w w w . L a w y e r S e r v i c e s . i n


Hotel Sahara Star, Sahara Hospitality Limited & Another v/s The State of Maharashtra & Others

    Writ Petition No.1531 of 2007
    Decided On, 10 July 2008
    At, High Court of Judicature at Bombay
    By, THE HONOURABLE CHIEF JUSTICE MR. SWATANTER KUMAR & THE HONOURABLE DR. JUSTICE D.Y. CHANDRACHUD
    For the Petitioners: K.K. Singhvi, Senior Advocate, T.N. Subramanian i/b. M/s. Haresh Mehta & Co., Advocates. For the Respondents: R1 to R4, R.M. Kadam, Advocate General, R5 & R6, Ms. A.K. Savla, Advocate.


Judgment Text
Dr. D.Y. Chandrachud, J.


The Centaur Hotel is situated in close proximity to the air terminals where domestic flight operations are carried on at Mumbai Airport. The hotel is located on a plot of land bearing CTS 2085 (part), and originally belonged to the Hotel Corporation of India Ltd. (HCI). Pursuant to the policy of disinvestment of the Government of India, HCI entered into an agreement on 18th April 2002 by which the Hotel was acquired by the First Petitioner as a going concern together with its property, assets and obligations. On 4th June 2003, the Petitioners made an application to the Municipal Corporation of Greater Mumbai under Section 342 of the Mumbai Municipal Corporation Act, 1888 and Section 44 of the Maharashtra Regional and Town Planning Act, 1966, for permission to carry out additions and alterations to the Hotel. The Municipal Corporation issued an Intimation of Disapproval on 15th January 2004 under Section 346. A commencement certificate was issued by the Municipal Corporation on 29th March 2004 and 6th November 2004.


2. On 4th November 2003 and 11th June 2004, the Petitioners applied to the Urban Development Department of the State Government for the grant of additional Floor Space Index (FSI) under Regulation 33(4) of the Development Control Regulations for Greater Mumbai, 1991. On 19th June 2004, the Department of Urban Development sought reports from the Chief Engineer (Development Plan) of the Municipal Corporation and the Deputy Director of Town Planning. On 6th August 2004, the Deputy Director informed the Urban Development Department that the plot of land was located in a Commercial Zone (C2) and was not reserved for any purpose. The Deputy Director stated that he had no objection to permission being granted for the utilization of an FSI of two, but the Municipal Corporation as the Planning Authority would, while scrutinizing the proposals, have to bear in mind other requirements including minimum prescribed distances and parking. On 29th January 2005, the Chief Engineer reported that there was no deficiency in open space and adequate car parking spaces had been provided for. Orders of the Government were consequently sought on the proposal for the grant of enhanced FSI. On 8th February 2005, the concerned Executive Engineer of the Municipal Corporation informed the architect that ?necessary concessions for allowing additional FSI under Regulation 33(4) .. are approved by the Municipal Commissioner?.


3. The Petitioners are alleged to have carried out work in excess of the construction which was sanctioned by putting up: (i) a ground and three storeyed building framework; and (ii) an extension to the fourth and fifth floors of the existing Hotel Building. The Municipal Corporation issued a notice on 20th April 2005 under Section 354A of the Municipal Act followed by a notice under Section 53(1) of the Town Planning Act calling upon the Petitioners to demolish the ground and three storeyed framework on the ground that it was beyond the approved plan. On 26th May 2005, an Advocate's reply was submitted to the Municipal Corporation with a request to treat it as an application for regularization under Section 44 of the Town Planning Act.


4. A petition under Article 226 of the Constitution of India was instituted by the Petitioners seeking a Writ of Mandamus against the State Government for the grant of 100% additional FSI under Regulation 33(4). On 8th September 2006, an order was communicated by the Urban Development Department recording that the land in question was situated at the junction of the Express Highway and a narrow road which leads to the Airport, besides being situated in close proximity to the Domestic Airport. The State Government held that the grant of additional FSI would lead to an increase in the number of vehicles in the vicinity of the Airport. The order recorded that Government had scrutinized the reports of the Chief (Transport and Communications) of the Mumbai Metropolitan Region Development Authority (MMRDA) and of the Joint Commissioner of Police (Traffic). The application for additional FSI was rejected for the following reasons:


?Traffic volume study carried out by MMRDA in 2003 shows that the current peak hour volume at the junction is 18298 PCU's of which 2525 PCU's (nearly 15%) are in the direction from Western Express Highway coming from sought turning right to Airport using the road next to Hotel Sahara Star.


The road to Airport is of 19 mt. width with only 2 lane dual carriage way and the road on rear side of Hotel Sahara is only 11 mt. operating as one way. The ultimate carrying capacity is operating at level of 2200 PCU's/hour at Service E (Volume/Capacity Ratio of 0.91 during peak hour) which is below the desirable level of Service C (0.50). Further the junction is having no service roads along highway. The traffic volume data is of year 2003. The current peak hour flow would have exceeded the level of Service-E.?


