1    

  REPORTABLE  

IN THE SUPREME COURT OF INDIA  

CIVIL APPELLATE JURISDICTION  

 Civil Appeal Nos. 5642-5643 of 2019  

(@SLP (C) Nos. 31274-31275 of 2014)    

Chennai Metropolitan Development Authority         …Appellants  Rep. by its Member- Secretary & Anr            

                              Versus  

Prestige Estates Project Ltd.             …Respondent  

J U D G M E N T  

Dr Dhananjaya Y Chandrachud, J  

1 These appeals arise from a judgment of a Division Bench of the High Court  

of Judicature at Madras in a Writ Appeal, affirming the judgment of a learned  

Single Judge in proceedings under Article 226 of the Constitution. The High Court  

set aside a demand raised by the appellant for revised charges on account of (i)  

Infrastructure and Amenities1; and (ii) Premium Floor Space Index2.  

                                                           1 I & A

2    

2 The respondent submitted an application on 22 March 2011 for planning  

permission to construct a multi-storeyed building complex at Ayyappan Thangal  

Village, Thiruperumbudur Taluk. The Housing and Urban Development  

Department of the Government of Tamil Nadu, to which the application was  

forwarded for approval in terms of the Development Regulations3, accorded its  

approval to the recommendation of the Multi-storeyed Building Panel.   

3 On 5 January 2012, the State government in a letter to the appellant  

approved the recommendation, subject to the following conditions:  

“(i) Chennai Metropolitan Development Authority should  

ensure that the applicant gifts the road widening  

portions marked in the plan to the Chennai  

Metropolitan Development Authority along with OSR  

spaces before issue of Planning Permission.   

(ii) The applicant shall furnish ‘No Objection Certificate’  

from Chennai Metropolitan Water Supply and  

Sewerage Board for using their land in S. Nos. 51/1B2  

and 1C2 for access before issue of Development  

Charges advice.  

(iii) Subject to other usual condition.”   

The letter stated that before the issuance of planning permission, an undertaking  

should be obtained from the respondent to fulfill  

(i) The provisions contained in the DR; and  

(ii) The conditions imposed by the Director of Fire and Rescue Service and  

other Departments.   

                                                                                                                                                                                     2 Premium FSI  3 DR

3    

The appellant, as the planning authority, was requested to take up further action  

for issuance of a planning permission.   

4 The appellant, which is a planning authority under the provisions of the  

Tamil Nadu Town & Country Planning Act 19714, was required to consider the  

application for the grant of planning permission under Section 49. The Chennai  

Metropolitan Water Supply and Sewerage Board5 addressed a letter on 6  

February 2012 to the respondent stating that it would consider the issuance of its  

No Objection Certificate6 subject to the acceptance of the following conditions:  

“1. RCC Compound wall shall be constructed on the  

boundaries of the proposed land adjacent to CMWSSB  

land with gate provisions of 6m. span at both ends as  

accesses to reach the other side of the proposed  

multistoried residential buildings as accepted in your Lr.  

dt. 28.01.2012.  

2. The design and estimate for proposed R.C.C culvert of  

suitable length and width should be submitted for approval  

of CMWSSB, before construction of culvert.   

3.The proposed R.C.C  culverts with clearance of 1.5mtr  

all-round the pipeline should be constructed at both  

crossings to reach the property under the supervision of  

CMWSS Board.  

4. Supervision charge @ 21% of the estimated  

construction cost should be deposited to CMWSSB before  

construction of culvert.  

5. The existing pipeline should not be damaged at any  

point of time and if any damage is caused at the time of  

construction of culverts/compound wall, the entire repair  

cost should be borne by you.  

6. If any leak or burst occurs in the pipeline in future within  

the culvert portion, the culvert will be demolished by the  

Board for attending leak/burst in future and the same has  

to be reconstructed at your risk and cost.  

                                                           4 The Planning Act 1971  5 The Sewerage Board   6 NOC

4    

7. You should not have any rights, whatsoever to claim  

the ownership of the above board’s land.  

8. The Board reserves the right to enter upon the  

premises for any inspection and to cancel the “No  

Objection Certificate” at any point of time without  

assigning any reason in the interest of public.”  

5 On 2 March 2012, the respondent addressed a communication to the  

appellant, stating that it had accepted the conditions imposed by Sewerage  

Board by its letter dated 18 February 2012 and that a formal NOC was expected  

shortly. The appellant was requested to process the planning permission and to  

issue a notice of demand for development charges in order to enable the  

respondent to arrange for the funds required. The respondent, in its above letter  

dated 2 March 2012 stated :  

“Now we expect the formal NOC from CMWSSB very  

shortly. In view of the above progress on the NOC, we  

request that the processing of Planning Permit and the  

notice for development charges may kindly be issued to  

assess the fees amount involved and also to make  

arrangement for the funds required. We further assure  

you that before the payment of fees is effected by us the  

formal NOC from CMWSSB will be submitted.”  

