R.K. Mittal & Ors vs State Of U.P. & Ors

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.6962 of 2005

R.K. Mittal & Ors. ... Appellants

Versus

State of U.P. & Ors. ...

Respondents

WITH

CIVIL APPEAL NO.6963 OF 2005

AND

CIVL APPEAL NOS.10535 &10536 OF 2011

(Arising out of SLP (C) No.24029 of 2005 and 9150 of 2007)

J U D G M E N T

Swatanter Kumar, J.

1. Leave granted in both the Special Leave Petitions.

2. The ambit and scope of power of New Okhla Industrial

Development Authority (for short, the `Development Authority')

to permit users, other than residential, in the sectors

specifically earmarked for `residential use' in the Master Plan of

the New Okhla Industrial Development Area (for short, the

2

`Development Area') is the basic question that falls for

consideration of this Court in this bunch of appeals. These

appeals demonstrate some of the instances of widespread

violation of statutory provisions and somewhat arbitrary

exercise of power by the Development Authority. Lack of

adoption of uniform application of law has resulted in large

number of cases of violation of law all over the State of Uttar

Pradesh going unnoticed. The time has come for the

Development Authorities to change their style of functioning

and act vigilantly and uniformly, that too, strictly in accordance

with law, keeping in view the larger public interest.

Introductory Facts

3. This judgment shall dispose of the above referred four civil

appeals and the applications for intervention therein. Out of

the four appeals, in Civil Appeal No. 6962 of 2005and Civil

Appeal arising out of SLP(C) No. 24029 of 2005, the lease deed

in favour of the parties had been cancelled by the Development

Authority while in other two appeals, Civil Appeal No. 6963 of

2005 and Civil Appeal arising out of SLP (C) No.9150 of 2007,

after giving notice, it had passed an order requiring the parties

concerned to stop the misuse within the stipulated time, failing

which appropriate action in accordance with law, including

cancellation of the lease deed, would be taken. The facts and

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circumstances in all the appeals and even the intervention

applications are somewhat similar. In any case, the common

question of law arising in all the appeals and applications is

whether the residential premises can be, wholly or partly, used

by the original allottee or even its transferee, for any purpose

other than residential? We do not consider it necessary to refer

to the facts of each case in greater detail, except the facts of the

lead case, i.e., Civil Appeal No.6962 of 2005, R.K. Mittal v. State

of U.P. However, wherever reference to certain additional facts

is called for, we would notice the same in the other cases as

well.

4. The Development Authority executed a lease deed dated 2nd

April, 1988 in favour of Shri Rajendra Kumar Srivastava in

relation to Plot No.778, Block A, Sector XIV, New Okhla

Industrial Development Area, District Ghaziabad, admeasuring

about 274.37 square meters as per the boundaries described in

the deed. Upon the plot, the lessee raised some construction

which remained unfinished. The lessee thereupon actually

transferred the plot in question along with unfinished

superstructure vide Transfer Deed dated 20th August, 1999 in

favour Shri R.K. Mittal, Shri Ashok Garg and Shri Sanjeev

Gupta, the appellants herein. The original lease deed contained

specific stipulations in regard to the lessee being obliged to

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obey all the Rules, Regulations and Directions made by the

lessor. The lessee was to raise construction as per approved

plans and to use the premises only for the purpose for which it

was committed in terms of the lease and as per law. These

clauses of the lease deed read as under :

"(d) That the lessee will obey and submit to all

Directions issued or Regulations made by the

Lessor now existing or hereafter to exist so for as

the same are incidental to the possession of

immovable property or so far as they effect the

health, safety or convenience of the other

inhabitants of the place.

(e) That the Lessee will at his own cost erect on

the demised premises in accordance with the

plans, elevation and design and in a position to be

approved by the lessor or any officer authorised by

the lessor in that behalf in writing and in a

substantial and workman like manner, a

residential building only with all necessary,

sewers, drains and other appurtenances according

to the Directions issued or Regulations made in

respect of buildings, drains, latrines and

connection with sewer.

XXX XXX XXX

(h) That the lessee shall use the demised

premises only for the purpose of constructing a

building for residential purpose of customary

home occupation or residential cum medical and

surgical clinic or dispensary or professional office

and for no other purpose without the consent of

the Lessor and subject to such terms & conditions

as Lessor may impose and will not do or suffer to

be done on demised premises or any part thereof,

any act or thing which may be or grow to be a

nuisance, damage, annoyance, or inconvenience to

the Lessor or the owners, occupiers of other

premises in the neighbourhood."

5

5. The Transfer Deed executed by the original lessee in favour

of the appellants also contained similar conditions and in

addition thereto provided that the conditions of the lease deed

shall be binding upon the appellants. The relevant clauses of

the Transfer Deed read as under :

"10. That the Transferees shall complete the

construction of plot and shall obtain

Occupancy Certificate of Plot from Building

Cell, Noida within balance construction

period as per terms of lease deed of plot

which is upto 23.2.2000. Extension of time

for construction of plot and for obtaining

occupancy certificate will be granted as per

terms of lease deed of plot and as per then

prevailing extension policy of NOIDA.

11. That the Transferee shall be bound by the

terms and conditions of lease deed of plot

executed on 2.4.88, subject to the

amendments indicated in the Transfer

Memorandum.

XXX XXX XXX

15. That the Transferees shall put the property in

the use exclusively for residential purpose

and shall not use it for any purpose other

than residential.

XXX XXX XXX

17. That the terms and conditions amended by

the NOIDA AUTHORITY from time to time

shall be binding on the Transferees

aforesaid."

6. After completing the construction, the appellants appear to

have rented out the premises to Andhra Bank and Akariti

Infotech. As such, both the bank and the company had been

carrying on their business from the premises in question. The

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Development Authority, on 18th January, 2001 and 22nd

February, 2001 issued notices to both Andhra Bank and Akariti

Infotech to stop commercial use in the said premises within 30

days, failing which action would be taken as per the lease deed.

In these notices, it was also stated that there was encroachment

in violation of the prescribed building byelaws and the use of

residential plot for commercial purpose was in violation of the

provisions of the lease deed of the plot. Invoking the provisions

of the U.P. Industrial Area Development Act, 1976 (for short,

`the Act'),the Development Authority gave them opportunity to

file objections. To these notices, the appellants not only filed

objections but also appeared before the Development Authority

and contended that the Development Authority, in furtherance

to the proposal to permit running of consulting clinics, banks

and guest houses in the residential areas, had permitted such

use on the main roads, on payment of 30 per cent of the

existing residential rate on per square meter area of plot per

annum and had invited suggestions from the general public.

Reliance was also placed on certain press reports. Noticing

these facts and obviously taking the view that there was no

legal sanctity to the alleged change of user, the Development

Authority rejected the objections and required the misuse to be

stopped and the violation of the building byelaws to be removed

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within four months. A part of the said order reads as follows :

"The terms and conditions of lease deed and

transfer deed of plot clearly states that allotted

plot shall be used exclusively for residential

purposes. The petitioner changed the land use of

plot without intimating to the Authority and did

not bother to seek any clarification or obtain

permission from the Authority for such change. It

is a well known fact that this Authority does not

permit commercial activity in the residential plots.

This is a classic case of violation of law by the

most educated enlightened class of the Country.