The State Government was of the view that the proposal for sanctioning of additional FSI under Regulation 33(4) could not be acceded to in view of the existing constraints at site. The road which leads to the Domestic Airport is narrow and since the Airport was being extended, the Government was of the view that it would not be desirable to permit further traffic. The proposal was rejected.


5. By a judgment and order dated 30th March 2007, a Division Bench of this Court set aside the decision of Government and remitted the proceedings for reconsideration.


6. A Special Leave Petition was filed before the Supreme Court by the State Government on or about 7th August 2007. Prior thereto, by an order dated 11th June 2007, the Chief Minister had rejected the proposal of the Petitioners for the grant of additional FSI under Development Control Regulation 33(4). The Special Leave Petition was disposed of by the Supreme Court on 24th August 2007, inter alia, with the following observations:


?Having heard ... learned senior counsel appearing on behalf of the Petitioner and ... learned senior counsel appearing on behalf of the writ petitioners ? respondents, we are of the opinion that the question raised in regard to the interpretation of Regulation 33(4) of the Development Control Regulations for Greater Bombay, 1991, need not be determined by this Court at this stage as it is accepted at the Bar that pursuant to or in furtherance of the order of remand, a fresh order has already been passed by the appellant State and the same is pending consideration before the High Court. We, however, make it clear that the question of law raised in this special leave petition shall remain open.?


7. The substantive challenge in these proceedings is to the order passed by the State Government on 11th June 2007, by which the application filed by the Petitioners for the grant of additional FSI under DCR 33(4) was rejected. The Petitioners seek a Mandamus, directing the Government ?to grant 100% FSI .. as provided in Regulation 33(4)?.


D.C.R. 33(4):


8. Development Control Regulation 33(4) provides as follows:


?Building of Starred Category Residential Hotels:


With the previous approval of Government and subject to payment of such premium as may be fixed by Government (out of which 50 percent shall be payable to the Corporation), and subject to such other terms and conditions as it may specify, the floor space indices in Table 14 may be permitted to be exceeded in the case of buildings of all starred category residential hotels in independent plots and under one establishment as approved by the Department of Tourism, by a maximum of 50 per cent over the normal permissible floor space index in the F and G Wards of Island City and by a maximum of 100 per cent over the normal permissible floor space index in wards of the suburbs and extended suburbs. No condonation in the required open spaces, parking and other requirements as in these Regulations shall be allowed in the case of grant of such additional floor space index.


[Notes ? The use of TDR will be permissible in case of starred category residential hotels in suburbs and extended suburbs only over and above additional FSI granted under these Regulations subject to following conditions:


(i) Additional floor area to the extent of 0.5 FSI by way of utilization of TDR (reservation TDR, and above the additional FSI granted in this Regulations, provided overall FSI does not exceed 2.5.)


(ii) Such additional FSI (in the form of TDR) will be permitted only if additional FSI is availed under this Regulations.


(iii) Loading of TDR will be governed by the prescriptions contained in these Regulations]?.


A. Submissions:


1. Petitioners:


9. The submissions urged on behalf of the Petitioners, to challenge to the order of the State Government are as follows:


(i) The interpretation placed in the judgment of the Division Bench of this Court on DCR 33(4), while remanding the proceedings to the Government, is binding and conclusive for this Court and though the Supreme Court kept the question of law open, that was only when the question arose before the Supreme Court in future and not before this Court;


(ii) In the order of remand, the Division Bench held that considerations pertaining to the volume of traffic are not relevant to the exercise of power by the State Government under DCR 33(4);


(iii) The State Government had unfairly discriminated against the Petitioners in that though all Five Star Hotels fall into the same category, it is only in the case of the Petitioners that the Government had made a reference to MMRDA regarding traffic congestion and no other starred category hotel had been refused additional FSI on that ground, on compliance of the conditions spelt out in the Regulations;


(iv) Once the conditions spelt out in DCR 33(4) are fulfilled, the State Government is bound to accord approval to the proposal of the Municipal Commissioner and has no discretion to withhold its approval;


(v) DCR 33(4) is not a complete code for the grant of additional FSI to starred category hotels;


(vi) Traffic congestion is not a relevant consideration for the grant of additional FSI under DCR 33(4) because (a) The question of infrastructure has to be considered by the Planning Authority and the State Government before a development plan is sanctioned; (b) DCR 52(8)(vii) provides that starred category hotels may be allowed on an 18 meter wide road; (c ) A developer of a starred category hotel can purchase TDR to the extent of 100% of the normal FSI and can construct a hotel consuming an FSI of two without the approval of the State Government; this would lead to the conclusion that traffic is not a relevant consideration for the grant of additional FSI; (d) Neither MMRDA, nor its authorities have been empowered under the statute to render advice to the State Government; (e) MMRDA has no role to play in framing and implementing the Development Plan for Greater Mumbai and the authority is prohibited from interfering with a subject which falls under Sections 61 and 63 of the Mumbai Municipal Corporation Act, 1888; and (f) Primacy would have to be given to the advice of the Planning Authority, the Deputy Director of Planning , the Police and the Tourism Department.


