MATHURA VRINDAVAN DEVELOPMENT AUTHORITY & ANOTHER versus RAJESH SHARMA AND OTHERS on 28 April 2023

Conclusion

MATHURA VRINDAVAN DEVELOPMENT AUTHORITY &ANOTHER

v.

RAJESH SHARMA AND OTHERSCivil Appeal No. 5645 of 2015)

APRIL 28, 2023

[M. R. SHAH AND C. T. RAVIKUMAR, JJ.]

U.P. Urban Planning and Development Act, 1973 ss. 15(2-A), 41 – Constitution of India – Art. 265 – The dispute before theHigh Court by way of various writ petitions was with respect tochallenge to the various demand notices by way of external/internaldevelopment charges, inspection fee/supervision fee while grantingof sanction layout plan, development charges, sub-division charges,stacking charges and impact fee etc – Except in one case, namely,Rekha Rani, in all other cases, the Allahabad High Court as suchhas upheld the levy of development charges/fees – On appeal, held:Insofar as the levy of development fees/charges is concerned, theissue is now not res integra, in view of the direct decision of SupremeCourt in the case of Malti Kaul and after taking into considerationthe entire scheme and the relevant provisions of the Act, 1973, moreparticularly ss. 14, 15(2-A), 41 & 59 of the Act, 1973, SupremeCourt has upheld the levy of development charges/fees – Under thecircumstances, the High Court has rightly upheld the levy ofdevelopment fees/charges except in the case of Rekha Rani and thedecision of the High Court in the case of Rekha Rani quashing andsetting aside the levy of development charges/fees thus isunsustainable and the same deserves to be quashed and set asideand the levy of development charges/fees, which otherwise ispermissible under section 15(2-A) of the Act, 1973 is to be upheld.

Disposing of the appeals, the Court

HELD: 1. Insofar as the levy of development fees/chargesis concerned, the issue is now not res integra, in view of thedirect decision of this Court in the case of Malti Kaul. After takinginto consideration the entire scheme and the relevant provisionsof the Act, 1973, more particularly Sections 14, 15(2-A), 41 & 59of the Act, 1973, this Court has upheld the levy of development

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Acharges/fees. Therefore, the issue with respect to levy ofdevelopment charges/fees is concerned, the same is concludedby this Court in the case of Malti Kaul. Under the circumstances,as such the High Court has rightly upheld the levy of developmentfees/charges except in the case of Rekha Rani. The decision ofthe High Court in the case of Rekha Rani quashing and settingBaside the levy of development charges/fees thus is unsustainableand the same deserves to be quashed and set aside and the levyof development charges/fees, which otherwise is permissibleunder section 15(2-A) of the Act, 1973 is to be upheld. [Para6][905-F-H; 906-A-B]

C2. Under the circumstances, in exercise of powers underSection 41 of the Act, 1973, the State could not have issued theorders permitting/allowing the Development Authorities to levythe charges/fees other than provided under Section 15(2-A) ofthe Act, 1973. At this stage, it is required to be noted that theDlevy of fees/charges provided under Section 15(2-A), all of themhave been specifically defined under Section 2 of the Act, 1973.Therefore, the intention of the Act is to levy only those charges/fees provided/mentioned under Section 15(2-A) of the Act, 1973,otherwise the other charges also would have been defined underthe Act, 1973. Levy of such other charges can be said to be hit byEArticle 265 of the Constitution of India. As per Article 265 of theConstitution of India, there shall not be any levy of tax/fees/charges except in accordance with law and/or as provided underthe statute. Under the circumstances and in view of the above,the High Court has rightly set aside the various demand notices Fby way of levy of inspection fee/supervision fee while granting ofsanction lay out plan, sub-division charges, impact fee etc. [Para12][914-D-G]

3. In view of the above and for the reasons stated above,the levy of development charges/fees by the various DevelopmentGAuthorities of the State of U.P. is hereby confirmed. The decisionof the High Court in the case of Rekha Rani (Civil Appeal No.4489/2014) quashing and setting aside the levy of developmentcharges/fees is hereby quashed and set aside to that extent. Theimpugned judgments and orders passed by the High Courtquashing and setting aside the demand notices/levy of otherH

MATHURA VRINDAVAN DEVELOPMENT AUTHORITY &ANOTHER v. RAJESH SHARMA AND OTHERS

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charges/fees, namely, inspection fee/supervision fee whilegranting of sanction layout plan, sub-division charges, impact feeetc. (other than development charges/fees) are hereby confirmed.[Para 13][914-G-H; 915-A-B]

State of U.P. & Others v. Malti Kaul (Smt.) & Another(1996) 10 SCC 425 : [1996] 5 Suppl. SCR 9 – reliedon.