This class in Noida has tried to change not only

the character of Noida but have for self interest

destroyed the peace of the Neighbours. It is also

possible that the then Bank staff also colluded in

the matter and did not bother to see the conditions

contained in the lease deed and did not even try to

approach the Authority for clarification.

In view of the above stated facts and after

listening to the petitioner, it is ordered that

representation pleadings of the petitioner Allottee

of Residential Plot No.A-778, Sector-19 stand

rejected and the petitioner is also directed to

ensure vacation of bank branch and infotec office

from the residential premises and restore the

building according to prescribed building bye-law

within 4 months (Four Months) from the date of

service of this order.

7. As the Petitioner has evaded compliance of

terms of lease deed for nearly five months on one

pretext or the other, he is also informed that in

case of failure to restore the land use of plot within

stipulated period, the Authority shall be free to

take further action under law WITHOUT FURTHER

NOTICE.

Orders regarding penalty for misuse of

premises will be passed separately."

7. Aggrieved from the aforesaid order, the appellants filed a

writ petition before the High Court of Judicature at Allahabad.

The writ petition preferred by the appellants came to be

8

dismissed vide order dated 19th January, 2002. It was noticed

by the High Court and rightly so, that the Development

Authority had invited some suggestions for change of user of

residential plots to commercial or mixed user on certain terms

and conditions, by bringing certain changes/amendments in its

byelaws and policy decisions. This remained at an interim stage

and no final decision was taken by any competent authority in

accordance with the provisions of the Act. The Development

Authority had not undertaken any exercise for the said

amendment in accordance with law and had not even sought

the approval of the State Government, as required under the

law, for change of user or amendment of the byelaws, Master

Plan, etc. In fact, the provisions directing forfeiture of property

under Section 14 of the Act and imposition of penalty for

misuse in terms of Section 15 of the Act were in force. Relying

upon judgment of this Court in Munshi Ram v. Union of

India[(2000) 7 SCC 22], the High Court not only dismissed the

writ petition but also directed the Development Authority to

take immediate and strong action against those who have

started using residential plots, wholly or partially, for other

non-residential uses. The appellants, feeling dissatisfied by the

judgment of the High Court, have preferred the present appeal

before this Court. In order to complete the factual matrix of the

9

case, we may notice that the appellants have placed on record

Annexure P-7, a copy of the public notice dated 30th March,

2000 indicating that there was proposal to grant permission for

mixed use consulting clinics, bank branch and guest houses on

18 A.M. wide roads on the conditions stated therein. These

conditions also included the provision that fees payable on

grant of permission for mixed use of land would be 30 per cent

of existing residential rate, on per square meter area of plot, on

yearly basis. To this proposal, public opinion was invited and it

was stated that objections/suggestions in this regard may be

filed in writing in the office of the Additional Chief Executive

Officer of the Development Authority. Even hearing was to be

granted. In the affidavit filed on behalf of the respondent-

Development Authority on 8th October, 2002, it has been

specifically averred that 21 banks were functioning in

residential sector in the Development Area under private

arrangements with the lessees of the concerned plots and these

banks have not obtained any permission or authorization from

the Development Authority. Two banks, namely, Oriental Bank

of Commerce, Sector 27, Noida and Vijaya Bank, Sector 19,

Noida had obtained such permission for a period of five years

and three years respectively since 1995 and 1994. These

banks had not obtained any permission or renewal thereafter.

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Show cause notices had been issued to all the banks to wind

up their activities from these areas. In para 10 of the affidavit,

it had been stated that the Development Authority `has taken a

firm decision to evict all the banks from the residential sectors

and notices have been issued to all these 21 banks without

exception'. A definite averment has also been made in this

affidavit that the functioning of the banks in the residential

sectors caused inconvenience and disturbance to the public at

large and the Development Authority has earmarked specific

areas for making land available to the banks to carry on their

commercial activities. They have allotted land to several banks

in commercial-cum-institutional and commercial portion of

industrial and institutional sectors. Option was given to the 21

banks to function in these areas and that if they would apply

for the same, the Development Authority shall consider their

cases sympathetically. The Development Authority, specifically

and with emphasis, reiterated that banking activities cannot be

allowed in residential plots of the residential sector. Another

affidavit was filed on behalf of the Development Authority in

March 2011, wherein a clear stand was taken that as per the

Master Plan, Sector 19 of the Development Area is a residential

sector, where the land use is residential alone, neither

commercial nor mixed. List of 43 properties in Sector 19, Noida

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was filed as Annexure-1, where non-residential activities,

including banking and medical clinics, were being carried on

while Annexure-2 related to other 11 properties being used for

other non-residential purposes in Sector 19 itself. There are

institutional plots in Sector 19, which had been allotted by the

Development Authority for running of nursing homes or

commercial activity. An office order was issued on or about 14th

May, 2009, in relation to Guest Houses, by the Chief Executive

Officer of the Development Authority. However, the same is

stated to have been withdrawn immediately thereafter. In other

words, according to the respondents, there is no order or

sanction operative and binding as of now, which permits any

user other than residential in the residential sector.

8. Having stated the facts, we may now examine the relevant

provisions of law. The State of Uttar Pradesh had enacted the

law to provide for creation of an Authority for development of

certain areas of the State into industrial and urban townships

and for matters connected therewith. `Authority' had been

defined under Section 2(b) of the Act to mean the Authority

constituted under Section 3 of the Act. Section 3 required the

State Government to constitute, for the purposes of the Act, an

authority for any industrial Development Area in terms of that

Section. Section 6 of the Act related to functions of the

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Authority while Section 7 mentions the powers of the Authority

in respect of transfer of land. In terms of these statutory

provisions, the object of the Authority was to secure the

planned development of industrial Development Area and the

Authority was required to perform certain functions in terms of

Section 6(2), which reads as under:

"2) Without prejudice to the generality of the

objects of the Authority, the Authority shall

perform the following functions--

(a) to acquire land in the industrial development

area, by agreement or through proceedings

under the Land Acquisition Act, 1894 for the

purposes, of this Act;

(b) to prepare a plan for the development of the

industrial development area;

(c) to demarcate and develop sites for industrial,

commercial and residential purposes

according to the plan;

(d) to provide infra-structure for industrial,

commercial and residential purposes;

(e) to provide amenities;

(f) to allocate and transfer either by way of sale

or lease or otherwise plots of land for

industrial, commercial or residential

purposes;

(g) to regulate the erection of buildings and

setting up of industries; and

(h) to lay down the purpose for which a

particular site or plot of land shall be used,

namely for industrial or commercial or

residential purpose or any other specified

purpose in such area."

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9. In terms of Section 8 of the Act, for the purposes of proper

planning and development of the industrial development area,

the Authority had the power to issue directions, as it consider

necessary, regarding the factors stated therein, including

restriction of use on any site for a purpose other than for which

it has been allocated. Every transferee in whose favour the land

was transferred was bound to comply with the directions issued

as expeditiously as possible and was obliged to erect the

building or to take such necessary steps to comply with the

directions in accordance with Section 8(2) of the Act. No person

could raise construction, erect or occupy the building in

contravention of the building regulations. The Authority has

been vested with the powers to make regulations with the

previous approval of the State Government in terms of Section

19 of the Act, while the State Government may, by notification,

frame Rules for the purposes of the Act as contemplated under

Section 18 of the Act.

