CHENNAI METROPOLITAN DEVELOPMENT AUTHORITY REPRESENTED BY ITS MEMBER SECRETARY versus D. RAJAN DEV AND OTHERS on 11 December 2019

[2019] 16 S.C.R. 1095

CHENNAI METROPOLITAN DEVELOPMENTAUTHORITY REPRESENTED BYITS MEMBER SECRETARY

v.

D. RAJAN DEV AND OTHERS

(Civil Appeal No. 9336 of 2019)

December 11, 2019

[R. BANUMATHI, A. S. BOPANNAAND HRISHIKESH ROY, JJ.]

Housing – Residential-cum-Shopping Building – Calculationof Premium FSI charges – First Respondent, a developer wascarrying on construction activities on basis of a planningpermission granted to him – Thereafter, the State Governmentintroduced a scheme called ‘Premium FSI Scheme’, wherein theGovernment permitted any builder willing to pay FSI charges toincrease FSI above the normally permitted FSI – On 04.05.2011,the first respondent made an application with revised proposal forpermission to have additional FSI area – The revised plan of thefirst respondent was considered and forwarded to the Governmentwith recommendation for approval – In the meanwhile, theRegistration Department revised and notified the revised guidelinevalue w.e.f. 01.04.2012 as per which the guideline value wasincreased from Rs.1650/- per sq.ft. to Rs.5,000/- per sq.ft. – On29.05.2012, the Government granted approval to the revised planof the first respondent – The premium was levied as Rs.7,61,40,000/- – The respondent made the representation against thecalculation and also regarding the area, however, the same wasrejected – Writ petition – First Respondent contended that the dateof application should be considered for the purpose of calculatingPremium FSI charges and not as per the guideline value prevailingon the date of approval of the plan – The writ petition wasdismissed by the Single Judge of the High Court – However, theDivision Bench of the High Court set aside the order of the SingleJudge – On appeal, held: No right accrues to the builder by meresubmission of a plan for construction of a building which has notbeen sanctioned by the Competent Authority – The rates prevailingat the time of granting of permission are the rates which an

A

B

C

D

E

F

G

H

Aapplicant has to pay – The respondent/applicant cannot claim thebenefit of the earlier guideline value existing prior to the date whenapproval was granted by the Government – Therefore, therespondent will have to pay FSI Premium charges based on theguideline value as existing on the date of grant of approval – Whenthe Government sanctioned the approval on 29.05.2012, theBDivision Bench of the High Court erred in directing the appellantto calculate the FSI charges as per the guideline value as on04.05.2011 – The impugned Judgment of the Division Bench ofthe High Court, therefore, set aside.

Allowing the appeal, the CourtC

HELD: 1. In the impugned judgment, the Division Benchof the High Court has relied upon Union of India and Others v.Dev Raj Gupta and Others and Union of India and another v.Mahajan Industries Ltd. and another. The ratio of those decisionsis not applicable to the case in hand as those decisions relateDto application for conversion of the land and not buildingpermission application. That apart, in those cases, there was adelay of more than three years in deciding the application. Inthe present case, there was no delay on the part of the appellant-CMDA or the Government to consider the first respondent’sEapplication for approval. [Para 24] [1108-G-H]

2. As submitted by the appellant-CMDA, the conduct ofthe first respondent is also to be taken note of. After the levyof Premium FSI charges calling upon the first respondent to paya sum of Rs.7,61,40,000/-, the first respondent submitted aFrepresentation on 19.07.2012 requesting to revise the PremiumFSI charges by considering the guideline value prevailing as onthe date of the application i.e. 04.05.2011. The saidrepresentation was rejected by the appellant-CMDA by its letterdated 31.08.2012 and the first respondent was directed to makepayment of Premium FSI Charges. The first respondent was alsoGinformed that if the payment was not made within sixty days, theapplication will be returned. The first respondent’s furtherrepresentation dated 14.12.2012 also came to be rejected.Thereafter, by letters dated 23.05.2013 and 14.06.2013, the firstrespondent had prayed for thirty days’ time for remitting theHPremium FSI charges as demanded by the appellant-CMDA. By CHENNAI METROPOLITAN DEVELOPMENT AUTH. REP. BYITS MEMBER SEC. v. D. RAJAN DEV

