REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVI APPELLATE JURISDICTION

CIVIL APPEAL NO. 2970 OF 2006

Jayant Achyut Sathe …….Appellant

Versus

Joseph Bain D’ Souza and Ors. …….Respondents   

WITH

Civil Appeal No. 2971 of 2006 Civil Appeal No. 2972 of 2006 Civil Appeal No. 2973 of 2006 Civil Appeal No. 2974 of 2006 Civil Appeal No. 2975 of 2006 Civil Appeal No. 2978 of 2006 Civil Appeal No. 2979 of 2006 Civil Appeal No. 2976 of 2006 Civil Appeal No. 2977 of 2006 Civil Appeal No. 5491 of 2008@ SLP (C)6712/2007 Civil Appeal No. 5492 of 2008@ SLP (C)6713/2007 Civil Appeal No.5493  of 2008@ SLP (C)6715/2007 Civil Appeal No.5494 of 2008@ SLP (C)6714/2007 Civil Appeal No. 5495 of 2008@ SLP (C)6716/2007 Civil Appeal No. 5490 of 2008@ SLP (C)14289/2007 Civil Appeal No. 5496 of 2008@ SLP (C)22326 /2008(CC.2987/08) Cont.Pet. (C) No.44/2008 in C.A. No.2970/2006)

J U D G M E N T

Dr. ARIJIT PASAYAT, J.

1. Leave granted.

2. Challenge  in  these  appeals  is  to  the  judgment  of  the

Bombay  High Court which while holding that Regulation 33

(7) of the Development Control Regulations, 1991 (in short the

‘Regulations’) for the city of Mumbai  as amended in the year

1999 does not suffer from any illegality, further observed that

the same applies only to dilapidated buildings of ‘A’ category

which satisfy the requirement and those declared prior to the

monsoon  of  1997  under  3rd proviso  are  covered  under

Regulation 33(7) and are entitled to extra “Floor Space Index”

(in short ‘FSI’). It also directed that certain site space has also

to be provided.  

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3. The conclusions essentially are as follows:

“For  the  reasons  stated  above,  we  hold  that the petition is very much maintainable and we read the provisions of the first part of D.C. Regulation 33 (7)  to  cover  only  the  privately  owned  dilapidated buildings which require  reconstruction and where the cost of structural repairs exceeds the monetary requirement  specified  under  Section  88(3)  of  the MHAD Act (vis. Rs.1200/- per sq.meter as of now).

In the circumstances, prayer (b) of the petition deserves to be accepted though not prayer (a) and D.C. Regulation 33(7) will have to be read  to mean that only the dilapidated buildings of “A” category which satisfy this requirement (and those declared unsafe  prior  to  the  monsoon  of  1997  under  3rd proviso thereof)  are covered under D.C. Regulation 33(7) and entitled to extra FSI provided therein.  

As  far  as  the  challenge  to  the  side  spaces being reduced to half as against what is otherwise provided,  it  was  submitted  that  the  provision  is totally  unreasonable.  The  side  spaces  will  now hardly be about 1.5 metres (about 5 feet) and for a building upto 24 metres,  no separate  fire  fighting arrangement will be insisted. This will almost mean a building of ground plus 7 floors. The fire engines will  not  be  able  to  go  inside.  In  our  view, independently on the merits of this submission, it. is required to be accepted. It was submitted by the respondents  that  in  the  erstwhile  buildings  there was hardly any space between two such buildings and if  one goes for a tower, i.e.  above 24 metres, obviously the side space will increase and the fire

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fighting  facilities  will  have  to  be  provided.  In  our view,  this  is  no  answer  to  the  safety  of  the occupants with height of less than 24 metres. We may  not  interfere  into  the  reduction  of  the recreational  space  or  not  providing  the  parking facilities though that will also create difficulties for the  residents  of  such  buildings.  Considering  that there  is  so  much  of  space  crunch,  we  may  not interfere   into  the  decision  of  the  rule  makers  in that behalf. However, having the side space of only 5 feet for buildings of the height less than 24 metres (of  ground  plus  7  floors)  is  on  the  face  of  it something  difficult to substantiate. That provision of  the  D.C.  Regulations  will  have  to  be  held  as arbitrary, unreasonable and violative of Article 14 of the Constitution. We have no option, but to accept prayer  (f)  to  this  extent.  The  requirement  of reducing  side  spaces  for  the  buildings  to  be reconstructed is bad in law and they will have to be provided with the minimum side spaces as required in the buildings on small plots, vis. 3.6 metres.

The Apex Court  has observed in its order  of 21st April,  2006 that no third party rights will be created and it further observed that it will be for the High Court to deal with that aspect. This being the position,  we  direct,  with  a  view  not  to  cause prejudice  to  the  investors,  that  those  projects  of reconstruction, which have already been approved, will  proceed  as  it  is.  However,  the  buildings  not having  the  certificate  of  the  cost  of  structural repairs  exceeding  Rs.  1200/-  per  sq.  m.  under section 88 (3) of the MHAD Act will not be permitted reconstruction henceforth. For future, the certificate under section 88 (3) of the MHAD Act, viz. that the structural repairs cannot be carried out within the monetary limits specified therein will be mandatory requirement whereafter if 70% of the occupants and the  landlord  come  together,  the  benefit  under

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Regulation 33(7) will be available and not otherwise. Similarly, in all such buildings to be reconstructed, the side spaces will be maintained at least as in the case  of  other  buildings  on  small  plots  vis.  3.6 metres.”  

4. The background facts in a nutshell are as follows:

The three writ petitioners (respondent Nos.  1,  2 and 3

herein)  claiming  to  be  public  spirited  citizens  filed  a  writ

petition before the Bombay High Court.  The 1st petitioner is a

former  Municipal  Commissioner  of  Mumbai,  who  is  also  a

former Chief  Secretary of the State of Maharashtra.  The 2nd

petitioner  has  been  a  member  of  various  committees

concerning  urban development.  The  3rd petitioner  is  a  Civil

Engineer by profession and for many years was an Executive

Committee Member of the Bombay Metropolitan Authority. He

was  also  a  member  of  the  Slum  Rehabilitation  Committee

constituted by the State of Maharashtra.     

