http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 13

CASE NO.:

Appeal (civil) 6057-6058 of 2001

Special Leave Petition (civil) 20494-95 of 2000

PETITIONER:

M/S. LIVE OAK RESORT P. LTD. & ANR.

Vs.

RESPONDENT:

PANCHGANI HILL STATION MUNICIPAL

DATE OF JUDGMENT: 31/08/2001

BENCH:

A.P.Misra, U.C.Banerjee

JUDGMENT:

BANERJEE,J.

Leave granted.

The appellants herein, moved this Court under Article 136 of

the Constitution of India seeking special leave to appeal against the

orders of the Division Bench of the High Court of Judicature at

Bombay in the matter of dismissal of the writ petition being No.

2226 of 1999 dated 10th July, 2000 as also an order of dismissal of

the Review Petition dated 6th November, 2000. By the impugned

order of dismissal, the High Court did lend its concurrence to an

order of demolition of an additional floor constructed by the

appellants in Panchgani said to be in violation of the Municipal

Rules as also of the direction contained in an earlier judgment of the

same High Court in a public interest litigation being No. 2754 of

1997 wherein the High Court has dealt with a circular issued by

Urban Development, Public Health and Housing Department in

1971. Incidentally, be it noted that various public interest petitions

have been filed before the High Court seeking to prevent

construction and/or regular constructions in the Mahabaleshwar-

Panchgani area in the State of Maharashtra being an ecologically

sensitive belt. In the writ petition filed by the Bombay

Environmental Action Group the bone of contention of the

appellants had been that there was large scale illegal construction

and deforestation in the Mahabaleshwar-Panchgani region resulting

in wide spread environmental and ecological degradation to these

two hill stations in the State of Maharashtra. The High Court upon

consideration of the pleadings and the facts on record passed various

orders from time to time and finally dealt with the matter in its

judgment dated 18th November, 1998 containing certain directions

in order to put an embargo to the constant exploitation of nature

resulting in ecological imbalance in the area and thus to avoid the

bio-diversity crisis. The appellants herein were also parties therein

as respondent No.17.

Ecological imbalance and non-conformity of the Municipal

Rules are however two independent and separate factors to invoke

the jurisdiction of the law courts and either of the two factors

however would prompt the law courts to pass necessary orders by

reason therefor to protect the environment.

Before adverting to the contextual facts in the present appeals

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 13

under Article 136 of the Constitution, the earlier order of the

Bombay High Court spoken of hereinbefore in this judgment dated

18th November, 1998 ought to be adverted to so as to appreciate the

resultant culmination on to the issuance of an order of demolition by

the Panchgani Municipal Council and subsequent concurrence

thereof by the High Court in a writ petition filed by the appellants

herein.

Incidentally, be it noted that the two hill stations of Panchgani

and Mahabaleshwar recently have been acclaimed to be very

popular tourist resorts and tourism has thus turned out to be a great

economic benefactor to the State - and it is this possible improved

economic situation that the State Government in the year 1971

issued a circular (more fully dealt with hereinafter in this judgment)

under which an additional FSI was made available to the luxury

hotels (with 3 star facilities and above) - obviously the State

Government at the time of issuance of the circular had in its mind

the long catena of cases of this Court as also that of various High

Courts that while ecology cannot be given a go by, in the same vein

development process cannot be ignored: As a matter of fact the law

courts thus evoked the factum of striking of a balance between the

development and ecology since in a developing economy there

cannot be either development or ecology but both must exist and

thus a balance shall have to be struck between the two, as otherwise

the society will perish in the absence of either of the two elements

noticed above.