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K.K. Bhalla v. State of M.P. (2006) 3 SCC 581 : [2006]1 SCR 342; Poonam Verma v. Delhi DevelopmentAuthority (2007) 13 SCC 154 : [2007] 13 SCR 552 –referred to.

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Case Law Reference

CIVIL APPELLATE JURISDICTIONL Civil Appeal No. 5645of 2015.

From the Judgment and Order dated 06.05.2011 of the High Courtof Judicature at Allahabad in CMWP No. 24531 of 2011.

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With

Civil Appeal Nos. 1976, 1979, 1984 of 2023, 5647, 5646, 6536 of2015, 658 of 2016, 4438, 4198, 4489 of 2014, 3636 of 2018, 1977, 1988,1983 of 2023, 5912-5915, 4492, 5910 of 2014, 2041 of 2023, 6247, 6249,6250, 6248 of 2014, 3176, 3242, 6537, 6540, 6541, 6538, 6539 of 2015,1982, 1978, 1980-1981 of 2023 and 5918, 5919 of 2014.

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Ms. Aishwarya Bhati, ASG., V. K. Shukla, Ravi Prakash Mehrotra,S. S. Kulshrestha, S. R. Singh, Rana Mukherjee, Brijender Chahar, Sr.Advs., Ms. Preetika Dwivedi, Abhisek Mohenty, Pardeep Gupta, ParinavGupta, Mrs. Mansi Gupta, Dr. (Mrs.) Vipin Gupta, Abhisth Kumar, AnuragRawat, Ms. Harshita Raghuwanshi, Ms. Shreya Jain, Shashibhushan P.Adgaonkar, Ajesh K Chawla, Ms. Saket Gautam, Ms. Shivangi Singh,Satish Kumar, Sudhir Kulshreshtha, Ms. Sushma Singh, Tanmay Mehta,Rajeev Mishra, Himanshu Tyagi, Yashva Ahuja, Ms. Jayanti Priya, Ms.Shashi Kiran, Dr. Satish Chandra, Arjun Saini, Ms. Parul Shukla, Ms.

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AShreya Bhojnagarwala, Abhishek Chaudhary, Abhishek Sharma, Mrs.Anchal Sharma, Ms. Chanda Trikha, Vivek Bansall, Vineet Bhagat, AjayKumar Singh, Ms. Manju Bhagat, Ms. Archna Midha, Mohit Gulati, Mrs.Anil Katiyar, Ritesh Agrawal, Tripurari Ray, Balwant Singh Billowria,Atul Wadera, Anirudh Ray, Nithyananda Murthy P., Ms. Bhanu Prabha,Vivekanand Singh, Ms. Shilpa Singh, Ajit Pandey, Naresh Kumar, PraveenBChaturvedi, Subhashree Mohapatra, Ms. Jyoti Chaturvedi, Tejaswi KumarPradhan, Manoranjan Paikaray, Aniruddha Purushotham, Mohan PrasadGupta, A. N. Arora, Jatin Zaveri, Abhinav Agrawal, Ms. Shweta Garg,Kishan Chand Jain, E. C. Agrawala, Ajay Yadav, Sushant Kumar Yadav,Prateek Yadav, Jaidev Yadav, Prithvi Yadav, Gaurav Lomes, Ankur Yadav,CRajeev Kumar Dubey, Ashiwan Mishra, Ms. Priya Gaur, KamlendraMishra, T. Mahipal, Shaswat Anand, Prabhat Ranjan Raj, GunjeshRanjan, Rameshwar Prasad Goyal, Anurag Tomar, Chandra Shekhar,Devendra Sharma, Prashant Shekhar, Yogesh Pachaori, Sanjay KumarTyagi, Ashwani Saini, Ms. Harshita Raghuvanshi, Vinay Kumar Sah, M/s. V. Maheshwari & Co., Mrs. Priyanka Swami, Ms. Sangeeta Singh,DAbhisth Kumar, Himanshu Shekhar Tripathi, Ambuj Dixit, T. N. Singh,Vikas Kumar Singh, Ms. Rajshree Singh, Dr. Sham Chand, Vikram Singh,Kunal Verma, Shantanu Sagar, Sidharth Sarthi, Mrs. Divya Mishra, AnilKumar, Gunjesh Ranjan, Shashi Bhushan, Karan Chahar, Vinay Garg,Ms. Pooja Chahar, Ms. Shweta Garg, Advs. for the appearing parties.EThe Judgment of the Court was delivered by

