TaxTMI 
TaxTMI 
2011 (12) TMI 770
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....r 'residential use' in the Master Plan of the New Okhla Industrial Development Area (for short, the 'Development Area') is the basic question that falls for consideration of this Court in this bunch of appeals. These appeals demonstrate some of the instances of widespread violation of statutory provisions and somewhat arbitrary exercise of power by the Development Authority. Lack of adoption of uniform application of law has resulted in large number of cases of violation of law all over the State of Uttar Pradesh going unnoticed. The time has come for the Development Authorities to change their style of functioning and act vigilantly and uniformly, that too, strictly in accordance with law, keeping in view the larger public interest. Introductory Facts 3. This judgment shall dispose of the above referred four civil appeals and the applications for intervention therein. Out of the four appeals, in Civil Appeal No. 6962 of 2005 and Civil Appeal arising out of SLP (C) No. 24029 of 2005, the lease deed in favour of the parties had been cancelled by the Development Authority while in other two appeals, Civil Appeal No. 6963 of 2005 and Civil Appeal arising out of S....
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....proved by the lessor or any officer authorised by the lessor in that behalf in writing and in a substantial and workman like manner, a residential building only with all necessary, sewers, drains and other appurtenances according to the Directions issued or Regulations made in respect of buildings, drains, latrines and connection with sewer. xxx (h) That the lessee shall use the demised premises only for the purpose of constructing a building for residential purpose of customary home occupation or residential cum medical and surgical clinic or dispensary or professional office and for no other purpose without the consent of the Lessor and subject to such terms & conditions as Lessor may impose and will not do or suffer to be done on demised premises or any part thereof, any act or thing which may be or grow to be a nuisance, damage, annoyance, or inconvenience to the Lessor or the owners, occupiers of other premises in the neighbourhood. 5. The Transfer Deed executed by the original lessee in favour of the Appellants also contained similar conditions and in addition thereto provided that the conditions of the lease deed shall be binding upon the Appellants. The....
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....press reports. Noticing these facts and obviously taking the view that there was no legal sanctity to the alleged change of user, the Development Authority rejected the objections and required the misuse to be stopped and the violation of the building byelaws to be removed within four months. A part of the said order reads as follows: The terms and conditions of lease deed and transfer deed of plot clearly states that allotted plot shall be used exclusively for residential purposes. The Petitioner changed the land use of plot without intimating to the Authority and did not bother to seek any clarification or obtain permission from the Authority for such change. It is a well known fact that this Authority does not permit commercial activity in the residential plots. This is a classic case of violation of law by the most educated enlightened class of the Country. This class in Noida has tried to change not only the character of Noida but have for self interest destroyed the peace of the Neighbours. It is also possible that the then Bank staff also colluded in the matter and did not bother to see the conditions contained in the lease deed and did not even try to approach the ....
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....this Court. In order to complete the factual matrix of the case, we may notice that the Appellants have placed on record Annexure P-7, a copy of the public notice dated 30th March, 2000 indicating that there was proposal to grant permission for mixed use consulting clinics, bank branch and guest houses on 18 A.M. wide roads on the conditions stated therein. These conditions also included the provision that fees payable on grant of permission for mixed use of land would be 30 per cent of existing residential rate, on per square meter area of plot, on yearly basis. To this proposal, public opinion was invited and it was stated that objections/suggestions in this regard may be filed in writing in the office of the Additional Chief Executive Officer of the Development Authority. Even hearing was to be granted. In the affidavit filed on behalf of the Respondent-Development Authority on 8th October, 2002, it has been specifically averred that 21 banks were functioning in residential sector in the Development Area under private arrangements with the lessees of the concerned plots and these banks have not obtained any permission or authorization from the Development Authority. Two banks, n....
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.... of now, which permits any user other than residential in the residential sector. 8. Having stated the facts, we may now examine the relevant provisions of law. The State of Uttar Pradesh had enacted the law to provide for creation of an Authority for development of certain areas of the State into industrial and urban townships and for matters connected therewith. 'Authority' had been defined under Section 2(b) of the Act to mean the Authority constituted under Section 3 of the Act. Section 3 required the State Government to constitute, for the purposes of the Act, an authority for any industrial Development Area in terms of that Section. Section 6 of the Act related to functions of the Authority while Section 7 mentions the powers of the Authority in respect of transfer of land. In terms of these statutory provisions, the object of the Authority was to secure the planned development of industrial Development Area and the Authority was required to perform certain functions in terms of Section 6(2), which reads as under: (2) Without prejudice to the generality of the objects of the Authority, the Authority shall perform the following functions-- (a) to a....