10. Section 2(d) of the Act defines `Industrial Development Area'

to be an area declared as such by the State Government by

notification. Section 6(2)(b) requires the Authority to prepare a

plan for the development of an industrial development area

while Section 6(2)(h) enjoins the Authority to lay down the

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purpose for which a particular site or plot of land shall be used,

namely for industrial or commercial or residential or any other

specified purpose. The power to transfer lands is also given to

the Authority. In terms of Section 19 read with Section 6 of the

Act, the New Okhla Industrial Development Area was notified

and the Authority framed the regulations for the purposes of

proper planning and development of that area. These were

called the New Okhla Industrial Development Area (Preparation

and Finalization of Plan) Regulations, 1991 [hereafter referred to

as `the Regulations']. Regulation 2 of the Regulations defines

various kinds of uses including `Land Use'. `Land Use' under

Regulation 2(g) means the use of any land or part thereof in the

industrial development area for industrial, residential,

institutional, commercial, public water bodies, organized

recreational open spaces, public and semi-public buildings,

agriculture and other like purposes. In contradistinction to the

`Commercial Use', `Industrial Use' `Institutional Use' and `Public

Use', the `Residential Use' has been defined under Regulation

2(1)(k) which reads as under: -

"(k) `Residential Use' means the use of any land or

building or part thereof for human habitation and

such other uses incidental to residential uses."

11. The expression `Sector' has also been defined in Regulation

15 2(l) to mean any one of the divisions in which the industrial

development area or part thereof may be divided, for the

purposes of development under the Act. Regulation 3 enjoins

upon the Authority a duty to prepare a Draft Plan for industrial

development areas in terms of Regulation 3(1) to 3(6). Under

Regulation 4, the Plan has to include sector plans into which

such industrial area has been divided. It should also depict the

residential use by allocating the area of land for housing, for

different and defined densities and plotted development for

different categories of households in terms of Regulation 4(1)(b)

(ii). Similarly, it should also state the commercial use, public

use, agricultural use and other purposes as the Authority may

deem fit. The procedure for finalization of the Draft Plan is also

contemplated under Chapter III, Regulations 5 to 11 of the

Regulations. The Regulations postulate that the Authority,

after preparation of the Draft Plan, shall, by public notice,

invite objections and suggestions to be filed before the date

notified but not earlier than 30 days from the date of

publication. A proper enquiry and hearing is contemplated

whereafter the Draft Plan is to be finalized in terms of

Regulation 9 and the date of commencement of the Plan is to be

specified in terms of Regulation 10. The Authority has the

power to amend the Plans but this power to amend is restricted

16

in its scope. Regulation 11 empowers the Authority to do so,

but no such amendment can be made which would result in

important alteration in the character of the Plan and which do

not relate to the extent of land use or standards of population

density. Even thereafter, it is required to follow the prescribed

procedure. Regulation 11 reads as under: -

"11. Amendment of the Plan. - (1) The

Authority may make such amendments in the Plan

which do not effect important alteration in the

character of the Plan and which do not relate to

the extent of land use or standards of population

density.

(2) Before making any amendment in the Plan

under sub-section (1), the Authority shall publish

a notice in at least one newspaper having

circulation in the development are inviting

objections and suggestions from any affected

person with regard to the proposed amendment

before such date as may be specified in the notice

and shall consider all objections that may be

received.

(3) Every amendment made under this Regulation

shall be published in any of the manner specified

in Regulation 5 and the amendment shall come

into operation either on the date of the first

publication or on such other date as the Authority

may fix.

(4) The Authority shall not make during the

specified period in which the Plan is to remain

effective, such amendment(s) in the Plan which

affects important alteration in the character of the

Plan and which relates to the extent of the land

sue or standards of population density."

12. It is not in dispute before us that the Development

17

Authority had finalized the Master Plan in accordance with the

provisions of the Act and the Regulations, which was titled as

`Master Plan, NOIDA, 2001'. This Plan is in force and is binding

on all concerned.

13. Besides the above provisions of the Act and the Regulations

framed thereunder by the Development Authority, the

Development Authority has also framed building regulations

and directions, which are termed as `The New Okhla Industrial

Development Area Building Regulations and Directions, 2006

(for short `Regulations 2006)'. These have been primarily

framed as byelaws in relation to the constructions, restrictions

thereof and type of user. Under Regulation 3.12 (h), a

residential building is explained as under: -

"(h) `Residential building' refers to any building in

which sleeping accommodation is provided for

normal residential purpose with or without

cooking or dining or both facilities and includes

one or two or multi family dwelling, lodging or

rooming houses, dormitories, apartment houses,

flats and hostels."

14. In distinction to the `residential building', an `industrial

building' is the building or part thereof, in which product or

materials of all counts and properties are fabricated,

assembled, manufactured etc. An `institutional building' refers

to a building or a part of a building which is used for purposes

18

such as medical or other treatment or care of persons suffering

from physical or mental illness, disease or infirmity and

includes hospital, institutions and sanitaria etc. while a

`business building' refers to a building or part of a building

which is used for transaction of business like Banks,

Commercial office, etc. In other words, each building proposed

to be used for a definite purpose has to meet different

standards, FAR (Floor Area Ratio) and byelaws. These

purposes are incapable of being confused with each other or

even used interchangeably. Respective purposes have been

defined in unambiguous terms in the byelaws, having distinct

implications.

15. It does not appear to be the scheme of the provisions of the

Act, the Regulations and the bye laws, including the

Regulations, 2006 that each of these purposes or buildings can

be understood or used interchangeably. In fact, each has

distinct features and it does not lie in the jurisdiction of the

Development Authority to permit such conversion in users,

beyond the scope of the Master Plan, the byelaws and the

statutory provisions. Regulation 3.22 of the Regulations, 2006

explain the word `conversion' to mean the change of an

occupancy or change in building structure or part thereof,

resulting into change of space or use requiring additional

19

occupancy certificate.

16. The change in user of the building is, therefore, violative

not only of the Regulations, byelaws and the provisions of the

Act, but is also contrary to the law governing erection of the

building. The legislative purpose that emerges from the scheme

of the Act and other relevant provisions is to keep a residential

building separate from commercial and other buildings. This

would necessarily imply that the jurisdiction of the

Development Authority to permit different user in violation of

this statute and the Regulations is not contemplated in law.

Contentions

17. On behalf of the appellants/lessees/users, in the cases

before us, it has been contended that the activity of banking or

running of clinics is being carried on by them for a long period.

Thus, this has been impliedly permitted by the Development

Authority. It is also their contention that a public notice had

been issued by the Development Authority, permitting mixed

user and, thus, the appellants/lessees/users are bonafidely

carrying on activities of running banks/nursing homes/other

commercial activities in the residential sectors. Reliance has

been placed upon Public Notice dated 30th March, 2000 and

also that vide notification dated 4th December, 2010 plots

20

allotted in the developed sector to farmers under a

Rehabilitation Scheme had permitted establishment of guest

houses, restaurants, banks, professional offices, day care

centres etc. vide notification dated 4th December, 2010.

18. It is also the contention of the appellants that neither the

byelaws, rules and regulations nor the layout plan of the

Development Authority, in any manner, impede or place any

kind of bar on carrying out banking activity in the residential

sectors.

