IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.1746 OF 2007

GODREJ & BOYCE MANUFACTURING           

CO.LTD.  …. APPELLANT

VERSUS

STATE OF MAHARASHTRA & ORS.         …RESPONDENTS  

W I T H

CIVIL APPEAL NOS.1591-1592 OF 2007

GODREJ & BOYCE MANUFACTURING           

CO.LTD. & ANR.       …. APPELLANTS

VERSUS

STATE OF MAHARASHTRA & ORS.         …RESPONDENTS  

W I T H  

CIVIL  APPEAL NO. 2045 OF 2007

MRS. JYOTIKA B.PATEL & ANR. … APPELLANTS

VERSUS

THE MUNICIPAL CORPORATION OF  

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GREATER MUMBAI                                             …  RESPONDENT

A N D

WRIT PETITION (C) NO.190 OF 2007  

MRS. JYOTIKA B.PATEL & ANR. …  PETITIONERS

VERSUS

STATE OF MAHARASHTRA & ANR.                  …  RESPONDENTS

J U D G M E N T  

AFTAB ALAM, J.

1. Maharashtra town planning law has evolved, with a view to promote

planned  development  and  de-congest  the  highly  congested  areas,  the

imaginative  concept  of  making,  under  certain  circumstances,  the

development potential of a plot of land separable from the land itself and

further letting the development rights to be transferable by the land owner.

The provisions made for the development rights that arise from a piece of

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land and yet acquire a separate and independent existence with the added

flexibility of being transferable come very useful in case of plots of land

shown in  the  Development  Plan  as  reserved for  some public  purpose  or

amenity that prohibits their owners from developing those plots by making

any  other  kind  of  construction.  In  such  circumstances  it  is  open  to  the

landowner  to  surrender  the  plot  of  land  free  of  cost  (and  free  from all

encumbrances)  to the municipal  authorities who may acquire the land by

granting to the landowner Floor Space Index or Transferable Development

Rights against the area of the surrendered land. The law further provides for

additional Floor Space Index or Transferable Development Rights against

the development or construction of amenities (for which the plot is shown

reserved in the plan) by the owner at his own cost.  

2. The appellants and the petitioners in this batch of appeals and writ

petition had their plots of land shown in the Development Plan as reserved

for  roads.  They  voluntarily  surrendered  their  lands.  In  addition,  they

constructed on their respective pieces of land the Development Plan roads at

their own cost and as per the specifications stipulated in the relevant rules.

There is no dispute between the parties in regard to the Floor Space Index or

Transferable  Development  Rights  granted  to  them  for  the  surrendered

pieces of land. But the parties are in serious controversy over the extent of

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Floor  Space  Index  or  Transferable  Development  Rights  for  the  roads

constructed on the surrendered lands at the owners’ cost. The landowners

claim that for constructing the roads they are entitled to Floor Space Index

or Transferable Development Rights for the whole of the surface area of the

roads. In support of their claim they rely upon paragraph 6 of Appendix VII

to  the  Development  Control  Regulations  for  Greater  Bombay,  1991  that

provides for, ‘…a further DR in the form of FSI  equivalent to the area  of

the  construction/development  done  by  him  (landowner)……’.  The

municipal  authorities would, however,  grant them additional  Transferable

Development Rights only to the extent of 15% of the road area. The stand of

the municipal authorities is based on a circular dated April 9, 1996 issued

by  the  Municipal  Commissioner,  Municipal  Corporation  of  Greater

Bombay. The circular envisages a graded scheme for grant  of Additional

Development Rights for construction of amenities by the landowner, e.g., in

case  of  amenities  like  general  hospital,  municipal  primary  school  etc.  it

allows FSI equal to the built up area of the structure but in case of DP road

only 15% of the area of the road surface. On behalf of the landowners it is

argued  that  the  contents  of  the  circular  are  no  more  than  executive

instructions  and  can  not  supersede  or  override  the  provisions  of  the

Regulations which are legislative in nature; in any event the circular would

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only operate prospectively and have no bearing on the cases in hand since it

was  issued  after  the  appellants  and  the  petitioners  had  surrendered  their

plots  of  lands after  constructing  roads  on those lands as  required  by the

authorities. The argument is sought to be repelled on behalf of the state and

the municipal  authorities  by taking the position that the law provides for

grant of additional Floor Space Index or Transferable Development Rights

commensurate to the value of the amenity constructed by the landowner and

the meaning of paragraph 6 of Appendix VII to the Regulations will be clear

by reading it  along with the other  provisions  of  the  Regulations  and the

parent Act. Seen thus the circular dated April 9, 1996 would appear to be

merely clarificatory and fully apply to the claims of the appellants and the

petitioners.  On  behalf  of  the  Municipal  Corporation  the  claims  of  the

appellants and the petitioners are also resisted on certain grounds of facts

that we shall consider in due course.

3. This is the parameter of the dispute between the parties.

4. At this point it will be useful to refer to some of the provisions of the

Maharashtra  Regional  and  Town  Planning  Act,  1966  (the  Act)  and  the

Development  Control  Regulations  for  Greater  Bombay,  1991  (the

Regulations).

