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‘  REPORTABLE’   

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.5989  OF 2007

Nargis Jal Haradhvala       …Appellant (s)

                versus

State of Maharashtra and others    … Respondent(s)

J U D G M E N T

M.Y. Eqbal, J.:

This  appeal  by  special  leave  is  directed  against  

judgment and order dated 16.8.2007 of the High Court of  

Judicature at Bombay whereby Division Bench of the High  

Court dismissed the writ petition preferred by the appellant  

challenging orders issued by the respondents.

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2. The  factual  matrix  of  the  case  is  that  the  appellant  

applied for an exemption under Section 20 of the Urban Land  

(Ceiling  and  Regulation)  Act,  1976  (in  short,  ‘the  Act’)  in  

respect of land bearing CTS No.1310 of village Versova in  

Andheri  Taluka  of  Mumbai  Suburban  District,  measuring  

5892.5  sq.mt.  (in  short,  “suit  property”),  out  of  which  

exemption  in  respect  of  3491.5  sq.mt.  was  granted  by  

Respondent No.1 in August, 1987.  The balance 2401 sq.mt.  

did not need exemption being reserved for road and garden  

and was duly handed over to the Municipal Corporation by  

the appellant.   500 sq.mt.  was “retainable  land” that  the  

landowner is entitled to retain.  Exemption order tentatively  

specified 30% of the permissible floor space of the exempted  

land to be sold to Government Nominees.  It was clarified  

that the percentage will be prescribed by the Government as  

per the extent of the land to be exempted.

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3. On  31.1.1990,  this  Court  in  the  case  of  Shantistar  

Builders vs. N.K. Toitame, (1990) 1 SCC 520, dealing with  

the  issue  of  constructions  over  exempted  lands  covered  

under Section 20 of the Act laid down that the number of the  

government  nominees  should  not  exceed  5% of  the  total  

accommodation available in  any scheme.  The case of  the  

appellant is that after the aforesaid decision, on 23.11.1990,  

by a  subsequent  corrigendum,  Respondent  No.1 amended  

the area to be surrendered to the Government nominees and  

finally prescribed it  as 20% of  the floor  space of the first  

2000  sq.mt.  of  the  net  permissible  F.S.I.  of  the  land  

exempted and 30% of the balance sq.mt. permissible.

4. The appellant’s further case is that being unaware of  

aforesaid decision of this Court, appellant initially offered 26  

flats  (1036.39  sq.mt.)  by  her  letters  and  subsequent  

reminders  in the years 1990 and 1991, but the respondents  

neither took up the flats offered nor did they respond in any  

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way to appellant’s letters.  However, respondents moved an  

application for modification of the judgment in the case of  

Shantistar Builders (supra) and maintained the quota of flats  

for  Government  nominees at  10% by its  Resolution dated  

22.10.1992.   Accordingly,  appellant  requested  the  

respondents to take over 10% of the net permissible area of  

the  exempted  land  viz.  296.73  sq.mt  and  offered  7  flats  

(having  area  of  303.73  sq.mt.),  in  reply  to  which,  

respondents  acknowledged  that  only  10%  of  the  area  

needed to be surrendered for the Government nominees but  

claimed that this 10% worked out to be 414.92 sq.mt. and  

not 296.73 sq.mt.  However, in May, 1993, respondents took  

up only 4 of the 7 flats offered by the appellant, whose area  

was 5.86% of the net permissible FSI of the exempted land.  

Upon being asked by the appellant for the issuance of the  

certificate to the effect that required number of flats have  

been  surrendered  to  the  Government,  Respondent  no.3  

asked the appellant to hand over 21 flats in addition to the 7  

flats already offered. On this, appellant pointed out that only  

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5% flats could be claimed in view of Apex Court’s judgment  

in  Shantistar  Builders  (supra)  and  the  same  had  already  

been handed over.  On 17.11.1995, this Court rejected the  

Government  request  to  allow  10% quota  for  Government  

nominees and restricted the quota to 5% only.

5. The appellant, therefore, reiterated in her subsequent  

letters to the respondent that only 5% flats could be claimed  

in  view of  aforesaid  judgment  of  the  Apex Court,  and on  

30.9.1998, three more flats were handed over to secure the  

Occupation  Certificates  that  were  being  withheld  by  the  

respondents.   It  is  the  case  of  the  appellant  that  several  

representations were made to the Government to limit the  

area to be surrendered to the Government as per aforesaid  

judgment of the Apex Court, but her requests were rejected  

and  Respondent  No.3,  vide  letters  dated  18.6.2002   and  

23.7.2004, asked the appellant to surrender 805.58 sq.mt. of  

area  in  addition  to  303.73  sq.mt.  already  surrendered  by  

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her.   The  appellant  was  also  served  with  notices  dated  

16.10.2004  and  3.1.2005,  in  reply  to  which,  appellant  

pointed  out  jurisdiction  of  Respondent  No.3  and  the  fact  

about the wrong calculation of area to be handed over to  

Government nominees.   

6. By letter dated 18.10.2005, Respondent no.3 informed  

appellant that since the appellant has failed to surrender in  

all  1109.31 sq.mt. built up area to the Government in the  

form of 28 flats from the subject scheme, a criminal case is  

being  filed  against  the  appellant  with  the  Versova  Police  

Station.   An appeal preferred by the appellant against this  

was  dismissed  by  Respondent  No.2  by  its  order  dated  

25.7.2006, stating inter alia that the Competent Authority is  

very  much  in  his  powers  to  hear  and  act  on  matters  

regarding  Section  20  and  is  in  no  way  exercising  any  

authority  outside  his  jurisdiction  or  outside  the  letter  and  

spirit of the Act.   