19. While relying upon the judgments of this Court in the case

of Hari Rao Vs. N. Govindachari & Ors. [(2005) 7 SCC 643], and

Dev Brat Sharma Vs. Jagjit Mehta [(1990) Supp. SCC 724], it

was contended that such use does not amount to change of

user as it is permissible to carry out professional or clinical

activity in the residential houses and, therefore, the notice of

termination issued and/or cancellation of the lease deeds,

being arbitrary and without application of mind, was vitiated in

law.

20. Lastly, it was contended that as there is inadequacy of

space for banks, clinics and other commercial offices in the

Development Area, the present user is need-based and is in the

larger public interest. According to the appellants, the number

of plots for the banks is not sufficient to meet the needs of the

21

public in the residential sectors and no alternative spaces are

available for relocation of the banks. The lease rent and other

charges payable to the Development Authority for both these

categories have a considerable difference. Thus, it has the

impact of creating heavy liability and inconvenience to the

appellants, particularly if they are forced to shift to commercial

or institutional sectors/pockets.

21. On the contra, the contention on behalf of the Development

Authority is that banking activity is impermissible in the

residential sectors. It causes inconvenience to public and

disturbance to the residents. Referring to the Meeting dated

17th December, 2002 of the Committee of the Officers, the stand

taken is that banking activity cannot be allowed in the

residential portions of the residential sectors and to this effect,

a notice was also published.

22. Further, the contention is that the power of the

Development Authority to demarcate and develop sites, to lay

down the purpose for which a particular site or plot of land

shall be used, is controlled by the specific provisions of the Act

and the Regulations framed thereunder. Sections 6(2)(b) and 7

of the Act are stated to be the source of power in this regard. It

is also the contention that in the Master Plan, 2001,

subsequent Plans and the Zoning Regulations, all residential

22

sectors are marked in yellow colour. Sector 19 of the

Development Area, where the subject matter of this case is

located, is a residential sector. Thus, it can only be used for

the residential purpose.

23. The learned counsel appearing for the lessee/transferees

had relied upon the judgments of this Court in the cases of

Hari Rao (supra) and Dev Brat Sharma (supra). Both these

judgments have no application to the present case, on facts or

in law. These were cases of eviction under the respective Rent

Restriction Acts. In one case, this Court held that putting up of

a clinic in a part of the house by a doctor was not change of

user, while in the other, where the premises had been rented

out for a commercial purpose of selling of leather goods, change

of the industry to a garment and cloth business, was not

considered as change of user. We are unable to understand as

to how the lessees in the present case can derive any benefit

from these judgments. In the present case, we have a clear law

in force and that law is neither similar in purpose nor

linguistically identical to the Rent Restriction Acts of the

respective States. The change of user, in the case in hand, has

to be seen in light of the Master Plan, the Regulations and the

provisions of the Act. What may not be change of user under

the Rent Restriction Act, as the rights of the parties therein are

23

governed by the contract between the parties and the grounds

of eviction taken by them, may be a change of user within the

scope of development Plan and the Regulations.

24. In light of the contentions raised, first of all, it will be

appropriate for this Court to examine the scheme of the Act and

the Regulations in question. Under the provisions of the Act,

the Development Authority is obliged to notify an industrial

development area. The very object of the Development

Authority is to secure the planned development of the

industrial development area and the first and foremost step in

this direction is to prepare a Plan for development of the

industrial development area. This development Plan is to

demarcate and develop sites for industrial, commercial and

residential purposes. The land which falls within the

jurisdiction of the Development Authority and is part of the

development Plan can be transferred in terms of Section 7 of

the Act by auction, allotment or otherwise, on such terms and

conditions as the Development Authority may state and subject

to any rules that may be made thereunder. No person can

erect or occupy any building in an industrial development area

in contravention to any building Regulation. Under Section

6(2) of the Act, the Development Authority is empowered to

make Regulations to regulate the erection of the buildings and

24 Section 6(2)(b) specifically authorizes the Development

Authority to make regulation providing for the layout Plan of

the building, whether industrial, commercial or residential.

The transfer of the land has to be as per the terms and

conditions contained in the lease deed executed by the

Development Authority in favour of the transferee. But this all

has to be subject to the provisions of the Act and the

Regulations framed thereunder. It has to be clearly understood

that the lease deed has to be in consonance with law and

cannot be in conflict with the provisions of the law. Section 14

of the Act empowers the Development Authority to resume the

site or building so transferred and further forfeit whole or any

part of the money paid in respect thereof, if the lessee commits

breach of the terms and conditions of the lease. No provision of

the Act has been brought to our notice which provides for the

manner and method to be adopted by the Development

Authority for preparation of the development Plan in

accordance with the provisions of the Act. This is where the

Regulations come into play. Under Regulations 3 and 4 of the

Regulations, the Draft Plan has to be prepared by the

Development Authority for development of an industrial area,

which will include a sector plan. The meaning of `residential

use' under the Regulations is a restricted one and is incapable

25

of being given a wide connotation. It means the use of any land

or building or part thereof for human habitation and such other

uses incidental to the residential use. The very language of

Regulation 2(1)(k) of the Regulations clearly depicts the intent

of the framers that the expression `residential use' is not to be

understood in its wider sense, in fact, it would require strict

construction because all other uses have been separately

defined. The different kinds of uses, therefore, have to be

understood only in terms of the explanation or meaning given

to them under the Regulations. If unduly wide meaning is

given to the expression `residential use', then it is bound to

cause overlap between the other uses. It would cause

unnecessary confusion. Thus, each use has to be understood

as per its plain language and there is no need for the

Development Authority or, for that matter, even for the courts,

to expand the meaning given to such expressions. The

expression `such other use incidental to residential use' in

Regulation 2(1)(k) has to take its colour from the use of the

building for human habitation. In other words, the latter part

of the Regulation has to be read ejusdem generis to the earlier

part of that Regulation.

25. The development Plan has to be prepared in accordance

with the provisions of the Act and the Regulations framed

26

thereunder. As already noticed, the Development Authority

has to prepare the Draft Plan, give public notice thereof, invite

objections and thereupon conduct an inquiry and hearing as

contemplated under the law, before preparing a final

development Plan. This final development Plan is a statutory

requirement which has to be prepared as ordained under the

provisions of Section 6(2)(b) of the Act read with Regulations 5

to 11 of the Regulations. This Plan necessarily provides for a

particular use or purpose of any area/site, namely industrial,

commercial institutional or residential. The notified

development Plan has a legal sanction and provisions contained

therein are mandatory in nature. They are incapable of being

altered or varied without following the due process prescribed

in law. Reference can be made to the judgment of this Court

in the case of NOIDA Entrepreneurs Association v. NOIDA & Ors.

[(2011) 6 SCC 527]. Further, this Court, in the case of NDMC &

Ors. v. Tanvi Trading and Credit Private Limited and Ors.

[(2008) 8 SCC 765], not only took the view that even the interim

guidelines issued in relation to Luytens' Building Zone till

finalization of the Master Plan for Delhi would have statutory

force and be treated mandatory, but also that such guidelines,

so far as consistent with the Master Plan, would continue to be

binding even after coming into force of the Master Plan. 27

26. It has to be noticed at this stage that the development Plan

prepared in accordance with the Regulations take the statutory

colour in terms of Section 6(2)(b) of the Act and, therefore, its

alteration by an executive order would be impermissible. Even

when a Master Plan is to be amended, the entire prescribed

procedure must be followed. The power to amend should be

exercised only in consonance with the settled norms without

going beyond the original power of the Development Authority

to make such Plan in accordance with the provisions of the Act.

