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CASE NO.: Appeal (civil)  2525 of 2007

PETITIONER: Commissioner of Municipal Corporation, Shimla

RESPONDENT: Prem Lata Sood and Others

DATE OF JUDGMENT: 15/05/2007

BENCH: S.B. Sinha & Markandey Katju

JUDGMENT: J U D G M E N T

CIVIL APPEAL NO. 2525 OF 2007 [Arising out S.L.P. (Civil) No. 3292 of 2006]

S.B. SINHA, J :

1.      Leave granted.

2.      This appeal is directed against the judgment and order dated  16.08.2005 passed by a Division Bench of the High Court of Himachal  Pradesh at Shimla, whereby and whereunder the writ petition filed by  Respondent Nos. 1 to 5 herein, praying, inter alia,  :  

"i)     That the respondents  may be directed to accord  necessary planning permission to the petitioners  for construction of hotel pursuant to Annexures \026  PA,  PB,  PC & PG in a time bound schedule;

ii)     That the impugned Annexures \026 PD,  PE,  PF &  PH, dated 24.3.1998, 1.9.1999, 6.6.2000 &  8.2.2002 respectively may be quashed and set  aside";

was allowed.   

3.      The State of Himachal Pradesh enacted ’The Himachal Pradesh Town  and  Country Planning Act, 1977’ (for short, ’the 1977 Act’) to make  provisions for planning and development as well as use of land; to make  better provision for the preparation of development plans and sectoral plans  with a view to ensuring that town planning schemes are made in a proper  manner and their execution is made effective to constitute the Town and  Country Development Authority for proper implementation of town and  country development plan, to provide for the development and  administration of special areas through the Special Area Development  Authority to make provisions for the compulsory  acquisition of land  required for the purpose of the development plans and for purposes  connected with the matter aforesaid.   

4.      ’Development’ has been defined in Section 2(g) of the 1977 Act to  mean :

"development" with its grammatical variations means the  carrying out of a building, engineering, mining or other  operations in, on, over or under land, or the making of  any material change in any building or land, or in the use  of either, and includes sub-division of any land;"

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’Planning area’ has been defined in Section 2(o) of the 1977 Act to  mean :

"planning area" means any area declared to be planning  area under this Act;"

5.      Section 3 of the 1977 Act provides for appointment of a Director or  other officers for the purpose of carrying out the functions under the  provisions of the said Act.  Section 10 of the said Act provides for restriction  on use of land or development thereof, sub-section (3) whereof reads as  under :

"(3)    If any work is carried out in contravention of the  provisions of this section, the Municipal Corporation or  Municipal Committee within its such local area, and the  Collector in area outside such local areas may cause such  work to be removed or demolished at the cost of the  defaulter, which shall be recovered from him in the same  manner as an arrear of land revenue."

6.      Section 14 of the 1977 Act provides for preparation  of development  plans by the Director.  Section 17 provides for interim development plans,  pursuant to or in furtherance whereof the interim development for the  planning area has been made to which     reference shall be made at an  appropriate place.

7.      In terms of the said provisions, an interim development plan is to be  made after consultation with the local authority concerned.  Sub-section (5)  of Section 17 mandates the State Government to publish the interim  development plan in the official gazette.   

8.      Chapter VI of the 1977 Act provides for control of development and  use of land.  Section 25 thereof reads as under :

"25.    The overall control of development and the use of  land in the planning area shall, as from the date of  publication in the official Gazette of a notification by the  State Government, vest in the Director."  

9.      Section 30 of the 1977 Act provides for an application for permission  for development by a person other than Union Government, State  Government, a local authority or a special authority constituted thereunder.   An application therefor is required to be filed in the office of the Director.   Section 31 provides for the mode and manner in which such application  shall be governed, inter alia,  stating :

"(5)    If the Director does not communicate  his decision  whether to grant or refuse permission to the applicant  within two months from the date of receipt of his  application, such permission shall be deemed to have  been granted to the applicant on the date immediately  following the date of expiry of two months.      

10.     Chapter IX provides for control.  Section 76 of the 1977 Act provides  for a non-obstante clause in terms whereof the Government is empowered to  review plans etc. for ensuring conformity, in the following terms :

"76.    Notwithstanding anything contained in any other  enactment for the time being in force, the State  Government may, with a view to ascertaining that no

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repugnancy exists or arises with the provisions of this  Act or the rules made thereunder, review the town  improvement schemes, building plans or any permission  for construction sanctioned or given by any authority  under development plans, sanctioned under any  enactment for the time being in force and may revoke,  vary, or modify any scheme, plan, permission or sanction  in conformity with the provisions of this Act :

       Provided that no order under this section shall be  made without giving a reasonable opportunity of being  heard to the persons affected thereby."