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The  respondents in  the  writ  petition were  the State  of

Maharashtra  through  the  Secretary,  Urban  Development

Department, Municipal Corporation of Greater Mumbai which

is the Planning Authority  for  the city  of  Mumbai  under  the

Maharashtra Regional and Town Planning Act, 1966 (in short

the  ‘Town  Planning  Act’)  whereunder  the  regulations  are

framed.  Respondent  No.3  was  a  statutory  authority

constituted  under  the  Maharashtra  Housing  and  Area

Development Act, 1976 (in short the ‘Development Act’).  The

concerned  authority  is  Maharashtra  Housing  and  Area

Development  Authority  (MHADA).  Respondent  No.4  was the

former Municipal Commissioner of Mumbai whose report was

amongst others led to the amendment of the Regulations in

the year 1999. Several parties intervened in the matter. Two of

them were the property owners. One was the Property Owners’

Association  and  one  claimed  to  be  a  tenant  in  pre  1940

building.  One of  the  interveners was Property  Redevelopers’

Association.  Intervener  No.6  was an Architect  by profession

who supported the petition while others opposed the petition.

Earlier,  a  Division  Bench  of  the  High  Court  rendered  a

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judgment  on  17.10.2005.  The  Division  Bench  accepted

number  of  grievances  and  amongst  others  appointed  a  few

Committees to look into some such aspects which according

to it had relevance for the issues highlighted in the petition.

One  of  the  interveners  filed  an  appeal  relatable  to  Special

Leave  Petition(C)  No.1376  of  2006  and  others  also  filed

appeals. By order dated 14th July, 2006 this Court disposed of

the appeals inter-alia with the following observations:

“The High Court has not dealt with the basic issues raised in the petition, i.e. as to whether the  amended  Regulation  33(7)  suffered  from any  infirmity.  We,  therefore,  think  it appropriate  to  direct  the  High  Court  to examine  those  issues.  The  parties  shall  be permitted  to  place  their  respective  stands before  the  High  Court.  It  is  open  to  the appellants to canvass before the High Court as to the non-maintainability of the writ petitions. The High Court  shall  appropriately deal  with the  same.  It  needs  no  re-iteration  that  the High  Court  shall  examine  the  challenge  to Regulation 33(7) as amended in 1999.”

Therefore, this Court directed the High Court to deal with

only that issue relating to the validity of the provisions and the

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maintainability of the writ petitions.  Intervention applications

had also been filed before this Court. These applications were

also to be directed to be dealt with by the High Court.  

The  grievances  of  the  petitioners  as  noted  before  the

High Court were as follows:

“The  petitioners  are  concerned  with  the problem  of  congestion  of  the  population  in  the island city of Mumbai.  The island area of the city covers the area from Colaba in the South to Mahim and Sion in the North (which originally consisted of eight islands before they were all linked). The areas of suburbs and extended suburbs are not covered when one  speaks  of  the  island  city.  The  existing infrastructure  in  the  island  city,  particularly  with respect  to  roads,  water  supply,  sewage  system, open areas and gardens, is already over stretched and under extreme strain. The petitioners point out that  the  island  city  has  already  reached  the saturation point with respect to the population that it can accommodate, which is not disputed by any of  the  public  authorities  concerned.  According  to the report entitled "Report on the Development Plan of Greater Bombay, 1966", the total acreage of the island  city  is  17,  388.83  acres  and  the  ultimate population,  which  it  can  accommodate,  is  32.5 lakhs.  As  of  now,  the  existing  population  of  the island  city  is  already  in  excess  of  this  figure  of ultimate population. It is now estimated to be 33.4 lakhs. It  is another matter  that the population in the  suburbs  is  much more,  but  the  area  covered

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there is also much more than the island city. The petition is concerning only the island city.

There  is  no  dispute  whatsoever  that  the present pubic amenities are inadequate to cater to the  present  population.  Hence,  according  to  the Petitioners,  any  cause  for  the  increase  in  the population in the island city has to be appropriately dealt  with.  Coupled  with  this  deterioration  of  the infrastructure in the island city, it is also a fact that a  very  large  number  of  buildings,  i.e.  more  than 16,500  (16,502  according  to  one  estimate)  were constructed prior to 1940 and are  in the need of urgent  repairs  and in  some  cases  reconstruction. The State has taken it upon itself to see to it that these  buildings  are  repaired  and,  wherever necessary,  reconstructed  and  for  that  purpose,  it created  the  Bombay  Building,  Repairs  and Reconstruction  Board  by  passing  the  Bombay Building Repairs and Reconstruction Board Act (Act No.XLVII of 1969). One of the main reasons for this large number of unattended buildings has been the freezing of the rent under the Bombay Rents, Hotel and Lodging  House  Rates  Control  Act,  1947 ("the Bombay Rent Act" for short). Rents received by the landlords  were  found  very  much  insufficient  for them to carry out repairs.

The  Bombay  Buildings,  Repairs  and Reconstruction Board Act was later on repealed and the activities under the Act were taken over by the Maharashtra  Housing  and  Area  Development Authority (MHADA) when the Maharashtra Housing and Area Development Act (MHAD Act) was passed in  1976.  A  cess  was  to  be  contributed  by  the tenants of the private buildings known as Mumbai Building,  Repairs  and  Reconstruction  Cess  under Section  82  of  the  said  Act.  Lands  and  buildings owned  by  the  Central  Government,  State

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Government,  Municipal  Corporation  of  Mumbai, Mumbai Port Trusts, lands and buildings vested in MHADA,  lards and buildings of  the  Public  Trusts exclusively  occupied  for  worship  or  educational purposes  and  those  vested  in  or  leased  to  a cooperative  society,  buildings  exclusively  in occupation of the owner, buildings exclusively used for  non-residential  purposes  and  some  other properties  as  mentioned  in  section  83  were exempted from this requirement of paying the cess. These  cessed  buildings  were  divided  into  the following three categories  under section 84 of  the MHAD Act.