communication dated 19.06.2013, the first respondent wasgranted time upto 15.07.2013 to pay Premium FSI charges. Afterso getting extension of time, the first respondent filed writpetition before the High Court challenging the order of CMDAdated 31.08.2012 and prayed for quashing the demand. It is tobe pointed out that the Single Judge also commented on theconduct of first respondent in obtaining extension of time toremit the Premium FSI charges and thereafter, filing the writpetition before the High Court challenging the demand. [Para25] [1109-A-E]

3. The Division Bench did not keep in view the wellsettled principle that no right accrued to the applicant-builderby mere filing of application for approval and the right accruesonly after approval is granted by the Government/concernedauthorities. The impugned judgment is contrary to the wellsettled principle that the applicant does not acquire any rightunder law till his application is considered and sanctioned.Regulation 36 clearly provides that the Premium FSI shall beallowed in specific areas only with the approval of theGovernment. Unless and until the Government grants approval,no right accrued to the first respondent. When the Governmentsanctioned the approval on 29.05.2012, the Division Bench erredin directing the appellant to calculate the FSI charges as per theguideline value as on 04.05.2011. The impugned judgment istherefore liable to be set aside. [Para 26] [1109-E-G]

Usman Gani J. Khatri of Bombay v. Cantonment Boardand Others (1992) 3 SCC 455 : [1992] 3 SCR 1 ;Chennai Metropolitan Development Authorityrepresented by its Member-Secretary and another v.–Prestige Estates Project Ltd. (2019) 10 SCALE 78 relied on.

Union of India and another v. Mahajan Industries Ltd.and another (2005) 10 SCC 203 ; Union of India andOthers v. Dev Raj Gupta and Others (1991) 1 SCC–63 : [1990] 2 Suppl. SCR 300 held inapplicable.

State of W.B. v. Terra Firma Investments & Trading Pvt.Ltd. (1995) 1 SCC 125 : [1994] 5 Suppl. SCR 485 –referred to.

AB

C

D

E

F

G

H

ACase Law Reference

C

From the Judgment and Order dated 03.08.2016 of the HighCourt of Judicature at Madras in W.A. No. 2376 of 2013.

Jayanth Muthuraj, Sr. Adv., Ms. A. Jaswathi, K. V. Vijayakumar,Advs. for the Appellant.

K.V. Viswanathan, Sr. Adv., Gagan Gupta, K.V. Dhanapalan,DVinodh Kanna B., Lenin Rajasehar, Advs. for the Respondents.

The Judgment of the Court was delivered by

R. BANUMATHI, J.

1. Leave granted.E

2. This appeal arises out of the impugned judgment dated03.08.2016 passed by the Division Bench of the High Court of Madrasin W.A. No. 2376 of 2013 filed by the first respondent in and by whichthe Division Bench set aside the order of Single Judge and allowed thewrit appeal thereby directing the appellant Chennai MetropolitanFDevelopment Authority (CMDA) to calculate the Premium FSI chargesat the rate prevalent as on the date of filing of application by the firstrespondent Rajan Dev.