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7. Thereafter, the appellant, challenged the order passed  

by the respondents by way of writ petition in the Bombay  

High Court.  The Division Bench of the High Court rejected  

the appellant’s writ petition holding that the present case is  

not covered by the decision in Shantistar Builders (supra) as  

the same does not have retrospective effect and that the  

document  dated  18.10.2005  was  not  an  order  but  a  

letter/intimation by the competent authority to the appellant  

that  the  conditions  of  the  exemption  order  were  not  

complied with.  Hence, this appeal by special leave under  

Article 136 of the Constitution of India is preferred by the  

appellant raising issue what percentage (5%, 10% or higher)  

of area in any scheme is to be surrendered under the Urban  

Land (Ceiling and Regulation) Act, 1976.

8. Mr.  C.A.  Sundaram,  learned senior  counsel  appearing  

for the appellant in course of argument fairly submitted that  

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since  the  decision  rendered  by  this  Court  in  Shantistar  

Builders’s  case was prospective in its operation, the same  

will  not apply in the facts of the present case.   However,  

admittedly,  the  respondents  issued  a  corrigendum  dated  

23.11.1990  amending  the  area  to  be  surrendered  to  the  

Government nominee and finally prescribed it as 20% of the  

floor space of the first 2000 sq.mt. of the net permissible FSI  

of the land exempted.  Learned counsel submitted that by  

another  circular  dated  22.10.1992  issued  under  the  

signature of Joint Secretary to the Government, the quota for  

the Government nominee was reduced from 20% to 10%.  

According  to  the  learned  counsel  the  appellant  already  

handed  over  10%  of  the  total  accommodation.   Mr.  

Sundaram  then  submitted  that  at  the  initial  stage  after  

completion  of  construction  30%  of  the  permissible  floor  

space was offered for sale to the Government nominee, but  

it  was  neither  acknowledged  nor  accepted  by  the  

Government, hence the respondent is stopped from claiming  

the same on the principle of waiver.  Learned counsel drawn  

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our attention to the relevant document and submitted that  

the flats which were surrendered by the appellant have been  

sold by the respondent to VIPs and not to the weaker section  

of the society.  Learned counsel lastly contended that on the  

basis  of  subsequent  corrigendum  dated  23.11.1990  read  

with the circular dated 22.10.1992 the appellant is not liable  

to  surrender more than 10% of  the quota as fixed in  the  

circular.  

9. Per  contra,  Mr.  Rahul  Chitnis,  learned  counsel  

appearing  for  the  State,  submitted  that  in  support  of  the  

above referred corrigendum and the circular, the appellant  

executed indemnity bond on 12.10.1998 and agreed to give  

30%  of  the  permissible  floor  space  to  the  Government  

nominee.   The  appellant  further  agreed  to  surrender  the  

remaining  tenements  within  five  years  from  the  date  of  

execution  of  indemnity  bond.  Learned  counsel  submitted  

that  as  against  30%  (28  flats)  and  20%  (18  flats),  the  

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appellant has given only seven flats to the respondent till  

date.  

10. We have considered the entire facts of the case and the  

argument  advanced by  the  learned counsel  appearing  for  

the parties.

11. Indisputably exemption under Section 20 of the Act was  

granted on 17.8.1987 with the condition to surrender 30% of  

the permissible floor space to the allottees nominated by the  

Government.   It  was  clarified  that  the  percentage will  be  

prescribed by the Government as per the extent of the land  

to be exempted.  It is also not in dispute that subsequent  

corrigendum was issued by the Government on 23.11.1990  

wherein the extent of 30% was agreed as 20% of the floor  

space of the first 2,000 sq.mt. of the net permissible FSI of  

the land exempted under the order and 30% of the 2364.37  

sq. mt. balance permissible area.  However, we do not find  

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any authenticity in  the circular  dated 22.10.1992,  copy of  

which  has  been  produced  before  us  in  support  of  the  

contentions made by the appellant that the 20% quota fixed  

by the corrigendum was further reduced to 10% of the floor  

space.   Further,  admittedly,  the  appellant  executed  an  

indemnity bond on 12.10.1998 wherein it was agreed that  

the  balance  built  up  area  would  be  surrendered  to  the  

Government within a period of five years i.e. up to 2003.

12. In the background of all these facts,  in our considered  

opinion,  the  appellant  is  bound  to  surrender  to  the  

Government a total 20% of the permissible floor space in the  

light  of  the  corrigendum dated  23.11.1990  issued  by  the  

Government.  As noticed above, till date, the appellant has  

given  only  seven  flats  to  the  allottees  nominated  by  the  

Government.   Calculating  20%  of  the  floor  space,  the  

appellant is bound to sell 11 more flats to the persons that  

may be nominated by the Government.  

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13. We, therefore, allow this appeal and set aside the order  

passed by  the  High  Court.   Consequently,  we  modify  the  

order  dated  25th July,  2006,  passed  by  the  Additional  

Commissioner,  Konkan  Division,  Mumbai  and  direct  the  

appellant to sell eleven more flats to the allottees, who shall  

be nominated by the Government.  Taking note of the fact  

that seven flats so surrendered by the appellant have been  

sold to the Government nominee in gross violation of the Act  

and the Scheme framed by the Government, we do not wish  

to issue any direction in this matter. However, we make it  

clear that the remaining eleven flats that shall  be handed  

over by the appellant to the Government shall be sold to the  

Government  nominees,  who  must  belong  to  the  weaker  

section of the society.  We also direct the appellant to hand  

over  and  sell  remaining  eleven  flats  to  the  Government  

within four months from today.  

…………………………….J.

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(M.Y. Eqbal)

……………………………..J. (Abhay Manohar Sapre)

New Delhi January 06, 2015

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