Category "A" Buildings erected prior to 1/9/ 1940

Category "B" Buildings erected between 1/9/ 1940

and 31/12/1950

Category "C" Buildings erected prior to 1/ 1/ 1951 and 30/12/1969

It appears to be the common case that as of now as per the affidavit of the State Government in the present matter, there are some 16502 buildings in "A" Category, 1491 buildings in "B" Category and 1651 buildings in "C" Category.

Chapter VIII of MHAD Act provided for repairs and reconstruction of dilapidated buildings. Under section  88  from  Chapter  VIII  of  the  MHAD  Act, Mumbai Housing and Area Development Board was supposed  to undertake  structural  repairs  of  the buildings,  which  were  in  ruinous  condition  and likely to deteriorate and fall. However, section 88 (3)

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provides  that  where  the  cost  of  the  structural repairs exceed Rs.1200/- per sq. m., the Board may not consider such buildings for repairs and issue a certificate to that effect to the owner of the buildings and affix it on the building for the information of occupiers  and  then  proceed  to  take  action  as provided  in  this  Chapter.  Thereafter  where  the occupiers  were  ready  to  contribute  to  the  cost  in excess of Ps.1200/- per sq. metre, the Board may carry  out  the  structural  repairs,  for  which  a provision is made in section 89 of the MHAD Act. This  will  mean  that  oherwise  the  steps  for reconstruction  will  be  taken  by  acquiring  the property as provided in sections 91 and 92 of this Chapter.  Section  91  provides  for  reconstruction where  a  building  suddenly  collapses  or  becomes inhabitate due to fire, torrential rein or tempest or otherwise. Section 92 lays down the procedure for acquisition  where  however  a  building  suddenly collapses.”

The  High  Court  noted  that  there  was  no  dispute  that

there was hardly any progress in the matter of repairs and/or

re-construction by the procedure provided. Therefore, even in

the year 1981 the Government appointed a Committee under

one Mr. Ajit Kerkar to consider the problems. The Committee

emphasized that there should be a shift from re-construction

of  individual  buildings  to  the  re-development  of  the  entire

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localities  and  the  formulation  of  a  programme  of  urban

renewal.  

The High Court noted that it was a common case that

MHADA  found  it  difficult  to  put  in  adequate  funds  for

acquisition of properties for reconstruction under Chapter VIII

of  the  Development  Act  and,  therefore,  Chapter  VIII-A  was

introduced in the said Act. The provisions of this Chapter have

been  stated  to  be  notwithstanding  what  was  provided  in

Chapter VIII as stated in Section 103-B of Chapter VIII-A. The

provisions under this Chapter were to operate when 70% of

the occupiers came together and approached the Government

to  acquire  the  property.  They  were  required  to  assure  to

contribute  towards  acquisition  and  take  steps  since  the

landlords were not cooperating and under the Scheme of this

Chapter  the  developed  buildings  were  to  be  given  FSI  2.

These provisions also did not receive adequate response.  

On 25.3.1991 the Regulations were notified  for greater

Mumbai. Regulation 33(7) to which these cases relate provided

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for reconstruction or re-development of cessed buildings in the

island city by cooperative housing societies or of old buildings

belonging to the Corporation. The Regulation provided for old

consumed FSI or FSI 2 whichever is higher. This Regulation

was further amended on 25.1.1999 to provide the FSI of 2.5

on the gross plot area or the FSI required for rehabilitation of

the  existing  tenants  plus  incentive  FSI  as  specified  in

Appendix III to the Regulations. This amendment was brought

about after a report was submitted by Study Group under the

Chairmanship  of  Shri  D.M.  Sukhtankar,  former  Municipal

Commissioner who was respondent No.4 in the writ petition.

The  Study  Group  had  submitted  its  reply  to  the  State

Government in July 1997 leading to amendments in the year

1999. The Regulation was further amended by adding a new

clause  w.e.f.  27th February,  2004  whereby  apart  from  the

Corporation buildings,  those  of  Department of  Police,  Police

Housing Corporation, Jail and Home Guard of Government of

Maharashtra constructed prior to 1940 were also covered.  

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The main grievance in the writ petitions was that there

was  gross  misuse  of  the  amended  Regulation  33(7)  when

applied  to  private  buildings  with  which  the  petitions  were

concerned.  They  submitted  that  taking  shelter  under  the

amended  Regulation  33,  there  has  been  misuse  by  pulling

down buildings which are otherwise in good conditions merely

because they were constructed prior to 1940. It was further

submitted that there are no guidelines under the Regulations

to lay down as to who are the tenants or occupiers who are

eligible  to  be  protected  under  the  Regulations.  Numbers  of

instances  were  cited.  It  was  submitted  that  builders  and

developers  and people  with  money  and muscle  power  were

dishousing  genuine  tenants/occupiers.  The  numbers  of

tenants/occupiers  were  being  inflated  by  creating  bogus

tenancies  to  claim  extra  FSI.  The  consequence,  it  was

submitted,  was  that  there  was  going  to  be  unjustified  and

tremendous  increase  in  the  population  in  the  island  city

causing further strain on its infrastructure. It was their case

that the extra FSI as per the amended Regulation was meant

for the reconstruction of unsafe and dilapidated buildings only

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and not for all the 16502 ‘A’ category cessed buildings. The

dilapidated buildings are supposed to be just about 10% of

them. Accordingly, there was a prayer to prevent strong and

sound cessed buildings  which are not in danger of collapse to

be not pulled down  and Regulation 33(7) should be declared

to  be  applicable  only  to  those  cessed  buildings  which  are

dilapidated and are in unsound and in unsafe  condition.  

Challenge  was  to  the  reduction  in  the  marginal  open

space  requirement  for  the  buildings  under  Regulation  33(7)

read  with Appendix  III  as  provided  for  the  buildings  under

other regulations and it was prayed that same should be also

struck down.  