11.     The said  Act, thus, provides for an overall policy to be taken  by the  authority as well the State Government.   

12.     The State of Himachal Pradesh also enacted the ’Himachal Pradesh  Municipal Corporation Act, 1994’ (for short, ’the 1994 Act’).  A municipal  corporation constituted under the said provisions is a local authority within  the meaning of the provisions of the 1977 Act.    13.     Section 243 of the 1994 Act provides that every person who intends to  erect a building shall apply for sanction by giving notice in writing of his  intention to the Commissioner in such form and containing such information  as may be prescribed by the bye-laws made in that behalf.  Despite the fact  that the 1977 Act provides for filing of an application for a development  plan, when an interim development plan has been made, the 1994 Act also  provides for sanction of a building plan, if a person intends to execute any of  the  works specified under Section 244 of the 1994 Act.  The said provision  lays down that every person who intends to execute any of the works  specified therein shall apply for sanction by giving notice in writing of his  intention to the Commissioner in such form and containing such information  as may be prescribed by the bye-laws made in that behalf.  Section 245 of  the 1994 Act provides for issuance of a notice wherein the purpose for which  it was intended  to use the building is required to be specified in the  following terms :

       "245.(1) A person giving the notice required by  section 243 shall specify the purpose for which it is  intended to use the building to which such notice relates  and a person giving the notice required by section 244  shall specify whether the purpose for which the building  is being used is proposed or likely to be changed by the  execution of the proposed work.

       (2)     No notice shall be valid until the  information required under sub-section (1) and any  further information and plans which may be required by  bye-laws made in this behalf have been furnished to the  satisfaction of the Commissioner along with the notice."   

14.     Section 246 which provides for the power of the Commissioner to  grant or refuse to grant such sanction, which is relevant for our purpose,   reads as under : "246(1).- The Commissioner shall sanction the erection  of a building or the execution of a work unless such  building or work would contravene any of the provisions  of sub-section (2) of this section or the provisions of  section 250.   

(2)     The grounds on which the sanction of a  building or work may be refused shall be the following,  namely :-

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(a)     that the building or work, or the use of the  site for the  building or work or any of the particulars  comprised in the site plan,  ground plan, elevation,  section or specification would contravene the provisions  of any bye-law made in this behalf or of any other law or  rule, bye-law or order made under such other law;

(b)     that notice for sanction does not contain the  particulars or is not prepared in the manner required  under the bye-laws made thereunder has or have not been  duly furnished;

(c)  that any information or documents required by  the Commissioner under this Act or any bye-laws made  thereunder has or have not been duly furnished;

(d) that in cases falling under section 222 lay out  plans have not been sanctioned in accordance with  section 223;

(e) that the building or work would be an  encroachment on Government land or land vested in the  Corporation;

(f) that the site of the building or work does not  abut on a street or projected street and that there is no  access to such building or work from any such street by a  passage or pathway appertaining to such site;

(g) that the building or work would be in  contravention of any scheme sanctioned under section  260; and

(h) that a building for habitation, does not provide  for a flush or a water seal latrine.

(3) The Commissioner shall communicate the  sanction to the person who has given the notice; and  where he refuses sanction on any of the grounds specified  in sub-section (2) of this section or under section 250 he  shall record a brief statement of his reasons for such  refusal and communicate the refusal alongwith the  reasons therefor to the person who has given the notice.

(4) The sanction or refusal as aforesaid shall be  communicated in such manner as may be specified in the  bye-laws made in this behalf."

15.     Section 247 of the 1994 Act provides for a deeming provision in the  following terms :

"247.(1) Where within a  period of sixty days after  the receipt of any notice under section 243 or section 244  or of the further information, if any, required under  section 245 the Commissioner does not refuse to sanction  the building or work or upon refusal does not   communicate the refusal to the person who has given the  notice, the Commissioner shall be deemed to have  accorded sanction to the building or work and person by  whom the notice has been given shall be free to  commence and proceed with the building or work in  accordance with his intention as expressed in the notice  and the documents and plans accompanying the same :

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Provided that if it appears to the Commissioner  that the site of the proposed building or work is likely to  be affected by any scheme of acquisition of land for any  public purpose or by any proposed regular line of a  public street or extension, improvement, widening or  alteration of any street, the Commissioner may withheld  sanction of the building or work for such period not  exceeding sixty days as he deems fit and the period of  sixty says shall be deemed to commence from the date of  the expiry of the period for which the sanction has been  withheld.