In this context, two decisions ought to be adverted to briefly:

one from the Calcutta High Court and the other of this Court. In the

Calcutta High Court, People United for Better Living in Calcutta -

Public & Anr. V. State of West Bengal & Ors.[AIR 1993 Calcutta

215] the Single Judge in paragraph 2 of the Report observed:

"2. While it is true that in a developing

country there shall have to be developments

but that development shall have to be in

closest possible harmony with the

environment, as otherwise there would be

development but no environment, which

would result in total devastation, though

however, may not be felt in presenti but at

some future point of time, but then it would

be too late in the day, however, to control and

improve the environment. Nature will not

tolerate us after a certain degree of its

destruction and it will in any event, have its

toll on the lives of the people: Can the present

day society afford to have such a state and

allow the nature to have its toll in future - the

answer shall have to be in the negative: the

present day society has a responsibility

towards the posterity for their proper growth

and development so as to allow the posterity

to breathe normally and live in a cleaner

environment and have a consequent fuller

development : time has now come therefore,

to check and control the degradation of the

environment and since the Law Courts also

have a duty towards the society for its proper

growth and further development and more so

by reason of definite legislations in regard

thereto as noted hereinafter, it is a plain

exercise of the judicial power to see that there

is no such degradation of the society and there

ought not to be any hesitation in regard

thereto - but does that mean and imply

stoppage of every developmental programme

- the answer is again 'no' : There shall have

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 13

to be a proper balance between the

development and the environment so that both

can co-exist without affecting the other. On

the wake of the 21st century, in my view, it is

neither feasible nor practicable to have a

negative approach to the development process

of the country or of the society, but that does

not mean, without any consideration for the

environment. As noted above, there should

be a proper balance between the protection of

environment and the development process:

the society shall have to prosper, but not at

the cost of the environment and in the similar

vein, the environment shall have to be

protected but not at the cost of the

development of the society - there shall have

to be both development and proper

environment and as such, a balance has tobe

found out and administrative actions ought to

proceed in accordance therewith and not de

hors the same."

This Court, however, in Goa Foundation's decision [Goa

Foundation, Goa v. Diksha Holdings Pvt. Ltd. & Ors.: 2001 (2) SCC

97] affirmatively approved the approach as stated in the Calcutta

High Court judgment.

Be it noted that on this factual backdrop and by reason of the

notification in 1971 there was a wide spread violation of the

regional plan for Mahabaleshwar-Panchgani area wherein

agricultural land was being extensively used for non-agricultural

purposes such as hotels, holiday homes, luxurious private

bungalows - it has been the contention of the Bombay

Environmental Action Group that forestry in the Mahabaleshwar-

Panchgani region being depleted at an alarming rate thus requiring

protection and resultant intervention of the Court. The records

further depict that the rule-nisi in the earlier matter was issued on

23rd June, 1997 and while issuing the said rule-nisi the State

Government was directed to form a high level committee to find out

as regards the illegal construction and user of land in violation of the

Regional Town Plan for the area or the Building Bye-laws and

Development Control Rules. The committee in terms of the order

did submit its report on 17th November, 1997, wherein about 1060

buildings in Mahabaleshwar- Panchgani region were found to be in

contravention of statutory protection and suggested various remedial

measures and in terms therewith apart from the directions on to the

Pollution Board, Mahabaleshwar Municipal Council were also

directed to take immediate action against erring parties and it is in

course of hearing that some of the persons who had received notice

submitted that they were prepared to give undertakings to the High

Court that basement of the construction could only be used for

parking, storage, air-conditioned plants and not for any other

purpose. The High Court while dealing with the matter observed:

"In our view, on such undertakings being

given by the parties to whom notices were

issued, no further action would be required to

be taken on the ground that the basement area

is to be included for built-up area

calculations. It was directed that such

undertakings be given to this Court and to the

Chief Officer of the Municipal Council on or

before 15th September, 1998. As regards the

interpretation of the Bye-law, the learned

counsel for the respondent sought time.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 13

On 15th September, 1998 the parties were

heard at length. With regard to the Building

Bye-laws and Development Control Rules for

Mahabaleshwar and Panchgani Municipal

Councils, the statements made by the learned

Advocate General were recorded, viz.,

(a) For deciding the permissible maximum

height, the council is taking into consideration

the height of average of the four corners of

the surrounding ground level;

(b) The lower storey of the building, if

constructed below or partly below the ground

level, is considered as basement and if

basement is used for the purpose specified in

the Rules such as parking space, store room

or air-conditioning plant room, then it is not

included for calculation of total built-up area

and it is also not considered as one storey or

floor;

(c) The council is following Bye-law 20.6.

which provides that the overall height of any

building shall not be more than 9 mtrs. In

Sector 1, S. No.52 and area selected for

MIG/LIG/EWS housing with approval of

Government and shall not be more than 11

mtrs. in all other areas.