Stand  of  the  respondents  apart  from  questioning  the

maintainability of  the writ  petitions, the locus standi  of the

writ petitioners,  was that Regulation 33(7)  as amended was

applicable  to  all  ‘A’  category  cessed  buildings  which  are

constructed  prior  to  1940.  Whenever  70%  of  the

tenants/occupiers of such buildings came together alongwith

their landlords for redevelopment of their properties, they were

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entitled  to  get  extra  FSI.  This  will  provide  houses  with

minimum 225 sq.ft.  free of cost to all  tenants in these pre-

1940 buildings. Many of them are otherwise cramped in still

smaller tenements.  The benefit could not be restricted only to

the  old  and  dilapidated  buildings.  There  was  no  such

restriction contemplated under Regulation 33.   

The High Court while upholding the validity of Regulation

33(7)  accepted  some  of  the  prayers  of  the  writ  petitioners

which are led to the filing of the appeals.  

5. Stand of appellants in these appeals is that the amended

Regulation 33(7) came into force on 25th January, 1999 after

inviting suggestions/objections from the public at large under

Section  37  of  the  Town  Planning  Act,  1966  and  after

considering  the  same.  Neither  any  suggestions  nor  any

objections  were  filed  by  the  writ  petitioners  nor  did  they

challenge the said amended D.C. Regulation 33(7) from 1999

till October, 2004.  In other words there was a delay of nearly

6 years.  

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6. It is submitted by learned counsel for the appellants that

Public Interest Litigation as claimed to have been filed is not

maintainable.  Such a  petition  lies  at  the  instance  of  the  a

third party only when it is shown that the affected person is

unable to approach the Court. It would not lie if a section of

the  public  was  not  interested  in  the  cause.   The  writ

petitioners  did  not  file  any  objections  or  suggestions  when

statutory notice  was issued.  Therefore,  they could  not  have

invoked Article 226 of the Constitution and to pray that the

High Court should consider their suggestions and restrict the

regulation to old and dilapidated buildings beyond economic

repair as set out in Section 88 of the Development Act or to

consider  impact  on  environment  or  infrastructure  due  to

unlimited  FSI  or to restrict  the FSI  given to MHADA.  They,

therefore, seek to substitute the High Court for the statutory

authorities. This is not permissible. The affected parties to any

dispute on the PIL are essentially the property owners and the

persons against whom serious allegations of alleged misuse of

the regulation were made. These persons were not impleaded.

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It is a settled position in law that in cases of public interest

litigation the principles of natural justice apply and any order

passed without impleading the affected parties would be bad.

The  prayer  was  to  amend  the  Regulations  as  framed.  This

prayer  could  not  have  been  accepted.  As  per  the  Kerkar

Report the FSI permissible to the Board ranged between 3.19

and  5.88.   By  the  impugned  judgment  the  applicability  of

Regulation 33(7)  was restricted to dilapidated buildings, the

cost of repair which was beyond the statutory time limit fixed

under Section 88 of the Development Act. Such a course is

impermissible as it is contrary to the intention of the delegated

legislation in view of the clear use of the expression “subject to

the  provision  of  MHADA  Act”  which  has  been  used  in  the

directives issued under Section 154 of Town Planning Act in

January 1989. Notification dated 9.3.1989, DC Regulation of

1991  and  the  amendments  made  in  1994  to  the  DC

Regulations  of  1991  were  deleted.  The  expression  “old  and

dilapidated  cessed  buildings”  have  been  used  in  the

Government  Policy  on  reconstruction  of  old  buildings  of

12.11.1984  and  in  the  letter  dated  20.3.1987  regarding

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Regulations of 1991, and the amendments made in 1994 to

the Regulations of 1991.  The expression “old and dilapidated

cessed building” had been used in the Government Policy on

Reconstruction of old buildings of 12.11.1984 and in the letter

dated  20.3.1987  regarding  Regulations,  and  the  said

expression  is  not  found  in  Regulation  33(7).  It  has  been

consistently held that landlord need not wait for the building

to get dilapidated as he is entitled to re-construct to augment

his income.    

7. It is pointed out that the historical background has great

relevance also.  With the advent of the Second World War in

1939,  rents  in Bombay  were  frozen at  1939 levels,  initially

under  the  Bombay  Rent  Restriction  Act,  1939  and

subsequently at 1940 levels under the Bombay Rent Act 1947.

As  a  result  of  the  freezing  of  rents  on  the  one  hand  and

increase in prices of building materials, wages of workers etc.

on the other, it was impossible for the landlords to carry out

repairs to the buildings. This led to collapse of some buildings.

To  meet  this  situation,  the  Bombay  Buildings  Repairs  and

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Reconstruction Board Act,  1969 was enacted on 1st October

1969. It was a temporary Act for ten years. It was applicable

only to the island city of Mumbai and not to the suburbs. The

buildings  in  Mumbai  were  categorized  into  three  groups

depending on their year of construction viz.,

Category “A” Buildings  constructed  prior to 1/09/1940

16,502 buildings.

Category “B” Buildings  constructed between  1/09/1940  and 31/12/1950

- 1,491 buildings.

Category “C” Buildings  constructed between  1/01/1951  and 30/12/1969

- 1,651 buildings.

Total 19,644 cessed buildings

8. A  cess  was  levied  on  these  buildings  and  the  Repair

Board  established  under  the  said  Act,  had  taken  up  the

responsibility  of  repairing  the  said  buildings.  In  case  the

repairs were beyond economic levels, such buildings were to

be acquired by the Board and reconstructed/ redeveloped.

20

9. The  said  1969  Repairs  Act  was  replaced  by  the

Development Act, which consolidated various Acts, including

the  said  1969  Repairs  Act,  which  was  inserted  into

Development  Act  as  Chapter  VIII  with  modifications.

Collection  of  Cess  continued  under  the  Development  Act.

Basic objective of Chapter VIII  of  said Act was to carry out

structural  repairs  to  the  cessed  buildings  and  if  they  were

beyond  economic  repairs  to  acquire  and  reconstruct.  This

scheme of reconstruction/ redevelopment failed. Thereafter in

1986,  Development  Act  was  amended  by  incorporating

Chapter VIIIA by which 70% of the occupiers of “A” category

cessed  buildings  could  come  together  and  acquire  the

property  through  Development  Act  for  “reconstruction”  on

paying only 100 months net rent to the owner [the rents were

frozen at 1940 levels]. The owner had no role to play in this

scheme.  The occupiers could acquire the building, demolish

the  building  and  reconstruct  it.  This  scheme  of

reconstruction/  redevelopment  also  failed.  The  Government

Policy for reconstruction/redevelopment  from 12th November

21

1984 to 23rd November 1991 granting FSI 2 or consumed FSI

whichever is more, to the co-operative societies of the owners

and occupiers also failed.