(2)     Where a building or work is sanctioned or  deemed to have  been sanctioned by the Commissioner  under sub-section (1), the person who has given the  notice shall be bound to erect the building or execute the  work in accordance with such sanction but not so as to  contravene any of the provisions of this Act or any other  law or of any bye-law made thereunder.

(3)     If the person or any one lawfully claiming  under him does not commence the erection of the  building or the execution of the work within one year of  the date on which the building or work is sanctioned or is  deemed  to have been sanctioned, he shall have to give  notice under section 244, or, as the case, may be, under  section 243 for fresh sanction of the building or the work  and the provisions of this section shall apply in relation  to such notice as they apply in relation to the original  notice.

(4)     Before commencing the erection of a  building or execution of a work within the period  specified in sub-section (3), the person concerned shall  give notice to the Commissioner of the proposed date of  the commencement of the erection of the building or the  execution of the work.

Provided that if the commencement does not take  place within seven days of the date so notified, the notice  shall be deemed not to have been given and a fresh notice  shall be necessary in this behalf.

(5)     Where the building plan is sanctioned or  deemed to have been sanctioned, the person, at whose  instance building operations are to be carried on, shall,  after the excavation of the foundation and before starting  construction thereon, intimate the Corporation about the  excavation of the foundation.

(6)     For the purpose of ascertaining, whether the  strata of the land, over which a building is to be erected is  geologically fit, and the building operation thereon can  be carried out in accordance with the sanctioned plan, the  Corporation may, within seven days from the intimation  under sub-section (5), cause inspection of excavated  foundation to be made by such persons as it may direct,  and in such manner as may be prescribed :

Provided that the person at whose instance the  building operations are carried out shall be associated in  the inspection.    (7)     The persons making the inspection under

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sub-section (6), may communicate to the person, from  whom intimation under sub-section (5) has been  received, its views in regard to the result of such  inspection and may after ascertaining the opinion of the  said person, recommend to that person the action to be  taken as a result of such inspection and also report to the  Commissioner the action, if any, which is proposed to be  taken for the purposes of implementation of any such  recommendation.

(8)     On the receipt of the report under sub- section (7), the Corporation may, within seven days from  the date of intimation under sub-section (5), give such  direction to the person concerned, as it may deem fit."

16.     We may, however, notice that a similar Act which was then  prevailing, namely, Himachal Pradesh Municipal Corporation Act, 1979 was  repealed.   

17.     Respondent No.1 to 5 herein (hereinafter referred to as ’the  respondents)  intended to construct a hotel on the Mall Road in the town of  Shimla.  They filed an application for grant of planning permission to the  Town and Country Planning Department on 27.06.1994.  Such permission  was approved by the Government of  Himachal Pradesh by an order dated  16.01.1998.

18.     The Executive Engineer of Respondent No.6 herein granted  permission under sub-section (1) of Section 31 of the 1977 Act subject    inter alia, to the condition that building permission should be obtained from  the local authority concerned before commencement of the development.  

19.     An application for sanction of the building plan in terms of the  provisions of the 1994 Act and building bye-laws framed thereunder was  submitted by Respondent No.1 on 07.07.1999.  The Municipal Corporation,  however, returned the said plans asking for certain clarifications.  Such  clarifications evidently had been asked for by the appellant herein in terms  of Section 246 of the 1994 Act.   

20.     Respondents resubmitted the plans upon purported compliance of the  objections raised in the said letter dated 01.09.1999 only on 10.04.2000.   However, immediately thereafter a purported temporary freeze on  construction activities in some areas appertaining to Shimla Planning Area  was issued by the Government of Himachal Pradesh, stating :

       "I am directed to say that it has been decided by  the Government that all development activities in banned  area of Shimla planning area are to be temporarily frozen  till the finalization of new guidelines to be framed by the  government for these area.

       In view of the above decision of the government  on planning permission cases are to be approved or sent  to this department till further orders."