3. Respondent No.1 is a developer carrying on constructionactivities under the name and style of M/s. Ben Foundation. HeGsubmitted an application dated 07.05.2009 for planning permission toconstruct a residential-cum-shopping building at Survey Nos. 223, 224and 225, Padi Village, Padi Kuppam Road, Chennai for 196 dwellingunits. He proposed construction of Block A – Stilt floor(part) + GF(part)+ 6 floors + 7[th] floor part; Block B and C – Stilt + 6 floors and BlockHD – Stilt + 7 floors with floor area of 14082.26 sq.mt. and height of 22.80 mt. The planning permission was granted by the appellant CMDAon 01.07.2009. Initially, the sanction was mistakenly accorded for 14889sq.mts. (1.84 FSI) instead of 14164 sq.mts. (1.75 FSI). The excess areafor which sanction was wrongly granted is 725 sq.mts. While theconstruction was in progress, on 09.09.2009 vide G.O.Ms.No.163-Housing and Urban Development, respondent No.2-Government ofTamil Nadu introduced a scheme called “Premium FSI Scheme”,wherein the Government permitted any builder willing to pay FSIcharges to increase FSI above the normally permitted FSI. Additionalbenefit by way of Premium FSI accrued to the developer is related tothe proportionate land extent. As per the guidelines for Premium FSI,the amount payable by the applicant towards the Premium FSI chargeshall be equivalent to the cost of the proportionate land as per theGuideline value of the Registration Department. On 04.05.2011, the firstrespondent made an application along with revised proposal forpermission to have additional FSI area of 11,860 sq.ft. (= 1102 sq. mt.)under the “Premium FSI Scheme” for extra fourteen dwelling units i.e.one floor each in two blocks. The said application was returned by theappellant on 10.02.2012 with the direction to furnish revised plan forrectifying sixteen defects as pointed out by the appellant. The firstrespondent submitted revised plans on 24.02.2012. The appellant-CMDAvide its letter dated 30.03.2012 forwarded the revised plan to theGovernment seeking to accord approval to the recommendation of theMulti-storeyed building panel and for issue of planning permission. Inthe meantime, the State Government revised the guideline value of theland w.e.f. 01.04.2012.

4. While the application of the first respondent for revisedproposal was pending, the guideline value of the land was revised w.e.f.01.04.2012 from Rs.1,650/- per sq.ft. to Rs.5,000/- per sq.ft. for thearea which the first respondent has put up construction. After inspectionof the site and recommendation of the multi-storeyed building panel,on 29.05.2012, the Government granted approval for the Premium FSI.Pursuant to the sanction granted by the Government, the appellant-CMDA vide letter dated 02.07.2012 called upon the first respondent toremit “Premium FSI Charges” quantified at Rs.7,96,50,000/- for 1479.81sq.mts. of the land area based on the revised guideline value of theproperty as revised w.e.f. 01.04.2012 by the Government and asprovided at the time of the approval for the proposed construction.

AB

C

DE

F

G

H

AB

C

DE

F

G

H

A5. Vide letter dated 19.07.2012, the first respondent raisedobjections to the aforesaid calculation and also as regards the area. Thefirst respondent submitted that the first respondent originally proposedto construct 14,889 sq.mts. of built up area of an extent of land of8093.64 sq.mts. It was stated that the projected FSI at 1.74 by adoptingthe total built up area was calculated as 14089 sq.mts. as against 14,889Bsq.mts. and the same was a human error and the same led to all theconfusion. The first respondent has also raised objection stating thathe made the application during May, 2011 itself and that he may beallowed to make payment of “Premium FSI Charges” by adopting theguideline value existed on both the dates of their application (04.05.2011)Cand the approval by the CMDA panel (30.03.2012). In therepresentation, the first respondent stated that they are ready to paythe “Premium FSI Charges” for both the projected built up area of 800sq.mt. in the already approved plan and for the proposed built up areaof 1102 sq.mts. (proposed extra FSI of 0.24) by adopting the guidelinevalue existed on the date of their application i.e. 04.05.2011. The saidDrepresentation was rejected by the CMDA vide letter dated 31.08.2012.The appellant by its letter dated 19.07.2012 modified the revised“Premium FSI Charges” for 1479.81 sq.mts. of the land area fromRs.7,96,50,000/- to Rs.7,61,40,000/-. By the time the plan wassanctioned, the guideline value had increased from Rs.1,650/- per sq.ft.Eto Rs.5,000/- per sq.ft. As per the revised guideline, the Premium FSIcharges were calculated at the rate of Rs.5,000/- per sq.ft. and thesame was quantified at Rs.7,61,05,480/-.