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5. Section 2 of the Act contains the definitions. Sub-section (2) defines

“Amenity”  very  widely  to  cover  vastly  different  public  utilities  from

hospitals, secondary schools and colleges to roads, streets and open spaces

etc..  Section 2 (2) of the Act is as under:

“(2)  “amenity”  means  roads,  streets,  open  spaces,  parks recreational grounds, play grounds, sports complex, parade grounds,  gardens,  markets,  parking  lots,  primary  and secondary  schools  and  colleges  and  polytechnics,  clinics, dispensaries and hospitals, water supply, electricity supply, street  lighting,  sewerage,  drainage,  public  works  and includes other utilities, services and conveniences;”

6. Sub-section  7  defines  ‘Development’  and  sub-section  9A  defines

‘Development Right’ as follows:  

“9A.  “Development  Right”  means  right  to  carry  out development or to develop the land or building or both and shall include the transferable development right in the form of right to utilise the Floor Space Index of land utilizable either on the remainder of the land partially reserved for a public  purpose  or  elsewhere,  as  the  final  Development Control Regulations in this behalf provide;

                    (italics supplied)”

Sub-section  9  defines  ‘Development  Plan’  to  mean  a  plan  for  the

development  or  re-development  of  the  area  within  the  jurisdiction  of  a

Planning  Authority  and  includes  revision  of  a  Development  Plan  and

proposals of special planning authority for the development of land within

its jurisdiction.  

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7. Sub-section 13A defines ‘Floor Space Index’ as follows:  

“13 A. “Floor Space Index” means the quotient or the ratio of the combined gross floor area to the total area of the plot, viz.: Floor Space Index = Total covered area of all floor  

             Plot area;”   

8. Sub-section  15  defines  ‘Local  Authority’  and  expressly  mentions,

amongst others, the Bombay Municipal Corporation constituted under the

Bombay Municipal Corporation Act.  

9. Sub-section  19  defines  ‘Planning  Authority’  to  mean  a  Local

Authority apart from certain other bodies.

10. Sub-section  23  to  26  define  ‘Region’,  Regional  Board’,  ‘Regional

Plan’ and ‘Regional Planning Committee’ respectively;  

11. Sub-section 27 defines ‘Regulation’ to mean a regulation made under

Section 159 of the Act and includes zoning, special development control

regulation  and  other  regulations  made  as  part  of  Regional  Plan,

Development Plan or town planning scheme.  

12. Chapter II of the Act contains the provisions relating to Regional Plan

under sections 3 to 20. In this group of cases, however, we are concerned

with the Regulations  forming part  of  a Development Plan which is  dealt

with under sections 21 to 42 in Chapter III of the Act. Section 21 obliges

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every Planning Authority to prepare a draft Development Plan for the area

within its jurisdiction subject to the provisions of the Act and in accordance

with the provisions of a Regional Plan, where there is such a plan. Section

22 deals with the contents of the ‘Development Plan’. It mandates that the

Development Plans would generally indicate the manner in which the use of

land  in  the  area  of  the  Planning  Authority  is  to  be  regulated  and  the

development of land therein is to be carried out. Further, the Development

Plan would provide for, in particular the proposals for allocating the use of

land for purposes, such as residential, industrial, commercial, agricultural,

and recreational. It would also contain proposals for designation of lands for

many different kinds of public purposes enumerated in clauses (b) to (l) of

the section. As per clause (m) of the section the Development Plan would

also provide for the provisions for grant of permission for controlling and

regulating the use and development of land within the jurisdiction of a local

authority and the matters connected therewith.  

13. Section  22A  enumerates  what  is  meant  by  modification  of  a

substantial nature in the Development Plan. Sections 23 to 31 lay down the

procedure for making Development Plan, including Development Control

Regulations  by  the  Planning  Authority  after  inviting  objections  and

submitting draft plans to the State Government. Section 31 empowers the

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State Government to sanction the draft Development Plan submitted by the

Planning  Authority. Section  37  deals  with  modification  of  final

Development Plan.  Chapter VII of the Act deals with Land Acquisition and

section  125  provides  that  any land  required,  reserved  or  designated  in  a

Regional Plan, Development Plan or Town Planning Scheme for a public

purpose  or  purposes  including  plans  for  any  area  of  comprehensive

development or for any new town would be deemed to be land needed for a

public purpose within the meaning of Land Acquisition Act, 1894.  Section

126  lays  down  three  modes  for  acquisition  of  land  required  for  public

purposes specified in the plans.  The provisions of this section are important

for the cases in hand and are reproduced below in so far as relevant for the

present:

“126.  (1)  When  after  the  publication  of  a  draft  Regional Plan,  a  Development  or  any other  plan  or  town planning scheme,  any  land  is  required  or  reserved  for  any  of  the public purposes specified in any plan or scheme under this Act  at  any  time  the  Planning  Authority,  Development Authority, or as the case may be, any Appropriate Authority may, except as otherwise provided in Section 113A acquire the land,-

(a) by agreement by paying an amount agreed to, or

(b) in lieu of any such amount, by granting the land-owner or  the  lessee,  subject,  however,  to  the  lessee  paying  the lessor  or  depositing  with  the  Planning  Authority, Development  Authority  or  Appropriate  Authority,  as  the case  may  be,  for  payment  to  the  lessor,  an  amount

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equivalent  to  the  value  of  the  lessor’s  interest  to  be determined by any of the said Authorities concerned on the basis  of the  principles  laid down in the  Land Acquisition Act,  1894  Floor  Space  Index  (FSI)  or  Transferable Development  Rights  (TDR)  against  the  area  of  land surrendered free of  cost  and free from all  encumbrances, and  also  further  additional  Floor  Space  Index  or Transferable Development Rights against the development or construction of the amenity on the surrendered land at his  cost,  as  the Final  Development  Control  Regulations prepared in this behalf provide, or

                                                                          (emphasis added)  (c) by making an application to the State Government for acquiring such land under the Land Acquisition Act, 1894, and the land (together with the amenity, if any, so developed or  constructed)  so  acquired  by  agreement  or  by  grant  of Floor  Space  Index  or  additional  Floor  Space  Index,  or Transferable  Development  Rights  under  this  sections  or under the Land Acquisition Act, 1894, as the case may be, shall  vest  absolutely  free  from  all  encumbrances  in  the Planning Authority, Development Authority, or as the case may be, any Appropriate Authority,

(2) to (4)   ….              ….              ….              ….”  

