In a significant legal case heard by the Supreme Court of India, the judgment regarding Premium FSI charges has set a new precedence in the realm of urban development. This case involves a dispute over revised charges post-amendment, with implications for planning permissions and development regulations. A crucial ruling that will shape future practices in the sector.
Facts
- The Chennai Metropolitan Water Supply and Sewerage Board issued an NOC letter on 6 February 2012 with conditions for approval.
- State government approval was subject to obtaining an NOC from the Sewerage Board.
- Appellant issued a demand notice on 22 August 2012 revising charges under two heads.
- Sewerage Board issued NOC on 30 March 2012 with a condition for a gift deed for land.
- Government revised guideline values on 26 March 2012, effective from 1 April 2012.
- Appellant demanded charges on 27 March 2012, which were paid by the respondent on 28 March 2012.
- The demand notice was challenged in writ proceedings before the High Court and was quashed.
- Office Order clarified the applicability of charges based on the payment date.
- Charges for Premium FSI revised from 1 April 2012 were not applicable to the respondent.
- Appellant requested action for issuance of planning permission and compliance with requisitions.
- The Single Judge allowed the writ petition stating that the respondent had a right to obtain planning permission, which could not be taken away by a subsequent amendment.
- The High Court rejected the demand for revised charges on Infrastructure and Amenities (I&A) and Premium Floor Space Index raised by the appellant.
- The Division Bench affirmed that there was no authority to levy I&A charges as per the amendment.
Arguments
- The GO dated 28 March 2012 had increased I & A charges by 50% over prevailing rates.
- The principle of increased charges was intended for regulatory aspects, not Premium FSI charges.
- The case Union of India v Mahajan Industries Ltd. is distinguishable as it dealt with conversion charges.
- Planning permission was granted in 2013 as per High Court’s interim order mandating a deposit of Rs 10 Crores.
- Absence of planning permission would result in a refund of the deposited amount.
- Pendency of an application or deposit does not create a vested right.
- The Office Order dated 16 April 2012 clarified old rates apply if development charges’ advice was sent before 28 March 2012.
- The crucial date for determining applicable charges is when planning permission is granted by the planning authority.
- Mr. Rana Mukherjee, learned Senior Counsel for the respondents argued regarding I & A charges.
- Clause 6 of G.O.Ms No 86 outlined the requirement for the Commissioner of Town and Country Planning to propose an amendment to the Rules of 2008 for the revision of charges.
- The Union of India’s counsel did not dispute the High Court’s view on this matter.
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Analysis
- Planning permission issued in May 2012 does not advance the case of the respondent.
- Any permission post revision of Premium FSI charges is subject to the revised charges.
- Revised I & A charges were unlawfully demanded from the appellant, as development charges were advised before 28 March 2012.
- Filing an application does not entitle the applicant to permission before the planning authority’s decision.
- Planning permission is granted upon application under Section 49 of the Planning Act 1971.
- No vested right exists for planning permission, despite pre-payment of charges.
- Deposit of Rs. 10 Crores made by the developer was a condition for interim planning permission granted by the High Court.
- Revised I & A charges could have been revised by the Vice-Chairman without amending Rules 2008 if within Rule 4 limits.
- Levy of Premium FSI charges is subject to approving Premium FSI, not less than minimum or more than maximum rates.
- Revised demand for I & A charges must be based on approved Premium FSI, with reasons specified.
- No Premium FSI approval means no Premium FSI charge can be demanded.
- High Court ruled that revised I & A charge demand without Rule 2008 amendment is unenforceable.
- Chennai Metropolitan Planning Area charges fixing authority is Vice-Chairman, within Rule 4 limits.
- Revised rates would not be applicable after payment is made.
- Cut-off date for application should be the date of payment.
- Principle from Union of India v Mahajan Industries Ltd. is applicable.
- Demand pertains to payment levied, not changes in development control rules.
- Planning permission was granted on 30 May 2012.
- Withholding of copy and basis of demand is deemed as an afterthought.
- Section 48 of the Planning Act 1971 imposes restraints on construction without permission.
- Provisions in Howrah Municipal Corporation Act 1980 require express sanction for building construction
- Interpretation of Rule 2 (A) of Mines and Minerals Act 1957 in State of Tamil Nadu v Hind Stone case
- No vested right created by submitting building construction application as per Usman Gani J. Khatri of Bombay v Cantonment Board case
- Building Rules at time of sanction govern, not Rules at application date per Howrah Municipal Corporation v Ganges Rope Co. Ltd. case
- Building Rules prevailing at time of sanction take precedence per Commissioner of Municipal Corporation, Shimla v Prem Lata Sood case
- Consistent view maintained by the Court in New Delhi Municipal Council v Tanvi Trading and Credit Private Limited
- Allowing the appeals partially by setting aside the judgment and order of the High Court regarding the quashing of the demand for Premium FSI charges.
- The demand for Premium FSI charges is valid upon the grant of planning permission to avail of Premium FSI.
- The appellant was justified in demanding Premium FSI charges at revised rates and is entitled to enforce these demands.
- The factual situation of the present case is distinct from the general contention.
- The appellant has the right to collect the demanded Premium FSI charges.
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Decision
- Developer held liable to pay revised charges applicable post 1 April 2012
- Appeals disposed of
- Order of the High Court upheld regarding the demand for I & A charges
- No order as to costs
Case Title: CHENNAI METROPOLITAN DEVELOPMENT AUTHORITY REP. BY ITS MEMBER SECRETARY . Vs. PRESTIGE ESTATES PROJECT LTD.
Case Number: C.A. No.-005642-005643 / 2019