6. The first respondent made further representation dated14.12.2012 requesting the appellant-CMDA to calculate the “PremiumFFSI Charges” taking into account the guideline value prevailing as onthe date on which the application was submitted and not to levy“Premium FSI Charges” as per the revised guideline value. The firstrespondent also requested to deduct all balcony and duct wall areawhich is within the limit of 10% allowance. The representation madeby the first respondent requesting for reduction of “Premium FSIGCharges” was rejected by the appellant-CMDA by order dated19.04.2013, affirming its earlier order dated 31.08.2012. By its lettersdated 23.05.2013 and 14.06.2013, first respondent sought for furtherthirty days’ time for remitting the Premium FSI charges as demandedby the appellant. By communication dated 19.06.2013, the appellant-HCMDA granted time till 15.07.2013 to pay Premium FSI charges.

7. After so taking time, the first respondent filed the writ petitionin WP No.18238 of 2013 before the Madras High Court. During thependency of the writ petition, construction of 196 dwelling units wascompleted and a partial completion certificate dated 17.06.2013 wasgranted. The learned Single Judge dismissed the writ petition by holdingthat the first respondent is liable to pay the “Premium FSI Charges”as per the guideline value prevailing on the date of approval of the plan.The learned Single Judge held that the builder would not acquire anyright by merely submitting application for building plan and the right tothe builder would accrue only after the approval of the plan. Thelearned Single Judge also held that there was no undue delay on thepart of CMDA or the second respondent-Government in disposing ofthe application of the first respondent.

8. Being aggrieved by the dismissal of the writ petition, the firstrespondent preferred the writ appeal before the Division Bench whichcame to be allowed by the impugned judgment. Relying upon Unionof India and another v. Mahajan Industries Ltd. and another(2005) 10 SCC 203, the Division Bench held that the appellant-CMDAis entitled to calculate levy of “Premium FSI Charges” taking intoaccount the guideline value prevalent as on the date of the applicationfor approval of the additional construction and not from the date onwhich the approval is being granted. During the pendency of the writappeal, an amount of Rs.3,80,00,000/- was deposited by the firstrespondent pursuant to the order dated 17.02.2014 passed by theDivision Bench. A provisional completion certificate dated 16.10.2014was granted for a total of 210 dwelling units. Being aggrieved, theappellant-CMDA has preferred this appeal.

9. Mr. Jayanth Muthuraj, learned Senior counsel appearing forthe appellant-CMDA submitted that under the “Premium FSI Scheme”,the application was returned for rectification of defects on 10.02.2012and the first respondent resubmitted the application on 25.02.2012.Placing reliance upon Chennai Metropolitan Development Authorityrepresented by its Member-Secretary and another v. Prestige EstatesProject Ltd. 2019 (10) SCALE 78, it was submitted that the crucialdate for determining the applicable rate for Premium FSI Charges isthe date on which the authority grants planning permission. It wassubmitted that mere pendency of the application or any payment madedoes not create any right under law in favour of the applicant till hisapplication is considered and sanction is granted as laid down by the A

B

C

D

E

F

G

H

ASupreme Court in Usman Gani J. Khatri of Bombay v. CantonmentBoard and others (1992) 3 SCC 455. The learned Senior counselsubmitted that the judgments relied upon by the Division Bench viz.Union of India and others v. Dev Raj Gupta and others (1991) 1SCC 63 and Union of India and another v. Mahajan IndustriesLtd. and another (2005) 10 SCC 203 are not applicable to the caseBin hand as both the judgments deal with the application for conversionand not application for building permission. The learned Senior counselfurther submitted that the first respondent being an experienced builderwith for more than three decades experience, is well aware of theprocedure to be followed in making an application seeking planningCpermission, but had deliberately filed a defective application andtherefore, the first respondent is not right in contending that there wasdelay on the part of the appellant-CMDA in processing the application.