6 On 7 March 2012, the appellant requested the Sub-Registrar, Chennai  

South to furnish the guideline value of urban land for the survey numbers where  

development was proposed by the respondent for assessing the Premium FSI  

charges in relation to the development proposal. This was furnished by the Sub-

Registrar on 7 March 2012.  

5    

7 On 27 March 2012, the appellant issued a demand notice requiring the  

respondent to deposit the following charges in order to facilitate the processing of  

its application:  

 “    i) Development  

charge for land and  

building under Sec.  

59 of the T&CP  

Act, 1971  

Rs. 63,10,000/-  

(Rupees sixty three Lakh and ten  

Thousand Only)  

ii) Balance Scrutiny  

Fee  

Rs. 50,000/- (Rupees fifty  

Thousand only)  

iii) Regularisation  

charge for  

unauthorized sub  

division &  

amalgamation   

Rs. 25,10,000/- (Rupees twenty  

five lakh and ten thousand only)  

iv) Security Deposit  

(For Building)  

Rs. 4,64,15,000/- (Rupees four  

crore sixty four lakh and fifteen  

thousand Only)  

v) Security Deposit for  

Display Board   

Rs. 10,000/- (Rupees Ten  

Thousand Only)  

vi) Security Deposit for  

STP  

Rs. 27,15,000/- (Rupees twenty  

seven lakh and fifteen Thousand  

Only)  

vii) Infrastructure &  

Amenities Charges   

Rs. 8,34,40,000/- (Rupees eight  

crore thirty four lakh and forty  

Thousand Only)  

viii) Premium FSI  

charge for  

78690.55 sq.m.  

Rs. 44,75,88,000/- (Rupees Forty  

four crore and seventy five lakh  

eighty thousand only)  

                       .”  

The appellant also required the respondent to comply with the following  

requisitions :  

“a. Furnish the letter of your acceptance for the following  

conditions stipulated by virtue of provisions available  

under DR 4(i) d of Annexure III:-

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(i) The construction shall be undertaken as per  

sanctioned plan only and no deviation from the plans  

should be made without prior sanction. Construction  

done in deviation is liable to be demolished.   

(ii) In cases of Multi-storied Building both qualified  

Architect and qualified structural Engineer who should  

be a Class-I Licensed Surveyor shall be associated  

and the above information to be furnished.  

(iii) A report in writing shall be sent to Chennai  

Metropolitan Development Authority by the  

Architect/Class-I Licensed Surveyor who supervises  

the construction just before the commencement of the  

erection of the building as per the sanctioned plan,  

similar report shall be sent to CMDA when the building  

has reached up to plinth level and thereafter every  

three months at various stages of the  

construction/development certifying that the work so  

far completed is in accordance with the approved  

plan. The Licensed Surveyor and Architect shall  

inform this Authority immediately if the contract  

between him/them and the owner/developer, has  

been cancelled or the construction is carried out in  

deviation to the approved plan.   

(iv) The owner shall inform Chennai Metropolitan  

Development Authority of any change of the Licensed  

Surveyor/Architect. The newly appointed Licensed  

Surveyor/Architect shall also confirm to CDMA that he  

has agreed for supervising the work under reference  

and intimate the stage of construction at which he has  

taken over. No construction shall be carried on during  

the period intervening between exit of the previous  

Architect/Licensed Surveyor and entry of the new  

appointee.  

(v) On completion of the construction the applicant shall  

intimate CDMA and shall not occupy the building or  

permit it to be occupied until a completion certificate is  

obtained from CMDA.   

(vi) While the applicant makes application for service  

connection such as Electricity, Water Supply,  

Sewerage he should enclose a copy of the completion  

certificate issued by CMDA along with his application  

to the concerned Department/Board/Agency.  

(vii) When the site under reference is transferred by way of  

sale/lease or any other means to any person before  

completion of the construction, the party shall inform  

CMDA of such transaction and also the name and  

address of the persons to whom the site is transferred  

immediately after such transaction and shall bind the  

purchaser to those conditions to the Planning  

Permission.  

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(viii) In the Open space within the site, trees should be  

planted and the existing trees preserved to the extent  

possible;  

(ix) If there is any false statement, suppression or any  

misrepresentation of acts in the applicant, planning  

permission will be liable for cancellation and the  

development made, if any will be treated as  

authorized.  

(x) The new building should have mosquito proof  

overhead tanks and wells.   