21.     Respondents were informed thereabout by the appellant in terms of its  letter dated 06.06.2000, stating :

       "Application for construction of house submitted  on 10.4.2000 by you.  On receipt of report from various  departments, the case has been considered in which  proposed hotel on Khasra Nos. 315, 316, 317, 318, 321,  322, 320, 310, 311, 313, 312, 319 at Talpat Cottage,  Shimla Sanction has been asked for.

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       Hence the map with the following observations has  not been considered for sanction :

       1.      Pucca burjirs have not been fixed at site.

       2.      The proposal shown with the cutting of earth more                        than 3.00 M   in both the blocks cannot be allowed                       as per M.C. bye-laws.

3.      The proposal for machine room structure is not as          per M.C. bye-law.

4.      Report from ME has not been received.

       5.      Ground    floor  plan  for  upper  Block  should   be                  shown separately with the boundary lines.

6.      The proposal falls in banned area.  As per the          notification received from Govt. of H.P. vide their          letter No. PBW (B&R)(B) 24(1)91-1 dated          17.4.2000, the development activities in banned          area of Shimla planning area have been          temporarily frozen.  As such the proposal cannot          be considered at this stage.

       Hence the plan is rejected and returned herewith."

22.     However, a question arose as to whether the temporary freeze of  development activities in the banned area of Shimla planning area was to  apply in relation to the cases where the building plans had already been  approved by the Government before the said date,  wherefor permission had  been issued to the Commissioner, Municipal Corporation, in the following  terms :

       "The temporary ban on development activities in  the Shimla Planning Area was imposed by the  Government  on dated 17.04.2000.  The building plans  approved by the Government before this date need not be  detained.  Therefore, the building plan cases already  cleared by the Government/Cabinet may be processed  further in accordance with the Rules and Regulations."

23.     Before, however, the Corporation could consider the Respondents’  application for grant of sanction of the said development plan in terms of the  1994 Act and/or building bye-laws framed thereunder, a notification was  issued by the State of Himachal Pradesh purported to be in terms of sub- sections (4) and 5 of Section 17 of the 1977 Act, making further  amendments in the interim development plans which was published in the  gazette on 31.03.1979 and is to the following effect :

       "(a)    All Private as well as Government  construction are totally banned within the core area of  Shimla Planning Area.  Only construction on old lines  shall be permitted in this area with the prior approval of  the State Government.  The ’core area’ shall comprise of  the following :

       ’Central Shimla bounded by the circular road  starting from Victory Tunnel and ending at Victory  Tunnel via Chotta Shimla & Sanjauli and the area  bounded by Mall Road starting from Railway Board  Building to Ambedkar Chowk, covering Museum Hill by

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a road starting from Ambedkar Chowk on the north side,  joining the chowk of the Indian Institute of Advance  Studies and following the road joining Summer Hill post  office and via upper road to Boileauganj Chowk and then  joining the cart Road, along Cart Road to Victory Tunnel.

       (b)     No development, unless specifically  permitted by the State Government shall take place in the  restricted area which shall comprise of the following :

               \005                    \005.                   \005"

24.     Yet again  a notification was issued by the State of Himachal Pradesh  on or about 22.08.2000 whereby and whereunder, for the existing Regulation  10.4.2(x)(a), the following was substituted :

"10.4.2 (x)(a), CORE AREA : (i) New construction in  core area shall be allowed in respect of residential  buildings upto maximum two storeys and ancillary used  thereto with the prior permission of the State  Government.

       Provided that in case of reconstruction of old  structured or building shall be permitted by the State  Government subject to the condition that the plinth area  and number of storeys on old lines shall remain the same  as were existing earlier."

25.     Regulation 10.7 provided for a ’Heritage Zone’, relevant clauses  whereof read  as under :                       "10.7   HERITAZE ZONE :

(A)     No development for reconstruction unless  specifically recommended by the Heritage Advisory  Committee and permitted by the State Government shall  take place in the Heritage Zone, which shall be  comprised of the following areas, namely :

       (i)     Viceregal lodge complex Complete;

       (ii)    One building depth on either side of the road  surrounding Viceregal lodge complex;    

       (iii)   One building depth on either side of the  Mall road starting from the gate of Indian Institute of  Advance Studies upto Chhota Shimla Chowk via State  Bank of India, Scandal Point, Shimla Club and Oak  Over."

26.     In view of the aforementioned amendments in the regulation declaring  ’core area’ and ’heritage zone’ within which only the respondents had filed  their application for grant of sanction of the building plans, no order could  be passed by the appellant.