10. Per contra, reiterating the findings of the Division Bench, Mr.K.V. Vishwanathan, learned Senior counsel appearing for the firstDrespondent submitted that as rightly held by the Division Bench thatthe crucial date for determining Premium FSI has to be the date ofreceipt of the application by the first respondent. It was submitted thatthe first respondent has submitted the application for permission to haveadditional FSI under the “Premium FSI Scheme” way back onE04.05.2011 and the same was returned on 10.02.2012 by the appellantfor rectifying the defects nearly after a delay of nine months. It wasfurther submitted that the application of the first respondent was pendingconsideration for quite some time with the appellant-CMDA and theMulti-Storeyed Building Panel discussed the application of the firstrespondent and forwarded the proposal to the Government withFrecommendation for approval even on 30.03.2012. The learned Seniorcounsel further submitted that the Division Bench of the High Courtrightly held that the FSI charges is payable on the date of filing of theapplication for conversion and not on the date of the approval and theimpugned judgment warrants no interference.G

11. We have considered the submissions and carefully perusedthe impugned judgment and other materials on record. The point fallingfor consideration is whether the High Court was right in holding thatthe Premium FSI charges are payable only as per the pre-revisedguideline value as on 04.05.2011 i.e. the date of filing of applicationHwith revised plan, by the first respondent?

CHENNAI METROPOLITAN DEVELOPMENT AUTH. REP. BYITS MEMBER SEC. v. D. RAJAN DEV [R. BANUMATHI, J.]

12. On 07.05.2009, the first respondent submitted an applicationfor construction of residential-cum-shopping complex at Padi Village,Padi Kuppam Road, Chennai. The planning permission was granted forthe original plan by the appellant-CMDA on 01.07.2009. When theconstruction was in progress, the Government of Tamil Nadu introducedthe “Premium FSI (Floor space Index) Scheme” vide G.O.Ms.No.163,Housing and Urban Development (UD-I) dated 09.09.2009 as perwhich the Government permitted willing builders to increase FSI abovethe normally permitted FSI subject to a maximum of one relating thesame to the road width parameters by paying premium FSI charges.

13. Regulation 36 deals with “Premium FSI”, which reads asunder:- “36. Premium FSI:- The Authority may allow Premium FSI overand above the normally allowable FSI subject to a maximum of1 (one) relating the same to the road width parameters asfollows:- SerialRoad widthPremium FSINumber(% of normallyallowable FSI)(i)18 meters and above40%(60’ and above)(ii)12 meters – below30%18 meters(40’ – below 60’)(iii)9 meters – below 12 meters(30’ – below 40’)20%

The premium FSI shall be allowed in specific areas as may benotified, subject to Guidelines and on collection of charge at the ratesas may be prescribed by the Authority with the approval of theGovernment. The amount so collected towards the award of PremiumFSI shall be remitted into the Government account to be allottedseparately for the purpose for utilizing it for infrastructure developmentin that area as may be directed by the Government.”

14. The first respondent sought to avail the benefits of PremiumFSI and submitted an application on 04.05.2011 seeking approval ofadditional FSI under the Premium FSI Scheme. The said applicationwas returned by the appellant-CMDA on 10.02.2012 for rectification A

B

C

D

E

F

G

H

Aof defects. Thereafter, on 24.02.2012, first respondent submitted therevised plan after rectification of the defects.

15. The Multi-Storeyed Building Panel considered the revisedplan of the first respondent and the appellant-CMDA by its letter dated30.03.2012 forwarded the proposal to the Government withBrecommendation for approval subject to the conditions indicated thereon.In the meanwhile, the Registration Department revised and notified therevised guideline value w.e.f. 01.04.2012 as per which the guideline valueof Padi Kuppam Road was increased from Rs.1,650/- per sq.ft. toRs.5,000/- per sq.ft. On 29.05.2012, the Government granted approvalto the revised plan of the first respondent. Based upon the revisedCguideline value, the appellant-CMDA by its letter dated 02.07.2012informed the first respondent that the Premium FSI has been levied atRs.7,96,50,000/-. The same was later modified as Rs.7,61,40,000/-.