(xi) The sanction will be revoked, if the conditions  

mentioned above are not complied with.  

(xii) Rainwater conservation measures notified by CMDA  

should be adhered to strictly.   

(a) . Undertaking (in the format prescribed in  

Annexure –XIV to DCR, a copy of it enclosed in  

Rs. 20/- stamp paper duly executed by all the land  

owner, GPA holders, builders and promoters  

separately. The undertakings shall be duly  

attested by a Notary Public.   

(b) Details of the proposed development duly filled in  the format enclosed for display at the site. Display  

of the information at site is compulsory in cases of  

Multi-storied buildings, Special buildings and  

Group developments”   

The letter further stipulated that :  

“7. The issue of planning permission depends on the  

compliance/fulfilment of the conditions/payments  

stated above. The acceptance by the Authority of the  

pre-payment of the Development charge and other  

charges etc. shall not entitle the person to the  

Planning Permission but only refund of the  

Development Charge and other charges (excluding  

Scrutiny Fee) in cases of refusal of the permission for  

non-compliance of the conditions stated above or any  

of the provisions of DR, which has to be complied  

before getting the Planning permission or any other  

reason provided the construction is not commenced  

and claim for refund is made by the applicant.”   

(Emphasis supplied)  

8    

8 On 28 March 2012, the respondent paid the charges which were  

demanded by the appellant on 27 March 2012. In the meantime, on 26 March  

2012, the Government revised the guideline values with effect from 1 April 2012.  

One of the conditions subject to which the State government had granted its  

approval to the respondent was the obtaining of an NOC from the Sewerage  

Board. On 28 March, 2012, G.O.Ms No. 86 was issued by the Housing and  

Urban Development Department whereby the I & A charges for different  

categories and buildings falling under the jurisdiction of the appellant and of the  

Commissioner of Town and Country Planning were to stand increased by 50 per  

cent over the then prevailing rates. The Sewerage Board issued its NOC on 30  

March 2012, subject to the condition that the respondent execute a gift deed in  

respect of a piece of land. This requirement was complied with on 27 April 2012.  

When the file pertaining to the grant of planning permission to the respondent  

was under consideration, guideline values were revised by the State government  

with effect from 1 April 2012. A demand notice was issued on 22 August 2012 by  

the appellant by which the demand was revised for charges under two heads:  

 “  i) Balance I & A  

Charges   

Rs. 4,17,15,000/-  

(Rupees Four Crore  

Seventeen Lakh and  

Fifteen thousand  

Only)  

ii) Balance Premium  

FSI Charge   

Rs. 90,76,75,000/-  

(Rupees ninety  

crore seventy six  

lakh and seventy  

five thousand only)  

                    ”  

9    

9 The demand notice was questioned by the respondent in writ proceedings  

before the High Court. A learned Single Judge, by a judgment dated 13  

December 2012, allowed the writ petition holding that a right had accrued to the  

respondent to obtain planning permission and that it could not be divested by the  

subsequent amendment made with effect from 1 April 2012. The demand was  

quashed and set aside. The Writ Appeal has been dismissed by a Division Bench  

of the High Court on 1 August 2014. The Division Bench held that :  

(i) Insofar as the levy of I & A Charges are concerned, no amendment has  

been made to the Tamil Nadu Town and Country Planning (Levy of  

Infrastructure and Amenities Charges) Rules 20087 and in  

consequence, the demand of Rs. 4,17,15,000/- is without the authority  

of law;  

(ii) The respondent had remitted the I & A charges and Premium FSI  

charges on 29 March 2012;  

(iii) Office Order No. 7/2012 dated 16 April 2012 made it clear that the I & A  

charges were applicable for applications for planning permission where  

the advice for the payment of development charges was sent on or  

after 28 March 2012. In the present case, since the demand had been  

remitted prior to 28 March 2012, the pre-revised  I & A charges were  

applicable; and  

(iv) The charges for Premium FSI as revised with effect from 1 April 2012  

could not be made applicable to the respondent. The NOC of the  

Sewerage Board was dated 30 March 2012 and the mere fact that it  

                                                           7 The Rules 2008

10    

was received by the appellant on 2 April 2012 was not a valid ground  

for the demand notice and hence the demand could not be justified.  

10 Assailing the decision of the High Court, Mr K M Nataraj, learned  

Additional Solicitor General of India formulated two issues which need to be  

addressed in these proceedings:  

“(i) Whether charges namely Infrastructure &  

Amenities charges and Premium FSI charges are required  

to be collected as per rates prevailing as on the date of  

submission of planning permission application or on the  

date of granting approval of planning permission;  

(ii) Whether the respondent herein has accrued any  

vested right before granting approval of planning  

permission merely because they remitted the charges as  

per demand notice dated 27-03-2012.”  