27.     In view of the aforementioned notification, the application for  sanction of the building plans was ultimately rejected by the Corporation.  

28.     In the aforementioned premise Respondents filed a writ petition   before the High Court of Himachal Pradesh at Shimla, praying for the reliefs  which have been noticed hereinbefore.  By reason of the impugned  judgment, a Division Bench of the said Court held that the purported  declaration in relation to the core area and heritage zone would not apply in

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the case of the writ-petitioners in view of the fact that the building plan  submitted by them before the Director in terms of the provisions of the 1977  Act had already been allowed, and, thus, the same had conferred a vested  right in them.  It was hence directed :

       "(a)    The respondent No. 3  shall process the  resubmitted building plans furnished by the petitioners  uninfluenced by the notification of the Government dated  22.8.2002.  Annexure R1/A and on the basis of the  building bye-laws as were prevalent at that time, i.e. on  17.4.2000 and shall pass the order within four weeks  from today.

       (b)     Needless to say, if any deficiency is found in  the resubmitted plans, on the basis of the bye-laws  prevalent on 17.4.2000, the petitioner shall remove such  deficiency within a week of being pointed out by the  Municipal Corporation and the Commissioner in turn  shall pass his orders within two weeks thereafter.

       (c)     In case the respondent No. 3 does not  comply with the aforesaid directions within the time  frame noticed above, the petitioners shall be at liberty to  carry out the construction as per their resubmitted plans  on 4.12.2000 in accordance with the bye-laws as in force  on 17.4.2000 after giving intimation to the  Commissioner, Municipal Corporation-respondent No.  3"  

29.     Appellant is, thus, before us challenging the aforesaid judgment.

30.     Mr. Anil Nag, the learned counsel appearing on behalf of the  appellant, submitted that having regard to the aforementioned notifications  dated 11.08.2000 and 22.08.2000, the impugned judgment could not have  been passed by the High Court.

31.     Mr. A.K. Ganguli, the learned Senior Counsel appearing on behalf of  the respondents, on the other hand, raised the following contentions :  i)      Having regard to the purport and object of the 1977 Act, once a  building plan is sanctioned in terms thereof, the Municipal  Corporation is required to only supervise the construction  thereof in exercise of its functions under the 1994 Act. ii)     Being a local authority, a building plan by the State sanctioned  in terms of the 1977 Act would be binding on the appellant and,  thus, the same could not have rejected; the functions of the  appellants confined only to oversee construction of the  building; iii)    In view of the clarificatory circular issued by the State of  Himachal Pradesh on 25.07.2000,  the building plan submitted  by the respondents having already been approved, the  Municipal Corporation was bound to act thereupon irrespective  of the effect of notification  dated 10.04.2000. iv)     In any event, as the application for building plans was  submitted on 07.07.1999,  in terms of the provisions contained  in Section 247of the 1994 Act, having regard to the fact that the  said application had neither been rejected nor accepted within a  period of sixty days therefrom, the sanction of the plan would  be deemed to have been granted. v)      In any view of the matter as during pendency of the writ  petition, the Municipal Corporation granted sanction in favour  of other applicants who were similarly situated, there is   absolutely no reason as to why the respondents should have  been discriminated against.   vi)     Appellant being a local authority was bound to act fairly, which

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would mean that they should have exercised their jurisdiction  within a reasonable time and having not done so, it does not  now lie in their mouth to rely upon the subsequent notifications  issued by the State under Section 17 of the 1977 Act. vii)    Unnecessary delay was caused by the appellant-Corporation in  dealing with the respondents’ application for grant of sanction  for the building plans.  Hence the original sanctioned plan was  only valid for a period of three years, the same should be held  to have been extended.          32.     In our opinion, the 1977Act and the 1994 Act operate in different  fields and they are complementary and supplementary to each other.  The  provisions of both the Acts can be worked out.  There is no conflict between  the two Acts.  The 1977 Act deals with laying down the broad policy.  It  provides for preparation of  development plans including the internal  development plans.  Indisputably, such development plans when made  would be binding upon the local authority.  It may, however, be not correct  to contend that despite the fact that the operation of the Acts cover two  different fields, namely, the 1977 Act deals with laying down the overall  policy matter and the 1994 Act deals with the grant of building plans in  terms of the provisions thereof by the Commissioner of the Municipal  Corporation;  only because sanction for development in the Mall area of the  town of Shimla was granted by the State in terms of the 1977 Act, the same  would mean that the same was binding upon the Municipal Corporation or  that the provisions of the 1994 Act or the building bye-laws were not  required to be complied with at all.   