The power to amend cannot be used to frustrate the provisions

of the statute. Regulations, being subordinate legislation must

fall in line with the principal provisions of the Act and in no

way should be detrimental to the provisions and the legislative

scheme of the Act.

27. In the case of M.C. Mehta v. Union of India & Ors. [(2004) 6

SCC 588] dealing with the question of unauthorized industrial

activity in residential area in Delhi, the plea raised for in situ

regularization of areas with 70 per cent industrial use was not

accepted by this Court, holding that regularization would have

adverse impact on the law abiders. This Court also held that

the land cannot be permitted to be used contrary to the

stipulated user except by amendment of Master Plan, after due

consideration of the provisions of the Act and the Rules.

28

Inaction by the Government authorities means permitting the

unauthorized use, contrary to law.

28. The authorities while reconsidering such matters are

expected to act reasonably and cautiously. They deal with

larger public interest and, therefore, have a responsibility to act

with greater degree of sensitivity and proper application of

mind. If the Development Authority aids the violation of the

statutory provisions, it will be a perversity in the discharge of

statutory obligations on the part of the Development Authority.

The public interest, as codified in the statutory regulations and

the provisions of the Act, should control the conduct of the

Development Authority and its decision making process, rather

than popular public demand guiding the exercise of its

discretion, that too, in a somewhat arbitrary manner. To

illustrate the dimensions of exercise of such powers, we may

refer to the judgment of this Court in the case of Bangalore

Medical Trust v. B.S. Mudappa & Ors. [(1991) 4 SCC 54],

wherein this Court was concerned with the provisions of the

Bangalore Development Authority Act, 1976 with particular

reference to Sections 33, 38 and 38(A) of that Act. A site

intended for a public park was sought to be converted into a

hospital/nursing home, under the garb of the latter being a

`civic amenity'. This Court formed the view that such

29

conversion of an open space reserved under the scheme for a

public park into a civic amenity site by constructing hospital

and allotment of the site to persons or body of persons, was

opposed to the objects of the Act and would be ultra vires the

same. This Court held as under:-

"46. .......No one howsoever high can arrogate to

himself or assume without any authorisation

express or implied in law a discretion to ignore

the rules and deviate from rationality by

adopting a strained or distorted interpretation

as it renders the action ultra vires and bad in

law. Where the law requires an authority to act

or decide, `if it appears to it necessary' or if he is

`of opinion that a particular act should be done'

then it is implicit that it should be done

objectively, fairly and reasonably. Decisions

affecting public interest or the necessity of doing

it in the light of guidance provided by the Act

and rules may not require intimation to person

affected yet the exercise of discretion is vitiated

if the action is bereft of rationality, lacks

objective and purposive approach. The action or

decision must not only be reached reasonably

and intelligibly but it must be related to the

purpose for which power is exercised. The

purpose for which the Act was enacted is spelt

out from the Preamble itself which provides for

establishment of the Authority for development

of the city of Bangalore and areas adjacent

thereto. To carry out this purpose the

development scheme framed by the

Improvement Trust was adopted by the

Development Authority. Any alteration in this

scheme could have been made as provided in

sub-section (4) of Section 19 only if it resulted

in improvement in any part of the scheme. As

stated earlier a private nursing home could

neither be considered to be an amenity nor it

could be considered improvement over necessity

30

like a public park. The exercise of power,

therefore, was contrary to the purpose for which

it is conferred under the statute."

29. The above decision of the Court was given in light of the

provisions of Section 19(4) of that Act which empowered the

Authority to alter the scheme, where it appeared to the

Authority that an improvement could be made in the scheme.

In other words, the power given to the Authority has to be

construed in strict terms and it cannot be exercised in a

manner which will run contrary to the scheme of the Act and

which would defeat the very object of the Act and the

Regulations.

30. The jurisdiction of the Development Authority has to be

seen on the touchstone of proper exercise of power within its

legal limitations while giving full effect to the statutory

provisions. This Court in the case of S.N. Chandrashekar &

Anr. v. State of Karnataka & Ors. [(2006) 3 SCC 208], referred

with approval to judgments of the High Courts, applying the

rule of strict construction to the terminology used and while

interpreting the words `commerce' and `commercial' held that

intra category changes could be permitted only in accordance

with law and Section 14-A of that Act. Even if the change of

user is consented to by the residents of the area, it would be no

31

ground to permit such a change in violation of the Regulations.

This Court stated the law as follows:-

"27. The Planning Authority has no power to permit

change in the land use from the Outline

Development Plan and the Regulations. Sub-section

(1) of Section 14, as it then existed, categorically

stated, that every change in the land use, inter alia,

must conform to the Outline Development Plan and

the Regulations which would indisputably mean

that it must conform to the Zoning Regulations.

28. The provisions of the Act are to be read with the

Regulations, and so read, the construction of

Sections 14 and 15 will lead to only one conclusion,

namely, such changes in the land use must be

within the Outline Development Plan and the

Zoning Regulations. If running of a hotel or a

restaurant was not permissible both under clauses

(a) and (b) of the Zoning Regulations in a residential

area, such change in the land use could not have

been permitted under Section 14 read with Section

15 of the Act. It is precisely for that reason, Section

14-A was introduced."

31. Even in the case of ITC Ltd. v. State of Uttar Pradesh & Ors.

[(2011) 7 SCC 493], this Court declined to accept the contention

that where the State Government had treated the hotels as an

`industry' even in such cases, the same could not be treated as

`industry' under the Act because the byelaws continued to treat

the hotels to be a commercial activity and that had alone

covered such industry. This Court held as under:-

"38. The learned counsel for the respondents

submitted that the lease was terminated by the

State Government, in exercise of revisional

jurisdiction under Section 41 of the U.P. Urban

32

Planning and Development Act, 1973 read with

Section 12 of the Act on the ground that there

were irregularities and violations of regulations

and policies of Noida Authority in allotting the

hotel plots to the appellants. It is submitted that

the State Government has such power to cancel

the allotment and as a consequence the lease."

32. Reference can also be made to the judgment of this Court in

Dr. G.N. Khajuria & Ors. v. Delhi Development Authority & Ors.

[(1995) 5 SCC 762]. In that case, the Plan had provided for a

public park and the Delhi Development Authority had taken the

decision to establish a nursery school for the benefit of the

children of the colony. Rejecting the contention, this Court

observed that within the framework of law and the provisions

made in the Master Plan, the authorities could only establish a

public park and nothing else, as such conversion would

amount to misuse of power.

33. All the above judgments clearly show that it is not merely at

the discretion of the Development Authority concerned to

designate user of a site and then alter the same without

following due process of law. Even where such an exercise is

required to be undertaken by the Development Authority, there

also it is expected of the Development Authority to act for the

betterment of the public and strictly in accordance with the

Plans and the statutory provisions. It cannot take recourse to

its powers and use its discretion contrary to such provisions

33

and that too, to frustrate the very object of the Act. Exercise of

power ought not to be destructive of the provisions of the Act

and the Plans, having the force of law. We would hasten to add

that even where the requisite prescribed procedure is followed,

still the discretion should be exercised sparingly for achieving

the object of the statute and not to completely vary or destruct

the purpose for which the sector has been earmarked.