The learned ASG urged that the appellant, as a planning authority, is under a  

statutory obligation to levy and collect the charges as applicable when planning  

permission is granted. The pendency of an application or the deposit of the  

payment earlier by the applicant does not create a vested right. If the planning  

permission is not granted, the planning authority would have to refund the  

amount deposited. Hence, the crucial date for determining the applicable charges  

is the date on which planning permission is granted by the planning authority. In  

the present case, the planning permission was granted only in 2013, pursuant to  

the interim order of the High Court subject to a further deposit of Rs 10 Crores as  

ordered. Insofar as I & A charges are concerned, it was urged that the High Court  

erroneously relied on the Office Order dated 16 April 2012 which records that the  

old rates would be applicable where the development charges’ advice was sent

11    

before 28 March 2012. This, it has been urged, is in conflict with the GO dated 28  

March 2012 according to which, I & A charges were to stand increased by 50 per  

cent over the then prevailing rates. The learned ASG argued that an amendment  

to the Rules was not necessary since the charges are determined and are  

leviable under an order issued pursuant to Section 63B while according building  

permission and hence the order of the High Court needs to be interfered with.                    

11 On the other hand, Mr Rana Mukherjee, learned Senior Counsel appearing  

on behalf of the respondents submitted that:   

(i) As regards I & A charges:   

(a) Clause 6 of G.O.Ms No. 86 by which the charges were revised  

required that the Commissioner of Town and Country Planning  

submit a proposal for an amendment to the Rules of 2008. As  

a matter of fact, no amendment has been carried out; and  

(b) Clause (i) of the Office Order dated 16 April 2012, states that  

revised I & A charges shall be applicable for demands made  

on or after 28 March 2012. Hence, the revised charges would  

not be applicable to the respondent against whom a demand  

had been raised on 27 March 2012 by the appellant.  

(ii) As regards charges for Premium FSI :   

(a)  All payment related obligations were completed by the appellant  

on 29 March 2012 prior to the revision of the guideline values on  

1 April 2012. Consequently, the revised rates would not be

12    

applicable and if any date after payment is to be taken into  

account that would only enable the government to unlawfully and  

unfairly delay the issuance of permissions and thereafter raise  

enormous demands. To obviate this, the cut-off date ought to be  

treated as the date of payment;   

(b) The principle which has been enunciated in the judgment of this  

Court in Union of India v Mahajan Industries Ltd.8 is  

applicable; and  

(c) The subject matter of the demand pertains to payment levied by  

the respondent and not a change in the development control  

rules such as involving a change in floors, setbacks etc.   

Moreover, it was urged that the planning permission in the present case was  

granted on 30 May 2012 and therefore the withholding of a copy and the basis of  

the impugned demand is a mere after thought. The revised demand does not  

indicate any reasons or basis.   

12 The rival submissions now fall for consideration.              

13 Section 48 of the Planning Act 1971 imposes a restraint upon the  

construction of buildings and making a material change in the use of land except  

with the written permission of the planning authority and in accordance with the  

conditions specified in the grant of permission9.  

                                                           8 (2014) 5 SCC 199  9 48. Restrictions on buildings and lands, in the area of the planning authority.- On or after the date of the  publication of the resolution under sub-section (2) of section 19 or of the notice in the Tamil Nadu Government  Gazette under section 26, no person other than any State Government or the Central Government or any local  authority, shall, erect any building or make or extend any excavation or carry out any mining or other operation,  in, on, over or under any land or make any material change in the use of land or construct, form or layout any

13    

Section 49 which provides for an application for permission is in the following  

terms:  

“49. Application for permission.- (1) Except as  

otherwise provided by rules made in this behalf, any  

person not being any State Government or the Central  

Government or any local authority intending to carry out  

any development on any land or building on or after the  

date of the publication of the resolution under sub-section  

(2) of section 19 or of the notice in the Tamil Nadu  

Government Gazette under section 26, shall make an  

application in writing to the appropriate planning authority  

for permission in such form and containing such  

particulars and accompanied by such documents as may  

be prescribed.  

(2) The appropriate planning authority shall, in deciding  

whether to grant or refuse such permission, have regard  

to the following matters, namely:-  

(a) the purpose for which the permission is required;  

(b)the suitability of the place for such purpose;  

(c) the future development and maintenance of the  

planning area  

(3) When the appropriate planning authority refuses to  

grant a permission to any person, it shall record in writing  

the reasons for such refusal and furnish to that person, on  

demand, a brief statement of the same.”  

