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CASE NO.: Appeal (civil)  3271 of 2005

PETITIONER: Bombay Dyeing & Manufacturing Co. Ltd.

RESPONDENT: Bombay Environmental Action Group & Ors.

DATE OF JUDGMENT: 11/05/2005

BENCH: N. Santosh Hegde & S.B. Sinha

JUDGMENT: J U D G M E N T

[@SLP (C) No. 7405 OF 2005]

WITH  

             I.A. NO.2 IN C.A. @ SLP (CIVIL) NO.7405 OF 2005                                         WITH CIVIL APPEAL NO.                    OF 2005 [@SLP (C) Nos. 7549-7550 of 2005]                                          WITH     I.A. NO. 7-11 IN  C.A. @ SLP (CIVIL) NOS.7549-7550 OF 2005                                         WITH CIVIL APPEAL NO.                OF 2005 [@ SLP(C) NO. 10511 of  2005]                                         WITH                 I.A. NO.3 IN C.A. @  SLP (CIVIL) NO.10511 OF 2005                                                WITH CIVIL APPEAL NO.                OF 2005 [@SLP(C) NO. 7453 of 2005]                                         WITH I.A. NO.2 IN C.A. @ SLP (CIVIL) 7453 OF 2005                         WITH CIVIL APPEAL NO.                OF 2005 [@SLP (C) NO. 7451 of 2005]                                         WITH                 I.A. NOS.2-3 IN C.A. @ SLP (CIVIL) NO.7451 OF 2005                                         WITH                         CIVIL APPEAL NO.                 OF 2005 [@SLP(C) NO. 8362 of 2005]                                          WITH I.A. NO. 2 IN C.A. @ SLP (CIVIL) NO.8362 OF 2005                                          AND                         CIVIL APPEAL NO.                OF 2005 [@SLP(C) NO. 8378 of 2005]                                          WITH                 I.A. NO.2 IN C.A. @ SLP (CIVIL) NO.8378 OF 2005

S.B. SINHA, J :

       Leave granted.

In the early eighties the workmen of the cotton mills situated in the  town of Bombay went on a strike resulting in closure of 58 textile mills  which together occupied lands measuring about 600 acres.  Out of the said  58 mills, 25 belonged to the National Textile Corporation and 33 to private  parties.  

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In terms of the Maharashtra Regional & Town Planning Act, 1966,  the Development Control Rules (DCR), 1967 were framed.  The State  Government took a policy decision to amend the DCR wherefor suggestions/  opinion from the public were invited.  In the year 1991, Development  Control Regulations, 1991 were framed; Regulation 58 whereof permitted  modernization of mills and development of surplus mill lands in the manner  specified therein.  It also provided for development of mill lands as a part of  BIFR approved rehabilitation schemes and also for modernization and  shifting thereof.

The said Regulation 58 sought to deal with the lands appertaining to  cotton textile mill pursuant whereto each of the mill owners could give one  of the options out of the following:

(i)     The mill owners could continue to operate their mills even though it  was running into losses.  This was the status-quo option which  entailed no land being surrendered to MHADA, public greens;

(ii)    The second option entailed retaining the outer shell of the mill  structures and building commercial structures within the mill  structure;

(iii)   The third option entailed two steps.  The first step was raising of  construction within the old structure and the second step was to  construct on the part of open spaces;

(iv)    The fourth option ensured demolition of the entire old structures and  sharing the entire mill lands in approximately three equal proportions.   The first part would remain with the mill owner which he would be  entailed to redevelop.  The second share would go to MHADA and  the third share would go to public greens.   

       Pursuant to or in furtherance of the said regulation, only two mills  exercised the second option and three mills the third one.  Nobody opted for  the fourth as in terms thereof the mill owners were required to surrender a  major portion of their land.  As allegedly, the said regulation did not work  satisfactorily as no significant amount of land either for public green or for  MHADA came to be surrendered, it was not implemented.  

       It is stated that some mills endeavoured to develop the lands in  accordance with the said regulation but the same did not achieve the purpose  for which the Regulation 58 was brought into force.  In the aforementioned  situation, as would be noticed supra, Regulation 58 was amended in 2001.   

       The Respondents filed a writ petition in the Bombay High Court  questioning the validity of the said regulation.  Some interim orders have  been passed therein which are in question in these appeals.  

