Case Note & Summary
The appellants, Prasad Pandurang Tapkir and Shakuntala Pandurang Tapkir, owned agricultural land in Survey No. 103/2/2 of Alandi Taluka, Pune District. They sought to develop the land under a scheme for homogenous development adjoining municipal corporation limits. On 25.05.2012, they applied for conversion of land use for group housing construction. Premium was payable for construction exceeding permissible FSI. On 30.08.2012, they paid ₹30,46,290/- as premium for extra FSI. Permission was granted on 08.10.2012. However, the appellants abandoned the group housing plan and instead sought to make plots. Their application was accepted on 19.04.2014, with the earlier terms remaining in force. On 13.08.2015, they applied for refund of the premium, claiming they had not utilized the extra FSI. The Assistant Director, Town Planning, Pune, rejected the refund on 15.02.2020, citing no provision in the Development Control Regulations for refund. The appellants challenged this in the Bombay High Court via Writ Petition No. 9040 of 2021, which was dismissed on 17.11.2022 on the ground of no refund provision and delay. The Supreme Court granted leave and allowed the appeal. The Court noted that the appellants sought refund within three years of payment, and the authorities' inaction could not be attributed to them. The Sub-Divisional Officer had recommended refund in 2015, but no action was taken. The Court held that the premium was paid for a specific privilege (extra FSI), and since the appellants did not utilize it, the authorities had no right to retain the amount. The absence of an express refund provision does not bar refund when the consideration for the payment fails. The Court directed refund of ₹30,46,290/- with interest at 6% per annum from the date of payment (30.08.2012) till realization, within eight weeks.
Headnote
A) Refund of Premium - Unutilized FSI - Absence of Express Refund Provision - The appellants paid premium for additional FSI but abandoned their project and did not utilize the privilege. The High Court denied refund on the ground that no provision permitted it. The Supreme Court held that the absence of an express refund provision does not bar refund when the privilege is not availed and the authorities have no right to retain the amount. The Court directed refund of ₹30,46,290/- with interest at 6% per annum from the date of payment till realization. (Paras 8-10) B) Delay and Laches - Refund Claim - Timely Application - The appellants sought refund within three years of payment, and the authorities' inaction on their request cannot be attributed to them as delay. The High Court's finding on delay was erroneous. (Paras 6-7)
Issue of Consideration
Whether the appellants are entitled to a refund of the premium paid for additional Floor Space Index (FSI) when they did not utilize the same and abandoned their construction project
Final Decision
Appeal allowed. The order of the Bombay High Court dated 17.11.2022 and the order of the Assistant Director, Town Planning dated 15.02.2020 are set aside. The respondents are directed to refund ₹30,46,290/- to the appellants with interest at 6% per annum from the date of payment (30.08.2012) till the date of realization, within eight weeks.
Law Points
- Refund of premium paid for additional FSI is permissible when the privilege is not availed
- absence of express refund provision does not bar refund
- delay cannot be attributed to applicant when authorities failed to act on timely request