10. Therefore,  on  23rd March  1991,  as  part  of  the  Town

Planning Act and not as part of Development Act, Regulation

No.33 (7) was brought into force in 1991.

11. Under Regulation 33(7),  in 1991 the FSI  was 2 or the

consumed  Floor  Space  Index  of  the  existing  old  building,

whichever is more. There was no incentive FSI. The minimum

carpet area for rehabilitating the tenants/occupiers in the new

building was 180 sq, ft. minimum upto a maximum of 735 sq.

ft. The redevelopment was to be “subject to the provisions of

the said Act” i.e. Development Act.  

12. In 1994, DC Regulation 33(7) was amended to make the

FSI  2 on the gross  plot  area  or the  consumed Floor  Space

Index,  that  is,  the  total  built-up  area  of  the  existing old

building,  whichever  is  more.  This  was  also  “subject  to  the

provisions  of  the  said  Act”  i.e.  Development  Act.  The  said

22

amendment to D.C. Regulation 33 (7) in 1994, however failed

to  achieve  the  desired  object.  In  1996,  the  Maharashtra

Government  therefore  constituted  a  Committee  popularly

known  as  “the  Sukhtankar  Committee”,  which  committed

comprised  of  members  from  all  affected  groups  including

tenants,  landlords,  bureaucrats,  experts,  etc.  It  was  a  very

broad-based  Committee.  The  terms  of  reference  inter  alia

included  how  the  reconstruction  of  the  old  cess  buildings

could be speeded up.

13. After detailed deliberations held over a large number of

meetings,  in  July,  1997,  the  Sukhtankar  Committee

submitted its report to the Government. It was noted in the

said Report that the life of most of the buildings in Category

“A” had nearly come to an end and instead of repairing such

buildings periodically, their reconstruction would be the only

far sighted solution. It  was felt that without giving incentive

FSI nothing could be achieved in respect of reconstruction and

redevelopment of the old buildings.

23

14. Therefore, amendment was made on 25'h January 1999

to Regulation 33(7), under the provisions of the Town Planning

Act, whereby for reconstructing “A” category cessed buildings,

FSI  of  2.5  was  granted  on  the  gross  plot  area  or  the  FSI

required  for  rehabilitating  the  tenants  plus  50%  to  70%

incentive FS], (as specified in Appendix III] whichever is more.

The  words  “subject  to  provisions”  of  Development  Act  were

expressly deleted.

15. Further under the 1st proviso to the amended Regulation

33(7), with the prior approval of the Government, MHADA and

the Corporation would be eligible  to get additional incentive

FSI  over  the  otherwise  permissible  FSI  as  specified  in

Annexure III of these Regulations without any cap.

16. The  history  of  the  Regulation  33(7)  framed  under  the

Town  Planning  Act,  1966  for  reconstruction  and

redevelopment  and  the  scheme  for  reconstruction/

redevelopment under Development Act shows that there are

24

separate  schemes  under  two  separate  Acts,  that  are  self

contained and one cannot borrow the provisions from one Act

and incorporate  them into  the  other,  without  upsetting  the

scheme of Regulation 33(7) read with Appendix III thereof.

17. The  scheme  under  Regulation  33(7)  involves  landlords

with  the  consent  of  70%  of  the  occupiers.  There  is  no

acquisition for redevelopment under this Scheme. Therefore to

bring in “old and dilapidated buildings” which is a prerequisite

for  acquisition  and reconstruction under  the other  Scheme,

namely under Chapter VIII  of MHADA cannot be included in

the provisions of Regulation 33 (7) read with Appendix III.

18. Learned counsel for the original writ petitioners on the

other hand submitted that the matters involved are not to be

considered  in  the  background  of  factual  scenario  only.  The

concept  of  Article  21  of  the  Constitution of  India,  1950  (in

short  the  ‘Constitution’)  cannot  be  lost  sight  of.   It  is

submitted  that  there  is  congestion  and  pressure  on  the

infrastructure  facilities  such as,  sewerage,  water,  transport.

25

The  fire  safety  requirements  cannot  be  adhered  to  in  the

cramped areas. With the increased inflow of persons into the

island city of Mumbai, the quality of life will be affected.  

19. In reply, learned counsel for the appellant submitted that

there was no need for filing a Public Interest Litigation if there

was good governance.  The buildings in question are situated

in  extremely  congested  localities.  There  are  narrow  lanes.

Traditional  buildings  are  Ground  plus  First  floor  and some

times  two  to  four  or  to  six  floors.  Originally,  there  was  no

notion of FSI which is presently prescribed.  

20. The Development Act does not really deal with present

issues. The density development parameters are very relevant.

With high FSI the density goes off. The basic challenge was to

the non-availability of the infrastructure and the basic quality

of life. The Town Planning Act has to ensure descent quality of

life.  More than 16% buildings fall in ‘A’ category and not all

that  are  in  dilapidated  condition.  Regulation  67  deals  with

26

heritage buildings. The structural repairs concept cannot be

lost sight of.  

21. The basic question raised is applicability of Section 88

vis-a-vis Regulation 33(7).  It  is pointed out that focus is on

structural  repairs  and  for  greater  preservation  of

reconstruction.  

22. Learned counsel for MHADA, State and the Corporation

pointed out that there was no challenge in the writ petitions to

the legality of Regulation 33(7) on the ground of either Articles

14 or 21 of the Constitution. It is urged that nothing can be

read  into  Regulation  33(7).  Reference  is  also  made  to  the

Development Act, Appendix III dealing with the procedure and

the reconstruction Board.  