34. A decision which is sought to be taken by the Development

Authority in the garb of a policy decision matter, if not in

conformity to the Master Plan, the Regulations and provisions

of the Act in force, would be an action extra jus. The

Development Authority is to act in adherence to the provisions

of the law regulating such user or construction. The laconic

result of a collective reading of the afore-referred statutory

provisions is that the Development Authority or its officers,

have no power to vary the user and spaces prescribed in the

Master Plan, except by amending the relevant laws and that

too, for a proper object and purpose. Any decision, as a policy

matter or otherwise, for any extent of public convenience, shall

be vitiated, if it is not supported by the authority. The Courts

would examine what is the sensible way to deal with this

situation, so as to give effect to the presumed purpose of the

34

legislation. The provisions in question should be construed on

their plain reading, supporting the structure of the legislative

intent and its purpose. The rule of schematic interpretation

would come into play in such situations and the concerned

Development Authority cannot be permitted to overreach the

procedure prescribed by law, with designs not acceptable in

law.

35. The Development Authority is inter alia performing

regulatory functions. There has been imposition of statutory

duties on the power of this regulatory authority exercising

specified regulatory functions. Such duties and activities

should be carried out in a way which is transparent,

accountable, proportionate and consistent. It should target

those cases in which action is called for and the same be

exercised free of arbitrariness. The Development Authority is

vested with drastic regulatory powers to investigate, make

regulations, impute fault and even to impose penalties of a

grave nature, to an extent of cancelling the lease. The

principles of administrative justice squarely apply to such

functioning and are subject to judicial review. The

Development Authority, therefore, cannot transgress its powers

as stipulated in law and act in a discriminatory manner. The

35

Development Authority should always be reluctant to mould the

statutory provisions for individual, or even public convenience

as this would bring an inbuilt element of arbitrariness into the

action of the authorities. Permitting mixed user, where the

Master Plan does not so provide, would be glaring example of

this kind.

36. In the case of Shabi Construction Company v. City &

Industrial Development Corporation & Anr. [(1995) 4 SCC 301],

this Court held that, prior sanction of the State Government

being the sine qua non for a final development Plan, as also for

minor modifications thereof, under Sections 31 and 37 of the

Maharashtra Regional and Town Planning Act, 1966, the

agreement entered into with the Planning Authority so far as it

relates to increased Floor Space Index (FSI) did not and could

not bestow any legal right upon the appellant. To put it

conversely, only on sanction by the State Government, could

the inchoate right under the agreement crystallize into a legally

enforceable right in favour of the appellant.

37. Still, in another case of K.K. Bhalla v. State of M.P. & Ors.

[(2006) 3 SCC 581], this Court did not approve and attach any

validity to the action of the Chief Minister directing and calling

for a proposal from the said Development Authority to make

36

allotment for development of an industrial area on concessional

terms and held that the purpose for which the allotments were

made might be well-meaning, but the allotments, being

contrary to the mandatory provisions of the Act and the Rules

were void and of no effect, being illegal.

38. Similarly, in the present case, the action of the

Development Authority in permitting mixed user was in

apparent violation of the statutory provisions in the Master

Plan.

39. Establishment of banks and nursing homes in the

residential sectors meant for residential use alone is

unequivocal violation of the statutory provisions in the Master

Plan.

40. Reverting to the case in hand, we may notice that the lease

deed executed in favour of the predecessor-in-interest of R.K.

Mittal and the other appellants had contained specific

stipulations that the lessee will obey and submit to all

directions issued, existing or thereafter to exist, as obeyed by

the lessor. The erection of the structure was also to be in

accordance with the approved plans. Clause (h) of the lease

deed specifically provides that the constructed building shall be

used only for the purpose of residential, residential-cum-

37

medical or surgical clinic and for no other purpose, that too

subject to such terms as are imposed by the lessor.

41. The transfer deed which was executed in favour of the

present appellants, with the approval of the Development

Authority, also contained similar clauses and also provided that

the terms and conditions imposed by Development Authority

from time to time shall be binding on the transferee. Clause

15 of the transfer deed stipulated that the transferee shall put

the property to use exclusively for residential purpose and shall

not use it for any purpose other than residential. After raising

the construction on the plot in question, admittedly, the

appellants have put the property to a different use other than

residential. The property was rented out to two different

commercial undertakings, i.e., Andhra Bank and a company by

the name `Akariti Infotech'. It is not even the case of the

appellants before us that the Development Authority had

granted any specific permission to them to use the property for

any purpose other than residential.

42. The appellants, in fact, have relied upon an agenda note

where there was a proposal put forward by the Development

Authority to grant permission for nursing home, guest house,

lodging house, banks etc. on a 100 metres wide road on such

terms and conditions as may be imposed by the Development

38

Authority. This also provided for levying certain additional

charges for granting such permission. Based on this proposal,

it is stated that a public notice was issued and objections were

invited.

43. The matter rested at that. This was not finalized. In other

words, no final decision was taken by the Development

Authority in consonance with the provisions of the Act to

permit such user in the residential sector. We, in fact, are

unable to understand why such action was initiated by the

authorities concerned, in face of the statutory provisions of the

Act, Regulations and the Master Plan in force. It is a settled

position of law that no authority can exercise the power vested

in it, contrary to law. In the present case, there appears to be

no proper data collected or study carried out by the

Development Authority even for mooting such a proposal, much

less amending the Plan or the Regulations. It is a matter of

regret that the Development Authority is dealing with such

serious matters in such a casual manner. Either way, this

certainly affected the rights of the parties adversely. It is not

only the rights of individuals which are to be examined by the

authorities concerned, but also the effect of such amendment

on the residential sector as a whole which is one of the relevant

factors to be considered.

39

44. The running of a bank or a commercial business by a

company in the residential sector is certainly not permissible.

In fact, it is in patent violation of the Master Plan, Regulations

and the provisions of the Act. We see no power vested in the

Development Authority to permit such user and ignore the

misuse for such a long period.

45. We may notice that only in two cases i.e. Oriental Bank of

Commerce (Sector 27, Noida) and Vijaya Bank (Sector-19,

Noida), the permission for running a bank in the residential

sector was granted for a period of five years and three years,

respectively. This permission came to end few years back and

was admittedly never renewed or extended. Even this initial

grant of permission is a case of lack of legal authority and is

contrary to the provisions of law. It is not the case of anyone

before us that the Development Authority had granted

permission for running a bank/commercial activity or nursing

home in the residential sector. A survey had been conducted

under the orders of the Court dated 3rd March, 2011. As per

this survey, a number of banks and nursing homes were being

run in the residential sector, which was not permissible.

46. The conduct of the authorities, prior to institution of the

writ petitions in the High Court, showed uncertainty and

wavering of mind in its decision-making processes. In fact, it

40

was expected of the Development Authority to take a firm and

final decision and put at rest the unnecessary controversy

raised by its proposal. However, once the writ petitions were

filed, thereafter, the stand of the Development Authority has

been consistent and unambiguous. In the counter affidavit

filed in this Court, it has been stated that even in case of grant

of permission to the above stated two banks, no extension was

granted and in fact show cause notices have been issued to all

the banks in the residential sector to wind up their activities

and move out of the residential sector. It is the definite case of

the Development Authority that banking activity is a

commercial activity and therefore, cannot be carried on in the

residential sector, more particularly on the plots in question.