2. The State Government:


10. On behalf of the State Government it has been urged that:


(i) This Court in the exercise of its extra ordinary jurisdiction under Article 226 of the Constitution of India ought not to grant any relief to the Petitioners, who without any statutory approval carried out an unauthorized construction which resulted in the issuance of notices of demolition under the Municipal Act and the Town Planning Act;


(ii) The Petitioners are disentitled to the benefit of regularization in writ proceedings since it is well settled that a deliberate deviation from the law cannot be condoned, particularly in the case of professional builders who understand the law;


(iii) The order passed by the Supreme Court on 24th August 2007 leaves the question of interpretation of DCR 33(4) open and any other interpretation would result in the words used in the order of the Supreme Court, namely, ?that the question of law raised in the Special Leave Petition shall remain open? being rendered otiose;


(iv) The plea of discrimination that is sought to be raised on behalf of the Petitioners was rejected in the earlier judgment of the Division Bench and was not kept open by the order of the Supreme Court; in any event, the Petitioners have failed to discharge the burden cast upon them of establishing that they have been unfairly discriminated against;


(v) The submission of the Petitioners that DCR 33(4) does not vest any discretion in the State Government, save and except for performance of the ministerial act of ascertaining that the conditions prescribed therein are fulfilled and to decide, the quantum of premium to be paid is fallacious;


(vi) DCRs 32, 33 and 34 cannot be read in isolation and are part of a scheme of the subordinate legislation in issue;


(vii) The provision for previous approval of the State Government under DCR 33(4) entitles the Government to determine whether, on considerations germane to planning, the grant of additional FSI would be justified;


(viii) DCR 32 prescribes an FSI which is available as a matter of right while DCR 33 is a relaxation by which additional FSI is permissible in certain cases;


(ix) Considerations of traffic are extremely relevant and vital to the process of planning;


(x) Planning itself is a dynamic process which involves meeting and adapting to changing needs. The Legislature could not have envisaged and provided for all situations which is why a wholesome discretion has been vested in the State Government under DCR 33 (4). This discretion must be exercised in consonance with considerations which are relevant to the Act;


(xi) The State Government is empowered to consider each individual application on considerations which are relevant to planning;


(xii) The challenge by the Petitioners to the action of the State Government must satisfy the Wednesbury principle of unreasonableness. In the present case, the State Government in the exercise of its discretion had taken into consideration a factor which the statute has regarded as relevant. The State Government was justified in calling for a response from MMRDA having regard to its statutory functions and the view which is formed by MMRDA was supported by abundant documentary material;


(xiii) There is a fundamental difference between utilization of TDR and additional FSI and considerations relevant to the grant of utilization of TDR will not necessarily apply to the grant of additional FSI.


B. Development Control Regulation 33(4):


11. Regulation 32 of the Development Control Regulations for Greater Mumbai, 1991, enunciates the maximum permissible Floor Space Indices in Table 14. These are defined with reference to the nature of occupancies, locations and use zones. Regulation 33 provides that an additional FSI may be allowed in certain categories. This addition of FSI is over and above what is prescribed in Regulation 32. Sub-regulations (1) and (2) provide for certain eventualities, namely, (i) Road widening and construction of new roads; (ii) Building of Educational and Medical Institutions and Institutional buildings. Sub regulation (3) deals with building of Government or Semi Government Offices and of public sector undertakings.


12. DCR 33(4) deals with buildings of starred category residential hotels. The Regulation postulates that the FSI in Table 14 may be permitted to be exceeded in the case of buildings of all starred category residential hotels subject to the fulfillment of certain conditions. These conditions are: (i) The existence of an independent plot; (ii) One establishment; and (iii) The approval of the Department of Tourism. Permission for the grant of additional FSI is subject to the ?previous approval of the State Government? and subject to the payment of such premium as may be fixed by Government. In the F and G Wards of the Island City, an additional FSI upto a maximum of 50% over the normal permissible FSI can be allowed while in the Suburbs and extended Suburbs, the normal FSI can be permitted to be enhanced by a maximum of 100%.


