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CASE NO.:

Appeal (civil) 3271 of 2005

PETITIONER:

Bombay Dyeing & Manufacturing Co. Ltd.

RESPONDENT:

Bombay Environmental Action Group & Ors.

DATE OF JUDGMENT: 11/05/2005

BENCH:

N. Santosh Hegde & S.B. Sinha

JUDGMENT:

J U D G M E N T

[@SLP (C) No. 7405 OF 2005]

WITH

I.A. NO.2 IN C.A. @ SLP (CIVIL) NO.7405 OF 2005

WITH

CIVIL APPEAL NO. OF 2005

[@SLP (C) Nos. 7549-7550 of 2005]

WITH

I.A. NO. 7-11 IN C.A. @ SLP (CIVIL) NOS.7549-7550 OF 2005

WITH

CIVIL APPEAL NO. OF 2005

[@ SLP(C) NO. 10511 of 2005]

WITH

I.A. NO.3 IN C.A. @ SLP (CIVIL) NO.10511 OF 2005

WITH

CIVIL APPEAL NO. OF 2005

[@SLP(C) NO. 7453 of 2005]

WITH

I.A. NO.2 IN C.A. @ SLP (CIVIL) 7453 OF 2005

WITH

CIVIL APPEAL NO. OF 2005

[@SLP (C) NO. 7451 of 2005]

WITH

I.A. NOS.2-3 IN C.A. @ SLP (CIVIL) NO.7451 OF 2005

WITH

CIVIL APPEAL NO. OF 2005

[@SLP(C) NO. 8362 of 2005]

WITH

I.A. NO. 2 IN C.A. @ SLP (CIVIL) NO.8362 OF 2005

AND

CIVIL APPEAL NO. OF 2005

[@SLP(C) NO. 8378 of 2005]

WITH

I.A. NO.2 IN C.A. @ SLP (CIVIL) NO.8378 OF 2005

S.B. SINHA, J :

Leave granted.

In the early eighties the workmen of the cotton mills situated in the

town of Bombay went on a strike resulting in closure of 58 textile mills

which together occupied lands measuring about 600 acres. Out of the said

58 mills, 25 belonged to the National Textile Corporation and 33 to private

parties.

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In terms of the Maharashtra Regional & Town Planning Act, 1966,

the Development Control Rules (DCR), 1967 were framed. The State

Government took a policy decision to amend the DCR wherefor suggestions/

opinion from the public were invited. In the year 1991, Development

Control Regulations, 1991 were framed; Regulation 58 whereof permitted

modernization of mills and development of surplus mill lands in the manner

specified therein. It also provided for development of mill lands as a part of

BIFR approved rehabilitation schemes and also for modernization and

shifting thereof.

The said Regulation 58 sought to deal with the lands appertaining to

cotton textile mill pursuant whereto each of the mill owners could give one

of the options out of the following:

(i) The mill owners could continue to operate their mills even though it

was running into losses. This was the status-quo option which

entailed no land being surrendered to MHADA, public greens;

(ii) The second option entailed retaining the outer shell of the mill

structures and building commercial structures within the mill

structure;

(iii) The third option entailed two steps. The first step was raising of

construction within the old structure and the second step was to

construct on the part of open spaces;

(iv) The fourth option ensured demolition of the entire old structures and

sharing the entire mill lands in approximately three equal proportions.

The first part would remain with the mill owner which he would be

entailed to redevelop. The second share would go to MHADA and

the third share would go to public greens.

Pursuant to or in furtherance of the said regulation, only two mills

exercised the second option and three mills the third one. Nobody opted for

the fourth as in terms thereof the mill owners were required to surrender a

major portion of their land. As allegedly, the said regulation did not work

satisfactorily as no significant amount of land either for public green or for

MHADA came to be surrendered, it was not implemented.

It is stated that some mills endeavoured to develop the lands in

accordance with the said regulation but the same did not achieve the purpose

for which the Regulation 58 was brought into force. In the aforementioned

situation, as would be noticed supra, Regulation 58 was amended in 2001.

The Respondents filed a writ petition in the Bombay High Court

questioning the validity of the said regulation. Some interim orders have

been passed therein which are in question in these appeals.