16. Learned Senior counsel for the respondent contended thatonly the date of application for revised building plan has to be takenDinto consideration and the first respondent cannot be levied with therevised FSI Premium charges because of the time taken by CMDA inprocessing the application. The learned Senior counsel mainly relied uponthe recommendation made by the appellant-CMDA to content that pre-revised guideline would only be applicable for calculation of the PremiumEFSI charges. The forwarding of the revised proposal by the appellant-CMDA to the Government reads as under:- “AGENDA ITEM NO:2/203 FILE NO: C3(N)/6476/2011

“AGENDA ITEM NO:2/203 FILE NO: C3(N)/6476/2011

Sub: CMDA – APU – MSB (North) Division – PlanningPermission Application for the revised approval for theFconstruction of Block A: Stilt/GF (Shop cum Parking) + 7 Floors;Block-B, C and D: Stilt + 7 Floors Commercial cum Residentialbuilding with 210 dwelling units at T.S.No.113/2, Block No.65,Ward I, Old S.No.224/1 (part) of Padi Village, PadikuppamRoad, Mogappair, Chennai – Applied by Thiru. D. Rajan Dev– Recommended for Approval – Reg G

The MSB Panel discussed the subject in detail and recommendedto forward the proposal to the Government recommending forapproval subject to the following conditions:

i) undertaking accepting conditions of NOCs to be obtainedbefore issue of Planning Permission; and H

CHENNAI METROPOLITAN DEVELOPMENT AUTH. REP. BYITS MEMBER SEC. v. D. RAJAN DEV [R. BANUMATHI, J.]

ii) undertaking to furnish IAF NOC before issue ofcompletion certificate to be obtained before issue ofPlanning Permission.

Sd.XXXX30.3.2012

MEMBER SECRETARY”

By reading of the above, it is seen that it is only forwarding ofthe proposal to the Government with recommendation for approval ofthe revised plan which is as per the procedure involved. Such forwardingof the proposal to the Government with recommendation for approval,does not create any right in favour of the respondent. In terms ofRegulation 36, Premium FSI shall be allowed in specific areas as notifiedsubject to guidelines with the approval of the Government and oncollection of charges at the rates as may be prescribed by the authority.Thus, for the award of Premium FSI, inter-alia the conditions “collectionof charges at the rates as may be prescribed by the authority” and“approval of the Government”, are mandatory. The collection of FSIPremium charges is subject to the guidelines. The revised guidelinecame into force w.e.f. 01.04.2012. Be it noted that the first respondent’sapplication was considered and finally approval was granted by theGovernment on 29.05.2012 only after revised guideline came into force.At the time of granting approval by the Government on 29.05.2012,when the revised guideline was in force, the High Court ought not tohave held that the guideline value as on 04.05.2011, that is, the date ofapplication of the first respondent, should be considered for the purposeof calculating Premium FSI charges. The right would accrue to the firstrespondent only after the Government grants approval to the revisedplan sanctioning the Premium FSI. Thus, the date on which the approvalwas granted by the Government i.e. 29.05.2012 ought to have beentaken into consideration for calculating the Premium FSI charges.

17. It is well settled that no right accrues to an applicant untilthe application for approval is considered and sanctioned. The firstrespondent has given the proposal for revised building plan underRegulation 36 with a view to avail the benefit of Premium FSI. Aspointed out earlier, the process of grant of Premium FSI is completedonly after the grant of approval by the Government. Regulation 36clearly provides that the Premium FSI shall be allowed in specific areaswith the approval of the Government and the approval of the A

B

CDE

F

G

H

AGovernment therefore is mandatory. Only when the Government grantsapproval, the right would accrue to the builder and not before that.Therefore, the date of approval is the crucial date.