The Planning Act 1971 requires the grant of planning permission before  

development or a change in the use of land can take place. The mere filing of an  

application does not entitle the applicant to permission. Nor is there a vested right  

to the grant of permission.   

Section 63B provides for the levy of I & A charges:  

                                                                                                                                                                                     work except with the written permission of the appropriate planning authority and in accordance with the  conditions, if any, specified therein.  

14    

“63-B. Levy of infrastructure and amenities charges .-(1)  

Every local authority or the planning authority, as the case  

may be, while according building permit under the  

relevant laws or according permission under this Act, as  

the case may be, shall levy charges on the institution of  

use or change of use of land or building or development of  

any land or building in the whole area or any part of the  

planning area so as to meet the impact of development  

and for ensuring sustainable development of urban and  

rural areas by providing adequate infrastructure and basic  

amenities at the rates as determined in accordance with  

such procedure as may be prescribed which shall not be  

less than minimum and not more than the maximum as  

may be prescribed, and different rates may be prescribed  

for different parts of the planning area and for different  

uses.  

(2) The infrastructure and amenities charges shall be  

leviable on any person who undertakes or carries out any  

such development or institutes any use or changes any  

such use.  

(3) The collection of the infrastructure and amenities  

charges shall be made in such manner as may be  

prescribed.  

Explanation.- For the purpose of this Section “relevant  

laws” means in case of-  

(i) the Chennai Metropolitan Development Authority, the  

Tamil Nadu Town and Country Planning Act, 1971  

(T.N.Act 35 of 1972);  

(ii) the Chennai City Municipal Corporation, the Chennai City  

Municipal Corporation Act, 1919 (T.N.Act 4 of 1919);  

(iii) the Madurai City Municipal Corporation, the Madurai City  

Municipal Corporation Act, 1971 (T.N.Act 15 of 1971);  

(iv) the Coimbatore City Municipal Corporation, the  

Coimbatore City, Municipal Corporation Act, 1981  

(T.N.Act 25 of 1981);   

(v) the Tiruchirappalli City Municipal Corporation, the  

Tiruchirappalli City Municipal Corporation Act, 1994  

(T.N.Act 27 of 1994);  

(vi) the Tirunelveli City Municipal Corporation, the Tirunelveli  

City Municipal Corporation Act, 1994 (T.N.Act 27 of 1994);  

(vii) the Salem City Municipal Corporation, the Salem City  

Municipal Corporation Act, 1994 (T.N.Act 29 of 1994);  

(viii) the Municipalities and Town Panchayats, the Tamil Nadu  

District Municipalities Act, 1920 (T.N.Act 5 of 1920); and  

(ix) the Panchayat Unions and Village Panchayats, the Tamil  

Nadu Panchayats Act, 1994 (T.N.Act 21 of 1994).”

15    

Section 63B provides for the levy of I & A charges while according a building  

permit either under relevant laws or while according permission under the  

Planning Act 1971. These charges are leviable on the institution of use or change  

of use of land or building or  development of any land or building. The rates are  

determined in accordance with such procedure as may be prescribed. The rates  

are not to be less than the minimum and more than the maximum that is  

prescribed.   

14 Rule 4 of the Rules 2008 contains provisions for the imposition of the I & A  

charges:   

“4. Infrastructure and Amenities Charges. – The  

infrastructure and amenities charges shall be collected for  

new construction, additions to existing constructions and  

change of use of existing buildings at the rates not  

exceeding the maximum rate and not less than the  

minimum rates indicated in the Table below, in case of  

different categories of buildings referred to in the Table:  

THE TABLE  

Sl No.  Type of building  Minimum rates per  

square metre   

Maximum  

rates per  

square  

metre   

(1) (2) (3)  

Rs.   

(4)  

Rs.  

1. Multistoryed buildings  

accommodating  

residential or commercial  

or Information  

technology or industrial  

of institutional or  

combination of such  

activities    

500 1,000  

2. Commercial building.  

Information Technology  

building, Group  

200 500

16    

development and  

Special building (not  

covered under Sl. No. 1)  

3. Institutional building (not  

covered under Sl. No.I)  

100 200  

4. Industrial building (not  

covered under Sl. No. 1)  

 .”  

15 Rule 5 empowers the Director Of Town and Country Planning to fix the  

rates of charges in respect of areas other than the Chennai Metropolitan Planning  

Area. In respect of the Chennai Metropolitan Planning Area, the power to fix the  

charges, subject to due observance of the minimum and the maximum specified  

in Rule 4, is conferred on the Vice-Chairman of the Chennai Metropolitan  

Development Authority. Rule 5 (2) provides thus:  

“5. Fixation of rates of Charges.-   

(2) In respect of the Chennai Metropolitan Planning Area,  

the Vice Chairman, Chennai Metropolitan Development  

Authority shall fix the rates of such charges for each of the  

above categories of buildings which shall not be less than  

the minimum and not more than the maximum as  

prescribed in Rule 4, taking into account the various  

aspects of developments including infrastructure needs.  