M. R. SHAH, J.

1. As common question of law and facts arise in this group ofappeals, all these appeals are decided and disposed of together, by thisFcommon judgment and order.

2. Feeling aggrieved and dissatisfied with the impugnedjudgment(s) and order(s) passed by the High Court of Judicature atAllahabad passed in the respective writ petitions, by which the HighCourt has quashed and set aside the various demand notices raised byGthe respective Development Authorities and the State of UP, theDevelopment Authorities and the State of U.P. have preferred the presentappeals.

2.1 Some of the appeals have been preferred by the original writpetitioners challenging the interim orders passed by the High Court inthe respective writ petitions refusing to stay the demand notices, however,H

subject to the outcome of the proceedings pending before this Courtwhich are being disposed of by this common judgment and order anddirecting the respective Development Authorities that in case the decisionin the present proceedings is against the Development Authorities/Stateof U.P., they shall refund the amount of various fees collected with 6%interest per annum.

2.2 By the impugned judgment(s) and order(s), the High Courthas set aside the various demand notices except the levy of developmentfees/charges. However, so far as Civil Appeal No. 4489 of 2014 (Stateof U.P. v. Rekha Rani & Others) is concerned, the High Court has evenset aside the levy/demand of development charges/fees also.

3. The dispute before the High Court by way of various writpetitions was with respect to challenge to the various demand notices byway of external/internal development charges, inspection fee/supervisionfee while granting of sanction layout plan, development charges, sub-division charges, stacking charges and impact fee etc. Except in onecase, namely, Rekha Rani (supra), in all other cases, the Allahabad HighCourt as such has upheld the levy of development charges/fees. However,the other levies/demands are concerned, i.e., other than developmentfees/charges, more particularly the sub-division charges etc., the HighCourt has set aside the said levy and/or demand notices on the groundthat U.P. Urban Planning and Development Act, 1973 (hereinafterreferred to as the ‘Act, 1973’) does not permit the levy of other chargesother than provided under Section 15(2-A) of the Act, 1973. The HighCourt has also observed and held that such levy on the basis of theorders issued by the State Government, issued in exercise of powersunder Section 41 of the Act, 1973, is illegal and bad in law. The levy ofother charges, other than development fees/charges is held to be bad inlaw and in violation of Article 265 of the Constitution of India.

3.1 Quashing and setting aside the levy/demand notices withrespect to external/internal development charges, inspection fee/supervision fee while granting of sanction layout plan, sub-division charges,stacking charges and impact fee etc. is the subject matter of presentappeals. The State of U.P. has also preferred appeal being Civil AppealNo. 4489/2014 [Rekha Rani (supra)] challenging the impugned judgmentand order passed by the High Court by which the High Court has setaside the levy/demand with respect to development charges/fees also.

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A4. Shri Rana Mukherjee, learned Senior Advocate appearing onbehalf of the State of U.P. has vehemently submitted that the State ofU.P. in exercise of powers under Section 41 of the Act, 1973 issuedorders permitting the Development Authorities in the State to recoverthe charges /fees with respect to external/internal development charges,inspection fee/supervision fee while granting of sanction layout plan,Bdevelopment charges, sub-division charges, stacking charges and impactfee etc. It is submitted that the said orders came to be issued in exerciseof powers under Section 41 of the Act, 1973, which as such were in thelarger public interest and for development of the area including thedevelopment plan/scheme and for development of other areas includedCwithin the limits of Development Authorities.

