TaxTMI 
TaxTMI 
2003 (12) TMI 634
X X X X Extracts X X X X
X X X X Extracts X X X X
....company, was delayed by the Corporation without any justification, its prayer for grant of sanction for additional three floors cannot be granted as the Howrah Municipal Corporation Building Rules 1991 framed under the provisions of Howrah Municipal Corporation Act 1980 (for short "the Act") have been amended and the resolution of the Corporation issued thereunder prohibit multi-storeyed construction above one plus two floors on G.T. Road, Howrah. 3. The Division Bench of the High Court by the impugned judgment by taking a contrary view has held that sanction for construction of the multi-storeyed complex of respondent - company up to fourth floor having been granted by orders of the High Court in the earlier Writ Petition with liberty reserved in favour of the company to seek sanction up to 7th floor, it was not open to the Corporation to refuse sanction only because after expiry of the stipulated period of sixty days provided in the rules for grant of sanction or refusal and expiry of the extended period granted by the High Court, Building Rules have been amended prohibiting construction of multi-storeyed buildings above third floor on the G.T. Road, Howrah. 4. Only few rel....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is thus disposed of." [Underlining to add emphasis] 6. It is not in dispute that after the order dated 23.12.1993 on grant of sanction by the Corporation, construction in the Building Complex up to 4th level has been completed. On the basis of the above order in which liberty was given to the present respondent company to apply for further sanction to construct beyond 4th floor up to 7th floor, further sanction was sought by letter dated 27th May, 1994, addressed to the Corporation with separate building plans for three additional floors. 7. Since the Corporation did not accept the application and communicated no order of sanction, the respondent-company again approached the High Court. Learned Single Judge of the High Court in his order dated 24.6.1994, by referring and reproducing the earlier order of the High Court dated 23.12.1993, held that as the right to the company was reserved to apply for sanction for further floors, the Corporation was bound to accept the construction plan. The learned Judge directed that on the application with plan submitted for construction of three additional floors, the Corporation should pass appropriate orders within four weeks from the d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eof, or (c) the density of population of that area, or (d) the commercial activity of that area, or (e) the conditions of the existing building, is of the opinion that the erection of any building exceeding 10 metres in height or execution of any work in such ward or part thereof will put additional burden on the existing civic services, he may sanction erection of such building or execution of such work subject to such restrictions of height and F.A.R. or conditions including uses as he may deem fit to impose, provided that no such action shall be taken by the Commissioner without the prior approval of the Mayor-in-Council." 10. In exercise of powers under sub-rule (3) of Rule (20) (as amended with effect from 15.7.1994) with due approval of Mayor-in- Council, the Commissioner of the Corporation imposed a restriction on construction of buildings exceeding ten metres in height in the prescribed wards and streets which include GT Road on which the respondent seeks sanction for construction of additional three floors. The relevant resolution of the Corporation dated 02.9.1994 in its relevant parts reads thus : "Having regard to 1. The existing water s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Corporation restricting height of buildings on GT Road, the Corporation had no option but to refuse the sanction for construction of three additional floors and this communication of the Corporation although delayed, cannot be described as malicious or against public interest. It is also contended on behalf of the Corporation that on the orders of the Court directing sanction within a specified period, no vested right was created in favour of the company to seek sanction for construction of additional three floors. The Division Bench was clearly in error in coming to the conclusion that the unamended rules and regulations in force on the date of submission of the application seeking sanction for further construction, would govern the matter of sanction and the subsequent amendment to the Building Rules cannot take away the alleged vested right for seeking sanction by the company. Learned counsel argued that a claim for such vested right for sanction for construction was negatived in comparable circumstances in two decisions of this Court viz. Usman Gani J.Khatri of Bombay vs. Cantonment Board [1992 (3) SCC 455] and State of West Bengal vs. Terra Firma investment & Trading Pvt. L....