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....se. The power to transfer lands is also given to the Authority. In terms of Section 19 read with Section 6 of the Act, the New Okhla Industrial Development Area was notified and the Authority framed the Regulations for the purposes of proper planning and development of that area. These were called the New Okhla Industrial Development Area (Preparation and Finalization of Plan) Regulations, 1991 (hereafter referred to as 'the Regulations'). Regulation 2 of the Regulations defines various kinds of uses including 'Land Use'. 'Land Use' under Regulation 2(g) means the use of any land or part thereof in the industrial development area for industrial, residential, institutional, commercial, public water bodies, organized recreational open spaces, public and semi-public buildings, agriculture and other like purposes. In contradistinction to the 'Commercial Use', 'Industrial Use' 'Institutional Use' and 'Public Use', the 'Residential Use' has been defined under Regulation 2(1)(k) which reads as under: - (k) 'Residential Use' means the use of any land or building or part thereof for human habitation and such ot....
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....mendment before such date as may be specified in the notice and shall consider all objections that may be received. (3) Every amendment made under this Regulation shall be published in any of the manner specified in Regulation 5 and the amendment shall come into operation either on the date of the first publication or on such other date as the Authority may fix. (4) The Authority shall not make during the specified period in which the Plan is to remain effective, such amendment(s) in the Plan which affects important alteration in the character of the Plan and which relates to the extent of the land sue or standards of population density. 12. It is not in dispute before us that the Development Authority had finalized the Master Plan in accordance with the provisions of the Act and the Regulations, which was titled as 'Master Plan, NOIDA, 2001'. This Plan is in force and is binding on all concerned. 13. Besides the above provisions of the Act and the Regulations framed there under by the Development Authority, the Development Authority has also framed building Regulations and directions, which are termed as 'The New Okhla Industrial Development Are....
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.... the provisions of the Act, but is also contrary to the law governing erection of the building. The legislative purpose that emerges from the scheme of the Act and other relevant provisions is to keep a residential building separate from commercial and other buildings. This would necessarily imply that the jurisdiction of the Development Authority to permit different user in violation of this statute and the Regulations is not contemplated in law. Contentions 17. On behalf of the Appellants/lessees/users, in the cases before us, it has been contended that the activity of banking or running of clinics is being carried on by them for a long period. Thus, this has been impliedly permitted by the Development Authority. It is also their contention that a public notice had been issued by the Development Authority, permitting mixed user and, thus, the Appellants/lessees/users are bonafidely carrying on activities of running banks/nursing homes/other commercial activities in the residential sectors. Reliance has been placed upon Public Notice dated 30th March, 2000 and also that vide notification dated 4th December, 2010 plots allotted in the developed sector to farmers under a Rehab....
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....Sections 6(2)(b) and 7 of the Act are stated to be the source of power in this regard. It is also the contention that in the Master Plan, 2001, subsequent Plans and the Zoning Regulations, all residential sectors are marked in yellow colour. Sector 19 of the Development Area, where the subject matter of this case is located, is a residential sector. Thus, it can only be used for the residential purpose. 23. The Learned Counsel appearing for the lessee/transferees had relied upon the judgments of this Court in the cases of Hari Rao (supra) and Dev Brat Sharma (supra). Both these judgments have no application to the present case, on facts or in law. These were cases of eviction under the respective Rent Restriction Acts. In one case, this Court held that putting up of a clinic in a part of the house by a doctor was not change of user, while in the other, where the premises had been rented out for a commercial purpose of selling of leather goods, change of the industry to a garment and cloth business, was not considered as change of user. We are unable to understand as to how the lessees in the present case can derive any benefit from these judgments. In the present case, we have a....
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....sume the site or building so transferred and further forfeit whole or any part of the money paid in respect thereof, if the lessee commits breach of the terms and conditions of the lease. No provision of the Act has been brought to our notice which provides for the manner and method to be adopted by the Development Authority for preparation of the development Plan in accordance with the provisions of the Act. This is where the Regulations come into play. Under Regulations 3 and 4 of the Regulations, the Draft Plan has to be prepared by the Development Authority for development of an industrial area, which will include a sector plan. The meaning of 'residential use' under the Regulations is a restricted one and is incapable of being given a wide connotation. It means the use of any land or building or part thereof for human habitation and such other uses incidental to the residential use. The very language of Regulation 2(1)(k) of the Regulations clearly depicts the intent of the framers that the expression 'residential use' is not to be understood in its wider sense, in fact, it would require strict construction because all other uses have been separately defined. T....