4.1 It is further submitted by Shri Rana Mukherjee, learned SeniorAdvocate appearing on behalf of the State of U.P. that as such the levytowards the development charges/fees has been upheld by this Court inthe case of State of U.P. & Others v. Malti Kaul (Smt.) & Another,Dreported in (1996) 10 SCC 425. It is submitted that therefore the HighCourt in the case of Rekha Rani (supra) (Civil Appeal No. 4489/2014)ought not to have and could not have set aside the levy of developmentcharges/fees which as such came to be affirmed by this Court.

4.2 Learned counsel appearing on behalf of the respectiveEDevelopment Authorities, while adopting the submissions made by ShriRana Mukherjee, learned Senior Advocate appearing on behalf of theState of U.P., have further submitted that in fact they collected therespective charges, other than development charges/fees, under theorders issued by the State Government.F4.3 Learned counsel appearing on behalf of the respective original F4.3 Learned counsel appearing on behalf of the respective originalwrit petitioners , as such, are not in a position to dispute that so far as thelevy of development charges/fees is concerned, the same is held to belegal in view of the decision of this Court in the case of Malti Kaul(supra).G4.4 It is submitted that so far as the other charges are concerned,the same are rightly held to be illegal and/or not in accordance with law,in view of Section 15(2-A) of the Act, 1973. It is submitted that onlythose charges which are enumerated/mentioned in Section 15(2-A) ofthe Act, 1973 can be recovered/levied. It is submitted that as per Article265 of the Constitution of India, there cannot be any levy/charges exceptH

in accordance with law. Meaning thereby, unless the law permits, therecannot be any levy of tax/charges.

4.5 Insofar as reliance placed upon Section 41 of the Act, 1973 onbehalf of the State as well as Development Authorities is concerned, it issubmitted that in exercise of powers under Section 41 of the Act, 1973,there cannot be any levy and/or no charge/fee can be recovered, ifotherwise the same is not permissible under the Act. It is submitted thatthe powers under Section 41 of the Act, 1973, as such, are supervisoryin nature and the directions can be issued by the State Government uponthe concerned Development Authorities to carry out the functions underthe Act. It is submitted that Section 41 does not permit the State to issueorders for levy of charges other than mentioned in Section 15(2-A) ofthe Act, 1973.

4.6 In one of the cases, learned counsel appearing on behalf ofthe original writ petitioner has vehemently submitted that as such thoughthe property in question may be within the limits of the DevelopmentAuthorities, however, with respect to the land which is not covered bythe development plan, there cannot be any levy of even developmentcharges/fees.

5. We have heard learned counsel for the respective parties atlength.

At the outset, it is required to be noted that before the High Courtthe dispute was with respect to various demand notices by way ofexternal/internal development charges, inspection fee/supervision feewhile granting of sanction layout plan, development charges, sub-divisioncharges, stacking charges and impact fee etc.

6. Insofar as the levy of development fees/charges is concerned,the issue is now not res integra, in view of the direct decision of thisCourt in the case of Malti Kaul (supra). After taking into considerationthe entire scheme and the relevant provisions of the Act, 1973, moreparticularly Sections 14, 15(2-A), 41 & 59 of the Act, 1973, this Courthas upheld the levy of development charges/fees. Therefore, the issuewith respect to levy of development charges/fees is concerned, the sameis concluded by this Court in the case of Malti Kaul (supra). Under thecircumstances, as such the High Court has rightly upheld the levy ofdevelopment fees/charges except in the case of Rekha Rani (supra).The decision of the High Court in the case of Rekha Rani (supra)

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Aquashing and setting aside the levy of development charges/fees thus isunsustainable and the same deserves to be quashed and set aside andthe levy of development charges/fees, which otherwise is permissibleunder section 15(2-A) of the Act, 1973 is to be upheld.