X X X X Extracts X X X X
X X X X Extracts X X X X
....area and provide proper civic amenities to it. The paramount considerations of regulatory provisions for construction activities are public interest and convenience. On the subject of seeking sanction for construction, no vested right can be claimed by any citizen divorced from public interest or public convenience. 17. To decide on the justification of the claim raised on behalf of the company that the order of Court fixing a time limit for the Corporation to decide its application for sanction creates a vested right, it would be necessary to examine the relevant provisions of the Act, Rules and the Regulations. Chapter XII of the Act contains provisions regulating sanction for construction or erection of buildings in the area within the limits of the Corporation. Section 173 states : "No person shall use any piece of land as a site for erection of a new building except in accordance with the provisions of this Act and the regulations made under this Act in relation to such erection of building." Section 174 requires : "Every person who intends to erect a building shall apply for sanction by giving notice in writing of his intention to the Commissioner in such form and containi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e second does not necessarily follow from the first. A right created by legal fiction is ordinarily the product of express legislation. It seems to us that when sub-section (3) declares that the Standing Committee shall within sixty days of receipt of the application deal with it, and when the proviso to sub-section (5) declares that the Standing Committee shall not in any case delay the passing of orders for more than sixty days the statute merely prescribes a standard of time within which it expects the Standing Committee to dispose of the matter. It is a standard which the statute considers to be reasonable. But non- compliance does not result in a deemed sanction to the lay-out plan." 20. The provisions of the Act, therefore, contemplate an express sanction to be granted by the Corporation before any person can be allowed to construct or erect a building. Thus, in ordinary course, merely by submission of application for sanction for construction, no vested right is created in favour of any party by statutory operation of the provisions. The question then is whether such a vested right can be deemed to have been created by the fixation of time limit by the Court in its order ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... company to seek sanction for further construction above 4th floor. 24. It is not possible for the court to read more into the order dated 23.12.1993 whereby the court merely observed that the applicant will not be 'prevented' from applying for further sanction. This one observation cannot be read to absolve the applicant from the obligations prescribed in Rules 3 & 4 of the Building Rules. 25. On a subsequent approach by the respondent - company to the High Court, by order dated 24.6.1994, learned Single Judge merely 'expected' the Corporation to pass the appropriate orders on the pending application for sanction of additional floors to the company within a period of four weeks. The relevant part of the order states :- "it is expected that the Howrah Municipal Corporation shall pass appropriate orders within four weeks from the date of submission of the Plan and receipt of copy of the order." 26. According to the company, on the expiry of period of four weeks fixed by order dated 24.6.1994, there was no justification for the Corporation to keep the application for sanction pending and to allow it to be rendered infructuous as a result of the amend....
X X X X Extracts X X X X
X X X X Extracts X X X X
....anction, have been amended more favourably in favour of the person or party seeking sanction, would it then be possible for the Corporation to say that because the more favourable Rules containing conditions came into force subsequent to the submission of application for sanction, it would not be available to the person or party applying. 30. The decision in Gani J. Khatri (supra) was followed by this Court in the case of State of West Bengal vs. Terra Firma Investment and Trading Pvt. Ltd. [1995 (1) SCC 125]. That case arose as a result of amendment introduced in the Act in the year 1990 restricting building heights within limits of Calcutta Municipal Corporation to 13.5 metres. Applications for sanction pending for construction with height above 13.5 metres were rejected because of the above restriction. In that case also the applicants claimed a vested right to get their plans passed and sanctioned as they were submitted prior to the amendment made to Calcutta Municipal Corporation Act in 1990. This Court on examining the object in restricting height of buildings in the city of Calcutta due to limited resources for civic amenities upheld the Amendment Act and negatived the cl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uilding Rules were amended and restrictions have been imposed on height of buildings on the GT Road. It cannot, therefore, be held that the action of the Corporation is malicious. The Building Rules were amended by the State and the Corporation can have no bona fide or mala fide hand in it. After the amended Building Rules were notified, the Corporation on relevant ground of limited resources for civic amenities in a congested city like Howrah, with the approval of Mayor-in-Council, could legally impose legitimate restrictions on the height of buildings, on specified wards, roads and localities. It is to be noted from the relevant resolution of the Corporation that restrictions with regard to the height of buildings are not imposed only on GT Road but there are several specified wards and areas in which such restrictions are applied. This Court cannot accept that such a legislative change and consequent resolution came to be passed and got approved only to frustrate the pending application of the company. 35. We have examined the provisions of section 175 of the Act fixing 'ordinarily' period of 'sixty days' for granting or refusing sanction. We have also examine....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the company an order of the High Court directing the Corporation to decide its pending applications for sanction within the allotted period but non-compliance thereof by the Corporation can not result in creation of any vested right in favour of the company to obtain sanction on the basis of the Building Rules as they stood on the date of making application for sanction and regardless of the amendment introduced to the Building Rules. Neither the provisions of the Act nor general law creates any vested right, as claimed by the applicant company for grant of sanction or for consideration of its application for grant of sanction on the then existing Building Rules as were applicable on the date of application. Conceding or accepting such a so-called vested right of seeking sanction on the basis of unamended Building Rules, as in force on the date of application for sanction, would militate against the very scheme of the Act contained in Chapter XII and the Building Rules which intend to regulate the building activities in a local area for general public interest and convenience. It may be that the Corporation did not adhere to the time limit fixed by the court for deci....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tions on the heights of buildings on G.T. Road and other wards, such 'settled expectation' has been rendered impossible of fulfillment due to change in law. The claim based on the alleged 'vested right' or 'settled expectation' cannot be set up against statutory provisions which were brought into force by the State Government by amending the Building Rules and not by the Corporation against whom such 'vested right' or 'settled expectation' is being sought to be enforced. The 'vested right' or 'settled expectation' has been nullified not only by the Corporation but also by the State by amending the Building Rules. Besides this, such a 'settled expectation' or so-called 'vested right' cannot be countenanced against public interest and convenience which are sought to be served by amendment of the Building Rules and the resolution of the Corporation issued thereupon. 38. In the matter of sanction of buildings for construction and restricting their height, the paramount consideration is public interest and convenience and not the interest of a particular person or a party. The sanction now directed to be granted ....