He may fix different rates for different categories of  

buildings or for different areas.”  

16 The power to levy charges for the Premium FSI is in Regulation 36 of the  

Second Master Plan for Chennai Metropolitan Area 2006 (Regulation)10.  

Regulation 36 is in the following terms :  

“36. Premium FSI.- The Authority  may allow premium  

FSI over and above the normally allowable FSI, in any  

case not exceeding 0.5 for special building and group  

developments, and not exceeding 1.0 for multistoreyed  

                                                           10 Regulation 2006

17    

buildings in specific areas which may be notified, on  

collection of a charge at the rates as may be prescribed  

with the approval of the Government. The amount  

collected shall be kept in an escrow amount for utilizing it  

for infrastructure development in that area as may be  

decided by the Government.”  

17 Premium FSI is the Floor Space Index over and above that which is  

normally allowable and is not to exceed 0.5 for special buildings and group  

developments or 1.0 for multi-storeyed buildings in specific areas. The rates for  

premium FSI are prescribed with the approval of the Government.    

18 On 27 March 2012, the appellant raised a demand on the respondent for  

the payment of charges including:  

(i) I & A charges of Rs. 8,34,40,000/-; and  

(ii) Premium FSI charges for 78690.55 sq.mtrs in the amount of Rs.  

44,75,88,000/-.   

While raising the demand, the respondent was informed of the conditions  

required to be complied with in order to ensure the grant of planning permission.  

The letter specifically stated that while the grant of planning permission depended  

upon the fulfillment of the conditions stipulated in the letter, pre-payment of the  

development charges and other charges would not entitle the respondent to  

planning permission but only to a refund if planning permission were to be  

refused.   

18    

19 On 28 March 2012, the Housing and Urban Development Department of  

the Government of Tamil Nadu issued G.O.Ms No. 86 stipulating that:   

(i) The minimum and maximum rates as specified in Rule 4 of  

the I & A Rules 2008 “shall be done away with”; and   

(ii) The I & A charges for different categories and buildings falling  

under the jurisdiction of the appellant and of the  

Commissioner of Town and Country Planning were to stand  

increased by 50 per cent over the then prevailing rates. Thus,  

for instance, the I & A charges for multi-storeyed residential  

buildings were sought to be revised for the Chennai  

Metropolitan Development Planning Areas from Rs. 250 per  

sq. mtr to Rs. 375 per sq.mtr.   

Clause (6) of G.O.Ms contemplates an amendment to the Rules 2008 :  

“6) The Commissioner of Town and Country Planning is  

directed to send necessary proposal on amendment to the  

Tamil Nadu Town and Country Planning (Levy of  

Infrastructure and Amenities Charges) Rules, 2008 to  

Government accordingly.”   

20 It was in view of the provisions contained in clause (6) extracted above that  

the Division Bench in its judgment dated 1 August 2014 recorded, having  

enquired of the Advocate General, as to whether any proposal for the  

amendment of the rules had been initiated. The Advocate General informed the  

High Court that while steps to amend the rules had been initiated, it would take

19    

about two months to complete the process of amending them. It was in this view  

of the matter and the statement of the Advocate General that the High Court  

recorded that as on the date of its judgment, no amendment was made to the  

Rules 2008 for the purpose of increasing the I & A charges. Rule 4 as it stands  

prescribes the minimum and the maximum rates for the levy of I & A charges.  

Rule 5(2) empowers the Vice-Chairman of Chennai Metropolitan Development  

Authority to fix the rates for the Chennai Metropolitan Development Planning  

Areas, while observing the minimum and the maximum rates set out in Rule 4.  

The proposal which was initiated by the government on 28 March 2012  

envisaged the elimination of the minimum and maximum rates specified in Rule 4  

as a result of which clause (6) of G.O.Ms. 86 incorporates a requirement of  

amending the Rules 2008. Absent an amendment to the Rules 2008, the High  

Court held that the demand for I & A charges at the revised rate could not be  

enforced against the respondent. A revision of the I & A charges could have been  

effected by the Vice-Chairman of the appellant in terms of Rule 5(2) without a  

formal amendment to the Rules 2008, so long as the minimum and maximum  

provided in Rule 4 is not breached. However, it appears that the government took  

the view that an amendment to the rules was necessitated since the table  

specifying the minimum and maximum in Rule 4 was to be abrogated. It was for  

the above reason that the High Court came to the conclusion that a revised  

demand for I & A charges could not be enforced in the absence of an amendment  

to the Rules 2008. Section 63B requires that the minimum and maximum rates  

should be prescribed. This will have to be borne in mind by the government.  