7. Insofar as the submission on behalf of one of the counsel thatBas the area in one of the cases is not included within the developmentplan, but the same is within the area of Development Authorities andtherefore there shall not be any levy of development charges/fees isconcerned, the same has no substance. It is required to be noted that thelevy of development fee/charges is for the area where development hasalready taken place and/or which is yet to be developed. The said aspectChas already been considered by this Court in the case of Malti Kaul(supra). In paragraph 5 of the said decision, it is observed and held asunder:

“5. Section 4 contemplates that the State Government may, bynotification in the Gazette, constitute, for the purpose of the Act,Dan authority called “Development Authority” for any developmentarea. ‘Development’ has been defined in Section 2(e) with itsgrammatical variations, to mean the carrying out of building,engineering, mining or other operations in, on, over or under land,or the making of any material change in any building or land, andEincludes redevelopment. “Development area” has been definedin Section 2(f) to mean any area declared to be development areaunder Section 3. It has been empowered, where the Governmentin exercise of the power under Section 3 has declared that anyarea within the State requires to be developed according to theplan, to declare such area to be a development area. Section 7Fenvisages the objects of the authority and gives power to thedeveloping authority to acquire, hold, manage or dispose of a landand any other property, to carry out building, engineering, miningand other operations, to execute works in connection with thesupply of water and electricity, to dispose of sewage and to provideGand maintain other services and amenities and generally to doanything necessary or expedient for purposes of such developmentand for purposes incidental thereto. ‘Amenity’ has been so definedin Section 2(a) as to include road, water supply, street lighting,drainage, sewerage, public works and such other convenience asthe State Government may, by notification in the Gazette specifyH

to be an amenity for the purposes of the Act. The expression“engineering operations” has been defined under Section 2(h) andincludes the formation or laying out means of access to a road orthe laying out of means of water supply. “Means of access” hasbeen defined under Section 2(i) and includes any means of access,whether private or public, for vehicles or for foot passengers andincludes a road.”

8. Insofar as the levy of other charges by way of inspection fee/supervision fee while granting of sanction layout plan, sub-division charges,stacking charges and impact fee etc., except levy of developmentcharges/fees, is concerned, while considering the legality of the levy ofsuch charges, the relevant provisions of the Act, 1973 are required to beconsidered, which are as under:

“S. 2. Definitions - In this Act unless the context otherwiserequires—

(e) ‘development’ with its grammatical variations, means thecarrying out of building, engineering, mining or otheroperations in, on, over or under land, or the making of anymaterial change in any building or land, and includes re-development:

(f) ‘Development Area’ means any area declared, developmentarea under Section 3:

(g) ‘the Development Authority’ or ‘the Authority’, in relationto any development area, means the Development Authorityconstituted under Section 4 for that area:

(ggg) ‘development fee’ means the fee levied upon a person orbody under Section 15 for construction of road, drain, sewerline, electric supply and water supply lines in the developmentarea by the Development Authority):]

(h) ‘engineering operation’ includes the formation or laying outmeans of access to a road or the laying out of means ofwater supply:

(hh) ‘Land use conversion charge’ means the charge levied ona person or body under section 38-A for the change of landuse in the Master Plan or Zonal Plan;]

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A(ii)‘mutation charges’ means the charges, levied under Section15 upon the person seeking mutation in his name of aproperty allotted by the Authority to another person:]

(kk) ‘Stacking fees’ means the fees levied under Section 15 uponthe person or body who keeps building materials on theBland of the Authority or on a public street or public places:]

(ll) ‘water fees’ means the fees levied under Section 15 upona person or body for using water supplied by the Authorityfor building operation or construction of buildings.]

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S. 14. Development of the land in the developed area - (1) Afterthe declaration of any area as development area under Section 3,no development of land shall be undertaken or carried out orcontinued in that area by any person or body (including adepartment of Government)-unless permission for suchDdevelopment has been obtained in writing from the [Vice-Chairman) in accordance with the provision of this Act.

(2) After the coming into operation of any of the plans in anydevelopment area no development shall be undertaken or carriedout or continued in that area unless such development is also inaccordance, with such plans.