23. It  is pointed out that 3.6 meters space as fixed by the

High Court is not practicable. No basis has been indicated for

fixation of such apace. It has also been pointed out that many

constructions  already  made  shall  be  required  to  be

27

demolished if the order is followed. It  is further pointed out

that minimum FSI open space was always there. Reference is

made to the situation in 1984, 1987, 1989 and 1991.  Clause

(6) in the old Appendix continued till 2004 and there was no

challenge earlier. It  is pointed out that there cannot be any

fixed norms to satisfy whether the building is dilapidated or

not.  

24. Firstly, the scope of judicial review in matters of policy

need to be looked into. In  Balco Employees Union (Regd.) v.

Union of India and Ors. (2002 (2) SCC 333) it was observed as

follows:

“34. Applying  the  analogy,  just  as  the  court does  not sit  over  the  policy  of  Parliament  in enacting  the  law,  similarly,  it  is  not  for  this Court  to  examine  whether  the  policy  of  this disinvestment is desirable or not. Dealing with the powers of the Court while considering the validity  of  the  decision  taken  in  the  sale  of certain  plants  and  equipment  of  the  Sindri Fertilizer  Factory,  which  was  owned  by  a public  sector  undertaking,  to  the  highest tenderer, this Court in Fertilizer Corpn. Kamgar Union  (Regd.) v.  Union  of  India SCC  568  at p.584,  while  upholding  the  decision  to  sell, observed as follows: (SCC para 35)

28

“We  certainly  agree  that  judicial interference  with  the  administration cannot be meticulous in our Montesquien system  of  separation  of  powers.  The Court cannot usurp or abdicate, and the parameters  of  judicial  review  must  be clearly defined and never exceeded. If the directorate of a government company has acted fairly, even if it has faltered in its wisdom,  the  court  cannot,  as  a superauditor, take the board of directors to task. This function is limited to testing whether  the  administrative  action  has been  fair  and  free  from  the  taint  of unreasonableness  and has substantially complied with the norms of procedure set for it by rules of public administration.”

36. In  State  of  M.P. v.  Nandlal  Jaiswal the change  of  the  policy  decision  taken  by  the State of Madhya Pradesh to grant licence for construction  of  distilleries  for  manufacture and  supply  of  country  liquor  to  existing contractors was challenged.  Dealing with the power of the Court in considering the validity of policy decision relating to economic matters, it was observed at pp.605-06 as follows: (SCC para 34)

“34.  But,  while  considering  the applicability of Article 14 in such a case, we must bear in mind that, having regard to  the  nature  of  the  trade  or  business, the Court would be slow to interfere with the  policy  laid  down  by  the  State Government  for  grant  of  licences  for manufacture  and  sale  of  liquor.  The Court  would,  in  view  of  the  inherently pernicious nature of the commodity allow a large measure of latitude to the State Government  in determining  its  policy  of regulating,  manufacture  and  trade  in liquor. Moreover, the grant of licences for manufacture  and  sale  of  liquor  would

29

essentially be a matter of economic policy where  the  Court  would  hesitate  to intervene and strike down what the State Government has done, unless it appears to be plainly arbitrary, irrational or mala fide.  We  had  occasion  to  consider  the scope of interference by the Court under Article 14 while dealing with laws relating to  economic  activities  in  R.K.  Garg v. Union  of  India.  We  pointed  out  in  that case  that  laws  relating  to  economic activities  should  be  viewed  with  greater latitude  than  laws  touching  civil  rights such as freedom of speech, religion, etc. We observed that the legislature should be  allowed  some  play  in  the  joints because  it  has  to  deal  with  complex problems which do not admit of solution through  any  doctrinaire  or  strait-jacket formula  and  this  is  particularly  true  in case of legislation dealing with economic matters,  where,  having  regard  to  the nature  of  the  problems  required  to  be dealt with, greater play in the joints has to  be  allowed  to  the  legislature.  We quoted  with  approval  the  following admonition  given  by  frankfurter  J  in morey v. Doud:

‘In  the  utilities,  tax  and  economic regulation cases, there are good reasons for  judicial  self-restraint  if  not  judicial deference  to  legislative  judgment.  The legislature  after  all  has  the  affirmative responsibility.  The  courts  have  only the power  to  destroy,  not  to  reconstruct. When these are added to the complexity of  economic  regulation,  the  uncertainty, the  liability  to  error,  the  bewildering conflict of the experts, and the number of times the Judges have been overruled by events — self-limitation can be seen to be the  path  to  judicial  wisdom  and institutional prestige and stability.’

30

What  we  said  in  that  case  in  regard  to legislation relating to economic matters must apply equally in regard to executive action in the  field  of  economic  activities,  though  the executive  decision  may  not  be  placed  on  as high a pedestal as legislative judgment insofar as  judicial  deference  is  concerned.  We  must not  forget  that  in  complex  economic  matters every decision is necessarily empiric and it is based  on  experimentation  or  what  one  may call ‘trial and error method’ and, therefore, its validity cannot be tested on any rigid ‘a priori’ considerations  or  on  the  application  of  any strait-jacket  formula.  The  Court  must  while adjudging  the  constitutional  validity  of  an executive  decision  relating  to  economic matters grant a certain measure of freedom or ‘play  in  the  joints’  to  the  executive.  ‘The problem of Government’ as pointed out by the Supreme  Court  of  the  United  States  in Metropolis Theater Co. v. State of Chicago:

‘are practical ones and may justify, if they do  not  require,  rough  accommodations, illogical, it may be, and unscientific. But even such criticism should not be hastily expressed.  What  is  best  is  not discernible,  the  wisdom  of  any  choice may  be  disputed  or  condemned.  Mere errors of Government are not subject to our judicial review. It is only its palpably arbitrary exercises which can be declared void’.

The Government, as was said in Permian Basin Area Rate cases, is entitled to make pragmatic adjustments  which  may  be  called  for  by particular  circumstances.  The  Court  cannot strike  down  a  policy  decision  taken  by  the State Government merely because it feels that another policy decision would have been fairer or wiser or more scientific or logical. The Court

31

can  interfere  only  if  the  policy  decision  is patently arbitrary, discriminatory or mala fide. It  is  against  the  background  of  these observations and keeping them in mind that we  must  now  proceed  to  deal  with  the contention of the petitioners based on Article 14 of the Constitution.