       The Appellants contend :

(i)     As the scheme containing 1991 regulations was not found to be  workable, committees were appointed and in furtherance of their  recommendations a new Regulation 58 was introduced in the year  2001. The new Regulation 58 envisaged a coherent development of  the various mills and their lands in Mumbai and also ensured that the  proceeds of such development are utilized in accordance with either  the schemes promulgated by BIFR and/ or for the satisfaction of the  dues of the workers and/ or for the satisfaction of the large  outstanding public monies by way of loans from financial institutions  and banks under the supervision of a Monitoring Committee.   Regulation 58 of 2001 while providing for a coherent development  also took care of the provision for open spaces, public amenities and  public housing.  The entire development is to be overseen by a  Monitoring Committee which over see an escrow account to ensure

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financial accountability, their payment to workers/ financial institution  etc. and is headed by a retired High Court Judge appointed under the  said Regualtion 58 of 2001.  Pursuant to or in furtherance of the new  regulation, the mill owners allegedly borrowed huge sums of money,  i.e., Rs. 2002 crores from the banks and financial institutions to pay of  the dues of the workers and also the dues of the others.

(ii)    Bombay Dyeing & Manufacturing Co. Ltd. alone after taking advances  from the financial institutions paid Rs. 120 crores to the workers and is   committed to pay a further sum of Rs. 50 crores.

(iii)   Within a span of four years since coming into force of the 2001  Regulations, third party rights have been created, sanctions have been  obtained for modernization of scheme and the parties have altered their  position to a large extent.

       The said regulation of 2001 was clarified in the year 2003.  With a  view to have a re-look at Regulation 58, a nine member committee with Shri  Deepak Parekh, Chairman, HDFC as its Chairman was appointed; the terms  of reference whereof are:

"(1) To examine the feasibility of an integrated  development of mills land.

(2) To study the existing DCR and suggest ways so  that enough land is made available for open use/  public housing without jeopardizing workers/  financial institutions interests."

                However admittedly no recommendation has been made by the said  committee nor its term has been extended.

       The first Respondent is a public charitable trust registered both under  the Bombay Public Trust Act, 1950 as also a society registered under the  Societies Registration Act.  Its aims and objects inter alia are to look after  environment in all aspects and it had been carrying activities therein.  The  Respondent filed a writ petition on or about 18th February, 2005 in the nature  of a Public Interest Litigation in the High Court of Judicature at Bombay  praying inter alia for the following reliefs:

"(a)    For an appropriate writ, order or direction  striking down the impugned order dated 20th  March, 2001 (Exhibit "C", hereto) and consequent  amendment to DC Regulation 58, in particular,  Clauses A-6 and C-1 (5) of Schedule 1 of the  impugned order dated 20th March, 2001 as ultra  vires the MRTP Act, illegal, unconstitutional, void  ab initio and non est;

(b)     For a writ of mandamus, or a writ in the  nature of mandamus or any other appropriate writ,  order or direction, ordering and directing the 1st  and 2nd Respondents (and their servants, agents or  officers):

(i) to withdraw/ cancel the impugned order dated  20th March, 2001 and the consequent amendment  to DCR 58;

(ii) to take such action as is necessary in law to  amend DCR 58 to ensure that the total amount of  space available for redevelopment in respect of  which the percentage wise allocations are to be  determined, is the open land and the land available

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after demolition of existing structures;

(iii) to forbear and desist from granting any  permission, in accordance with amended DCR 58  (including to Respondent Nos. 3 and 4) for the  redevelopment of the mill lands; (iv) restraining them from in any way acting in  furtherance of the report submitted by NTC and  prepared by "Team One".