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(3) Notwithstanding anything contained In Sub-sections (1) and(2), the following provisions shall apply in relation to developmentof land by any department of any State Government or the CentralGovernment or any local authority—

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(a) When any such department or local authority intends to carryout any development of land it shall inform the (Vice Chairman)in writing of its intention to do so giving full, particulars thereof,including any plans and documents, at least 30 days beforeundertaking such development; G

(b) In the case of a department of any State Government or theCentral Government, if the (Vice-Chairman) has no objections, itshould inform such department of the same within three weeksfrom the date of receipt by it under Clause (a) of the department’sintention, and if the Vice-Chairman does ‘not make any objection H

within the said period, the department shall be free to carry outthe proposed development;

(c) Where the (Vice-Chairman) raises any objection to theproposed development on the ground that the development is notconformity with any Master Plan or Zonal Development Planprepared or intended to be prepared by it, or on any other ground,such department or the local authority, as the case be, shall—

(i) either make necessary modifications in the proposal developmentto meet the objections raised by the [Vice-Chairman] or

(ii) submit the proposals for development together with theobjections raised by the [Vice-Chairman] to the State Governmentfor decision under Clause (d)

(d) The State Government, on receipt of proposals for developmenttogether with the objections of the (Vice-Chairman) may eitherapprove the proposals with or without modifications or direct thedepartment or the local authority, as the case may be, to makesuch modification as proposed by the Government and the decisionof the State Government shall be final:

the development of any land begun by any such department orsubject to the provisions of Section 59 by any such local authoritybefore the declaration referred to in Sub-section (1) may becompleted by that department or local authority with compliancewith the requirement of Sub-sections (1) and (2).

S. 15. Application for permission—(1) Every person or body (otherthan any department of Government or any local authority) desiringto obtain the permission referred to in Section 14 shall make anapplication in writing to the [Vice-Chairman] in such form andcontaining such particulars in respect of the development to whichthe Application relates as may be prescribed by [bye-laws].

(2) Every application under Sub-section (1) shall be accompaniedby such fee as may be prescribed by rules.

[(2-A) The Authority shall be entitled to levy development fees,mutation charges, stacking fees and water fees in such mannerand at such rates as may be prescribed.]

Provided that the amount of stacking fees levied in respect of anarea which is not being developed or has not been developed, by AB

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the Authority, shall be transferred to the local authority withinwhose local limits such area is situated.]

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S. 41. Control by State Government - (1) The [Authority, theChairman or the Vice-Chairman] shall carry out such directionsas may be issued to it from time to time by the State Governmentfor the efficient administration of this Act.

(2) If in, or in connection with, the exercise of its powers anddischarge of its functions by the [Authority, the Chairman or theVice-Chairman) under this Act any dispute arises between theauthority, the Chairman or the Vice-Chairman) and the StateGovernment the decision of the State Government on such disputeshall be final.

(3) The State Government may, at any time, either on its ownmotion or on application made to it in this behalf, call for the recordsof any case disposed of or order passed by the [Authority or theChairman) for the purpose of satisfying itself as to the legality orpropriety of any order passed or direction issued and may passsuch order or issue such direction in relation thereto as it maythink fit:

Provided that the State Government shall not pass an orderprejudicial to any person without affording such person a reasonableopportunity of being heard.

[(4) Every order of the State Government made in exercise of thepowers conferred by this Act shall be final and shall not be calledin question in any court.]

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S. 59. Repeal etc. and Savings - (1)(a) The operation of Clause(c) of Section 5, Sections 54, 55 and 56, Clause (xxxiii) of Section114, Sub-section (3) of Section 117, Clause (c) of Sub-section (1)of Section 119, Section 191, Sections 316, 317, 318, 319, 320, 321,322, 323, 324, 325, 326, 327, 328, 329 and 333, Clauses (a) and (b)of Sub-section (1) of Section 334, Sections 335, 336, Chapter XIVof the Uttar Pradesh [U.P. Municipal Corporation Act, 1959]Sections 178, 179, 180, 180-A, 181, 182, 183, 184, 185, 186, 203,