...............................................

In this view of the matter, the Municipal

Councils were directed to exclude the

basement area from built up area calculations

if the owners of the building filed necessary

undertakings before this Court...............

...........As regards the violation of height

restrictions, the Planning Authority was

directed, at its discretion, to condone violation

of 1 or 2 feet wherever such violation was

there and that it was not to be treated as a

license to grant permission to violate the

height limit. Further height should be

counted by taking average height of the four

corners of the plot. The applications for

condonation of such height violations were

required to be filed on or before 30th

September, 1998. Such condonation was

directed to be granted on recovering a penalty

of Rs.1,000/- to Rs. 25,000/-. It was also

clarified that this would not give the authority

to the Councils to sanction plans in violation

of the height regulation.

.........................

...........However, it is clarified that if the

benefit of the Government Resolution of the

year 1971 is already given then those cases

are not to be disturbed and are not to be

reviewed. Henceforth, the benefit of the said

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 13

Resolution is not to be given." (Emphasis

supplied)

It would be convenient to note the true scope and effect of

1971 circular spoken of earlier at this juncture. The circular

incidentally pertains to higher floor space index to luxury hotels

within the jurisdiction of the Municipal Corporations and Municipal

Council in the State of Maharashtra. Relevant extract of the circular

however is noticed herein below. The circular reads:

"Government has been receiving requests from

several Hotels in Maharashtra that they should be

allowed higher F.S.I. for their buildings than is

normally permissible. Government decided that all

the Municipal Corporations - Municipal Councils

in the State of Maharashtra should be advised to

allow higher FSI for luxury hotels with a grading of

3 star and above within their jurisdiction provided

the request is recommended by the Department of

Tourism. Government is also pleased to advise

that the additional FSI to be allowed should not

exceed 50 per cent of the normal FSI allowed in

such cases. Government is further pleased to direct

that the minimum area of the plot should not be less

than 1/4 acre or 1000 sq. meters in respect of hotels

having 10 rooms and where the number of rooms is

more than 10, the plot size should be larger as may

be required by the Department of Tourism.

Government is further pleased to advise the

Municipal Corporations (other than Bombay),

Municipal Councils that if any Development

Control Rules, Town Planning Regulations,

Building regulations applicable in their area do not

permit a higher FSI for luxury hotels as indicated

above, the higher FSI may be allowed in

anticipation of suitable modifications in the

rules/regulations etc."

Admittedly, the appellants herein had commenced the

construction of an additional floor in the existing hotel premises

after conferment of a 3 Star status. Mr. Ganguly, learned senior

counsel, appearing in support of the petition for special leave

contended that the commencement of the construction of the

additional floor in the hotel was on bonafide belief since the plan

furnished by them had in fact being sanctioned by the Director,

Town Planning and as such question of issuance of the order of

demolition would not arise and it is the issuance of this order of

demolition, the appellants herein moved the High Court at Bombay

in a petition under Article 226 of the Constitution which however

was negatived by the High Court with an order of dismissal of the

same and hence the special leave petition before this Court as

noticed earlier.

Mr. Ganguly addressed this Court in detail on two specific

counts challenging the dismissal of the order of the writ petition by

the High Court: the first count being that the High Court's refusal to

entertain the writ petition has been totally on a misreading of the

earlier judgment of the High Court and on the second it has been

contended by Mr. Ganguly that the finding of violation of the

Municipal Rules warranting a demolition in the contextual facts

have been totally unjustified.

Needless to record that Panchgani, a hill station in Satara

district of the State of Maharashtra has recently been facing a

tremendous influx of people as noticed herein above: a virgin land

having all round beauties of nature thus turned out to be a

tremendously popular tourist centre. Admittedly the High Court,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 13

however, in order to stop further exploitation of nature directed a

restraint order effective from the date of the order viz., 18th

November, 1998 in regard thereto. It is only a prospective order and

not a retrospective one.

Incidentally, Mr. Dushyant Dave, learned senior counsel

appearing for the intervenor in the matter with his usual felicity of

expression very strongly objected to the submissions of Mr.