The Appellants contend :

(i) As the scheme containing 1991 regulations was not found to be

workable, committees were appointed and in furtherance of their

recommendations a new Regulation 58 was introduced in the year

2001. The new Regulation 58 envisaged a coherent development of

the various mills and their lands in Mumbai and also ensured that the

proceeds of such development are utilized in accordance with either

the schemes promulgated by BIFR and/ or for the satisfaction of the

dues of the workers and/ or for the satisfaction of the large

outstanding public monies by way of loans from financial institutions

and banks under the supervision of a Monitoring Committee.

Regulation 58 of 2001 while providing for a coherent development

also took care of the provision for open spaces, public amenities and

public housing. The entire development is to be overseen by a

Monitoring Committee which over see an escrow account to ensure

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financial accountability, their payment to workers/ financial institution

etc. and is headed by a retired High Court Judge appointed under the

said Regualtion 58 of 2001. Pursuant to or in furtherance of the new

regulation, the mill owners allegedly borrowed huge sums of money,

i.e., Rs. 2002 crores from the banks and financial institutions to pay of

the dues of the workers and also the dues of the others.

(ii) Bombay Dyeing & Manufacturing Co. Ltd. alone after taking advances

from the financial institutions paid Rs. 120 crores to the workers and is

committed to pay a further sum of Rs. 50 crores.

(iii) Within a span of four years since coming into force of the 2001

Regulations, third party rights have been created, sanctions have been

obtained for modernization of scheme and the parties have altered their

position to a large extent.

The said regulation of 2001 was clarified in the year 2003. With a

view to have a re-look at Regulation 58, a nine member committee with Shri

Deepak Parekh, Chairman, HDFC as its Chairman was appointed; the terms

of reference whereof are:

"(1) To examine the feasibility of an integrated

development of mills land.

(2) To study the existing DCR and suggest ways so

that enough land is made available for open use/

public housing without jeopardizing workers/

financial institutions interests."

However admittedly no recommendation has been made by the said

committee nor its term has been extended.

The first Respondent is a public charitable trust registered both under

the Bombay Public Trust Act, 1950 as also a society registered under the

Societies Registration Act. Its aims and objects inter alia are to look after

environment in all aspects and it had been carrying activities therein. The

Respondent filed a writ petition on or about 18th February, 2005 in the nature

of a Public Interest Litigation in the High Court of Judicature at Bombay

praying inter alia for the following reliefs:

"(a) For an appropriate writ, order or direction

striking down the impugned order dated 20th

March, 2001 (Exhibit "C", hereto) and consequent

amendment to DC Regulation 58, in particular,

Clauses A-6 and C-1 (5) of Schedule 1 of the

impugned order dated 20th March, 2001 as ultra

vires the MRTP Act, illegal, unconstitutional, void

ab initio and non est;

(b) For a writ of mandamus, or a writ in the

nature of mandamus or any other appropriate writ,

order or direction, ordering and directing the 1st

and 2nd Respondents (and their servants, agents or

officers):

(i) to withdraw/ cancel the impugned order dated

20th March, 2001 and the consequent amendment

to DCR 58;

(ii) to take such action as is necessary in law to

amend DCR 58 to ensure that the total amount of

space available for redevelopment in respect of

which the percentage wise allocations are to be

determined, is the open land and the land available

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after demolition of existing structures;

(iii) to forbear and desist from granting any

permission, in accordance with amended DCR 58

(including to Respondent Nos. 3 and 4) for the

redevelopment of the mill lands;

(iv) restraining them from in any way acting in

furtherance of the report submitted by NTC and

prepared by "Team One".

(c) For a writ of mandamus or a writ in the nature

of a writ of mandamus directing Respondent Nos.