204, 205, 206, 207, 208, 209, 210 and 222 of the [U.P. MunicipalitiesAct, 1916] (or the said sections as extended under Section 338thereof or under Section 38 of the [United Provinces Town AreasAct, 1914], or as the, case may be, of Sections 162 to 171 ofthe [U.P. Kshetra Panchayat Zila Panchayat Adhiniyam, 1961]and of the Uttar Pradesh (Regulation of Building Operations) Act,1958 and the Uttar Pradesh Avas-Evam Vikas ParishadAdhinlyam, 1965, [except in relation to those housing orImprovement schemes which have either been notified underSection 32 of Uttar Pradesh Avas Evam Vikas ParishadAdhiniyam, 1965 before the declaration of the area comprisedtherein as development area or which having been notified underSection 28 of the said Adhiniyam before the said declarations arebye-thereafter approved by the State Government for continuanceunder the said Adhiniyam or which are initiated after suchdeclaration with the approval of the State Government, hereinafterin this section referred to as Special Avas Parishad Schemes]shall in respect of a development area remain suspended and Sub-section (3) of Section 139 of the Uttar Pradesh [MunicipalCorporation Act, 1959) shall have effect as if the requirement asto constitution of a Development Fund were suspended with effectfrom the date of constitution of the Authority for that area anduntil the dissolution of such Authority and the provisions of [Sections6 and 24 of the United Provinces General Clauses Act, 1904)shall apply, in relation to such suspension as if the suspensionamounted to repeal of the said enactment by this Act, and inparticular, all proceedings relating to acquisition of land and interestin land for Improvement schemes under the said enactmentpending immediately before such suspension before any court,tribunal or authority may be continued and concluded in accordancewith the provisions of the said enactment (which shall mutatismutandis apply) as if those provisions were not suspended andthe powers, for doing anything which could but for such suspensionof the Uttar Pradesh (Regulation of Building not Operations) Act,1958, be done by the Prescribed Authority and controlling authorityand which can, after such suspension be done by virtue of theapplication of Section 6 of the Uttar Pradesh General Clause Act,1904, shall vest in the Vice-Chairman and the Chairmanrespectively).

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(b) The operation of the provisions suspended by virtue ofClause (a) shall revive upon the dissolution of the Authorityunder Section 58, the provisions of [Sections 6 and 24 of theUnited Provinces General Clauses Act, 1904] shall apply inrelation to the cesser of application of the correspondingprovisions of this Act as if such cesser amounted to a repeal ofthese provisions of this Act by an Uttar Pradesh Act.

(c) Without prejudice to the generality of the provisions ofClauses (a) and (b), and bye-laws, directions or regulationsunder the [U.P. Municipalities Act, 1916] or the Uttar Pradesh(Regulation of Building Operations) Act, 1958 or the [U.P.Municipal Corporation Act, 1959) as the case may be, and inforce on the date immediately before the date ofcommencement of this Act, shall, insofar as they are notinconsistent with the provisions of this Act, continue in force,until altered, repealed or amended by any competent authorityunder this Act).

(6) Notwithstanding the provisions of Sub-sections (1) and (2)

(a) anything done or any action taken (including any notificationissued or order or scheme made or permission granted) underany of the enactments referred to in Sub-sections (1) and shall, sofar as it is not inconsistent with the provisions of the Act continuein force and be deemed to have been done or take under theprovisions of this Act unless and until it is superseded by anythingdone or any action taken under the provisions this Act; Therefore, as per Section 15(2-A) of the Act, 1973, theDevelopment Authority can levy only those charges, namely, developmentfees, mutation charges, stacking fees and water fees. The Act, 1973does not permit levy of other charges other than provided under Section15(2-A) of the Act, 1973.

9. Insofar as the reliance placed upon Section 41 of the Act, 1973by the State as well as the Development Authorities is concerned, at theoutset, it is required to be noted that the power exercisable under Section41 by the State, as such, are supervisory in nature and under the saidprovision, the State Government can issue various directions to theDevelopment Authorities for implementation of the provisions of the said

Act. In para 9 in the case of Malti Kaul (supra), it is observed and heldas under:

“9. Section 41 envisages control by the State Government inimplementation of the provisions of the Act. Under sub-section(1) thereof, the authority, the Chairman or the Vice-Chairmanshall carry out such directions as may be issued to it/him fromtime to time by the State Government for the efficientadministration of this Act. Section 56 gives power to makeregulations under the Act. Sub-section (1) thereof provides thatany authority may, with the previous approval of the StateGovernment, make regulations, not inconsistent with this Act andthe rules made thereunder, for the administration of the affairs ofthe authority. Therefore, the general power is available underSection 56 for the authority to make regulations for theadministration of the affairs of the authority. In particular sub-section (2) thereof provides that despite the generality of the powergiven in sub-section (1) specific power has been given by way ofregulations as enumerated thereunder. Clause (i) which is aresiduary clause provides for any other matter which has to be ormay be prescribed by the regulations.”