14. Section  154  of  the  Act  obliges  every  Regional  Board,  Planning

Authority  and  Development  Authority  to  carry  out  such  directions  or

instructions as may be issued from time to time by the State Government for

the  efficient  administration  of  this  Act. Section  158  contains  the  rule

making powers and authorizes the State Government to make rules to carry

out  all  or  any of the purposes of the Act. Section 159 provides that  any

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Regional  Board,  Planning Authority or Development Authority may with

the previous approval of the State Government make regulations consistent

with the Act and the rules made thereunder.

15. The Municipal Corporation of Greater Bombay which is a Planning

Authority under section 2(19) of the Act prepared a revised Development

Plan and on April 30, 1985 submitted the Revised Draft Building bye-laws

and Development Control Rules to the State Government as required under

section  30(1)  of  the  Act.  The  Development  Control  Rules,  after  being

subjected to the procedure prescribed by law finally received the sanction of

the State Government on March 25, 1991 and came into force from that date

under  the  name,  ‘The  Development  Control  Regulations  for  Greater

Bombay’.

16. Before  proceeding  to  examine  the  relevant  provisions  of  the

Regulations it may be noted that on the date on which the Regulations came

into force certain amendments were introduced in the Act as well. Some of

the amendments made in the Act with effect from March 25, 1991 include

the definition of ‘Amenity’ in its present form that was substituted for the

original  definition  of  the  term  and  the  insertion  of  the  definition  of

‘Development  Right’  as  sub-section  (9A)  of  section  2.  Another  very

important  amendment made in the Act was the insertion of clause (b) in

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section 126(1) of the Act. Before March 25, 1991, section 126 of the Act

provided for Acquisition of Land only by two means, one by payment of an

amount agreed upon by the parties and the other by following the procedure

under  the  Land  Acquisition  Act,  1894. The  introduction  of  clause  (b)  in

section 126(1) provided for a third mode for land acquisition that is based

on the concept of Transferable Development Rights against the area of land

surrendered  free  of  cost  and  free  from  all  encumbrances  and  a  further

Additional Floor Space Index or Transferable Development Rights against

the development or constructions of the amenity on the surrendered land by

the land owner (or the lessee) at his own cost. On behalf of the appellants

and the petitioners it is argued that apart from section 2(9A) and clause (b)

of section 126 (1), there is no other provision in the Act dealing with the

concept of Transferable Development Rights and those two provisions were

introduced in the Act on the same day the Regulations came into force in

order  to  give  effect  to  the  concept  of  Transferable  Development  Rights

evolved in the Regulations.    

17. Coming  back  to  the  provisions  of  the  Development  Control

Regulations for  Greater  Bombay, regulation 2(2)  provides that  any terms

and expressions not defined in the Regulations shall have the same meaning

as in the Act or the Bombay Municipal Corporation Act, 1888 and the rules

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and bye-laws  framed  thereunder,  as  the  case  may be,  unless  the  context

otherwise  required.  Regulation  3  contains  the  definitions  and  clause  (7)

defines ‘amenity’ as under:  

“Amenity  means  roads,  streets,  open  spaces,  parks recreational  grounds,  play grounds, gardens,  water supply, electric  supply,  street  lighting,  sewerage,  drainage,  public works and other utilities, services and conveniences”.

18. It  is  to  be  noted  here  that  the  definition  of  ‘amenity’  under  the

Regulations is much restricted than the one given under the Act and under

the Regulations ‘sport complex, parade grounds, gardens, markets, parking

lots, primary and secondary schools and colleges and polytechnics, clinics,

dispensaries and hospitals’ are not expressly included in the definition of

amenity.

19. ‘Road’ indeed is common to the definitions both under the Act and

the Regulations and in clause (76) of regulation 3 it is defined in the widest

possible terms.

Regulation 3 (42) defines Floor Space Index as follows:-

“(42)  Floor  space  index (FSI)” means  the quotient  of  the ratio  of  the  combined  gross  floor  area  of  all  floors, excepting  areas  specifically  exempted under  these Regulations to the total area of the plot, viz.:

                                                      Total covered area on all floors Floor Space Index (FSI) =----------------------------------------

                                                                 Plot area”

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20. Regulation 32 deals with Floor Space Indices and Tenement Density

and provides for different Floor Space Indices for different areas in Greater

Bombay. Regulation 33 provides for Additional Floor Space Index that may

be  allowed  to  certain  categories.  Regulation  34  contains  the  concept  of

Transferable Development Rights and it reads as follows:-

“34.  Transfer  of  Development  Rights.  –  In  certain circumstances, the development potential  of a plot of land may be  separated  from the  land  itself  and  may  be  made available  to  the  owner  of  the  land  in  the  form  of Transferable  Development  (TDR). These  Rights  may  be made  available  and  be  subject  to  the  Regulations  in Appendix VII hereto”.