In regard to Sector 19, a specific averment has been made in

the affidavit of the Development Authority that the land use is

residential alone and is neither commercial nor mixed. As per

the Master Plan, its primary use is `residential' where plots are

planned for residential purpose alone. It is, therefore,

abundantly clear from the pleadings on record that commercial

activity of any kind in the residential sector is impermissible.

These pleadings are in conformity with the statutory provisions

and the Master Plan.

47. All the cases where banks, nursing homes or any

41

commercial activity is being carried on, particularly like the

appellants' case, where a bank and company are running their

offices in the residential sectors would amount to change of

user and thus be impermissible. The officers of the

Development Authority should refrain from carving out

exceptions to the implementation of the Master Plan and the

Regulations in force, that too without the authority of law. For

taking up any exercise for change of user or such similar

conditions, amendment to the relevant Regulations, Master

Plan and if needed, the provisions of the Act, is a condition

precedent. It should be ensured that such exercise would

further the cause and object of the Act and would not be

destructive to the scheme of the development. We have no

hesitation in our minds in holding that no such jurisdiction or

authority vests in the officers of the Development Authority to

permit change of user in its discretion and in violation of the

law in force.

48. Another important aspect is that the Development

Authority had taken a policy decision and had earmarked

specific areas where land was made available to the banks to

carry on their commercial activities in the commercial pockets

of the industrial or institutional sectors. This land was being

provided at a concessional rate and a number of banks had

42

taken advantage of this scheme to get the lands allotted to

them in the appropriate sectors. They have been given lands in

the commercial and even in the commercial pockets of the

industrial or institutional sector. However, the 21 banks

functioning in the residential sectors have not even opted to

apply under the said scheme. If they would apply, the

Development Authority has taken onto itself to consider the

same sympathetically. This Scheme was opened on 20th June,

2011 and closed on 11th July, 2011. 26 commercial plots were

offered for allotment under this Scheme in different sectors and

plots were even reserved to be used as banks. In other words,

the Development Authority has provided due opportunity to

these banks to shift their activities to the appropriate sectors,

however, to no effect. Despite issuance of show cause notices

and offer to allot alternative plots, the unauthorized use by the

appellant - banks and nursing homes have persisted in the

residential sectors.

49. Another case which is required to be noticed by us from

amongst the number of cases listed, is the case of Chairman

and Chief Executive Officer, New Okhla Industrial Development

Authority & Anr. v. Mange Ram Sharma & Anr., SLP (C) No.

24029/2005. In this case, according to the Development

Authority, the lessee is running a 20 bedded hospital with all

43

modern and diagnostic facilities, admitted by the lessee and his

family members in a letter Annexure P-7 to the authorities. In

this letter they had claimed that the hospital is being run from

the premises in question and had all the modern facilities.

However, these facts are not admitted by the lessee who have

tried to explain that letter by stating that in a three-storeyed

building of 400 square metres, they are carrying on

professional activity of medical consultancy only in an area of

28.42 square metres on the ground floor and rest of the

premises is being used entirely for residential purposes. It is

also denied that any hospital is being run from the premises.

According to them, the order dated 15th October, 1994

terminating the lease is contrary to law and they have also

submitted an undertaking that the premises will not be used

for any purpose other than residential. According to the

applicant/respondent in terms of the lease deed, such a user is

permissible. The respondents being doctors, are carrying out

their professional activity in a limited portion and as such, they

have also placed on record a list of hospitals being operated

from residential blocks which have even been empanelled by

the appellant Development Authority. The Development

Authority is acting arbitrarily and not taking any action against

those persons, though they have executed the lease deed with

44

the same terms and conditions as the appellant's. In this case,

this Court had appointed a local Commissioner to visit the

premises. As per report of the Commissioner dated

20thSeptember, 2003, the premises in question is a corner plot

in front of 30 metres wide road and had two gates. There is a

sign board displaying `Sharma Clinic and Medical Surgical

Centre'. Names of the doctors have also been displayed on the

sign boards on the boundary wall. There is a reception

counter which is attended to by a nurse. On ground floor, the

basement was still under construction. Major part of the

ground floor was being used as medical clinic. There were four

cabins used by different doctors of different specialties. The

first floor is being used for residential purposes. The second

floor is being partly used for residential purposes while there is

also an office on that floor. None of the parties had filed

objections to this report of the Local Commissioner and,

therefore, there is no reason for us not to accept the same.

Even as per the report of the Local Commissioner, the house is

being used for medical-cum-surgical clinic and is not merely a

consultant's clinic. Use of a major part of the ground floor for

running the medical centre obviously is not permissible in

accordance with the provisions of the Act and the Regulations.

The Development Authority is expected to take proper action at

45

the earliest. Even if we reject the case of the appellant

Development Authority that a 20 bedded hospital is being run

from the premise, still the fact stands established on record

that practically the entire ground floor and part of the second

floor is being used for activities other than residential.

50. According to the respondents, they had not been served

with the show cause notice, though according to the appellant,

show cause notice dated 29th August, 1992 was issued and

thereafter, the order of termination/cancellation of lease had

been passed against the respondents. This order had been set

aside by the High Court and the Development Authority has

come up in appeal before this Court.

51. In the light of what we have discussed above, even on facts

of this case, running of a hospital or even a medical clinic of

this dimension cannot be permitted in a residential area. It

would be different if a doctor uses permissible part of the

premises for clinical purposes i.e. to meet or examine his

patients in any portion. For surgery or specific treatments,

such patients would have been addressed to proper nursing

homes or regular hospitals. Therefore, doctors cannot carry on,

in the garb of a medical clinic, a regular medical and surgical

activity on a commercial scale. Thus, we find that action of the

Development Authority was justifiable.

46

52. One of the allegations against the Development Authority is

that they have acted arbitrarily and discriminatorily in issuance

of notices, in passing of orders of cancellation of the lease deed

and/or even in imposing other restrictions in relation to the

properties in question. It is their contention that commercial

activity, nursing homes and banks are operating in a large

number of residential houses but the Development Authority

has adopted a policy of pick and choose and has not acted

uniformly even in that regard. Certain instances have been

mentioned. Instances of banks have been mentioned in the

case of R.K. Mittal (supra), while nursing homes have been

mentioned in the case of Mange Ram (supra). We are unable to

grant approval to this discriminatory policy of the Development

Authority. They are expected to act fairly and judiciously in

such matters. The action of the Development Authority should

be free of arbitrariness and must be applied uniformly. The

ground of legitimate expectation taken by the lessees on the

premise that public notice had been issued by the Development

Authority proposing to permit mixed user in the residential

sector binds the Authority. Firstly, the action of the

Development Authority in issuing the notices is not in

accordance with law. Secondly, this argument is without any

substance and is misconceived. The doctrine of reasonable

47

expectation has no applicability to the present case and there

cannot be any waiver of statutory provisions as well. The user

of a sector is provided under the Master Plan and in

furtherance to Regulations and the provisions of the Act. It is

incapable of being administratively or executively altered. The

lessees, who have changed the user contrary to law, are liable

to be proceeded against as per the terms of the lease deed and

the provisions of the Act.

