.64 sq. meters, which was 10% of the total surplus built-up area of 8,336.40 sq. meters (calculated after deducting the rehab area from the permissible total built-up area of 14,354.40 sq. meters). Later, in 2010, the Board imposed an additional condition requiring the developer to execute a formal agreement regarding the surplus area within 30 days of approval of plans and before issuance of the commencement certificate. The Municipal Corporation was directed not to grant further permissions without such agreement. When the petitioner sought occupation certificates for subsequent construction, they were withheld due to non-execution of the agreement and non-surrender of the demanded area. The petitioner, along with other developers facing similar conditions, filed writ petitions in 2011 challenging the impugned clause as unconstitutional. They contended that the regulation amounted to compulsory acquisition of part of their property constructed on their own lands without any authority of law and without providing adequate or reasonable compensation. They argued that the compensation offered under the MHADA Act was illusory. The respondents – MHADA, the Board, the State of Maharashtra, and the Municipal Corporation – defended the regulation as part of the statutory scheme for rehabilitation of occupants of cessed buildings, authorized under the Maharashtra Housing and Area Development Act, 1976, and the Development Control Regulations framed under the Maharashtra Regional and Town Planning Act, 1966. They argued that the surrender condition was a valid regulatory measure linked to the grant of additional FSI and was essential for the public purpose of providing transit accommodation and rehabilitating occupants of non-reconstructible buildings. During the pendency of the petitions, the court granted interim relief on 31 January 2012, directing the Board to issue No Objection Certificates and the Municipal Corporation to issue occupation certificates for completed buildings, subject to the petitioners keeping a certain number of flats vacant and not creating any third-party rights in them until further orders. This arrangement corresponded to the aggregate area demanded by the Board. The court heard the parties at length and reserved judgment on 30 March 2015. The key legal issues were: (i) whether the impugned regulation constituted an unconstitutional acquisition of property without authority of law and without adequate compensation; and (ii) whether the Board could validly insist on compliance with the surrender condition by withholding building permissions and occupation certificates. The resolution of these issues required an examination of the statutory framework, the extent of the State’s power to impose conditions while granting development permissions, and the interpretation of Article 300A of the Constitution pertaining to the right to property. The court’s final decision and reasoning are not included in the available excerpt.
Issue of Consideration
Whether clause 4 of Appendix III of Regulation 33(7) of the Development Control Regulations for Greater Mumbai, 1991 providing for surrender of a prescribed percentage of surplus built-up area to the Mumbai Repairs and Reconstruction Board for accommodating occupants in transit camps or cessed building which cannot be reconstructed, on payment of an amount as may be prescribed under MHADA Act, 1976, amounts to compulsory acquisition of property without authority of law and without adequate compensation; and whether the Board can withhold building permissions and occupation certificates for non-compliance with the impugned condition.
Law Points
- Compulsory acquisition without authority of law
- Adequate compensation
- Development Control Regulations for Greater Mumbai
- 1991