21. Regulation  35  provides  for  the  method  of  computation  of  Floor

Space Index.

22. Regulation  62  empowers  the  State  Government  to  interpret  the

Regulations in the event of any dispute between the Municipal Corporation

and  an  aggrieved  party. Regulation  63  empowers  the  Commissioner  to

delegate  functions  which  he  is  empowered  to  discharge  to  other

subordinate officers.  Regulation 64 provides for discretionary power of the

Commissioner which can be exercised in the event of any hardship.

 23. Appendix VII, referred to in regulation 34, lays down the manner for

the grant of Transferable Development Rights to owners/ developers and the

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conditions for the grant of such rights. The claim of the appellants and the

petitioners are fully based on the provisions of Appendix VII, hence, those

provisions, in so far as relevant for the present, are reproduced below:

“APPENDIX VII   (Regulation 34)  

Regulations  for  the  grant  of  Transferable  Development  Rights

(TDRs) to owners/developers and conditions for grant of such Rights   1. The owner (or lessee) of a plot of land which is reserved

for  a  public  purpose  in  the  development  plan  and  for additional amenities deemed to be reservations provided in accordance with these Regulations,  excepting  in the case  of  an  existing  or  retention  user  or  any  required compulsory or recreational open space, shall be eligible for  the  award  of  Transferable  Development  Rights (TDRs) in the  form of Floor  Space Index (FSI)  to  the extent and on the conditions set out below.  Such award will entitle the owner of the land to FSI in the form of a Development  Rights  Certificate  (DRC)  which  he  may use himself or transfer to any other person.

2.  Subject to the Regulation 1 above, where a plot of land is  reserved  for  any purpose  specified  in  section  22  of Maharashtra Regional and Town Planning Act, 1966, the owner will be eligible for Development Rights (DR’s) to the  extent  stipulated  in  Regulations  5  and  6  in  this Appendix had the  land been not  so reserved,  after  the said  land  is  surrendered  free  of  cost  as  stipulated  in Regulation 5 in this Appendix, and after completion of the development or construction as in Regulation in this Appendix if he undertakes the same.

3. Development Rights (DRs) will be granted to an owner or  a  lessee  only  for  reserved  lands  which  are retainable/non-retainable under the Urban Land (Ceiling and Regulations) Act, 1976, and in respect of all other reserved lands to which the provisions of the aforesaid

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Act do not apply, and on production of a certificate to this effect from the Competent Authority under that Act before a Development Right is granted.  In the case of non-retainable  lands,  the  grant  of  Development  Rights shall be to such extent and subject to such conditions as Government  may  specify.  Development  Rights  (DRs) are  available  only  in  cases  where  development  of  a reservation has not been implemented i.e. TDRs will be available  only  for  prospective  development  of reservations.

4. Development Rights Certificates (DRCs) will be issued by the Commissioner himself.  They will state, in figures and in words, the FSI credit in square meters of the built- up area to which the owner or lessee of the said reserved plot is entitled, the place and user zone in which the DRs are  earned  and the  areas  in  which  such credit  may be utilized.

5. The built-up  area  for  the  purpose  of  FSI  credit  in  the form of a DRC  shall be equal to the gross area of the reserved plot to be surrendered and will proportionately increase or decrease according to the permissible FSI of the zone where from the TDR has originated.

6. When an owner or lessee  also develops or constructs the amenity on the surrendered plot at his cost subject to  such  stipulations  as  may  be  prescribed  by  the Commissioner or  the appropriate authority, as  the case may be and to their satisfaction and hands over the said developed/constructed  amenity  to  the  Commissioner/ appropriate authority, free of cost, he may be granted by the  Commissioner  a  further  DR in  the  form of  FSI equivalent to the area of the construction/development done by him utilization of which etc. will be subject to the Regulations contained in this Appendix.  

(emphasis added)  

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7. A  DRC  will  be  issued  only  on  the  satisfactory compliance  with  the  conditions  prescribed  in  this Appendix.

8. to 19.  ….               .…              ….              ….              ….”

24. In light of the provisions of the Act and the Regulations the case of

the  appellants  and  the  petitioners  is  plain  and  simple.  Mr.  Ashok  Desai

learned Senior Counsel appearing on behalf of the appellants submitted that

the law clearly envisaged grant of FSI or TDR under two separate heads,

one, for the land and the other for the construction of the amenity for which

the land is designated in the Development Plan, at the cost of the owner.

Section  2(9A)  defined  ‘Development  Right’  to  include  the  transferable

development right and section 126(1) (b) provided for the grant of FSI or

TDR against the area of land surrendered free of cost and further additional

FSI or TDR against the development or construction of the amenity on the

surrendered  land  at  the  owner’s  cost  as  the  final  Development  Control

Regulation should provide. Mr. Desai further submitted that the extent of

FSI or TDR for the land would be equal to the gross area of the surrendered

plot and the extent of FSI or TDR for construction of the amenity for which

the land was designated in the final Development Plan would be equivalent

to the area of construction/development made on the land. Regulation 34

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made provisions for transferability of development rights and Appendix VII

referred  to  in  regulation  34  provided  for  the  extent  of  FSI  or  DRT

admissible under the two heads. Paragraph 5 of Appendix VII that related to

the  surrender  of  the  land  provided  for  FSI  credit  in  the  form  of  a

development right certificate ‘equal to the gross area of the reserved plot’.