13. The submission which has been urged before the Court is that in granting previous approval, the role of the State Government is confined to no more than verifying compliance with the conditions which have been spelt out in the Regulation and to the quantification of the premium which is charged from the developer. Such a restrictive reading of the power which has been conferred upon the State Government would not be justified having regard to the object and purpose of the Regulation and the language which has been used. The Regulation uses the expression ?previous approval?. The expression ?approval?, as was noted by the Division Bench in the earlier proceedings means an act of confirming, ratifying, assenting, sanctioning or consenting to a certain act or thing done by another. The subordinate legislation in the present case qualifies the expression ?approval? by the requirement that the approval should be previous. It would be impermissible for the Court to adopt an interpretation that would dilute the power of the State Government, by ignoring the import of the requirement that the approval must be a previous approval. The additional FSI is sanctioned in the first instance by the Municipal Corporation, but this is subject to the previous approval of the State Government.


14. The power which is conferred upon the State Government by DCR 33(4) is incidental to the obligation to ensure that the grant of additional FSI does not impede or obstruct the planned development of Greater Mumbai. If the intent of the subordinate legislation in the present case was that the State Government is to perform only a ministerial act of verifying compliance with the conditions which have been spelt out, the Regulation would have been couched in restrictive language indicative of the conferment of only a limited function.


15. DCR 33(4) allows the normal FSI mentioned in Table 14 to be exceeded subject to the previous approval of the Government and subject to such other terms and conditions as Government may certify. The provisions of Regulation 33 enunciate specific categories in which the normal FSI that has been prescribed for the City may be permitted to be exceeded; the circumstances for the grant of additional FSI; the authority competent to do so and the safeguards subject to which the grant of additional FSI is contemplated. Some of those categories have already been mentioned hereinabove. Others included low cost, housing schemes for the Maharashtra Housing and Area Development Authority; reconstruction of buildings destroyed by fire; reconstruction or redevelopment of cessed buildings in the Island City by Cooperative Housing Societies; construction of houses for the dishoused; and Urban Renewal Schemes. Similarly, normal FSI can be exceeded in the interest of resettling or rehabilitating project affected persons, redevelopment of contravening structures in a Town Planning Scheme and other such cases. The subordinate legislation has contemplated situations envisaged in the public interest where towards the realization of a socioeconomic objective and the interests of proper planning it was contemplated that the normal FSI may be permitted to be increased. Many situations are such that the achievement of the desired object of rehabilitation may not be capable of being achieved within the parameters of the normal FSI. Allowing an increase in the normal FSI casts a burden on the already stretched infrastructure of the City and may impact upon the density of tenements, the sharing of open spaces and the quality of life for the residents. It is in this backdrop that the power that has been conferred upon the State Government by diverse provisions of Regulation 33 must be construed. The State Government is not merely empowered, but is duty bound to consider the impact of the grant of enhanced FSI upon the integrity of the planning process and upon the planned development of the City. Planning by its very nature is a dynamic exercise. The metropolitan city of Greater Mumbai is rapidly evolving and planning cannot be stratified into a static existence. Planning must be allowed to evolve to meet the exigencies of the day. The Legislature may not be able to envisage all the eventualities which may occur over a spell of time in the implementation of planning or town planning legislation. A provision has legitimately been made to confer upon the Government which has ultimate authority for the proper implementation and enforcement of Town Planning legislation to supervise the grant of additional FSI so as to ensure that the impact of the grant of additional FSI is consistent with planning norms. The submission that the role which has been assigned to the State Government by DCR 33(4) is purely ministerial in character cannot be accepted. On the contrary, the nature of the Regulation, the context in which it appears and the source of the statutory power must be given a purposive interpretation so as to recognize as vesting in the State Government the duty to take into consideration all considerations relevant and germane to and that have a bearing on the proper implementation of planning legislation.


C. The relevance of road infrastructure and the impact of vehicular use:


16. By a notification dated 2nd June 1973 the State Government approved the Regional Plan for the Bombay Metropolitan Region for the period 1970 to 1991. This region presently extends over 4355 square kilometers and comprises of the Municipal Corporations of Greater Mumbai, Thane, Kalyan and Navi Mumbai besides, 16 Municipal towns, 7 non-Municipal Urban Centres and 995 villages. There are nearly 40 Planning Authorities in the region for micro level planning of different areas. A situation was liable to emerge where the proliferation of Planning Authorities would lead to each authority dealing with its own problems on a localized basis, resulting in an absence of a holistic approach to the development of the region. Government, therefore, considered it appropriate to provide for the establishment of a central authority for planning, coordinating and supervising the proper, orderly and rapid development of the Bombay Metropolitan Region. The State Legislature enacted the Mumbai Metropolitan Regional Development Authority Act in 1974 and the Authority came to be constituted under Section 3 thereof. The main object of setting up the Authority is to secure the planned development of the Mumbai Metropolitan Region and to achieve the objects and functions of the Authority as enunciated in the Act. Section 12(2) of the Act empowers MMRDA to undertake a revision of the Regional Plan. The Revised Regional Plan for the Mumbai Metropolitan Region, for the period 19962001, was sanctioned by the State Government on 23rd September 1999.


