Godrej And Boyce Manufacturing Co. Ltd vs State Of Maharashtra And Ors

MRS. JYOTIKA B.PATEL & ANR. ... PETITIONERS

VERSUS

STATE OF MAHARASHTRA & ANR. ... RESPONDENTS

JUDGMENT

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

2 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

3 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

4 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).

5

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.

6

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

7 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

8 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

9 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

1 0 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

1 1 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

1 2 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"

1 3 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

1 4 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

1 5 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)

1 6

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 1 7 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

1 8 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"

1 9 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

2 0 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

2 1 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

2 2 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'

2 3

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

2 4 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

2 5 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."

2 6

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.""

2 8 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

2 9 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

3 0 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

3 1 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)

3 2 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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