Ganguly, upon reliance on the earlier judgment of the High Court as

noticed herein before. Equally forceful however have been the

submissions of Mr. Deshpande appearing for the Government and

Mr. Singh for the Municipal Council.

Before going into the main thrust of submissions of the parties,

a brief look to the order impugned would be convenient at this stage:

the relevant extracts are as below:

"3. We have gone through the original files of the

Municipal Council and the record of the case with

the assistance of the learned counsel for the parties.

We have also perused the photographs of the

structure constructed by the petitioners. The

respondent No.1 has sanctioned for construction of

only ground plus one storey and basement.

However, it appears that the petitioners have

constructed a building of ground plus 3 stories.

The so-called basement is actually a ground floor

which is being used for the purpose of residence

contrary to the Development Control Rules. It is

also seen that the petitioners have violated high

restriction and there is excess construction to the

extent of 107 sq. meters. It seems that this

construction was carried out inspite of stop work

notice given by the respondent no.1 and when the

writ petition No.2754 of 1997 was pending before

this Court.

4. Mr. Reis the learned counsel for the

petitioners strenuously contended that the

petitioners constructed an additional floor in view

of the no objection granted to the Director of Town

Planning. He contended that although technically

there was no sanction from the Municipal Council,

keeping in mind the fact that no objection was

granted by the Director of town Planning and also

the fact that the petitioners had invested additional

funds for the construction of the extra floor and

having regard to the observations made by the

division bench in para 27 of the order dated

18.11.1998, the construction of the extra floor by

the petitioners should be regularised. We do not

find any merit in the submission of the learned

counsel. In the first place petitioners had

constructed extra floors and not one as

contemplated by the circular dated 7.10.1971. As

indicated above petitioners have not constructed

basement and instead they have constructed a

ground floor. Secondly the observation of the

division bench in para 27 of the order are of no help

to the petitioners. The division bench has

categorically held that the benefit of the additional

FSI could not have been given to any 3 Star hotels

after the commencement of the Development

Control Rules. The division bench has merely

clarified that if the benefit of the circular of

7.10.1971 was already given then those

constructions were not be disturbed. In the instant

case it is an admitted position that the plans for

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 13

additional floors were not sanctioned by the

respondent No.1. In the circumstances the

observations made by the Division Bench are not

applicable to the present case and the petitioners

are not entitled to claim any benefit of the said

Government Circular. The construction of

additional two stories is totally unauthorised and

contrary to the Development Control Rules. We do

not find any infirmity in the impugned orders

passed by the respondent No.1."

It is this order which is under challenge in this petition under

Article 136. Incidentally, upon issuance of notice and the interim

order passed in the presence of the parties, all the parties agreed

that the matter under consideration ought to be disposed of at the

notice stage itself and hence the final disposal in terms of this

judgment.

Turning on to the factual score it appears that the rejection of

the plan by the letter dated 20.3.1997 emanating from Panchgani Hill

Station Municipal Council has had four specific grounds and the

same are set out hereinbelow:

"1. The present F.S.I. of the present building's Ground Floor

and First Floor is more than the F.S.I. given by Hon'ble

Director, Town Planning, Maharashtra State, Pune.

2. It is not correct to grant permission/permissible for

Health Club and Sanitation House.

3. Alongwith the annexed Plan of the construction some

measurements are shown in feet. The feet measurements

must be shown in Metric.

4. Sanitation House is not permissible in Kitchen."

A plain look at the grounds mentioned however, depict that the

principal objection centres round the first of the four grounds. It is in

this respect that one ought to fall back upon relevant correspondence

either inter-departmental or intra parties. First of the series however

is a letter dated 8/13th June, 1995 from the Director, Town Planning

to the Assistant Director, Town Planning, Satara, the letter though

inter-departmental stands disclosed in the proceedings and pertains to

the circular dated 7th October, 1971 spoken of earlier since Mr

Ganguly's principal defence against so-called violation of Municipal

Act is dependant on this document. Let us have a clear view of the

matter in a broader perspective - A letter dated 6th April, 1995 was

sent by the Municipal Council to the Town Planning Department

expecting guidance whether additional FSI can be granted for the

construction of a three Star hotel at a final plot No.414-E - Town

Planning Scheme No.3 Panchagani by Director, Town Planning,

Maharashtra State, Pune. The same in turn was placed before the

Director, Town Planning, Pune for his opinion and guidance by the

Assistant Director, Town Planning, Satara and which was in turn

replied to by the Director by the letter noticed above dated 8/13th

June, 1995, wherein the issue of grant of additional FSI was

considered and an opinion expressed therein by way of a sanction.