(c) For a writ of mandamus or a writ in the nature  of a writ of mandamus directing Respondent Nos.  1 and 2 (and their servants, agents or officers) to  undertake preparation of plan for comprehensive  development of appropriately delineated Textile  Mill District so as to provide for the  comprehensive development of these mill lands in  an integrated manner in furtherance of the  recommendations made by the Charles Correa  Expert Committee Report submitted in August,  1996;

(d) That pending the hearing and final disposal of  this petition, Respondent Nos. 1 and 2 should be  restrained by an appropriate writ, order direction or  injunction from granting any permission or taking  any action pursuant to permission already granted  for the redevelopment of mill lands (including to  Respondent Nos. 3 and 4) in pursuant of the  provisions of amended DCR 58;

(e)     That pending the hearing and final disposal  of this petition, the Respondent Nos. 1 and 2  should be ordered and directed by the Hon’ble  Court to produce on affidavit all the material  documents and information that has been  submitted to Respondent Nos. 1 and 2 by  Respondent Nos. 3 and 4 as part of their  application for permission to develop the said land  or any part thereof and any other material and  information available to Respondent Nos. 1 and 2  which it has considered / likely to consider in  relation to the grant of permission to Respondent  Nos. 3 and 4 for the development of the said mill  land;

(f)     That pending the hearing and final disposal  of this petition, Respondent Nos. 1 and 2 should be  ordered and directed by this Hon’ble Court to  produce on affidavit all the material documents  and information that has been submitted to  Respondent Nos. 1 and 2 by privately owned mills  as part of their applications for permission to  develop their respective textile mill lands, and any  other material information and documents that  Respondents Nos. 1 and 2 considered in relation to  the grant of permission to them for the  development of their respective mill lands;

(g)     That pending the hearing and final disposal  of this petition, Respondent Nos. 1 and 2 should be  ordered and directed to appoint a Special Planning  Authority or any other supervisory body/  committee to supervise the comprehensive /  integrated development of mill lands, including

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private mill lands (that fall within the purview of  DCR 58), in furtherance of the recommendations  of the Charles Correa Expert Committee Report  submitted in August, 1996;

(h)     For ad-interim reliefs in terms of prayer  clauses (d) to (g); and

(i)     For such further and other reliefs and orders  as this Hon’ble Court deem fit in the nature and  circumstances of this petition."

       In the said writ petition, apart from the State of Maharashtra, the  Municipal Corporation of Mumbai, the Maharashtra Housing and Area  Development Authority, National Textile Corporation Maharashtra North  and South Maharashtra were impleaded as Respondents.  Before the said  High Court, a large number of mill owners and others who allegedly have  invested a huge sum on the lands of the Mill owners or otherwise interested  in implementation of Regulation 58 of 2001 filed applications for their  impleadment as parties therein but the same was opposed by the  Respondents.  The Applicants, however, were allowed to intervene.  

       It was, however, stated at the bar that whereas 6th April, 2005 was  fixed for filing responses by the interveners, but after hearing the matter for  three days, viz., 29th to 31st March, 2005, the impugned orders were passed.   

       Before the High Court, the National Textile Corporation inter alia  contended that it had been carrying on its activities in terms of a scheme  framed by the BIFR and which has been approved by this Court by an order  dated 27.9.2002 in the following terms:

"We have been informed that BIFR has already  formulated eight schemes which stand approved by  all concerned and agencies.  But the Schemes as  sanctioned by BIFR be implemented.  The special  leave petition and the transfer petitions stand  disposed of accordingly."

       The National Textile Corporation contends that out of 25 mills 17/18  Mills have closed down.  Approximately 14,800 employees have been  relieved.  Payment of Rs. 643.94 crores have been made to the employees.

       It has further been contended that several financial institutions and  others have acted pursuant to or in furtherance of the said scheme.  It is  stated that negotiations for selling seven textile cotton mills have been  finalized and, thus, it was submitted that no stay should be granted.

The High Court passed two interim orders on 1st April, 2005.  As  regard National Textile Corporation, it was directed:

"On behalf of the N.T.C. the learned Counsel  submits that they should be allowed to proceed  with the sale of Jupiter Mills.  The matter is  pending before this Court.  However, considering  the urgency which Counsel make out any further  as N.T.C. has 25 mills the request for confirming  the sale can be agreed to, subject to the following  conditions:

i)      The NTC will file an undertaking in this  Court, that on the Court passing an order on  interim relief they will comply with the order of  the Court including if a situation arises of

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reserving the land in the other mills for which  development is sought in terms of the order that  may be passed by the Court.  On such undertaking  being filed, it is open to the NTC to confirm the  sale of Jupiter Mills."

       It was further directed:

"ii)    Considering that the matter has now been  adjourned to 20.4.2005 the Respondent No. 2 \026  Municipal Corporation directed not to approve any  further lay outs, issue IOD, or CC without the  permission of this Court or till further orders."