18. Learned Senior counsel for the appellant has submitted thatthe builder would not acquire any legal right by merely submitting anBapplication for approval of the building plan and the right would accrueonly after sanction of the revised plan by the Government. In this regard,we may usefully refer to Usman Gani J. Khatri of Bombay v.Cantonment Board and Others (1992) 3 SCC 455 which has beenreferred to by the learned Single Judge in the order passed in the writpetition wherein, the Supreme Court held as under:-C

“24. …….The petitioners did not acquire any legal right inrespect of building plans until the same were sanctioned in theirfavour after having paid the total amount of conversion chargesin lump sum or in terms of sanctioned instalments and gettingconversion of their land in freehold tenure…….”.D19. As pointed out by the learned Single Judge, in Usman Gani,the Supreme Court in order to explain the unsustainability of the claimmade by the builders has also explained a reverse case as under:- “24. ……..If we consider a reverse case where buildingEregulations are amended more favourably to the builders beforesanctioning of building plans already submitted, the builders wouldcertainly claim and get the advantage of the regulations amendedto their benefit.”

Learned Single Judge has also referred to State of W.B. v. TerraFFirma Investments & Trading Pvt. Ltd. (1995) 1 SCC 125 and otherjudgments wherein, the Supreme Court held that no right accrues tothe builder by mere submission of a plan for construction of a buildingwhich has not been sanctioned by the competent authority.

20. In the impugned judgment, the High Court relied upon thedecision in Union of India and Another v. Mahajan Industries Ltd.GAnd Another (2005) 10 SCC 203 wherein, the Supreme Court hadfollowed the decision of the Delhi High Court in the case of Ansal &Saigal Properties (P) Lts. bs. L & DO, holding that the crucial datefor calculating the conversion charges has to be the date of receipt ofapplication for conversion of land use. It is the submission of theHappellant that the decision in the said case is not applicable to the case in hand as the said judgment deals with application for conversion ofland and not the application for building permission. Apart from that,there was delay of more than three years in deciding the said application.We find merit in the submission of the appellant that the decision inMahajan Industries is not applicable to the facts of the present case.Though the application was filed on 04.05.2011 and resubmitted afterrectification of defects on 24.02.2012, the Government approved therevised proposal only on 29.05.2012. In the meanwhile, the revisedguideline value was introduced for implementation w.e.f. 01.04.2012.As rightly held by the learned Single Judge that the first respondent/builder does not acquire any legal right until the plan is sanctioned.

21. Mere pendency of the application for planning permission doesnot create a vested right in an applicant. Right accrues only when thepermission/sanction is granted by the Government/concerned authorities.This is because planning permission is accorded on the basis of scrutinyof application form and the concerned documents. There is alwayspossibility of an application not meeting the requisite criteria for carryingout the proposed development and being rejected. Until and unless anapplication complete in all respect is approved, it remains a mereapplication and no right can be claimed on the basis of such anapplication. A proposal cannot be equated with an approval, otherwisethe later will lose all significance. The obvious logical conclusion is thatthe right to an applicant accrues when the permission has been granted.Further, as a corollary, it can be said that the rates prevailing at thetime of granting of permission are the rates which an applicant has topay. The respondent/applicant cannot claim the benefit of the earlierguideline value existing prior to the date when approval was grantedby the government. In our considered view, the respondent will haveto pay FSI Premium charges based on the guideline value as existingon the date of grant of approval.

22. Learned Senior counsel for the appellant has placed relianceupon Chennai Municipal Development Authority v. Prestige EstatesProjects Limited 2019 (10) Scale 78. In Prestige Estates, despite thepayment having been made by the builder on 28.03.2012, the SupremeCourt held that the developer is liable to pay Premium FSI chargesbased on the revised guideline value which are applicable post01.04.2012. In Prestige Estates, after referring to Usman Gani andother judgments, the Supreme Court held that the demand on accountof Premium FSI charges arises only upon the grant of approval by the AB

C

DEF

GH

AGovernment to avail Premium FSI. The ratio of the decision in PrestigeEstates is squarely applicable to the present case. In the present case,since the sanction for revised plan was granted by the Government on29.05.2012, the first respondent in the present case is liable to pay thePremium FSI charges based on the revised guideline value which cameinto force w.e.f. 01.04.2012.B