The relevant extract of the letter dated 8/13th June, 1995 are set out

hereinbelow for appreciation of the submissions and being the main

plank of defence against the order of demolition as noticed above.

The relevant extracts whereof, however are as below:

"Holder of the property consisting of the piece and

parcel of land bearing final Plot No.414-E, Town

Planning Scheme No.III situated within limits of

Panchgani Hill Station Municipal Council has been

granted permission for the Hotel by the Municipal

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 13

council and he has submitted proposal for the

additional FSI for carrying out construction of star

Category Hotel and in that connection guidance has

been expected from this directorate.

In accordance with the Circular dated 7.10.71

of the Government, an additional FSI is permissible

for the Three Star and higher grade hotel and

applicant has submitted proposal in accordance

with this circular, there is no objection to sanction

the same. (Emphasis supplied)

In connection with this proposal as suggested

by the Deputy Director, Town Planning,

Maharashtra State, Pune Region, Pune it will be

appropriate to charge fees @ 50% of the existing

markets rate for the additional FSI.

As because of this permission of additional

FSI as one floor will be more than the sanction and

height of the building is more by 3.20 mtrs. than

sanction, it is unavoidable but to give relaxation.

In accordance with provision No.28.2 of the

Development Control Regulations and Certified

Construction Bye-laws which are applicable for

"B" and "C" Class Municipal Councils, relaxation

is being granted as of the special case. Enclose

herewith all papers of the branch office."

(Emphasis supplied)

This decision of the Director, Town Planning as above, was in

turn communicated to the Chief Officer, Panchgani Hill Station

Municipal Council by a letter from the Assistant Director, Town

Planning dated 23rd February, 1996 wherein it has been categorically

mentioned that the letter of the Director dated 13.6.1995 has

provided guidance and a copy whereof was also sent therewith. The

Assistant Director by the said intimation dated 23.2.1996 also

requested the Municipality to deposit a sum of Rs.7,442/- for the

additional FSI granted in the letter of the Director in terms of Section

360-B of the B.C.S.R fees. A further intimation has also been

effected to the effect that the aforesaid sum of Rs.7442/- being the

additional premium is to be recovered from the applicant - The

sanction thus stands acted upon by the parties. The record further

depicts that by letter dated 3rd June, 1996, the Assistant Director,

Town Planning did call for the construction plans of the existing

building and in terms therewith the Municipal Council, Panchgani

forwarded the same upon obtaining copies of the same from the

appellants herein. It is only thereafter however that the Town

Planning Department by a letter dated 31st December, 1996 informed

the Chief Officer of the Municipal Council that the permission for

construction ought not to be granted, the reason being the total area

of construction is more than the construction area which is

permissible and sanctioned by the Director, Town Planning,

Maharashtra State vide letter dated 8/13th June, 1995 and in terms

therewith Panchgani Hill Station Municipal Council wanted a further

clarificatory order from the town planning authority who in turn by

its letter dated 6th March, 1997 recorded the 4 point objection as

noticed hereinbefore and the subsequent application dated 9th

September, 1997 regarding the grant of permission for construction

of the 3 star hotel at the premises in question stood rejected.

Representation made by the appellants but to no effect and

subsequently order of demolition of the portion constructed said to

be unauthorisedly was issued which was brought to challenge before

the High Court and the factual score thereafter stands already noted

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 13

in this judgment and as such we do not think it expedient to repeat

the same once again.