1 and 2 (and their servants, agents or officers) to

undertake preparation of plan for comprehensive

development of appropriately delineated Textile

Mill District so as to provide for the

comprehensive development of these mill lands in

an integrated manner in furtherance of the

recommendations made by the Charles Correa

Expert Committee Report submitted in August,

1996;

(d) That pending the hearing and final disposal of

this petition, Respondent Nos. 1 and 2 should be

restrained by an appropriate writ, order direction or

injunction from granting any permission or taking

any action pursuant to permission already granted

for the redevelopment of mill lands (including to

Respondent Nos. 3 and 4) in pursuant of the

provisions of amended DCR 58;

(e) That pending the hearing and final disposal

of this petition, the Respondent Nos. 1 and 2

should be ordered and directed by the Hon'ble

Court to produce on affidavit all the material

documents and information that has been

submitted to Respondent Nos. 1 and 2 by

Respondent Nos. 3 and 4 as part of their

application for permission to develop the said land

or any part thereof and any other material and

information available to Respondent Nos. 1 and 2

which it has considered / likely to consider in

relation to the grant of permission to Respondent

Nos. 3 and 4 for the development of the said mill

land;

(f) That pending the hearing and final disposal

of this petition, Respondent Nos. 1 and 2 should be

ordered and directed by this Hon'ble Court to

produce on affidavit all the material documents

and information that has been submitted to

Respondent Nos. 1 and 2 by privately owned mills

as part of their applications for permission to

develop their respective textile mill lands, and any

other material information and documents that

Respondents Nos. 1 and 2 considered in relation to

the grant of permission to them for the

development of their respective mill lands;

(g) That pending the hearing and final disposal

of this petition, Respondent Nos. 1 and 2 should be

ordered and directed to appoint a Special Planning

Authority or any other supervisory body/

committee to supervise the comprehensive /

integrated development of mill lands, including

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private mill lands (that fall within the purview of

DCR 58), in furtherance of the recommendations

of the Charles Correa Expert Committee Report

submitted in August, 1996;

(h) For ad-interim reliefs in terms of prayer

clauses (d) to (g); and

(i) For such further and other reliefs and orders

as this Hon'ble Court deem fit in the nature and

circumstances of this petition."

In the said writ petition, apart from the State of Maharashtra, the

Municipal Corporation of Mumbai, the Maharashtra Housing and Area

Development Authority, National Textile Corporation Maharashtra North

and South Maharashtra were impleaded as Respondents. Before the said

High Court, a large number of mill owners and others who allegedly have

invested a huge sum on the lands of the Mill owners or otherwise interested

in implementation of Regulation 58 of 2001 filed applications for their

impleadment as parties therein but the same was opposed by the

Respondents. The Applicants, however, were allowed to intervene.

It was, however, stated at the bar that whereas 6th April, 2005 was

fixed for filing responses by the interveners, but after hearing the matter for

three days, viz., 29th to 31st March, 2005, the impugned orders were passed.

Before the High Court, the National Textile Corporation inter alia

contended that it had been carrying on its activities in terms of a scheme

framed by the BIFR and which has been approved by this Court by an order

dated 27.9.2002 in the following terms:

"We have been informed that BIFR has already

formulated eight schemes which stand approved by

all concerned and agencies. But the Schemes as

sanctioned by BIFR be implemented. The special

leave petition and the transfer petitions stand

disposed of accordingly."

The National Textile Corporation contends that out of 25 mills 17/18

Mills have closed down. Approximately 14,800 employees have been

relieved. Payment of Rs. 643.94 crores have been made to the employees.

It has further been contended that several financial institutions and

others have acted pursuant to or in furtherance of the said scheme. It is

stated that negotiations for selling seven textile cotton mills have been

finalized and, thus, it was submitted that no stay should be granted.

The High Court passed two interim orders on 1st April, 2005. As

regard National Textile Corporation, it was directed:

"On behalf of the N.T.C. the learned Counsel

submits that they should be allowed to proceed

with the sale of Jupiter Mills. The matter is

pending before this Court. However, considering

the urgency which Counsel make out any further

as N.T.C. has 25 mills the request for confirming

the sale can be agreed to, subject to the following

conditions:

i) The NTC will file an undertaking in this

Court, that on the Court passing an order on

interim relief they will comply with the order of

the Court including if a situation arises of

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reserving the land in the other mills for which

development is sought in terms of the order that

may be passed by the Court. On such undertaking

being filed, it is open to the NTC to confirm the

sale of Jupiter Mills."

It was further directed:

"ii) Considering that the matter has now been

adjourned to 20.4.2005 the Respondent No. 2 \026

Municipal Corporation directed not to approve any

further lay outs, issue IOD, or CC without the

permission of this Court or till further orders."