37. A  policy  decision  of  the  Government whereby  validity  of  contract  entered  into  by Municipal  Council  with the private  developer for construction of a commercial complex was impugned, came up for consideration in  G.B. Mahajan v.  Jalgaon  Municipal  Council and  it was observed at p.104 as follows: (SCC para 22)

“The  criticism  of  the  project  being ‘unconventional’  does  not  add  to  or advance the legal contention any further. The  question  is  not  whether  it  is unconventional  by  the  standard  of  the extant practices,  but whether there was something  in  the  law  rendering  it impermissible.  There  is,  no  doubt,  a degree  of  public  accountability  in  all governmental  enterprises.  But,  the present question is one of the extent and scope  of  judicial  review  over  such matters.  With  the  expansion  of  the State’s presence in the field of trade and commerce and of the range of economic and  commercial  enterprises  of Government  and  its  instrumentalities there  is  an  increasing  dimension  to governmental  concern  for  stimulating efficiency, keeping costs down, improved management methods, prevention of time and cost overruns in projects, balancing of  costs  against  timescales,  quality

32

control, cost-benefit ratios etc. In search of  these  values  it  might  become necessary  to  adopt  appropriate techniques  of  management  of  projects with concomitant economic expediencies. These are essentially matters of economic policy  which  lack  adjudicative disposition,  unless  they  violate constitutional or legal limits on power or have  demonstrable  pejorative environmental implications or amount to clear  abuse  of  power.  This  again is  the judicial  recognition  of  administrator’s right to trial  and error,  as long as both trial and error are bona fide and within the limits of authority.”

38. To the same effect are the observations of this  Court  in  Peerless  General  Finance  and Investment Co. Ltd. v. Reserve Bank of India in which Kasliwal, J. observed at p. 375  as follows: (SCC para 31)

“31.  The function of the Court is to see that  lawful  authority  is  not  abused  but not  to  appropriate  to  itself  the  task entrusted  to  that  authority.  It  is  well settled that a public body invested with statutory powers  must  take  care  not  to exceed or abuse its power. It must keep within  the  limits  of  the  authority committed to it. It must act in good faith and  it  must  act  reasonably.  Courts  are not  to  interfere  with  economic  policy which is the function of experts. It is not the  function  of  the  courts  to  sit  in judgment over matters of economic policy and  it  must  necessarily  be  left  to  the expert  bodies.  In  such  matters  even experts  can  seriously  and  doubtlessly differ.  Courts  cannot  be  expected  to

33

decide  them  without  even  the  aid  of experts.”

39. In  Premium Granites v.  State of T.N. while considering  the  Court’s  powers  in  interfering with the policy decision, it was observed at p.  

“54. It is not the domain of the Court to embark  upon  unchartered  ocean  of public policy in an exercise to consider as to  whether  a  particular  public  policy  is wise  or  a  better  public  policy  can  be evolved. Such exercise must be left to the discretion of the executive and legislative authorities as the case may be.”

92. In  a  democracy,  it  is  the  prerogative  of each  elected  Government  to  follow  its  own policy.  Often  a  change  in  Government  may result  in  the  shift  in  focus  or  change  in economic  policies.  Any  such  change  may result  in  adversely  affecting  some  vested interests. Unless any illegality is committed in the  execution  of  the  policy  or  the  same  is contrary  to  law  or  mala  fide,  a  decision bringing  about  change  cannot  per  se  be interfered with by the Court.”  

25. It is to be noted that if different language is used in the

same section or in different sections, the legislative intent is

that they are intended to lead to different results and there is

a  conscious  intent.  (See  the  Member  Board  of  Revenue vs.

Arthur  Paul  Benthall (1955 (2)  SCR 842,  845 846.)  Similar

34

was the view expressed in Commissioner of Income Tax, New

Delhi (now Rajasthan) v. M/s East West Import and Export (P)

Ltd. (now known as Asian Distributors Ltd.), Jaipur (1989 (1)

SCC 760). It was inter alia observed as follows:

“7. The Explanation has reference to the point of time at two places:  the first one has been stated as “at the end of the previous year” and the second, which is in issue, is “in the course of  such  previous  year”.  Counsel  for  the revenue has emphasised upon the feature that in the same Explanation reference to time has been expressed differently and if the legislative intention  was  not  to  distinguish  and  while stating “in the course of such previous year” it was intended to convey the idea of the last day of the previous year, there would have been no necessity of expressing the position differently. There  is  abundant  authority  to  support  the stand of the counsel for the revenue that when the  situation  has  been  differently  expressed the legislature must be taken to have intended to express a different intention.”

26. It is of significance to note that in the writ petitions filed

there was no challenge to Regulation 33(7). Only incentive FSI

was challenged. So far as Regulation 33(7) is concerned, there

will be no acquisition in Chapter VIII.  Stress is on spending

35

money out of  the funds and of  acquisitions. Chapter  VIII-A

essentially deals with occupiers.  Acquisition and the Board’s

role  is  that  of  certification.   Under  Regulation  33(7)  the

occupier and the landlord are involved. There is no acquisition

and  there  is  no  government  fund  utilized.  There  is  a

Transferable  Development  Right  (in  short  ‘TDR’)  and  the

concept of incentive FSI.  

27. It is the case of the appellant that the TDR is utilized to

recover the money spent for subsidizing other constructions.  

28. Certain other aspects also need to be noted.

29. The  provisions  relating  to  buildings  which  have  been

declared  unsafe  are  specifically  covered  by Regulation 33(6)

and reconstruction by MHADA is covered by Regulation 33(9).

When the situation has been differently expressed in different

sections,  the legislature  must be  taken to have  intended to

express a different intention.

36

30. A  survey  conducted  by  the  Corporation  in  1980-81

showed that  30,237 buildings would  have  crossed  their  life

span  by  1996.  The  Kerkar  Committee  report  also  recorded

that  the  vast  majority  of  the  buildings  would  have  to  be

reconstructed. The report on the Development Plan for Greater

Bombay  showed  that  in  1981,  5,82,200  tenements  were

required to house the natural growth of population.  