Subordinate legislation has to be in conformity with parent legislation.  

20    

21 The High Court also adverted to the Internal Office Circular/Order dated 16  

April 2012 of the appellant which specified that while the revised I & A charges  

were leviable with effect from the issuance of G.O.Ms. No. 86 on 28 March 2012:  

“i.The revised rate of Infrastructure & Amenities charges  

are applicable for the Planning Permission Applications,  

where Development Charges advice was sent on or after  

28.03.2012. In the case of Planning Permission  

Applications for which DC advice dated prior to  

28.03.2012, the pre-revised rates only applicable.”  

In terms of the above office order, cases where the “Development Charges  

advice” was sent prior to 28 March 2012 would be governed by the pre-revised  

rates. The government is bound by its own decision. Consequently, on this  

aspect of the matter, we are in agreement with the view of the High Court that the  

revised I & A charges were not lawfully demanded from the appellant to whom  

the development charges advice had been issued prior to 28 March 2012.  

22 The second aspect of the matter which needs scrutiny is in regard to the  

levy of Premium FSI charges. The levy of Premium FSI charges under  

Regulation 36 is incident to the planning authority allowing Premium FSI over and  

above the FSI which is normally allowable. In other words, it is upon and subject  

to the grant of Premium FSI that the authority can demand Premium FSI charges.  

If no Premium FSI is sanctioned, obviously there would be no occasion to  

demand a charge for Premium FSI. Similarly, if planning permission were to be  

refused, the deposit which is made by the developer would be refunded. This was  

categorically stated in the demand which was raised on the respondent on 27  

March 2012.  

21    

23 Planning permission is granted by the planning authority upon an  

application for permission which is made under Section 49 of the Planning Act  

1971. In the present case, the planning permission was granted upon an interim  

order of the High Court, subject to the deposit of Rs. 10 Crores on 13 March  

2013. Though the appellant received the approval of the Housing and Urban  

Development Department on 5 January 2012 following the recommendation of  

the Multi-storyed Building Panel, the grant of planning permission was still to be  

considered by the Planning Authority. The letter dated 5 January 2012 of the  

Housing and Urban Development Department contemplates that several steps  

were still to be taken including the transfer to the road widening portion to  

Chennai Metropolitan Development Authority, the issuance of an NOC by the  

Sewerage Board and the fulfillment of all requisite conditions under the  

development regulations. Moreover, even after compliance with those conditions,  

the appellant had to process the grant of planning permission. The letter of  

demand that was issued by the appellant on 27 March 2012 similarly required the  

fulfillment of several conditions precedent upon which the application for the grant  

of planning permission would be considered.   

24 On 27 March 2012, while issuing a demand notice to the respondent, it  

was made clear by the appellant that the planning permission was still to be  

issued. The submission of the application for permission and the steps taken by  

the respondent to comply with the conditions and the deposit of the charges did  

not confer a vested right in the respondent for the grant of planning permission.  

The grant of planning permission would only ensue upon the appellant

22    

scrutinizing the application and determining that the permissions which were  

sought were in accordance with the development regulations and all other  

planning requirements holding the field. Before the planning permission was  

issued, the revised charges for Premium FSI came to be enforced. Once the  

revised charges came into force with effect from 1 April 2012, the respondent, as  

the applicant for planning permission, was bound to pay the revised charges. As  

on 1 April 2012, the respondent had no planning permission in its favour. The  

submission of the respondent that planning permission was issued in May 2012  

evidently will not advance the case of the respondent. The grant of any  

permission post the revision of the Premium FSI charges would necessarily be  

subject to the revised charges. Hence, in raising the demand on the basis of the  

revised charges on 22 August 2012, the appellant was acting in accordance with  

law.   

25 The principle which we have adopted accords with a consistent line of  

precedent of this Court. In State of Tamil Nadu v Hind Stone11, Justice O  

Chinnappa Reddy speaking for a Bench of two learned judges of this Court, while  

interpreting the provisions of Rule 2 (A) of the Mines and Minerals (Regulation  

and Development)  Act 1957 observed :  

“13…While it is true that such applications should be dealt  

with within a reasonable time, it cannot on that account be  

said that the right to have an application disposed of in a  

reasonable time clothes an applicant for a lease with a  

right to have the application disposed of on the basis of the  

rules in force at the time of the making of the application.  