Paragraph  6  of  the  Appendix  VII  that  dealt  with  the  additional  DR for

construction of the amenity for which the surrendered plot was designated

in the Development Plan at the owner’s cost provided for a further DR in

the form of FSI ‘equivalent to the area of the construction/ development’

made on the  surrendered  land.  Mr.  Desai  contended  that  paragraph 6 of

Appendix  VII  used  the  words  ‘equivalent  to  the  area of

construction/development’ which was capable of only one meaning, that is

to  say,  the  additional  DR  would  be  the  same  in  area  as  the  amenity

constructed/developed on the surrendered land. Mr. Desai further pointed

out  that  no  provision  of  Appendix  VII,  much  less  paragraph  6  of  the

Appendix made any distinction between the different amenities as defined

under the  Act or  the Regulations  and there  was not  the  slightest  hint  or

suggestion for grant of additional TDR on a variable and sliding scale for

construction/development of different kinds of amenities on the surrendered

land. Learned counsel submitted that the additional TDR permissible under

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the statutory Regulations could not be reduced or curtailed on the basis of

the circular issued by the Municipal Commissioner.

25. Here it would be appropriate to take a look at the circular dated April

9, 1996 issued under the hand of the Municipal Commissioner, Municipal

Corporation  of  Greater  Bombay.  It  deals  with  the  grant  of  additional

development rights in lieu of construction of amenities as per the provisions

of regulation 34 read with paragraph 6 of Appendix VII of the Regulations.

It was apparently issued on the basis of the decision arrived at in a meeting

held  on  June  17,  1994  in  which  representatives  of  various  bodies  were

present and in which after considering the various aspects such as  cost of

construction  of  amenity,  category  of  reservation  etc.  a  scheme  was

formulated  for  grant  of  additional  development  right  in  lieu  of  various

constructed amenities on a graded basis. The circular provides that 100%

FSI  (Built  up  area)  would  be  granted  for  the  following  buildable

reservations:   

   a] Municipal Transport Garage b] General Hospital      c] Fire Station d] Auditorium      e] Electrical Crematorium f] Municipal Workshop     g] Municipal Primary School h] Municipal Retail Market      i] Town Duty Office j] Office Building”

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Paragraph III of the circular deals with construction of DP roads etc. with

which we are directly concerned in this  group of cases,  and in so far as

relevant for the present, provides as under.

“3.  CONSTRUCTION  OF  DP  ROADS,  WIDENING OF EXISTING ROADS ETC.”

i]  Additional Development Right equivalent to 15% area of DP Road  constructed by the Owner of the land as per the Municipal  specifications  which  includes  provisions  of SWDs,  footpaths, Central verge, dividers, providing street lights,  laying  water  mains  and  sewer  lines  etc.  shall  be considered.”

ii to viii]   …. …. …. …. …. ….      ….”

26. Later on, it appears, it came to the notice of the municipal authorities

and the State Government that the matter was taken to the Court where the

circular  dated  April  9,  1996  was  challenged  and  claim  was  made  for

additional Development Right equal to the area of the road constructed on

the  surrendered  plot  of  land.  The  extent  of  the  additional  Development

Right for construction of DP roads was then increased from 15% to 25% of

the area of the road by circular dated April 5, 2003, the relevant parts of

which are as follows:  

“Under  the circumstances,  the  quantum of addl.  TDR for construction  of  roads/setback  lands  to  be  granted  to owners/developer  of  DP  Roads/setback  lands  is  being

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enhanced from 15% to 25% for all prospective cases which are not covered under litigation”

And  

“In cases  where  owners  have  filed  writ  petition  which  is pending in the Court, the additional TDR will be granted as per the orders of the Court. However in case these owners are agreeable to accept 25% additional TDR, the same can be considered after withdrawal of the Writ Petition filed by them in the Court”

27. Mr. Desai submitted that in Pune Municipal Corporation and Anr. V.

Promoters and Builders Association & Anr. (2004) 10 SCC 796 this Court

held  that  the  Development  Control  Rules  framed  under  the  Maharashtra

Regional and Town Planning Act, 1966 had statutory force. On the other

hand  the  circulars  issued  by  the  Municipal  Commissioner  were  simply

executive  instructions.  The  circulars,  therefore,  could  not  override  or

supersede the provisions of the Regulations. He further submitted that the

municipal  authorities  too  were  fully  aware  and  conscious  of  this  legal

position  and  had accordingly  requested  the  State  Government  vide  letter

dated July 19, 1997 to suitably modify paragraph 6 of Appendix VII of the

Regulations.  Mr.  Desai  further  submitted  that  the circular  dated  April  9,

1996 on the basis of which the appellant was being denied additional FSI or

TDR equal  in  area  to  the  road  constructed  on  the  surrendered  plot  was

issued subsequent to the surrender of the land after construction of the road

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on it. In any event, therefore, the circular would not affect the appellant’s

right as it would operate only prospectively and not retrospectively.