31. In  1991  nearly  73%  of  the  households  occupied  one

room tenements - vertical slums; 18% occupied two rooms i.e.

most  of the persons -  more  than 90% lived in small  areas.

Those  occupying  large  areas  constitute  2.7% only.  Between

1961  and  1991,  the  number  of  households  increased  to

20,88,000. Most of the tenements are of 100 to 120 square

feet area only.

32. It is thus clear that the policy was to enhance the quality

of  the  lives  of  those  living  in  such  poor  conditions  by

increasing  the  living  space  to  nearly  double.  This  is  to  be

contrasted with the need to give a better lifestyle to those who

37

can afford it namely those who can afford the time to live a

leisurely life. If such people have to undergo some hardships,

the policy cannot be faulted especially when they constitute a

minority.

33. In interpreting a statute, the meaning of particular words

is to be found not so much in a strict etymological propriety of

language,  nor  even  in  popular  use,  as  in  the  subject  or

occasion on which they are used and object that is intended to

be attained.  

34. The  writ  Petitioners  did  not  challenge  the  validity  of

Regulation  33(9)  pertaining  to  reconstruction by MHADA or

Regulation 33(7) in so far as it applies to the reconstruction by

the Government or the Municipal Corporation even though the

FSI  is  the  same.  The  proviso  to  Regulation  33(7)  allows

Government, MHADA/Corporation to get even more than the

FSI specified in Appendix III.

38

35. Most of the buildings constructed prior to 1940 (17,490

buildings)  were  constructed  prior  to  1905.  Most  of  the

buildings have outlived the period of their survival by 1979.

80% were occupying one-room tenements. [See: Vivian Joseph

Ferreira  and  Anr. v.  The  Municipal  Corporation  of  Greater

Bombay and Ors. 1972 (1) SCC 70 (paras 9, 10 and 11).

36. In  Mahadeolal Kanodia v.  The Administrator General of

West  Bengal (1960  (3)  SCR 578),  it  was  held  that  rules  of

grammar  require  that  an  adjectival  phrase  qualifies  the

proximate substance. [pages 584-585]. Applying that rule, the

term  “which  attracts  the  provisions  of  MHADA  Act,  1976”

could only qualify the proximate substance “cessed building of

A category in Island city” and nothing more.

37. It  would be seen that with respect to reconstruction of

buildings both Chapters VIII and VIIIA require the building to

be acquired by the Board for the reconstruction in terms of

Sections 92 and 103B (3). This is not the case with Regulation

33 (7).

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38. Appendix  III  casts  several  duties  on the Board for  the

working of Regulation 33 (7) as inter alia:

(a)  Clause  3  requires  certification  of  the  occupiers  and

irrevocable consent to be certified by the Board;

(b) Clause 4 requires that the tenements have to be allotted to

the occupiers as per the list certified by the Board;

(c) Clause 11 requires the FSI as in Regulation 33 (7) should

be  allowed  only  after  the  Board  is  satisfied  that  the

redevelopment  proposal  satisfies  all  the  conditions  to  be

eligible for the benefits under the Regulations.  

39. The challenge to the restriction of five  feet  open space

(1.5 metres) is hopelessly delayed and barred by time as inter

alia:

(i) the requirement of limiting the open space to five feet has

been  in  existence  since  1984  and  was  also  a  part  of

Development Control Regulation of 1991.

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40.   When the Board reconstructs a building it covers almost

the entire land save for five feet open space. The Sukthankar

Committee also recommended that the open space should be

5 feet. The challenge to the restriction of five feet open space

has been made on the basis that the open spaces are already

too low and that the DC Regulations made it even less. This is

a  contention  which  was  rejected  by  this  Court  in  Bombay

Dyeing & Mfg. Co. Ltd.  (3)  v.  Bombay Environmental Action

Group and Ors. (2006) 3 SCC 434) at paras 297 & 298.  

41. The  State  and MHADA filed  affidavits  in  CA 2970  of

2006  supporting  the  appeals.  In  the  affidavit  dated  12th

March filed by the State, it was set out that :

(i)  The Tour Planning Act does not define category A cessed

buildings and the reference to the provisions of Development

Act  were  only  to  explain  what  the  term “category  A  cessed

buildings” meant.  

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(ii) By and large the old buildings constructed prior to 1940

were built  when there was no concept of FSI  and the open

spaces were at times only 2 to 3 feet.  

(iii)  The width of most of  the plots was about  30 feet  and

requiring a 12 feet open space to be left would mean that

there would be no scope to redevelop the building.  

(iv)  Where  a  building  was  in  the  set  back  area  as  per  the

development plan, the land covered by the set back area had

to be given to the authorities and the road was widened.  

42. In the affidavit dated 17th March 2007 filed by MHADA, it

was set out that:

(i) Reference  to  Development  Act  is  with  reference  to  the

definition of  cessed buildings which is not found under the

Town Planning Act or the DC Regulations and is found only in

the Development Act.  

(ii) A perusal of Regulation 33 (7) shows that the emphasis is

on pre 1940 buildings and nothing more.  

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(iii) Confining Regulation 33 (7) to only the private buildings

and not the Government buildings would make the Regulation

arbitrary.

(iv) Under Regulation 33 (10) the open space is 5 feet and to

insist  on 12  feet  as  per  the  High Court  judgment  it  would

make  the  same  unreasonable  and  prevent  even  buildings

which are on the verge of collapse from being redeveloped.

43. Above  being  the  position,  the  inevitable  conclusion  is

that  the  High Court  was  not  justified  in  reading  additional

requirements into Regulation 33(7) after holding the same to

be valid.  The appeals  are allowed but  in the circumstances

with no order as to costs.  

44. In view of the order passed in Civil Appeal No.2970/2006

and  other  connected  appeals,  no  order  is  necessary  to  be

passed in contempt petition.   

…………………………..J. (Dr. ARIJIT PASAYAT)

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……………….………….J. (P. SATHASIVAM)

New Delhi, September 4, 2008

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