It is not in dispute that although no argument was advanced in that

behalf, the Division Bench by a separate order directed the State as also the

Bombay Municipal Corporation to file a large number of documents under

fourteen different heads.

The learned counsel appearing on behalf of the Appellants inter alia

would submit:

(i) Keeping in view of the fact that the writ petitioners did not file any

objection or suggestions before Regulation 58 was given a concrete

shape, it was not entitled to any interim relief.

(ii) Regulation 58 being a subordinate legislation, a public interest

litigation should not have been entertained questioning its validity.

(iii) In any event, as within the interregnum of four years, the Appellants

as also the others have invested a huge sum of money, the interim

order ought not to have been passed as they would affect the interests

inter alia of (i) the workers, (ii) the financial institutions, (iii) the mill

owners; and (iv) the third party purchasers.

(iv) No interim order in any view of the matter could have been passed

without impleading the interested parties and permitting them to file

their affidavits.

(v) Several parties have obtained lay out, IOD or commencement

certificates for different stages and in that view of the matter if the

interim order is allowed to operate, the same would result in great

hardship.

The learned Solicitor General appearing on behalf of the State of

Maharashtra further submitted that if the State of Maharashtra is asked to

carry out the directions of the High Court as regard filing of the documents,

they will be put to a great hardship as truck loads of documents will have to

be brought before the High Court.

Mr. Parasaran and Mr. Rohtagi, learned senior counsel appearing on

behalf of the National Textile Corporation would contend that keeping in

view of the fact that in respect of seven mills, negotiations have been entered

into, they should be allowed to be sold off and in the event, the writ petition

succeeds, the order of the court can be complied with by adjusting vacant

land belonging to the other mills.

Mr. Iqbal Chagla, learned senior counsel appearing on behalf of the

writ petitioner-Respondents, on the other hand, would contend that in terms

of the 1991 Regulations, at least 200 acres out of 600 acres of land situate in

the middle of the city would have been made available providing for large

space for the inhabitants of the town and further 200 acres of land would

have been available to MHADA for construction of residential houses for

the weaker sections. Integrated development of town of Bombay, the

learned counsel would contend, is imperative having regard to the fact that

whereas in other metros, three to four acres of open space is available for

one thousand residents, in the town of Mumbai, it is only 0.03 acres per

thousand. It was contended that in terms of Section 37 of the Maharashtra

Regional & Town Planning Act, 1966, the State of Maharashtra itself

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imposed a ban in 1996 on constructions on the ground that no final decision

had been taken in that behalf and in that view of the matter there is

absolutely no reason as to why the impugned order cannot be sustained in as

much as the validity of Regulation 58 has been questioned in the writ

petition. It was pointed out that the State of Maharashtra itself issued

clarification of 2001 Regulations in March, 2003 in terms whereof allotment

in favour of MHADA came to an end. It had been pointed out that Bombay

Municipal Corporation and MHADA had adopted resolutions asking the

State Government to have a relook in the matter and in January, 2005, the

State appointed a committee therefor. In any event, the learned counsel

would contend that the High Court by reason of the impugned order having

not directed stoppage of constructions or any other activity in relation

whereto agreements have been entered into or requisite sanctions have been

granted, the impugned orders should not be interfered with.

The learned counsel would urge that the undertaking directed to be

given by the National Textile Corporation is commensurate with the

suggestion given by Mr. Parasarn before this Court.

This Court at this stage is concerned with an interim order passed by

the High Court. The writ petition is still to be heard. Affidavits between the

parties are yet to be exchanged. The objection as regard maintainability of

the writ petition is also required to be finally determined by the High Court

itself. This Court at this stage cannot, thus, enter into all the contentious

questions raised in these appeals. But, there cannot be doubt or dispute

whatsoever that before an interim order is passed and in particular a public

interest litigation, the court must consider the question as regard existence of

a prima facie case, balance of convenience as also the question as to whether

the writ petitioners shall suffer an irreparable injury, if the injunction sought

for is refused. The courts normally do not pass an interlocutory order which

would affect a person without giving an opportunity of hearing to him. Only

in extreme cases, an ad interim order can be passed but even therefor, the

following parameters as laid down by this Court in Morgan Stanley Mutual

Fund etc. vs. Kartick Das etc. [(1994) 4 SCC 225] are required to be

complied with:

"As a principle, ex parte injunction could be

granted only under exceptional circumstances. The

factors which should weigh with the court in the

grant of ex parte injunction are\027

(a) whether irreparable or serious mischief will

ensue to the plaintiff;

(b) whether the refusal of ex parte injunction

would involve greater injustice than the grant of it

would involve;

(c) the court will also consider the time at which

the plaintiff first had notice of the act complained

so that the making of improper order against a

party in his absence is prevented;

(d) the court will consider whether the plaintiff had

acquiesced for sometime and in such

circumstances it will not grant ex parte injunction;

(e) the court would expect a party applying for ex

parte injunction to show utmost good faith in

making the application.

(f) even if granted, the ex parte injunction would

be for a limited period of time.

(g) General principles like prima facie case,

balance of convenience and irreparable loss would

also be considered by the court."

[See also Andhra Bank Vs. Official Liquidator and Anr., 2005 (3) SCALE

178]

The courts while passing an order of interim injunction must also

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consider the parameters of a Public Interest Litigation as laid down by this

Court in Dr. B. Singh Vs. Union of India and Others [(2004) 3 SCC 363]

and Dattaraj Nathuji Thaware Vs. State of Maharashtra and Others [(2005) 1

SCC 590].

The courts, however, have to strike a balance between two extreme

positions, viz., whether the writ petition would itself become infructuous if

interim order is refused, on the one hand, and the enormity of losses and

hardships which may be suffered by others if an interim order is granted,

particularly having regard to the fact that in such an event, the losses

sustained by the affected parties thereby may not be possible to be

redeemed.

In Deoraj vs. State of Maharashtra and Others [(2004) 4 SCC 697]

this Court opined:

"12. Situations emerge where the granting of an interim

relief would tantamount to granting the final relief itself.

And then there may be converse cases where withholding

of an interim relief would tantamount to dismissal of the

main petition itself; for, by the time the main matter

comes up for hearing there would be nothing left to be

allowed as relief to the petitioner though all the findings

may be in his favour. In such cases the availability of a

very strong prima facie case \027 of a standard much

higher than just prima facie case, the considerations of

balance of convenience and irreparable injury forcefully

tilting the balance of the case totally in favour of the

applicant may persuade the court to grant an interim

relief though it amounts to granting the final relief itself.

Of course, such would be rare and exceptional cases. The

court would grant such an interim relief only if satisfied

that withholding of it would prick the conscience of the

court and do violence to the sense of justice, resulting in

injustice being perpetuated throughout the hearing, and at

the end the court would not be able to vindicate the cause

of justice. Obviously such would be rare cases

accompanied by compelling circumstances, where the

injury complained of is immediate and pressing and

would cause extreme hardship. The conduct of the parties

shall also have to be seen and the court may put the

parties on such terms as may be prudent."

In Raunaq International Ltd. Vs. I.V.R. Construction Ltd. and Others

[(1999) 1 SCC 492], this Court held that in appropriate cases, the petitioners

should be put on appropriate terms such as providing an indemnity or an

adequate undertaking to make good the loss or damage in the event the PIL

filed is dismissed. [See also Guruvayoor Devaswom Managing Committee

and Another Vs. C.K. Rajan and Others, (2003) 7 SCC 546].

The Courts are also required to consider the decisions of this Court

relating to public interest litigation vis-`-vis reason of delay in bringing the

same as noticed by this Court in Chairman & MD BPL Ltd Vs. S.P.

Gururaja and Others, (2003) 8 SCC 567] in the following terms:

"In the facts and circumstances, we do not find that

the Board and the State had committed any

illegality which could have been a subject-matter

of judicial review. The High Court in our opinion

committed a manifest error insofar as it failed to

take into consideration that the delay in this case

had defeated equity. The allotment was made in

the year 1995. The writ application was filed after

one year. By that time the Company had not only

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taken possession of the land but also made

sufficient investment. Delay of this nature should

have been considered by the High Court to be of

vital importance."