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....an prepared in accordance with the Regulations take the statutory colour in terms of Section 6(2)(b) of the Act and, therefore, its alteration by an executive order would be impermissible. Even when a Master Plan is to be amended, the entire prescribed procedure must be followed. The power to amend should be exercised only in consonance with the settled norms without going beyond the original power of the Development Authority to make such Plan in accordance with the provisions of the Act. The power to amend cannot be used to frustrate the provisions of the statute. Regulations, being subordinate legislation must fall in line with the principal provisions of the Act and in no way should be detrimental to the provisions and the legislative scheme of the Act. 27. In the case of M.C. Mehta v. Union of India and Ors. (2004) 6 SCC 588 dealing with the question of unauthorized industrial activity in residential area in Delhi, the plea raised for in situ regularization of areas with 70 per cent industrial use was not accepted by this Court, holding that regularization would have adverse impact on the law abiders. This Court also held that the land cannot be permitted to be used contrar....
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....e provided by the Act and rules may not require intimation to person affected yet the exercise of discretion is vitiated if the action is bereft of rationality, lacks objective and purposive approach. The action or decision must not only be reached reasonably and intelligibly but it must be related to the purpose for which power is exercised. The purpose for which the Act was enacted is spelt out from the Preamble itself which provides for establishment of the Authority for development of the city of Bangalore and areas adjacent thereto. To carry out this purpose the development scheme framed by the Improvement Trust was adopted by the Development Authority. Any alteration in this scheme could have been made as provided in Sub-section (4) of Section 19 only if it resulted in improvement in any part of the scheme. As stated earlier a private nursing home could neither be considered to be an amenity nor it could be considered improvement over necessity like a public park. The exercise of power, therefore, was contrary to the purpose for which it is conferred under the statute. 29. The above decision of the Court was given in light of the provisions of Section 19(4) of that Act whi....
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....not be treated as 'industry' under the Act because the byelaws continued to treat the hotels to be a commercial activity and that had alone covered such industry. This Court held as under: 38. The Learned Counsel for the Respondents submitted that the lease was terminated by the State Government, in exercise of revisional jurisdiction under Section 41 of the U.P. Urban Planning and Development Act, 1973 read with Section 12 of the Act on the ground that there were irregularities and violations of Regulations and policies of Noida Authority in allotting the hotel plots to the Appellants. It is submitted that the State Government has such power to cancel the allotment and as a consequence the lease. 32. Reference can also be made to the judgment of this Court in Dr. G.N. Khajuria and Ors. v. Delhi Development Authority and Ors. (1995) 5 SCC 762. In that case, the Plan had provided for a public park and the Delhi Development Authority had taken the decision to establish a nursery school for the benefit of the children of the colony. Rejecting the contention, this Court observed that within the framework of law and the provisions made in the Master Plan, the authori....
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..... 35. The Development Authority is inter alia performing regulatory functions. There has been imposition of statutory duties on the power of this regulatory authority exercising specified regulatory functions. Such duties and activities should be carried out in a way which is transparent, accountable, proportionate and consistent. It should target those cases in which action is called for and the same be exercised free of arbitrariness. The Development Authority is vested with drastic regulatory powers to investigate, make Regulations, impute fault and even to impose penalties of a grave nature, to an extent of cancelling the lease. The principles of administrative justice squarely apply to such functioning and are subject to judicial review. The Development Authority, therefore, cannot transgress its powers as stipulated in law and act in a discriminatory manner. The Development Authority should always be reluctant to mould the statutory provisions for individual, or even public convenience as this would bring an inbuilt element of arbitrariness into the action of the authorities. Permitting mixed user, where the Master Plan does not so provide, would be glaring example of this....
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....elopment Authority, also contained similar clauses and also provided that the terms and conditions imposed by Development Authority from time to time shall be binding on the transferee. Clause 15 of the transfer deed stipulated that the transferee shall put the property to use exclusively for residential purpose and shall not use it for any purpose other than residential. After raising the construction on the plot in question, admittedly, the Appellants have put the property to a different use other than residential. The property was rented out to two different commercial undertakings, i.e., Andhra Bank and a company by the name 'Akariti Infotech'. It is not even the case of the Appellants before us that the Development Authority had granted any specific permission to them to use the property for any purpose other than residential. 42. The Appellants, in fact, have relied upon an agenda note where there was a proposal put forward by the Development Authority to grant permission for nursing home, guest house, lodging house, banks etc. on a 100 metres wide road on such terms and conditions as may be imposed by the Development Authority. This also provided for levying certa....