The MUTP and MUIP Projects:


17. The State Government and the Union Ministry of Railways jointly undertook the Mumbai Urban Transport Project (MUTP) with the assistance of the World Bank to upgrade traffic infrastructure in Mumbai. The emphasis of the Project was on the provision of rail services. Subsequently, the Mumbai Urban Infrastructure Project (MUIP) was envisaged so as to provide for an enhancement of the infrastructural facilities for road services. MMRDA was entrusted with the preparation of the MUIP Project with a budgetary outlay of Rs.2,047/crores which was sanctioned by the State Government on 1st November 2000. MMRDA has been appointed as the implementing authority for the MUIP project.


18. In the counter affidavit which has been filed by the State Government, it has been stated that the MUIP project encompasses the development and upgradation of major arterial roads in the City of Mumbai flowing in the North-South directions and of high capacity roads connecting the National and International Airports in Mumbai. The Western Express Highway which abuts the hotel of the Petitioners is stated to be one of the roads prominently earmarked in the MUIP project. The Western Express Highway is stated to be a vital traffic corridor for the Mumbai Metropolitan Region.


19. MMRDA undertook a comprehensive transportation plan with a view to developing a long term planning strategy for the Mumbai Metropolitan Region that would remain valid until the year 2031. An international expert based in Canada ? Lea International Ltd., was associated with the preparation of what is termed as a Comprehensive Transportation Plan. MMRDA, the Court is informed on affidavit, carried out a detailed survey and assessment of traffic patterns, traffic density, road carrying capacities and of congestion on various roads. A survey was carried out of the movement of traffic on the Western Express Highway near the junction of the Domestic Airport.


20. A report published in May 2007 under the aegis of MMRDA in collaboration with the Canadian expert, entitled ?Long Term Transportation Strategy for MMR? inter alia highlighted the serious problems which were confronted by the City as a result of what is described as ?a lethal dose of traffic congestion which has elevated Mumbai into the category of one of the worst congested cities in the world?. The report contains a statement of average speed on various roads in the City. Speed on the Western Express Highway has reduced from 35.5 km. per hour in 1990 to 25 kms. in 2006. The growth of traffic in the suburbs of the City is noted to be particularly high. The Report states that the volume of traffic at the Airport has increased radically as a result of the rapid growth of airlines and passenger traffic:


?3.9 Airports


Region is host to the busiest airport of India which handles more than 400 flights, 36000 passengers and 900 Mt of cargo every day. Agency which manages this airport (Airport Authority of India) specifies 1.55 Crore passengers per annum as the ultimate capacity of total system (1 Crore for domestic terminals and 0.55 Crore International Terminal). Last year (200506), it handled 1.8 Crore passengers.?


21. In this background, having regard to the statutory functions of MMRDA, the role which is ascribed to it and the work which was already conducted by MMRDA in identifying problems and considering solutions for the future, the State Government cannot be regarded as in error in having consulted MMRDA. The State Government is entitled to regard the views of MMRDA with a considerable degree of deference. The affidavit filed by the State Government notes that the expertise, specialization and information at the command of MMRDA would not be matched by other agencies, nor for that matter, would the Traffic Police ? who primarily look after the issue of parking ? have a comparable degree of expertise. There is merit in the submission which has been urged on behalf of the State Government that merely because the Municipal Corporation is the Planning Authority that does not preclude the State Government from taking into consideration the views of MMRDA and the data, information and inputs which are available with it. Material available with MMRDA is relevant and germane to the decision making process. In seeking the views of MMRDA, the State Government cannot be regarded as having pursued a line of enquiry which is extraneous to the object of planning.


22. MMRDA noted in its report of 7th September 2006 that the genesis of the flyover at the junction of the Western Express Highway and the domestic terminal is because of the long delays which occur at the location. At a peak hour the traffic volume at the junction is 18,298 PCU's of which nearly 15% of the vehicles travel from a southerly direction and make a right turn to the Airport using the road next to the Petitioners' hotel. The road from the Western Express Highway to the Airport is noted to be 19 meters in width with only a two lane dual carriageway. The road on the rear side of the Petitioners' hotel is stated to be 11 meter wide and operates as a one-way road. The ultimate carrying capacity for a two lane carriageway to the Airport was 2400 PCU's per hour whereas traffic entering the Airport is around 2200 PCU's at the peak hour. There are no service roads along the highway in this section. MMRDA noted in its report that the possibility of a vehicular subway or a second level right turn ramp were examined, but these alternatives were not found to be technically feasible due to the existence of large storm water drains and a limited carriageway. In view of the constraints at the site, including the narrow approach road to the Airport, both from its Southern and Northern sides, as well as the limited scope for widening the road surrounding the Airport, MMRDA was of the view that it was not desirable to grant additional FSI to the Petitioners.