It is in this factual matrix, the High Court dealt with the

matter. At the first stroke, it seems rather significant though the

High Court in the earlier judgment has categorically recorded that if

the benefit of the Government resolution of the year 1971 has

already been given, then and in that event, those cases are not to be

disturbed and thus not to be reviewed. The High Court while

incorporating the same recorded that it is an admitted position that

the plans for additional floors were not sanctioned by the respondent

No.1 and as such, the issue does not seem to have any benefit from

the order of the Division Bench - at the first sight, it seems no

exception can be taken on this but on a closer scrutiny of the record

displaces such an observation of the High Court. By the letter dated

8/13th June, 1995, the Director, Town Planning has categorically

recorded grant of permission of additional FSI and having regard to

an additional floor, it would obviously be more than the sanctioned

height of the building. The appellants were not only authorised to

construct an additional flour but the memo also contained a

relaxation on the height as well to the extent of 3.20 meters than the

permissible sanction limit The letter in question stands extensively

quoted in the earlier part of the judgment and the emphasised portion

would depict the conclusion as has been noticed hereinbefore. The

situation therefore, turns out to be that the Director, Town Planning

being the authority in terms of the provisions of law did grant

sanction of an additional floor with an additional height of 3.20

metres upon proper relaxation being granted. This aspect of the

matter, the High Court has not considered at all and thus clearly fell

into an error. It is to be placed on record that Director himself as a

matter of fact did place reliance on provision 28.2. of the bye-laws

applicable to 'B' and 'C' class municipalities in the State of

Maharashtra. The entire reference to the Director was by reason of

the above said provision and all the statutory agencies have acted

thereupon. The above noted provision 28.2 reads as below:

"28.2 The Director of Town Planning may permit

special relaxation to any of the bye-laws, provided the

relaxation sought does not violate the health safety, fire

safety, structural safety, public safety of the inhabitants

and the buildings and the neighbourhood" -

The proviso noticed above having the definite application in

the contextual facts, sanction from the Director, Town Planning in

terms of the Standardised Building Bye-laws for "B" and "C" Class

Municipal Council of Maharashtra supersedes any further power of

the council. As a matter of fact, the power conferred under 28.2

being supreme, the Council is under statutory obligation to abide by

the directions as contained in the Director's letter as above, and

grant sanction in terms of Section 45 of the MRTP (for short) but in

accordance therewith : This power stands absolute and there is no

escape from that situation. We however, ought not to be understood

to record the unguided power of the Director - The powers of the

Director also stand circumscribed by and under the provision 28.2

itself and to the effect that exercise of such a power pertains to the

grant of additional FSI and correspondingly authority and

jurisdiction to grant relaxation as regard the height.

It is on this score, Mr. Ganguly, contended that the provision

as contained 28.2 of the bye-laws as noticed above does not

recognise any superior authority than the Director in the matter of

grant of additional FSI and since the Director has granted, the

Council has no other alternative or option but to follow the same and

grant sanction in accordance therewith and not de hors the same.