[See also Narmada Bachao Andolan Vs. Union of India and Others, (2000)

10 SCC 664 at 762 and R & M Trust Vs. Koramangala Residents Vigilance

Group and Others, (2005) 3 SCC 91 at 112-13]

So far as transactions relating to seven mills belonging to National

Thermal Corporation are concerned, including sale of Jupiter Mills, it is not

in dispute that transactions have reached a final stage. The purchasers of

Jupiter Mills have already paid 16 crores and a sum of Rs. 376 crores would

pass hands if the transaction is completed. If the transactions in respect of

the mills are not allowed to be completed, the scheme framed by the BIFR

would come to a stand still resulting in accrual of interest payable by the

National Textile Corporation to the financial institutions besides other

hardships which may be caused to various other persons including the

workers.

We, therefore, having regard to the facts and circumstances of this

case as also the law operating in the field, are of the opinion that interest of

justice would be sub-served if the National Textile Corporation is permitted

to complete the transactions in terms of the scheme framed by the BIFR but

the same shall be subject to the conditions that in the event, the writ petition

ultimately succeeds, the vacant land available from other mills, if necessary,

shall be offered by way of adjustment.

In some cases, the State might have sanctioned DCR. Yet in some

other cases, IODs might have been obtained. Yet again, in some cases,

Commencement Certificates might have been granted. In such cases, the

statutory authorities shall process applications or further applications for

grant of sanction required for commencement and/ or continuation of

structures strictly in accordance with law. It is stated that in some cases such

applications may be entertained although the period of lease has expired.

We do not think that the statutory authorities shall be so callous so as to

grant permission in favour of a person who does not have ownership over

the land in question. We furthermore have no doubt that the scheme, rules,

regulations and byelaws framed under the provisions of Maharashtra

Regional & Town Planning Act, 1966 shall be strictly complied while

granting permission. We have furthermore no doubt that the committee

appointed in terms of the regulation shall grant its approval only in

accordance with the extant regulations. The Appellants and/ or interveners

herein, however, before creating any further third party interest or before

raising any constructions pursuant to or in furtherance of any fresh lay out,

IODs or CCs must put an advertisement in two newspapers having wide

circulation in Mumbai; one in English and the other in Marathi Vernacular

clearly indicating the same. If any agreement is to be entered into in future

or any third party right is to be created, a stipulation shall be made therein

that the enforcement thereof shall be subject to any other or further order

which may ultimately be passed by the High Court in the pending

proceedings.

Any further constructions and/ or creation of any third party rights by

the mill owners will be at their own risk wherefor they would not claim any

equity whatsoever and furthermore the same shall be subject to the orders of

the Court. However, any new application for grant of approval of any lay

outs, issue of IODs or commencement certifications may be processed but

no construction shall be carried on pursuant thereto or in furtherance thereof.

It appears that there exists some dispute between two rival trade

unions. Their interse disputes representing different sections of workers, if

any, may be determined by an appropriate forum in an appropriate

proceeding.

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We are informed that the Division Bench of the Bombay High Court

had fixed hearing of the writ petition in the last week of August, 2005. We

would request the High Court to consider the desirability of preponing the

date so that the writ petition may be heard out and disposed of at an early

date and preferably by 31st July, 2005.

The impleaded parties and/ or interveners may file their affidavits

before the High Court within three weeks from date.

The State of Maharashtra and the Bombay Municipal Corporation

shall place all the relevant documents before the High Court and in the

event, it is found at a later stage that they have withheld any document

which is relevant, the High Court would be at liberty to draw adverse

inference against them or pass such other order or orders as may be found

necessary. We have passed this order having regard to the fact that the

directions to produce documents have been passed without hearing the

parties and without taking into consideration the hardship which may be

faced by the State and/ or Bombay Municipal Corporation.

We, by our order dated 18th April, 2005 directed the matter to be

placed on 23rd August, 2005 for hearing but keeping in view of the fact that

in these appeals we were called upon to deal with an interim order, we are of

the opinion that no purpose would be served in keeping the matters pending.

We, therefore, dispose of these appeals and the intervention applications on

the aforementioned terms.

Having regard to the directions issued, it is not necessary to pass any

separate orders on the applications for impleadment and/or intervention..

No order as to costs.