23. Considerations of the volume, pattern and density of traffic cannot be regarded alien to the decision on whether or not to grant approval under DCR 33(4). Considerations relating to vehicular congestion and traffic are vital ingredients in the process of planning particularly in a metropolitan urban area. The contention that the traffic patterns have been borne in mind while preparing the Development Plan, in fact, underscores the importance of these considerations. But, the assessment of traffic flows cannot be regarded as a one time exercise, to be considered before the sanctioning of a Development Plan and to be treated as a closed chapter thereafter. By their very nature, such considerations have to be borne in mind during the entire period of the evolution and implementation of the Development Plan particularly when provisions such as DCR 33(4) contemplate the previous approval of the State Government to the grant of additional FSI in certain specified situations. Planning has to keep pace with the dynamics of a rapidly evolving city. The life of a Development Plan under the Maharashtra Regional and Town Planning Act, 1966 is 20 years. Planning has both a macro aspect which regards the region as a holistic entity and has a micro level aspect which deals with the impact of a particular project on the available infrastructure. Planning the development of a metropolitan region as geographically far flung and diverse as the Mumbai Metropolitan Region is a complex exercise and the Court must allow the full range of discretion that has been conferred upon the State Government by the provisions of subordinate legislation in the present case, DCR 33(4). Town Planning Legislation cannot contemplate and provide for every eventuality that may occur and it is to meet such eventualities that a wholesome discretion is conferred upon the State Government.


D. The judgment of the Division Bench and the directions of the Supreme Court:


24. The submission of the Petitioners is that in view of the judgment of the Division Bench dated 30th March 2007, considerations of traffic are alien to the exercise of power by the State Government under DCR 33(4). The judgment of the Division Bench, it is urged, binds this Court and the order passed by the Supreme Court in the Special Leave Petition that emanated from that decision cannot be regarded as altering the position.


25. When the Special Leave Petition came up for hearing before the Supreme Court, the State Government had passed a fresh order on remand rejecting the application of the Petitioners for additional FSI under DCR 33(4) and these proceedings had been instituted under Article 226 of the Constitution of India. In view of this position, the Supreme Court observed that the question raised in regard to the interpretation of DCR 33(4) need not be determined at that stage by the Court. The Supreme Court, however, clarified that the question of law raised in the Special Leave Petition shall remain open. The passing of a fresh order by the State Government and the fact that the order of the Government was pending consideration before this Court were, therefore, important circumstances which weighed with the Supreme Court not to decide the issue regarding the interpretation of DCR 33(4) at that stage. These proceedings were never intended to be sterile proceedings. The interpretation of DCR 33(4), upon which the legality of the order of the Government would turn, was not precluded from being evaluated by this Court. Any other interpretation would render the observations of the Supreme Court to the effect that the question of law raised in the Special Leave Petition shall remain open, otiose. Considered, therefore, in perspective, the impact of the order passed by the Supreme Court on 24th August 2007 is not to preclude this Court from considering the correctness of the order passed by the State Government including with reference to the interpretation of DCR 33(4).


E. Issue of TDR:


26. On behalf of the Petitioners it has been urged that the use of Transferable Development Rights (TDR) is permissible in the Suburbs and extended Suburbs and, if a developer of a starred category hotel can purchase TDR to the extent of 100% of the normal FSI and construct a hotel consuming an FSI of two, he could do so without the approval of the State Government. In other words, it has been submitted that by availing of TDR, the developer can, in any event, construct a hotel with an FSI of two in which case traffic considerations would not enter into the picture. Hence, it has been urged that there is no reason why considerations of traffic should be relevant to an application made by a developer for the grant of additional FSI.