       It is not in dispute that although no argument was advanced in that  behalf, the Division Bench by a separate order directed the State as also the  Bombay Municipal Corporation to file a large number of documents under  fourteen different heads.   

       The learned counsel appearing on behalf of the Appellants inter alia  would submit:

(i)     Keeping in view of the fact that the writ petitioners did not file any  objection or suggestions before Regulation 58 was given a concrete   shape, it was not entitled to any interim relief.   (ii)    Regulation 58 being a subordinate legislation, a public interest  litigation should not have been entertained questioning its validity. (iii)   In any event, as within the interregnum of four years, the Appellants  as also the others have invested a huge sum of money, the interim  order ought not to have been passed as they would affect the interests  inter alia of (i) the workers, (ii) the financial institutions, (iii) the mill  owners; and (iv) the third party purchasers. (iv)    No interim order in any view of the matter could have been passed  without impleading the interested parties and permitting them to file  their affidavits. (v)     Several parties have obtained lay out, IOD or commencement  certificates for different stages and in that view of the matter if the  interim order is allowed to operate, the same would result in great  hardship.

       The learned Solicitor General appearing on behalf of the State of  Maharashtra further submitted that if the State of Maharashtra is asked to  carry out the directions of the High Court as regard filing of the documents,  they will be put to a great hardship as truck loads of documents will have to  be brought before the High Court.

       Mr. Parasaran and Mr. Rohtagi, learned senior counsel appearing on  behalf of the National Textile Corporation would contend that keeping in  view of the fact that in respect of seven mills, negotiations have been entered  into, they should be allowed to be sold off and in the event, the writ petition  succeeds, the order of the court can be complied with by adjusting vacant  land belonging to the other mills.

       Mr. Iqbal Chagla, learned senior counsel appearing on behalf of the  writ petitioner-Respondents, on the other hand, would contend that in terms  of the 1991 Regulations, at least 200 acres out of 600 acres of land situate in  the middle of the city would have been made available providing for large  space for the inhabitants of the town and further 200 acres of land would  have been available to MHADA for construction of residential houses for  the weaker sections.  Integrated development of town of Bombay, the  learned counsel would contend, is imperative having regard to the fact that  whereas in other metros, three to four acres of open space is available for  one thousand residents, in the town of Mumbai, it is only 0.03 acres per  thousand.  It was contended that in terms of Section 37 of the Maharashtra  Regional & Town Planning Act, 1966, the State of Maharashtra itself

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imposed a ban in 1996 on constructions on the ground that no final decision  had been taken in that behalf and in that view of the matter there is  absolutely no reason as to why the impugned order cannot be sustained in as  much as the validity of Regulation 58 has been questioned in the writ  petition.  It was pointed out that the State of Maharashtra itself issued  clarification of 2001 Regulations in March, 2003 in terms whereof allotment  in favour of MHADA came to an end.  It had been pointed out that Bombay  Municipal Corporation and MHADA had adopted resolutions asking the  State Government to have a relook in the matter and in January, 2005, the  State appointed a committee therefor.  In any event, the learned counsel  would contend that the High Court by reason of the impugned order having  not directed stoppage of constructions or any other activity in relation  whereto agreements have been entered into or requisite sanctions have been  granted, the impugned orders should not be interfered with.   

       The learned counsel would urge that the undertaking directed to be  given by the National Textile Corporation is commensurate with the  suggestion given by Mr. Parasarn before this Court.

       This Court at this stage is concerned with an interim order passed by  the High Court.  The writ petition is still to be heard.  Affidavits between the  parties are yet to be exchanged.  The objection as regard maintainability of  the writ petition is also required to be finally determined by the High Court  itself.  This Court at this stage cannot, thus, enter into all the contentious  questions raised in these appeals.  But, there cannot be doubt or dispute  whatsoever that before an interim order is passed and in particular a public  interest litigation, the court must consider the question as regard existence of  a prima facie case, balance of convenience as also the question as to whether  the writ petitioners shall suffer an irreparable injury, if the injunction sought  for is refused.  The courts normally do not pass an interlocutory order which  would affect a person without giving an opportunity of hearing to him.  Only  in extreme cases, an ad interim order can be passed but even therefor, the  following parameters as laid down by this Court in Morgan Stanley Mutual  Fund etc. vs. Kartick Das etc. [(1994) 4 SCC 225] are required to be  complied with:

"As a principle, ex parte injunction could be  granted only under exceptional circumstances. The  factors which should weigh with the court in the  grant of ex parte injunction are\027 (a) whether irreparable or serious mischief will  ensue to the plaintiff; (b) whether the refusal of ex parte injunction  would involve greater injustice than the grant of it  would involve; (c) the court will also consider the time at which  the plaintiff first had notice of the act complained  so that the making of improper order against a  party in his absence is prevented; (d) the court will consider whether the plaintiff had  acquiesced for sometime and in such  circumstances it will not grant ex parte injunction; (e) the court would expect a party applying for ex  parte injunction to show utmost good faith in  making the application. (f) even if granted, the ex parte injunction would  be for a limited period of time. (g) General principles like prima facie case,  balance of convenience and irreparable loss would  also be considered by the court."

[See also Andhra Bank Vs. Official Liquidator and Anr., 2005 (3) SCALE  178]

       The courts while passing an order of interim injunction must also

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consider the parameters of a Public Interest Litigation as laid down by this  Court in Dr. B. Singh Vs. Union of India and Others [(2004) 3 SCC 363]  and Dattaraj Nathuji Thaware Vs. State of Maharashtra and Others [(2005) 1  SCC 590].

       The courts, however, have to strike a balance between two extreme  positions, viz., whether the writ petition would itself become infructuous if  interim order is refused, on the one hand, and the enormity of losses and  hardships which may be suffered by others if an interim order is granted,  particularly having regard to the fact that in such an event, the losses  sustained by the affected parties thereby may not be possible to be  redeemed.

       In Deoraj vs. State of Maharashtra and Others [(2004) 4 SCC 697]  this Court opined:  

"12. Situations emerge where the granting of an interim  relief would tantamount to granting the final relief itself.  And then there may be converse cases where withholding  of an interim relief would tantamount to dismissal of the  main petition itself; for, by the time the main matter  comes up for hearing there would be nothing left to be  allowed as relief to the petitioner though all the findings  may be in his favour. In such cases the availability of a  very strong prima facie case \027 of a standard much  higher than just prima facie case, the considerations of  balance of convenience and irreparable injury forcefully  tilting the balance of the case totally in favour of the  applicant may persuade the court to grant an interim  relief though it amounts to granting the final relief itself.  Of course, such would be rare and exceptional cases. The  court would grant such an interim relief only if satisfied  that withholding of it would prick the conscience of the  court and do violence to the sense of justice, resulting in  injustice being perpetuated throughout the hearing, and at  the end the court would not be able to vindicate the cause  of justice. Obviously such would be rare cases  accompanied by compelling circumstances, where the  injury complained of is immediate and pressing and  would cause extreme hardship. The conduct of the parties  shall also have to be seen and the court may put the  parties on such terms as may be prudent."

       In Raunaq International Ltd. Vs. I.V.R. Construction Ltd. and Others  [(1999) 1 SCC 492], this Court held that in appropriate cases, the petitioners  should be put on appropriate terms such as providing an indemnity or an  adequate undertaking to make good the loss or damage in the event the PIL  filed is dismissed. [See also Guruvayoor Devaswom Managing Committee  and Another Vs. C.K. Rajan and Others, (2003) 7 SCC 546].

       The Courts are also required to consider the decisions of this Court  relating to public interest litigation vis-‘-vis reason of delay in bringing the  same as noticed by this Court in Chairman & MD BPL Ltd Vs. S.P.  Gururaja and Others, (2003) 8 SCC 567] in the following terms:

"In the facts and circumstances, we do not find that  the Board and the State had committed any  illegality which could have been a subject-matter  of judicial review. The High Court in our opinion  committed a manifest error insofar as it failed to  take into consideration that the delay in this case  had defeated equity. The allotment was made in  the year 1995. The writ application was filed after  one year. By that time the Company had not only

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taken possession of the land but also made  sufficient investment. Delay of this nature should  have been considered by the High Court to be of  vital importance."