No one has a vested right to the grant or renewal of a  

lease and none can claim a vested right to have an  

                                                           11 (1981) 2 SCC 205

23    

application for the grant or renewal of a lease dealt with in  

a particular way, by applying particular provisions. In the  

absence of any vested rights in anyone, an application for  

a lease has necessarily to be dealt with according to the  

rules in force on the date of the disposal of the application  

despite the fact that there is a long delay since the making  

of the application. We are, therefore, unable to accept the  

submission of the learned counsel that applications for the  

grant of renewal of leases made long prior to the date of  

GOMs No. 1312 should be dealt with as if Rule 8-C did not  

exist.”  

The same principle was followed by another two judge Bench of this Court in  

Howrah Municipal Corporation v Ganges Rope Co. Ltd.12. Justice D M  

Dharmadhikari speaking for the court held :  

“17…The statutory provisions regulating sanction for  

construction within the municipal area are intended to  

ensure proper administration of the area and provide  

proper civic amenities to it. The paramount considerations  

of regulatory provisions for construction activities are  

public interest and convenience. On the subject of  

seeking sanction for construction, no vested right can be  

claimed by any citizen divorced from public interest or  

public convenience.”  

This Court held that the provisions contained in the Howrah Municipal  

Corporation Act 1980 contemplate an express sanction before a person can be  

allowed to construct or erect a building. Hence, in ordinary course, no vested  

right is created merely by the submission of an application for sanction to  

construct a building. Adverting to the decision in Usman Gani J. Khatri of  

Bombay v Cantonment Board13, the Court held thus:  

“30. This Court, thus, has taken a view that the Building  Rules or Regulations prevailing at the time of sanction  would govern the subject of sanction and not the Rules  

                                                           12 (2004) 1 SCC 663  13 (1992) 3 SCC 455

24    

and Regulations existing on the date of application for  sanction.”  

In Commissioner of Municipal Corporation, Shimla v Prem Lata Sood14,  

Justice S B Sinha speaking for a two judge Bench observed thus:   

“30…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.  

36. 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.”  

The same view has been taken by a Bench of three judges of this Court in New  

Delhi Municipal Council v Tanvi Trading and Credit Private Limited15.Justice  

J M Panchal speaking for the court held  :  

“39. It is well settled that the law for approval of the  

building plan would be the date on which the approval is  

granted and not the date on which the plans are  

submitted. This is so in view of para 24 of the decision of  

this Court in Usman Gani J. Khatri v. Cantonment  

Board [(1992) 3 SCC 455] . It would not be out of place to  

mention that on 7-2-2007, the Master Plan, 2021 has  

been approved in which the LBZ guidelines have been  

incorporated and since the plan submitted by the  

respondents was not approved up to the date of coming  

into force of Master Plan of 2021, the LBZ guidelines will  

apply with full force to the plan submitted by the  

                                                           14 (2007) 11 SCC 40  15 (2008) 8 SCC 765

25    

respondents and the plan which is contrary to the LBZ  

guidelines could not have been directed to be  

sanctioned.”  

26 Mr Rana Mukherjee, learned Senior Counsel appearing on behalf of the  

respondent sought to make a distinction on the ground that this principle will  

apply as regards regulatory aspects of the development regulations, not in regard  

to the demand of Premium FSI charges.   

We are unable to accept the contention simply because the demand on account  

of Premium FSI charges arises upon the grant of planning permission to avail of  

Premium FSI. The respondent, as the developer, is liable to pay the revised  

charges which are applicable post 1 April 2012 when planning permission has  

been granted. Learned counsel for the respondent also relied on the decision in  

Union of India v Mahajan Industries Ltd.16. The case is clearly distinguishable  

since the judgment of this Court adverted to the position which was laid down in a  

judgment of the Delhi High Court that the “crucial date” for calculating conversion  

charges has to be the date of the receipt of the application for conversion.  

Significantly, the counsel for the Union of India did not contest the correctness of  

the view of the High Court in that regard. The factual situation in the present case  

is clearly distinguishable.   

27 For the above reasons, we allow these appeals in part by setting aside the  

impugned judgment and order of the High Court insofar as it quashed the  

                                                           16 (2005) 10 SCC 203

26    

demand raised by the appellant on 22 August 2012 for the levy of Premium FSI  

charges.   

28 The appellant, in our view, was justified in demanding Premium FSI  

charges at the revised rates and would be entitled to enforce its demands.  

However, we maintain the order of the High Court insofar as the demand for I & A  

charges is concerned.   

29 The appeals are disposed of. There shall be no order as to costs.   

…..…………..........................................J.               [Dr Dhananjaya Y Chandrachud]   

..……..…………………………...............J.  

                                                                [Indira Banerjee]  

New Delhi;  July 29, 2019