27. The reply of the Advocate General to these submissions is two fold. Firstly, it has been urged that the assumption that a builder can load TDR on a hotel plot without reference to the State Government as a matter of right and outside the provisions of DCR 3 (4) is incorrect. According to the Government, for starred category residential hotels, DCR 33(4) is a self contained code in so far as the use of FSI above the basic FSI is concerned. A starred category residential hotel which desires to exceed the basic FSI either by the use of additional FSI or by the use TDR is, in the submission, required to follow the provisions of DCR 33(4). Under DCR 33(4), TDR cannot be availed of unless additional FSI under the Regulations is utilized. Consequently, unless previous approval is granted by the State Government for the use of additional FSI, TDR cannot be loaded. The second defence of the State Government is that there is a fundamental difference between FSI and TDR. TDR is in the nature of compensation given to a person who is unable to develop his property, while on the other hand, FSI has no such component by way of compensation. TDR, it is urged, stands in a separate category altogether. The genesis of the concept is that TDR is allowed when property is acquired or a fetter is imposed on the development of the property at its original location. Note 2 to Regulation 33(4) enunciates that the use of TDR will be permissible in the case of starred category hotels in the Suburbs and extended Suburbs only over and above the additional FSI granted under the Regulation subject to the conditions which are spelt out therein. These conditions are to the effect that an additional extent of 0.5 FSI would be permitted, over and above the additional FSI granted under the Regulation provided that the overall FSI does not exceed 2.5. Moreover, it is provided that the use of FSI in the form of TDR will be permitted only if additional FSI is availed of under the Regulation. The third condition is that loading of TDR must be governed by the prescription contained in the Regulations. According to the Petitioners, the word ?only? in the note to Regulation 33(4) qualifies the expression ?Suburbs and extended Suburbs? and as a result, the right of a developer to avail of TDR for a starred category residential hotel by the purchase of TDR in the open market is not restricted only to DCR 33(4).


28. While considering the submissions, it is important to emphasize that DCR 33 is a part of an over all scheme in the subordinate legislation here under which DCR 32 prescribes the basic FSI while DCRs 33 and 34 lay down specified situations in which the basic FSI can be enhanced. The basic FSI which is prescribed in DCR 32 can be enhanced for projects falling in one of the categories spelt out in DCR 33 under which an additional FSI can be sanctioned. The second method is by purchase of TDR with reference to DCR 34. The concept of TDR postulates that the development potential of a plot of land may be separated from the land itself and may be made available to the owner in the form of a Development Rights Certificate. Section 2(9A) of the Maharashtra Regional and Town Planning Act, 1966 defines the expression ?development right? as follows:


?(9A) ?development right? means right to carry out development or to develop the land or building or both and shall include the transferable development right in the form of right to utilise the Floor Space Index of land utilizable either on the remainder of the land partially reserved for a public purpose or elsewhere, as the final Development Control Regulations in this behalf provide.?


A Transferable Development Right is, therefore, a right of development which consists of a right to utilize the FSI of land either on the remainder of land which is partially reserved for a public purpose or elsewhere. Planning legislation in the State of Maharashtra brought in the concept of TDR as a means of providing compensation to the owner of land which is subject to acquisition or upon which there is a fetter on development. The grant of TDR is recognized by Section 126(1)(b) as a mode of compensating an owner whose land is acquired for a public purpose specified in a Development Plan or in a Town Planning Scheme. Appendix 7 to the Development Control Regulations defines the conditions subject to which a Development Rights certificate can be issued to the owner of land in relation to the grant of TDR. Though the effect of TDR is to separate the development potential of land from the land itself and to allow the buildable potential of land to be utilized elsewhere, there is a fundamental difference in the genesis of FSI and TDR. FSI represents the development potential of land. TDR is a recompense given to a person whose right to develop property of his ownership is subject to a fetter either by a restriction on the development of the property at its original location or by the acquisition of the property. Inherent in the concept of TDR is the recognition that TDR reduces the attending strain on infrastructure at the place where it is created. The plot of land where TDR is created is referred to as the generating plot. TDR in the City of Greater Mumbai can permissibly be utilized on another plot, referred to as a receiving plot, northwards of the generating plot. TDR, as the State correctly asserts, represents a trade off between development in one area which is more developed with development in another area which may be less developed. Unlike TDR, additional FSI does not represent any element of trade off since it would only result in additional development on a particular plot without any reduction of development on any other plot of land. TDR and additional FSI are two different planning concepts and cannot be used interchangeably.


29. The Petitioners contend that a developer of a starred category residential hotel can avail of TDR outside the provisions of DCR 33(4). Contrariwise, the State asserts that any such application must confine itself to the parameters which are spelt out in the note to DCR 33(4). The Petitioners submitted that the word ?only? in the prefatory part of the note qualifies the Suburbs and extended Suburbs. Even if that be so, it is evident that the impact of the note is to define those situations in which use of TDR will be permissible in the case of starred category residential hotels in the Suburbs and extended Suburbs. The second condition to the note is that such additional FSI in the form of TDR will be permitted only if additional FSI is availed of under the Regulation. In other words it is only when additional FSI has been availed of under DCR 33(4) that a developer of a starred category residential hotel is permitted to avail of TDR to the extent which is prescribed in the note to DCR 33(4). In any event, we are of the view that the concepts TDR and additional FSI are founded on completely different planning considerations and cannot be equated.