33.     We have noticed hereinbefore that even in the order of sanction  passed in favour of the respondents by the State,  a condition was imposed  that before undertaking the development activities by way of erection of the  building, the respondents would take the requisite sanction from the  Municipal Corporation.  Even if such a condition had not been imposed, the  provisions of the Municipal Corporation Act, as noticed hereinbefore, would  operate.

34.     Section 243 of the 1994 Act clearly mandates that erection of a  building must precede grant of express sanction of a building plan.  How and  in what manner the same is required to be dealt with is provided in Sections  244 and 245 of the 1994 Act.  Clause (a) of sub-section (2) of Section 246 in  no uncertain terms restrict the power of the Appellant-Corporation to grant  sanction for erection, inter alia, for development of an area by way of  erection of a building or otherwise,  not only if the same is not in conformity  with the building bye-laws, but also if it contravenes any other law or rules  operating in the field.

35.     The 1977 Act is one of such Act.  As noticed hereinbefore, the  provisions thereof are binding upon the local authority.  Once the provisions  thereof are held to be binding, the law made by the State by way of  subordinate legislation in the form of the regulations and/or notifications  issued under sub-sections (4) and (5) of Section 17 of the 1977 Act would  also be binding.  Indisputably, the Municipal Corporation would not have  any authority to grant any sanction in violation thereof.

36.     Section 247 no doubt provides for a legal fiction specifying a period  of sixty days, within which the application for grant of sanction of a building  plan should be granted, but the said period evidently has been considered to  be providing for a reasonable period during which such application should  be disposed of.  However, only because the period of sixty days has elapsed  from the date of filing of application, the same by itself would not attract the  legal fiction contained in Section 247 of the 1994 Act.  When such an  application is attended to and the defects in the said building plans are  pointed out, there cannot be any doubt whatsoever that the applicant must  satisfactorily answer the queries and/or remedy the defects in the building  plans pointed out by the competent authority.

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37.     The building plans for which sanction was prayed for by the  respondents, as noticed hereinbefore, had been attended to.  The purported  defects were removed, as noticed hereinbefore only on 10.04.2000.  Even  according to the appellant-Corporation all the defects were not removed  which had been pointed out by the appellant-Corporation in terms of its  letter dated 06.06.2000.  In any event, as noticed hereinbefore, the State of  Himachal Pradesh imposed a temporary freeze on the development activities  in the Mall area by an order dated 17.04.2000.  The said order was also  binding upon the appellant-Corporation and no permission could have been  granted in favour of the respondents in violation thereof.  It is true, as has  been contended by Mr. Ganguli, that the said purported temporary freeze on  the construction activities imposed in terms of the notification dated  17.04.2000 came to be clarified by the State on or about 25.07.2000.  But by  reason thereof, the State could not have directed the Municipal Corporation  to grant sanction, as a statutory authority must be permitted to perform its  statutory functions in respect whereof even any higher authority cannot issue  any direction. [See Commissioner of Police, Bombay v. Gordhandas Bhanji   AIR 1952 SC 16 and Mohinder Singh Gill and Another v. The Chief  Election Commissioner, New Delhi and Others - AIR 1978 SC 851] and  R.S. Garg v. State of Uttar Pradesh and Others [(2006) 6 SCC 430].  

38.     In any event, as in the meanwhile, the period for which the building  plan was sanctioned by the State had expired, the question as to whether in  the aforementioned fact situation obtaining,  the respondents acquired any  vested right despite the amendments in the regulation by defining ’core area’  and  providing for the heritage zone is the issue, in our opinion, is  misconceived.   

39.     It is now well-settled that where a statute provides for a right, but  enforcement thereof is in several stages, unless and until the conditions  precedent laid down therein are satisfied, no right can be said to have been  vested in the person concerned.   The law operating in this behalf, in our  opinion is no longer res integra. 40.     In Director of Public Works v. Ho Po Sang [1961 AC 901 : (1961) 2  All ER 721], the Privy Council considered the said question having regard to  the repealing provisions of the Landlord and Tenant Ordinance, 1947 as  amended on 9-4-1957. It was held that having regard to the repeal of  Sections 3-A to 3-E, when applications remained pending, no accrued or  vested right was derived.  It was observed therein : "In summary, the application of the second appellant for  a rebuilding certificate conferred no right on him which  was preserved after the repeal of Sections 3-A to 3-E, but  merely conferred hope or expectation that the Governor- in-Council would exercise his executive or ministerial  discretion in his favour and the first appellant would  thereafter issue a certificate. Similarly, the issue by the  first appellant of notice of intention to grant a rebuilding  certificate conferred no right on the second appellant  which was preserved after the repeal, but merely  instituted a procedure whereby the matter could be  referred to the Governor-in-Council. The repeal  disentitled the first appellant from thereafter issuing any  rebuilding certificate where the matter had been referred  by petition to the Governor-in-Council but had not been  determined by the Governor." [See also Lakshmi Amma v. Devassy  [1970 KLT 204]