[See also Narmada Bachao Andolan Vs. Union of India and Others, (2000)  10 SCC 664 at 762 and R & M Trust Vs. Koramangala Residents Vigilance  Group and Others, (2005) 3 SCC 91 at 112-13]

       So far as transactions relating to seven mills belonging to National  Thermal Corporation are concerned, including sale of Jupiter Mills, it is not  in dispute that transactions have reached a final stage.  The purchasers of  Jupiter Mills have already paid 16 crores and a sum of Rs. 376 crores would  pass hands if the transaction is completed.  If the transactions in respect of  the mills are not allowed to be completed, the scheme framed by the BIFR  would come to a stand still resulting in accrual of interest payable by the  National Textile Corporation to the financial institutions besides other  hardships which may be caused to various other persons including the  workers.

       We, therefore, having regard to the facts and circumstances of this  case as also the law operating in the field, are of the opinion that interest of  justice would be sub-served if the National Textile Corporation is permitted  to complete the transactions in terms of the scheme framed by the BIFR but  the same shall be subject to the conditions that in the event, the writ petition  ultimately succeeds, the vacant land available from other mills, if necessary,  shall be offered by way of adjustment.

       In some cases, the State might have sanctioned DCR.  Yet in some  other cases, IODs might have been obtained.  Yet again, in some cases,  Commencement Certificates might have been granted.  In such cases, the  statutory authorities shall process applications or further applications for  grant of sanction required for commencement and/ or continuation of  structures strictly in accordance with law.  It is stated that in some cases such  applications may be entertained although the period of lease has expired.   We do not think that the statutory authorities shall be so callous so as to  grant permission in favour of a person who does not have ownership over  the land in question.  We furthermore have no doubt that the scheme, rules,  regulations and byelaws framed under the provisions of Maharashtra  Regional & Town Planning Act, 1966 shall be strictly complied while  granting permission.  We have furthermore no doubt that the committee  appointed in terms of the regulation shall grant its approval only in  accordance with the extant regulations. The Appellants and/ or interveners  herein, however, before creating any further third party interest or before  raising any constructions pursuant to or in furtherance of any fresh lay out,  IODs or CCs must put an advertisement in two newspapers having wide  circulation in Mumbai; one in English and the other in Marathi Vernacular  clearly indicating the same.  If any agreement is to be entered into in future  or any third party right is to be created, a stipulation shall be made therein  that the enforcement thereof shall be subject to any other or further order  which may ultimately be passed by the High Court in the pending  proceedings.

       Any further constructions and/ or creation of any third party rights by  the mill owners will be at their own risk wherefor they would not claim any  equity whatsoever and furthermore the same shall be subject to the orders of  the Court.  However, any new application for grant of approval of any lay  outs, issue of IODs or commencement certifications may be processed but  no construction shall be carried on pursuant thereto or in furtherance thereof.

       It appears that there exists some dispute between two rival trade  unions.  Their interse disputes representing different sections of workers, if  any, may be determined by an appropriate forum in an appropriate  proceeding.  

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       We are informed that the Division Bench of the Bombay High Court  had fixed hearing of the writ petition in the last week of August, 2005.  We  would request the High Court to consider the desirability of preponing the  date so that the writ petition may be heard out and disposed of at an early  date and preferably by 31st July, 2005.   

       The impleaded parties and/ or interveners may file their affidavits  before the High Court within three weeks from date.

       The State of Maharashtra and the Bombay Municipal Corporation  shall place all the relevant documents before the High Court and in the  event, it is found at a later stage that they have withheld any document  which is relevant, the High Court would be at liberty to draw adverse  inference against them or pass such other order or orders as may be found  necessary.  We have passed this order having regard to the fact that the  directions to produce documents have been passed without hearing the  parties and without taking into consideration the hardship which may be  faced by the State and/ or Bombay Municipal Corporation.

       We, by our order dated 18th April, 2005 directed the matter to be  placed on 23rd August, 2005 for hearing but keeping in view of the fact that  in these appeals we were called upon to deal with an interim order, we are of  the opinion that no purpose would be served in keeping the matters pending.   We, therefore, dispose of these appeals and the intervention applications on  the aforementioned terms.  

       Having regard to the directions issued, it is not necessary to pass any  separate orders on the applications for impleadment and/or intervention..                                  No order as to costs.