F. Plea of discrimination:


30. The judgment of the Division Bench in the earlier proceedings considered and rejected the plea of discrimination. A plea of discrimination has to be founded on cogent material and cannot be based on vague grounds. The plea in this case is too vague to sustain a cogent challenge under Article 14. That apart, the hotel of the Petitioners is situated at a particular junction of the Western Express Highway on the road which leads to the Domestic Airport. The Eastern Express Highway and the Western Express Highway are vital north-south arterial roads which handle vehicular traffic. The Airport at Santacruz is the only airport for Greater Mumbai and for the entire Mumbai Metropolitan Region. We have already noted that considerations relating to traffic cannot be ignored as being without any significance. The State Government has placed reliance on the report of MMRDA. The material on record is sufficient to negative the plea of discrimination.


G. The order passed by the State Government:


31. The Division Bench of this Court in the judgment dated 30th March 2007, held that the State Government had ignored relevant material while forming its opinion and that its order declining previous approval on 8th September 2006 suffered from illegality and procedural impropriety. The observations of the Division Bench in that regard were as follows:


?We may now deal with the second aspect in the context of non-application of mind and or ignoring relevant material. We had called for the files of the respondent No.1 to examine as to what was the material considered. We have noted earlier, the application by the petitioners was of November 4, 2003 with the reminder of 11th June 2004. Pursuant to this letter, the Government had sought informatio

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n from the Chief Engineer (Development Planning) and the Deputy Director (City Planning). Both these authorities had granted their no objection for the sanction. This material has not at all been considered. It was not open to Respondent No.1 to ignore the material which had become available at its insistence. Even in so far as the additional material is concerned, the only information received is letter of MMRDA on 7th September 2006 before the decision making process of 8th September 2006. The material that has come on record shows that peak hour traffic volume is 18298 PCU's out of which 2525 PCU's (nearly 15%) are coming from the Express Highway to the Airport. A flyover is already under construction which will result in the major traffic being diverted over the flyover, thus, causing less congestion at the junction. In so far as access to the airport is concerned, we have the letter of 8.9.2006 of the Joint Commissioner of Police, (Traffic), Mumbai. From that, it is clear that in so far as traffic flow is concerned, there was absolutely no objection. Attention was invited to the NOC given by the Traffic Control Branch by letter of 16.3.2005. The Joint Commissioner of Police (Traffic) by that letter considering the additional construction gave his no objection based upon which the Commissioner of Police informed the Municipal Commissioner of their no objection. The letter of Joint Commissioner of Police (L&O) dated 8th September, in our opinion, is not relevant, considering that in so far as height is concerned, in terms of the rules in force there are height restrictions for the buildings near the Airport and the Airport Authority itself has granted approval. It is based on all these factors that Respondent No.2 had communicated their decision to Respondent No.1. In our opinion, Respondent No.1 while considering the issue has ignored the relevant material whilst forming its opinion. An administrative authority deciding the question has to consider all the relevant material. The action, therefore, in our opinion, suffers from both, illegality as well as procedural impropriety. The impugned order, therefore, is liable to be set aside on this count also.? 32. The Division Bench held that since judicial review is not concerned with reviewing the merits of the decision, but the decision making process, it was appropriate to send the matter back for reconsideration by the State Government. The reasoning in the impugned order of the State Government is confined to the view formed by MMRDA. We have held in the earlier part of our judgment that considerations of traffic are relevant to the decision of the Government on whether to grant previous approval under DCR 33(4) and the discretion which is vested in the State Government has to be exercised on the basis of all relevant considerations that are germane to the planned development of Greater Mumbai. In the present case, the reasons which have been indicated in the order passed by the State Government do not reflect a consideration of the entire material on the record including the material which was adverted to in paragraph 16 of the judgment of the Division Bench, extracted hereinabove. In that sense, the Petitioners are justifiably aggrieved by the failure of the Government to consider the material in its entirety before forming a decision not to grant its approval. The reasons contained in the order of the Government are so brief as to be laconic. The order should reflect a consideration and evaluation of the entire material on record. That has not been done. The power to grant previous approval vests in the Government. Having held that there is a deficiency in the decision making process, we are of the view that the appropriate course of action is to set aside the impugned order and remand the proceedings back to the State Government for reconsideration. In order to facilitate this exercise, the impugned order passed by the State Government on 11th June 2007 is quashed and set aside. Upon remand, the Government shall pass a fresh order within a period of six weeks from today. 33. Before concluding, it would be necessary for the Court to observe that for the purposes of these proceedings, it has not become necessary to render a finding on the application of the Petitioners for regularization. Notices were issued by the Municipal Corporation under Section 354A of the Municipal Act and Section 53(a) of the Town Planning Act. In response thereto, the Petitioners applied for regularization. Since the Competent Authority has been moved in that regard, we express no opinion on that aspect of the matter, leaving it open to the Competent Authority to take a decision in accordance with law. 34. The petition shall stand disposed of in the aforesaid terms. There shall be no order as to costs.
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