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....e being run in the residential sector, which was not permissible. 46. The conduct of the authorities, prior to institution of the writ petitions in the High Court, showed uncertainty and wavering of mind in its decision-making processes. In fact, it was expected of the Development Authority to take a firm and final decision and put at rest the unnecessary controversy raised by its proposal. However, once the writ petitions were filed, thereafter, the stand of the Development Authority has been consistent and unambiguous. In the counter affidavit filed in this Court, it has been stated that even in case of grant of permission to the above stated two banks, no extension was granted and in fact show cause notices have been issued to all the banks in the residential sector to wind up their activities and move out of the residential sector. It is the definite case of the Development Authority that banking activity is a commercial activity and therefore, cannot be carried on in the residential sector, more particularly on the plots in question. In regard to Sector 19, a specific averment has been made in the affidavit of the Development Authority that the land use is residential alone....
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....to be used as banks. In other words, the Development Authority has provided due opportunity to these banks to shift their activities to the appropriate sectors, however, to no effect. Despite issuance of show cause notices and offer to allot alternative plots, the unauthorized use by the Appellant - banks and nursing homes have persisted in the residential sectors. 49. Another case which is required to be noticed by us from amongst the number of cases listed, is the case of Chairman and Chief Executive Officer, New Okhla Industrial Development Authority and Anr. v. Mange Ram Sharma and Anr. SLP (C) No. 24029/2005. In this case, according to the Development Authority, the lessee is running a 20 bedded hospital with all modern and diagnostic facilities, admitted by the lessee and his family members in a letter Annexure P-7 to the authorities. In this letter they had claimed that the hospital is being run from the premises in question and had all the modern facilities. However, these facts are not admitted by the lessee who have tried to explain that letter by stating that in a three-storeyed building of 400 square metres, they are carrying on professional activity of medical consu....
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....pellant Development Authority that a 20 bedded hospital is being run from the premise, still the fact stands established on record that practically the entire ground floor and part of the second floor is being used for activities other than residential. 50. According to the Respondents, they had not been served with the show cause notice, though according to the Appellant, show cause notice dated 29th August, 1992 was issued and thereafter, the order of termination/cancellation of lease had been passed against the Respondents. This order had been set aside by the High Court and the Development Authority has come up in appeal before this Court. 51. In the light of what we have discussed above, even on facts of this case, running of a hospital or even a medical clinic of this dimension cannot be permitted in a residential area. It would be different if a doctor uses permissible part of the premises for clinical purposes i.e. to meet or examine his patients in any portion. For surgery or specific treatments, such patients would have been addressed to proper nursing homes or regular hospitals. Therefore, doctors cannot carry on, in the garb of a medical clinic, a regular medical ....
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....ary even quash the orders of the public authorities. This Court in the case of K. Ramadas Shenoy v. Chief Officer, Town Municipal Council, Udipi and Ors. ((1976) 1 SCC 24) was concerned with the resolution of the Municipal Committee to construct a cinema theatre at place where earlier the permission was granted for construction of Kalyan Mandap? cum-Lecture Hall and the contention before the Court was that town planning scheme forbade any cinema building at the place asked for and therefore, the resolution of the committee was invalid. This Court accepted the contention and while setting aside the resolution observed that an illegal construction of a cinema building materially affected the right to enjoyment of the property of the persons residing in the residential area and there being unauthorized construction, the Court would intervene and quash the resolution of the Municipality. This view was followed in the case of M.I. Builders v. Radhey Shyam Sahu (1999) 6 SCC 464, wherein this Court even directed demolition of unauthorized constructions. At this stage, we may also refer to the judgment of this Court in the case of Virender Gaur and Ors. v. State of Haryana and Ors. (1995) ....
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.... permissible in face of the Regulations, terms and conditions of the lease deed executed by the parties and the Master Plan. It would, therefore, be suffice if 30 per cent of the ground floor area is permitted to be used for office of an architect/lawyer and for clinic simplicitor by a doctor. 55. From the above dictum of this Court, it is clear that environmental impact, convenience of the residents and ecological impact are relevant considerations for the Courts while deciding such an issue. The law imposes an obligation upon the Development Authority to strictly adhere to the plan, Regulations and the provisions of the Act. Thus, it cannot ignore its fundamental duty by doing acts impermissible in law. There is not even an iota of reason stated in the affidavits filed on behalf of the Development Authority as to why the public notice had been issued without amending the relevant provisions that too without following the procedure prescribed under law. The concept of public accountability and performance of public duties in accordance with law and for the larger public good are applicable to statutory bodies as well as to the authorities functioning therein. We find no justifi....