41.     The question again came up for consideration in Howrah Municipal  Corpn. and Others  v. Ganges Rope Co. Ltd. and Others [(2004) 1 SCC  663], wherein this Court categorically held :  "\005The context in which the respondent Company  claims a vested right for sanction and which has been  accepted by the Division Bench of the High Court, is  not a right in relation to ownership or possession of any  property for which the expression vest is generally

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used. What we can understand from the claim of a  vested right set up by the respondent Company is that  on the basis of the Building Rules, as applicable to their  case on the date of making an application for sanction  and the fixed period allotted by the Court for its  consideration, it had a legitimate or settled expectation  to obtain the sanction. In our considered opinion, such  settled expectation, if any, did not create any vested  right to obtain sanction. True it is, that the respondent  Company which can have no control over the manner  of processing of application for sanction by the  Corporation cannot be blamed for delay but during  pendency of its application for sanction, if the State  Government, in exercise of its rule-making power,  amended the Building Rules and imposed restrictions  on the heights of buildings on G.T. Road and other  wards, such settled expectation has been rendered  impossible of fulfilment due to change in law. The  claim based on the alleged vested right or settled  expectation cannot be set up against statutory  provisions which were brought into force by the State  Government by amending the Building Rules and not  by the Corporation against whom such vested right or  settled expectation is being sought to be enforced. The  vested right or settled expectation has been nullified not  only by the Corporation but also by the State by  amending the Building Rules. Besides this, such a  settled expectation or the so-called vested right cannot  be countenanced against public interest and  convenience which are sought to be served by  amendment of the Building Rules and the resolution of  the Corporation issued thereupon."

42.     In Union of India and Others v. Indian Charge Chrome and Another  [(1999) 7 SCC 314], yet again this Court emphasized :  "\005The application has to be decided in accordance with  the law applicable on the date on which the authority  granting the registration is called upon to apply its mind  to the prayer for registration\005"

43.     In S.B. International Ltd. v. Asstt. Director General of Foreign Trade  [(1996) 2 SCC 439], this Court repelled a contention that the authorities  cannot take advantage of their own wrong viz. delay in issuing the advance  licence, stating :          "We have mentioned hereinbefore that issuance of  these licences is not a formality nor a mere ministerial  function but that it requires due verification and  formation of satisfaction as to compliance with all the  relevant provisions."

[See also Kuldeep Singh v. Govt. of  NCT of  Delhi [(2006) 5 SCC 702]

44.     Mr. Ganguli, however, submitted that whereas in the case of State of  West Bengal etc.  v. Terra Firma Investment & Trading Pvt. Ltd. etc.,  [(1995) 1 SCC 125], the amended statute itself provided for rejection of all  pending applications, no such provision has been laid down in the  notification and, thus,  the said decision is distinguishable.

45.     Ganges Rope Co. Ltd. (supra) was also sought to be distinguished by  Mr. Ganguli, submitting (i) in the Howrah Municipal Corporation Act, 1980  there was no deeming provision; (ii) the said law had been amended; and  (iii) therein the statute used the word ’ordinarily’.

46.     It is difficult to agree with the aforementioned contention of the  learned Senior Counsel.

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47.     There cannot be any doubt whatsoever that an owner of a property is  entitled to enjoy his property and all the rights pertaining thereto.  The  provisions contained in a statute like the 1994 Act and the building bye-laws  framed thereunder, however, provide for regulation in relation to the  exercise and use of such right of an owner of a property.  Such a regulatory  statute must be held to be reasonable as the same is enacted in public  interest.  Although a deeming provision has been provided in sub-section (1)  of Section 247 of the 1994 Act, the same will have restricted operation.  In  terms of the said provision, the period of sixty days cannot be counted from  the date of the original application,  when the building plans had been  returned to the applicant necessary clarification and/or compliance of the  objections raised therein.  If  no sanction can be granted, when the building  plan is not in conformity with the building bye-laws or has been made in  contravention of the provisions of the Act or the laws, in our opinion, the  restriction would not apply despite the deeming provision.