53. The Master Plan and the Zonal plan specify the user as

residential and therefore these plots cannot be used for any

other purpose. The Plans have a binding effect in law. If the

scheme/Master Plan is being nullified by arbitrary acts and in

excess and derogation of the power of the Development

Authority under law, the Court will intervene and would direct

such authorities to take appropriate action and wherever

necessary even quash the orders of the public authorities. This

Court in the case of K. Ramadas Shenoy v. Chief Officer, Town

Municipal Council, Udipi and Others [(1976) 1 SCC 24] was

concerned with the resolution of the Municipal Committee to

construct a cinema theatre at place where earlier the

permission was granted for construction of Kalyan Mandap-

cum-Lecture Hall and the contention before the Court was that

town planning scheme forbade any cinema building at the place

48

asked for and therefore, the resolution of the committee was

invalid. This Court accepted the contention and while setting

aside the resolution observed that an illegal construction of a

cinema building materially affected the right to enjoyment of

the property of the persons residing in the residential area and

there being unauthorized construction, the Court would

intervene and quash the resolution of the Municipality. This

view was followed in the case of M.I. Builders v. Radhey Shyam

Sahu [(1999) 6 SCC 464], wherein this Court even directed

demolition of unauthorized constructions. At this stage, we

may also refer to the judgment of this Court in the case of

Virender Gaur & Ors. v. State of Haryana & Ors. [(1995) 2 SCC

577], wherein this Court was concerned with the issue whether

Dharmshala should be permitted to be constructed upon the

land which was reserved as open space under the plan. This

Court, while noticing the impact on environment, right to

hygienic environment and protection of the residents, observed

as under:-

"11. It is seen that the open lands, vested in the

Municipality, were meant for the public amenity to

the residents of the locality to maintain ecology,

sanitation, recreation, playground and ventilation

purposes. The buildings directed to be constructed

necessarily affect the health and the environment

adversely, sanitation and other effects on the

residents in the locality. Therefore, the order

passed by the Government and the action taken

49

pursuant thereto by the Municipality would clearly

defeat the purpose of the scheme. Shri D.V. Sehgal,

learned Senior Counsel, again contended that two

decades have passed by and that, therefore, the

Municipality is entitled to use the land for any

purpose. We are unable to accept the self-

destructive argument to put a premium on

inaction. The land having been taken from the

citizens for a public purpose, the Municipality is

required to use the land for the protection or

preservation of hygienic conditions of the local

residents in particular and the people in general

and not for any other purpose. Equally acceptance

of the argument of Shri V.C. Mahajan encourages

pre-emptive action and conduct, deliberately

chartered out to frustrate the proceedings and to

make the result fait accompli. We are unable to

accept the argument of fait accompli on the

touchstone of prospective operation of our order."

54. An ancillary question that comes up for consideration is as

to how much area can be permitted to be used by a doctor to

run his clinic or by a lawyer or architect to run their offices in

the residential sector. If other conditions are satisfied, then as

the law stands today, according to the Development Authority,

they can be permitted to use 30 per cent of the Floor Area Ratio

(FAR) of the ground floor for their clinics/offices. Reference

can also be made to the judgment of this Court in the case of

Delhi Pradesh Citizen Council Vs. Union of India & Anr. [(2006) 6

SCC 305] wherein similar directions were issued. We are not

only relying upon the precedents of this Court, but such an

approach would also be permissible in face of the Regulations,

50

terms and conditions of the lease deed executed by the parties

and the Master Plan. It would, therefore, be suffice if 30 per

cent of the ground floor area is permitted to be used for office of

an architect/lawyer and for clinic simplicitor by a doctor.

55. From the above dictum of this Court, it is clear that

environmental impact, convenience of the residents and

ecological impact are relevant considerations for the Courts

while deciding such an issue. The law imposes an obligation

upon the Development Authority to strictly adhere to the plan,

regulations and the provisions of the Act. Thus, it cannot ignore

its fundamental duty by doing acts impermissible in law.

There is not even an iota of reason stated in the affidavits filed

on behalf of the Development Authority as to why the public

notice had been issued without amending the relevant

provisions that too without following the procedure prescribed

under law. The concept of public accountability and

performance of public duties in accordance with law and for the

larger public good are applicable to statutory bodies as well as

to the authorities functioning therein. We find no justification,

whatsoever, for the respondents to act arbitrarily in treating

equals who are similarly placed as unequals. There is also no

justification for the Development Authority to issue a public

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notice in the fashion in which it has done. A few officers of the

Development Authority cannot collectively act in violation of the

law and frustrate the very object and purpose of the Master

Plan in force, Regulations and provisions of the Act.

56. For the reasons afore-recorded, we would dispose of the

appeals of the Development Authority, the

appellants/occupiers/ lessees, interveners and occupants in

the following terms:-

1. That banking or nursing homes or any other commercial

activity is not permitted in Sector 19 and for that matter,

in any sector, in the Development Area earmarked for

`residential use'.

2. That the 21 banks and the nursing homes, which are

operating in Sector 19 or any other residential sector,

shall close their activity forthwith, stop misuse and put

the premises to residential use alone, within two months

from the date of pronouncement of this judgment.

3. That lessees of the plots shall ensure that the occupant

banks, nursing homes, companies or persons carrying on

any commercial activity in the residential sector should

stop such activity and shift the same to the appropriate

sectors i.e. commercial, commercial pockets in

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industrial/institutional area and specified pockets for

commercial use within the residential sector, strictly

earmarked for that activity in the development Plan,

Regulations and provisions of the Act.

4. That the Development Authority shall consider the request

for allotment of alternative spaces to the banks and the

persons carrying on other commercial activities, with

priority and expeditiousness.

5. That the Doctors, Lawyers and Architects can use 30 per

cent of the area on the ground floor in their premises in

residential sector for running their clinics/offices.

6. That for such use, the lawyers, architects and doctors

shall be liable to pay such charges as may be determined

by the Development Authority in accordance with law and

after granting an opportunity of being heard. The affected

parties would be at liberty to raise objections before the

Development Authority that no charges are payable for

such users as per the law in force.

7. In the event the lessee or the occupant fails to stop the

offending activity and/or shift to alternate premises within

the time granted in this judgment. The Development

53

Authority shall seal the premises and proceed to cancel

the lease deed without any further delay, where it has not

already cancelled the lease deed.

8. Wherever the Development Authority has already passed

the orders cancelling the lease deeds, such orders shall be

kept in abeyance for a period of two months from today. In

the event the misuse is not stopped within a period of two

months in terms of this judgment, then besides sealing of

the premises, these orders of cancellation shall stand

automatically revived and would come into force without

further reference to any Court. In the event the misuse is

completely stopped in all respects, the orders passed by

the authorities shall stand quashed and the property

would stand restored to the lessees.

9. These orders shall apply to all cases, where the order of

termination of lease has been passed by the Development

Authority irrespective of whether the same has been

quashed and/or writs of the lessees dismissed by any

Court of competent jurisdiction and even if such judgment

is in appeal before this Court.

10. The orders in terms of this judgment shall be passed by

an officer not below the rank of Commissioner. This

54

order shall be passed after giving an opportunity to the

parties of being heard by such officer. This direction shall

relate only to the determination of charges, if any, payable

by the lessee or occupant for the period when the

commercial activity was being carried on in the premises

in question.

57. The appeals are disposed of in the above terms, with no

order as to costs.

...................................J.

(Swatanter Kumar)

...................................J.

(Ranjana Prakash

Desai)

New Delhi;

December 05, 2011