10. An identical question came to be considered by this Court inthe case of K.K. Bhalla v. State of M.P., reported in (2006) 3 SCC581. While dealing with the powers of the State Government under theMadhya Pradesh Act, which is pari materia to Section 41 of the Act,1973, in paragraph 62, it is observed and held as under:

“62. Furthermore, in terms of Section 73 of the 1973 Act, thepower of the State Government to issue direction to the officersappointed under Section 3 and the authorities constituted underthe Act is confined only to matters of policy and not any other.Such matters of policy yet again must be in relation to dischargeof duties by the officers of the authority and not in derogationthereof.”

11. In the case of Poonam Verma v. Delhi DevelopmentAuthority, (2007) 13 SCC 154, while dealing with the pari materiaprovision under the Delhi Development Authority Act (Section 41 of theDDA Act), this Court has observed and held in para 13 as under:

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A“13. Having failed to establish any legal right in themselves asalso purported deficiency in services on the part of the respondentbefore competent legal forums, they took recourse to remedieson administrative side which stricto sensu were not available. Ithas not been shown as to on what premise the Central Governmentcan interfere with the day-to-day affairs of the respondent. SectionB41 of the Act, only envisages that the respondent would carry outsuch directions that may be issued by the Central Governmentfrom time to time for the efficient administration of the Act. Thesame does not take within its fold an order which can be passedby the Central Government in the matter of allotment of flats byCthe Authority. Section 41 speaks about policy decision. Anydirection issued must have a nexus with the efficient administrationof the Act. It has nothing to do with carrying out of the plans ofthe authority in respect of a particular scheme.”

12. Under the circumstances, in exercise of powers under SectionD41 of the Act, 1973, the State could not have issued the orders permitting/allowing the Development Authorities to levy the charges/fees otherthan provided under Section 15(2-A) of the Act, 1973. At this stage, it isrequired to be noted that the levy of fees/charges provided under Section15(2-A), all of them have been specifically defined under Section 2 ofthe Act, 1973. Therefore, the intention of the Act is to levy only thoseEcharges/fees provided/mentioned under Section 15(2-A) of the Act, 1973,otherwise the other charges also would have been defined under theAct, 1973. Levy of such other charges can be said to be hit by Article265 of the Constitution of India. As per Article 265 of the Constitution ofIndia, there shall not be any levy of tax/fees/charges except in accordance Fwith law and/or as provided under the statute. Under the circumstancesand in view of the above, the High Court has rightly set aside the variousdemand notices by way of levy of inspection fee/supervision fee whilegranting of sanction lay out plan, sub-division charges, impact fee etc.

13. In view of the above and for the reasons stated above, theGlevy of development charges/fees by the various DevelopmentAuthorities of the State of U.P. is hereby confirmed. The decision of theHigh Court in the case of Rekha Rani (supra) (Civil Appeal No. 4489/2014) quashing and setting aside the levy of development charges/feesis hereby quashed and set aside to that extent. The impugned judgmentsand orders passed by the High Court quashing and setting aside theH

demand notices/levy of other charges/fees, namely, inspection fee/supervision fee while granting of sanction layout plan, sub-division charges,impact fee etc. (other than development charges/fees) are herebyconfirmed.

14. It is observed and directed that any amount already paid bythe respective original writ petitioners other than the development charges/fees and the charges provided under Section 15(2-A), now be refundedto the respective original writ petitioners with 6% interest per annum,within a period of twelve months from today, of course after adjustingdevelopment charges/fees. It is made clear that we have not expressedanything on the levy of betterment charges, which, as such, is otherwisepermissible under section 35 of the Act, 1973. It is also made clear thatthe order of refund shall be applicable only with respect to those originalwrit petitioners/persons who have challenged the demand notices andwho were before the High Court. It is also observed and it is made clearthat if any individual/original writ petitioner has any other grievances, itwill be open for them to approach the High Court by way of independentproceedings.

15. The present appeals stand disposed of in terms of the above.In the facts and circumstances of the case, there shall be no order as tocosts.

Ankit Gyan(Assisted by : Abhishek Agnihotri and Mahendra Yadav, LCRAs)

Appeals disposed of.

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