23. Learned Senior counsel for the first respondent inter-aliacontended that there was inordinate delay on the part of appellant-CMDA in processing the application and the first respondent cannotbe burdened with extra charges on account of delay caused by theappellant. Learned Senior counsel further submitted that the applicationCof the first respondent dated 04.05.2011 for revised proposal wasreturned after nine months on 10.02.2012 and the respondent cannotbe blamed for the delay caused by the appellant in processing theapplication of the first respondent. This contention does not meritacceptance. The appellant-CMDA is a body entrusted with the task ofexamination and approval of multitude of building applications throughoutDthe planning area. That apart, the appellant-CMDA is a single windowsystem and it has to verify various documents with the connectedDepartments at various levels. The application was processed at variouslevels and it was sent to the departments like police, Fire, etc. forclearance. Considering the fact that different departments and agenciesEare involved with the process of approval, we feel that, there was noundue delay on the part of the appellant-CMDA or the StateGovernment. As rightly pointed out by the learned Single Judge, thefirst respondent submitted the application after rectification of defectsonly on 24.02.2012 and within a period of one month, the applicationwas placed before the meeting. Therefore, it cannot be said that thereFwas undue delay on the part of the appellant-CMDA or Governmentto consider the first respondent’s application for approval of the revisedplan.

24. In the impugned judgment, the Division Bench has relied uponUnion of India and Others v. Dev Raj Gupta and Others (1991) 1SCC 63 and Mahajan Industries Limited. The ratio of those decisionsGis not applicable to the case in hand as those decisions relate toapplication for conversion of the land and not building permissionapplication. That apart, in those cases, there was a delay of more thanthree years in deciding the application. In the present case, as discussedabove, there was no delay on the part of the appellant-CMDA or theHGovernment to consider the first respondent’s application for approval.

25. As submitted by the learned Senior counsel for the appellant-CMDA, the conduct of the first respondent is also to be taken note of.After the levy of Premium FSI charges calling upon the first respondentto pay a sum of Rs.7,61,40,000/-, the first respondent submitted arepresentation on 19.07.2012 requesting to revise the Premium FSIcharges by considering the guideline value prevailing as on the date ofthe application i.e. 04.05.2011. The said representation was rejectedby the appellant-CMDA by its letter dated 31.08.2012 and the firstrespondent was directed to make payment of Premium FSI Charges.The first respondent was also informed that if the payment was notmade within sixty days, the application will be returned. The firstrespondent’s further representation dated 14.12.2012 also came to berejected. Thereafter, by letters dated 23.05.2013 and 14.06.2013, thefirst respondent had prayed for thirty days’ time for remitting thePremium FSI charges as demanded by the appellant-CMDA. Bycommunication dated 19.06.2013, the first respondent was granted timeupto 15.07.2013 to pay Premium FSI charges. After so getting extensionof time, the first respondent filed writ petition before the High Courtchallenging the order of CMDA dated 31.08.2012 and prayed forquashing the demand. It is to be pointed out that the learned Single Judgealso commented on the conduct of first respondent in obtainingextension of time to remit the Premium FSI charges and thereafter, filingthe writ petition before the High Court challenging the demand.

26. The Division Bench did not keep in view the well settledprinciple that no right accrued to the applicant-builder by mere filing ofapplication for approval and the right accrues only after approval isgranted by the Government/concerned authorities. The impugnedjudgment is contrary to the well settled principle that the applicant doesnot acquire any right under law till his application is considered andsanctioned. Regulation 36 clearly provides that the Premium FSI shallbe allowed in specific areas only with the approval of the Government.Unless and until the Government grants approval, no right accrued tothe first respondent. When the Government sanctioned the approval on29.05.2012, the Division Bench erred in directing the appellant tocalculate the FSI charges as per the guideline value as on 04.05.2011.The impugned judgment is therefore liable to be set aside.

27. In the result, the impugned judgment dated 03.08.2016 passedby the High Court of Madras in W.A. No.2376 of 2013 is set asideand this appeal is allowed. The appellant-CMDA is at liberty to recover AB

C

D

E

F

G

H

Athe balance Premium FSI charges from the first respondent inaccordance with its regulations and rules. No costs.

Ankit Gyan

Appeal allowed.

B

C

D

E

F

G

H