28. Mr.  Naphade,  learned  Senior  Counsel  appearing  for  the  State  of

Maharashtra, countered the claim of the appellants  and the petitioners by

submitting that the circulars simply made clear the position that was implicit

in  the  statutory  provisions  and  would  be  clearly  discernable  on  reading

paragraph 6 of Appendix VII to the Regulations along with other relevant

provisions.  Apart  from clarifying  the statutory position,  by introducing a

graded scheme for grant of additional FSI or TDR the circular eliminated

the possibility of any discriminatory or arbitrary action on the part of the

authority  competent  to  issue  the  development  right  certificate.  The

submission  of  Mr.  Naphade  is  based  on  the  premise  that  the  law

contemplated grant of further additional TDR commensurate to the value of

the  amenity  constructed/developed  on  the  surrendered  land.  Learned

counsel pointed out that the definition of amenity covered vastly different

public utilities like a school building or a road or even an open space. He

further submitted that  though both a single storied school building and a

road built on plots of land equal in area may have more or less the same

carpet  area, the cost  of construction of the school building will  be much

higher than the road. Hence, the grant of additional TDR for construction of

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all  the different  kinds  of  amenities  equal  to  the  area  of  the  construction

would  be illogical,  unreasonable  and discriminatory.  Further,  in  case  the

graded system was not followed it would be left in the hands of authority

competent to issue the development right certificate to give additional FSI

or TDR on a subjective basis. The circular, by introducing a graded scheme

eliminated the subjective element and closed any possibility of arbitrary and

discriminatory action on the part of the authority. Coming back to the basic

argument  that  under  the  law the  grant  of  additional  TDR could  only be

commensurate  to  the  value  of  the  amenity  constructed/developed  on  the

surrendered  land  and  not  necessarily  equal  in  area  of  the

construction/development  Mr.  Naphade  submitted  that  paragraph  6  of

Appendix VII, unlike paragraph 5 didn’t use the words ‘equal to the gross

area of the reserved plot’ or ‘equal in area’. Instead, paragraph 6 used the

words  ‘equivalent to  the  area  of  construction/development’.  He  further

submitted that paragraph 6 of Appendix VII to the Regulations must be read

with  Section  126(1)  (b),  the  relevant  provision  in  the  parent  Act  and

paragraph 6 of Appendix VII must be controlled and must take its meaning

from  the  provision  of  that  section.  Section  126(1)  (b)  used  the  words

‘against the area of the land surrendered’ and ‘against the development or

construction of amenity on the surrendered land’

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29. Seen  thus,  Mr.  Naphade  argued,  it  would  be  clear  that  the  law

provided for the grant of additional Development right proportionate to the

value of the amenity constructed by the owner at his own cost. The circulars

issued  by  the  Municipal  Commissioner  simply  quantified  the  exchange

value  of  the  different  kinds  of  amenities  in  percentage  terms depending

upon their costs of construction and other relevant considerations.

30. The Bombay High Court accepted the line of argument advanced by

Mr.  Naphade  and  in  the  judgment  coming  under  appeal  it  observed  as

follows:  

“18.  The  terms  used  in  a  statute  are  to  be  read  and understood  in  the  context  in  which  they  are  used  in  the relevant provision. The term “equivalent” in the said Clause is undoubtedly related to the area and the term “area” relates to the construction or development of the amenity done in the surrendered plot. The word “area” therein does not refer to  that  of  the  area of  the plot.  The term “equivalence”  is defined in  the Black’s  Law Dictionary to  mean “equal  in value, force, measure, volume, power and effect or having equal  or  corresponding  import,  meaning  or  significance; alike;  identical.”  The  equivalence  in  case  of  construction activity  cannot  be  ascertained  by  merely  referring  to  the carpet area of the land occupied by the construction but it has to take into consideration the total quantity as well as the quality of the construction. The term “quantity” would refer to the total area of construction, not only on the ground of the  land but  it  would include even the upper floors  of construction. The quality of construction would include the description as well as the type of construction i.e. whether it is road or building or shed, etc., as well as of what material. The area of construction would obviously refer to its total area of the structure and when it relates to a building erected

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on a land, it would not only include the carpet area of the land  occupied  by  such  building  but  the  total  area  of  the super-structure and the same will have to be considered to ascertain the FSI and consequently the value of such total area of the construction would be the determining factor in that  regard.  It  is  also to  be noted that  the term “FSI” i.e. floor  space  index  means  and  has  been  defined  under  the clause 2 (42) of the said Regulations as the quotient of the ratio  of  the  combined  gross  floor  area  of  all  floors, excepting  areas  specifically  exempted  under  the  said Regulations,  to  the total  are  of  the  plot,  viz.,  floor  space index  is  equal  to  the  total  covered  area  of  all  the  floors divided  by  the  plot  area.  Therefore  the  total  expenditure incurred in the construction or development of amenity in the surrendered plot assumes importance while determining the entitlement of the owner or the developer for further DR in the form of FSI on that count under Clause 6 of Appendix VII.

19.     As rightly submitted on behalf of the respondents, the differentiation  in  the  percentage  is  directly  linked  to  the value  of  the  area  of  the  construction  or  the  development carried out  in relation to  the amenities  in the surrendered plot. Certainly the valuation of the construction of a road in a specified area cannot be equated with that of the value of construction  in  relation to  a  building occupying the  same measure of area of land. There is bound to be a substantial difference between the value of the road built in an area of land and that of the building constructed in same measure of area of land. In case of road, the construction lies merely on the  carpet  area  of  the  land.  In  case  of  building,  the construction is not only on the carpet area of the land but it goes  vertically  above  depending  upon  the  number  of  its floors.  In  other  words,  while  the  road  would  occupy  the ground as many times as the number of floors it will have. Being so, the area of land occupied by the construction or development of a road cannot be equivalent to the same area of  the  land  occupied  by  the  construction  of  a  building. Considering  this  important  aspect  of  the  matter,  the authorities having decided to grant the FSI on the basis of

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the  value  of  the  area  occupied  by  construction  or development  of  amenity  in  the  surrendered  plot  which would  depend upon the  prevailing  rate of  the  cost  of  the construction or the development. The same cannot be found fault with.”