48.     A legal fiction, as is well-known, must be construed having regard to  the purport and object of the Act for which the same was enacted. [See  Ishikawajma-Harima Heavy Industries Ltd. v. Director of Income Tax,  Mumbai \026 2007 (1) SCALE 140 \026 Para 36].  

49.     It is in the light of the aforementioned principle that the question as to  whether the respondents had  acquired any vested right or not must be  considered.  Strong reliance, in this behalf, has  been placed by Mr. Ganguli   on a decision of the Division Bench of this Court in Live Oak Resort (P)  Ltd. and Another v. Panchgani Hill Station Municipal Council and Another  [(2001) 8 SCC 329].  The said decision was rendered on its own facts.  In  that case a building plan had been granted; construction had been started in  terms  of the building plan as also the rules which were applicable at the  relevant point of time. The question which arose for consideration therein  was as to whether a subsequent amendment to the rules, in respect of  additional FSI shall have any effect on the sanctioned building plan, it was  contended that keeping in view the environmental question, the same will  have not.

50.     The said decision having been rendered in the fact situation obtaining  therein, which has no similarity to the facts of the present case, which in our  opinion, cannot be said to have any application whatsoever.  The submission  of Mr. Ganguli that despite expiry of the period of sanction of the  development plan by the State  under the 1977 Act, the same should be held  to be extended, in our opinion, cannot be accepted.  Reliance has been  placed by Mr. Ganguli on M.C. Mehta (Badkhal and Suraj Kund Lakes  Matter)  v. Union of India and Others [(1997) 3 SCC 715].  Therein, it was  held :         "2. No construction of any type shall be permitted,  now onwards, in the areas outside the green belt (as  shown in Ex. A and Ex. B) up to one km radius of the  Badhkal lake and Surajkund (one km to be measured  from the respective lakes). This direction shall, however,  not apply to the plots already sold/allotted prior to 10-5- 1996 in the developed areas. If any unallotted plots in the  said areas are still available, those may be sold with the  prior approval of the Authority. Any person owning land  in the area may construct a residential house for his  personal use and benefit. The construction of the said  plots, however, can only be permitted up to two and a  half storeys (ground, first floor and second half floor)  subject to the Building Bye-laws/Rules operating in the  area. The residents of the villages, if any, within this area  may extend/reconstruct their houses for personal use but  the said construction shall not be permitted beyond two  and a half storeys subject to Building Bye-laws/Rules.  Any building/house/commercial premises already under  construction on the basis of the sanctioned plan, prior to

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10-5-1996 shall not be affected by this direction"   51.     The restriction therein was imposed by the court, which was a judge- made law and not a statute law.  Relaxation, therefore, was granted keeping  in view the rights of the parties in terms of the order passed by the court.   However, in this case, we are bound by the provisions contained in a statute. 52.     In T. Vijayalakshmi and Others v. Town Planning Member and  Another (2006) 8 SCC 502], although exercise of  jurisdiction by a statutory  authority within a reasonable time has been emphasized, but there again the  applicability of existing law has been emphasized referring to Ganges Rope  Co. Ltd. (supra) and Ho Po Sang (supra).  The said decision was rendered  having regard to the fact that only a proposal of amendment was made, and  no amendment as such had come into effect.  A right of a citizen under a  statute, therefore, could not have been taken away only because a proposal  was in the offing.  In that case, the State had not given its final approval  having regard to the development of the plan.  The said decision, therefore,  cannot be said to have any application in the instant case.   53.     Furthermore, since special regulations have been framed in the town  of Shimla, the core area as provided for in the regulation is required to be  protected.  The area in question has been declared to be a heritage zone, and  hence no permission to raise any construction can be issued, which would  violate the ecology.  Such regulations have been framed in public interest.   Public interest, as is well-known, must override the private interest. [See  Friends Colony Development Committee v. State of Orissa and Others AIR  2005 SC 1 \026 para 22]. 54.     For the reasons aforementioned, the impugned judgment cannot be  sustained, which is set aside accordingly.  The appeal is allowed.  In the  facts and circumstances of the case, however, there shall be no order as to  costs.