31. We are  unable  to  agree with  the  view taken  by the Bombay High

Court and to accept the submissions of Mr. Naphade because it seems to us

to do violence to the plain language of the statute.  

32. Section 126 (1) (b) of the Act uses the word  ‘against’:  it speaks of

granting  FSI  or  TDR ‘against  the  area  of  land  surrendered’  and  further

additional  FSI  or  TDR  ‘against the  development  or  construction  of

amenities on the surrendered land’. Now, one of the meanings of the word

‘against’ is given as “in return of something”, e.g., the exchange rate against

Franc” (CHAMBERS 21st Century Dictionary, 1st Published in India 1997

reprinted 1999).

33. Webster’s  third New International  Dictionary gives the meaning of

the word ‘against’ as “in exchange for: in return for”  

34. The Concise Oxford English Dictionary gives one of the meanings of

the word as “in exchange for, in return for; as an equivalent or set-off for; in

lieu of, instead of.”

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35. Thus, on the basis of the language used in section 126(1) (b) it could

be legitimately argued that what is contemplated is to recompense the land

owner proportionate to the value of the development or construction of the

amenity on the surrendered land. But the matter doesn’t stop there. As seen

above  in  Appendix  VII  to  the  Regulations  paragraph  5  uses  the  words

‘equal to the gross area of reserved plot’. Therefore, in so far as the bare

land  is  concerned  there  is  no  difficulty.  Paragraph  6  of  the  Appendix,

however,  uses  the  words  ‘equivalent to  the  area  of  the

construction/development’ and much argument is made on the meaning of

the word equivalent.

36. Mr.  Naphade  cited  before  us  the  Black’s  law dictionary  in  which

‘equivalent’ as an adjective is defined as  “equal in  value, force, measure,

volume,  power,  and  effect  or  having  equal  or  corresponding  import,

meaning or significance; alike, identical.”.

37. Chambers  21st Dictionary  defines  equivalent  as  “equal  in  value,

power or meaning”.   

38. Concise Oxford English Dictionary defines the word as an adjective

as “Equal in value, amount, function, meaning, etc. (equivalent to) having

the same or a similar effect as”.  

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39. New  Webster’s  Dictionary  defines  equivalent  as  “Equal  in  value,

measure,  force,  effect,  or  significance;  corresponding  in  position  or

function;”

40. Webster’s  Third  New  International  Dictionary  defines  it  as  an

adjective as” 1: equal in force or amount ….. equal in area or volume but

not  admitting  of  superposition  (  a  square  ~  to  a  triangle)  2  a:  like  in

signification or import  3 a: equal in value : COMPENSATIVE.

41. “WORDS  AND  PHRASES  Permanent  Edition  Vol.15  at  p.157

defines ‘equivalent’ as follows:

“To be ‘equivalent to’ means to be equal in value, to be the same, corresponding to and to be worth. Desoe v. Desoe, 23 N. E. 2d 82, 83, 304 Mass. 231”.

“The word “equivalent” has been defined to mean “equal in value, area, volume, force, meaning, or the like; synonym: alike,  identical.”  Nahas  v.  Nahas,  90  P.  2d  223,  224,  59 Nev. 220”

42. The  Advanced  law  Lexicon  3rd Edition  2005  Book  2  defines

‘equivalent’ as follows:  

“Equal  in worth or value. Equal in  value,  measure, force, effect  etc.  EQUIVALENT,  EQUAL.  Equal  expresses  the fact that two things agree in anything which is capable of degree,  e.g.,  in  quantity,  quality,  value,  bulk,  number, proportion, rate, rank, and the like. Equivalent  is  equal in such  properties  as  affect  ourselves  or  the  use  which  we make of things, such as value, force, power, effect impact and the like (as) “Equivalent of money.””

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43. The last  of the above makes the meaning of the word ‘equivalent’

very clear by explaining it in contradistinction to the word ‘equal’. It says

equivalent is equal in such properties  as affect the use which we make of

things. Seen thus any of the relevant properties, e.g., value, area, volume,

quantity, quality etc. may form the basis for determining equivalence. Now,

if  the words in paragraph VI of  schedule  were to be  “equivalent to the

construction/development” then the submission of  Mr. Naphade  would

have been fully acceptable as in that case it  would be open to determine

equivalence on the basis of value of the construction and not on any other

basis.  But  the  regulation  fixes  the  measure  of  equivalence  by  using  the

words  “equivalent  to  the  area of  construction/development  done  on  the

surrendered land”. ‘Area’ of construction/development having being fixed

as the measure of equivalence it is no longer open to contend that any other

basis such as value may be used for determining equivalence.  

44. We may here  make  it  clear  that  we  fully  appreciate  the  rationale

behind trying to make value of the development/construction rather than its

area  as  the  basis  to  recompense  the  land  owner  and  for  granting  the

additional FSI or TDR. The submissions of Mr. Naphade in that regard are

not without substance but that is not the law as it stands and the value of the

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development/construction can only be made the basis for granting additional

FSI  or  TDR by making  suitable  amendments  in  the  law and  not  by  an

executive circular.

45. In regard to the circular there is something else too that we find quite

curious. This aspect of the matter was not argued before us and it is  not

relevant for the present, nevertheless we would like to point it out as it may

help the concerned authorities in future. It is to be noted that both section

126 (1)(b) of the Act and paragraph 6 of Appendix VII to the Regulations

provide  for  additional  FSI  or  TDR  for  construction  or  development  of

amenity which term is defined both in the Act and the Regulations. But in

the circular dated April  9, 1996 100% FSI (built  up area) is reserved for

public utilities none of which is  expressly mentioned in the definition of

amenity  in  clause  3(7)  of  the  Regulations.  Furthermore  ‘Municipal

Transport  Garage’,  ‘Fire  Station’,  ’Auditorium’,  ’Electric  Crematorium’,

‘Municipal Workshop’, ‘Town Duty Office’ and ‘Office Building’ are not

even covered by the definition of ‘amenity’ under section 2 (2) of the Act. It

is highly debatable if those public utilities can be introduced through the

circular as ‘amenities’ within the meaning of the Act or the Regulations.   

46. Apart  from  the  contention  raised  by  Mr.Naphade,  Mr.  Shishodia

Senior Advocate appearing for the Municipal Corporation, Greater Mumbai

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resisted the claims of the appellants and the writ petitioners on certain other

grounds. Mr. Shishodia submitted that for acquisition of the designated plot

of land recourse to clause (b) of sub section (1) of Section 126 of the Act

could only be taken by mutual agreement of the parties concerned. It was

equally open to the municipal authorities not to accept the surrender of the

land under clause (b) as it was open to the land owner to make the offer.

Therefore, it followed according to him, that the municipal authorities could

accept acquisition of the land in terms of clause (b) on certain conditions to

which the land owner might or might not agree. In case the land owner did

not agree to the condition(s) put by the municipal authority he would not

surrender  the  land  and then  the  acquisition  of  the land could  take  place

either in terms of clause (a) or clause (c) of section 126 (1). Mr. Shishodia

submitted that  the appellants  in all  the cases  had agreed to construct  the

road as part of the condition to surrender the land and getting 100% TDR in

lieu of the land. According to him, since the construction of the road was a

condition for grant of 100% TDR for the bare land the appellants and the

petitioners were not entitled to claim any further TDR at all for construction

of  the  roads  by  them.  He further  submitted  that  it  was  only  indulgence

shown to the appellants  and the petitioners  that the municipal authorities

agreed to give them additional TDR to the extent of 15% of the road area

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after the issuance of circular dated April 9, 1996 and 25% of the road area

after the issuance of the circular dated April 5, 2003.

47. The  submission  of  Mr.  Shishodia  is  completely  unacceptable.  The

conditions, that is to say, the mutual rights and obligations subject to which

the  land  owner  may  offer  to  surrender  the  designated  plot  of  land  to

municipal authority and the latter may accept the offer are enumerated in

detail in the statutory provisions. Beyond those conditions there can be no

negotiations for surrender of the land, particularly in derogation to the land

owner’s  statutory  rights.  Having  regard  to  the  nature  of  the  law  the

submission advanced on behalf  of  the municipal  authority would lead  to

palpably  unjust  and  inequitable  results.  The  land  owner  whose  land  is

designated  in  the  development  plan  as  reserved  for  any of  the  purposes

enumerated in section 22 of the Act or for any of the amenities as defined

under section 2(2) of the Act or regulation 2(7) of the Regulations is not left

with many options and he does not have the same bargaining position as the

municipal authority. Therefore, surrender of the land in terms of clause (b)

of section 126(1) of the Act cannot be subjected to any further conditions

than those already provided for in the statutory provisions. It is of course

open to the legislature to add to the conditions provided for in the statute (or

for that matter to do away with certain conditions that might be in existence)

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But  it  certainly  can  not  be  left  in  the  hands  of  the executive  to  impose

conditions  in  addition  to  those  in  the  statutes  for  accepting  the  offer  to

surrender the designated land.  

48. Mr. Shishodia next submitted that the measure of 15% (later raised to

25%) of the area of the road constructed for grant of TDR by the impugned

circulars of April 9, 1996, April 5, 2003 and May 5, 2004 was decided in

meetings in which Mr. Nayan M.Shah, constituted attorney of the appellants

was  also  present  as  the  representative  of  the  industry.  Hence,  it  was  no

longer open to the appellants and the petitioners to question those circulars.

We are once again unable to accept the submission, Mr. Shah might have

been present in the meeting and he might or might not have voted for the

graded scheme for grant of additional TDR but that would not authorise the

municipal authorities to override or supersede the statutory provisions by

issuing circulars in the nature of executive instructions.

49. In  light  of  the  discussions  made  above  we  find  that  the  stand  of

municipal authorities is contrary to the law as it stands today and the view

taken  by  High  Court  is  unsustainable.  The  judgment  and  order  dated

October 18, 2005 passed by High Court of Bombay in W.P.(C) No.323 of

2000  and  other  analogous  cases  is  accordingly  set  aside  and  the  writ

petitions are allowed.

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50. In the result, the appeals and the writ petition are allowed but with no

order as to costs.  

……………………………….J                                                       [Markandey Katju]

.……………………………..J                                               [Aftab Alam]

New Delhi February 6, 2009.

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