Additional FSI stands granted and the plan on the basis of such

grant, ought in the ordinary course of events to have been

sanctioned. It is on this score that Mr. Dave appearing for the

intervenor alongwith the learned Advocates appearing for the State

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 13

of Maharashtra and the Municipal Council in one voice also very

strongly contended that since the Municipal Council is the ultimate

sanctioning authority in terms of the Maharashtra Regional and

Town Planning Act, 1966, the question of acting in excess of

jurisdiction so far as the Council is concerned would not arise -

obviously there is some confusion persists by reason wherefor the

High Court has also fallen into an error : the reason being failure to

distinguish between the grant of sanction of additional FSI and the

sanction of the building plan. The additional FSI stands granted and

in the event of such a grant, can the Council sit over the decision of

the Director and refuse permission - on an analysis of the different

statutory provisions, our answer cannot but be in the negative. Bye-

law 28.2 clearly recognised the power to grant such a sanction for

additional FSI and the decision of the Director is final on that score

and the Council is to implement such a decision and not act de hors

the same. In the event the respondents' contentions are to be

accepted, then there exist no justifiable reason for forwarding the

application of the appellants to the Town Planning Department of

the State Government for guidance neither there was any

justification for the Council to deposit the regulation fee of

Rs.7,442/- in terms of the letter of the Town Planning Department as

additional levy for grant of additional FSI - These issues however

remain unanswered: Mere silence however will not provide a solace

to the appellants herein. It is in this aspect of the matter that the

High Court has also fallen to a great error. The High Court by its

earlier judgment has clarified that in the event of the benefit of the

Government resolution of 1971 has already been given, then those

cases are not to be disturbed and not to be reviewed - in fact, such a

benefit has been given by the Director who happened to be the

proper authority to confer such benefit, there ought not to have been

any confusion between the conferment of benefit of the additional

FSI and the grant of sanction of building plans - two issues are

separate in nature and the authorities are also separate - whereas the

Director, Town Planning happened to be the deciding factor in the

matter of grant of sanction of additional FSI and power to relax the

height issue, the Municipality in terms of section 45 of the Act

remained and still remains the authority to sanction or reject the plan

in the ordinary course of events. There is thus no conflict between

the provisions - Mr. Deshpande however significantly contended

that the Director, Town Planning being the authority who is

consulted by the Government before it finalises the draft

development plan of the Municipal Council has a very limited

function to discharge and only to provide technical guidance to the

local authority: the submission however runs counter to statutory

rules and as such we are unable to concur therewith.

In this context a public notice No.VI/999-95-96 in terms of

resolution No.71 dated 28th November, 1995 ought to be noticed.

The public notice reads as below:

"PANCHGANI HILL STATION MUNICIPAL

COUNCIL, PANCHGANI

PUBLIC NOTICE

Under Section 37 of Maharashtra Regional and Town

Planning Act, 1966.:

No.VI/999-95-96. - All citizens residing in

Panchgani Hill Station Municipal Council's limit are

informed by this public notice, that the Panchgani Hill

Station Municipal Council intends to suggest the

following addition to the development control and

Buildings Byelaws in Chapter XII-B after Law No.52.

In the sanctioned (Revised) Development Plan of

Panchgani Hill Station Municipal Council which has

been sanctioned by the Director of Town Planning,

Maharashtra State's Notification No.DP/Panchgani

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 13

(R) /49-88/TPV-II dated 12th May 1988 and came into

force with effect from 1st July, 1988.

Proposed addition in Byelaws is given below:

Particulars of Additional Bye-laws

For star category Luxury Hotels in independent

plots and under one establishment with a raling of 3

and above as approved by the Department of

Tourism, Government of India or the State

Government, additional F.S.I. to the maximum

extent of 50 per cent over and above the

permissible F.S.I. in the area in which such hotel

plot is situated may be permitted provided that such

extra F.S.I. shall be subject to payment of such

premium as may be fixed from time to time by the

Municipal Council in consultation with the Director

of Town Planning, Pune provided further that

permissible height of 9.15 m. may be relaxed if

necessary and only to facilitate use of extra F.S.I. in

consultation with the Director of Town Planning.

No condonation in the required open spaces,

parking spaces and any other requirements of the

Development Control Rules except the height as

provided above shall be allowed in case of grant of

such additional F.S.I."

Mr. Deshpande next contended that the letter dated 8/13th June,

1995 cannot but be read as a mere direction to consider the grant of

relaxation of height and not a sanction - we are however unable to

record our acceptance thereto by reason of the specific language of

the Director's letter noted above.

Mr. Dave for the Intervenor further contended that Bye-law

28.2 of the Development Control Regulation as noted above does

not have any manner of application to Panchgani and contended that

even if it does so applied, the same cannot have any manner of

application by reason of Sections 45, 154 and 156 of the

Maharashtra Regional and Town Planning Act, 1966. Grant or

refusal of permission stands vested with the planning authority and

there cannot be any manner of dispute in regard thereto by reason of

the provisions of Section 45 of the Act of 1966 - This aspect of the

matter has already been dealt with herein before as such we need not

further dilate on the issue excepting recording that the Director did

not act on its own initiative but the ball has been set to roll by the

Municipal Council itself, since they wanted guidance and opinion

apropos the application for additional FSI: It is not that the

petitioner applied before the Town Planning authority but the

application was made to, as in the normal course of events it has to

be, to the Municipal Council and who in their turn sent it to the

Department of Town Planning which ultimately was placed before

the Director, Town Planning and the latter granted while expressing

opinion in regard thereto also granted sanction as also relaxation in

terms statutory conferment of power as noticed more fully

hereinbefore. Mr. Dave's definite submission however has been that

the appellants are not entitled to get the additional FSI and thus

resultantly no relaxation on heights also is permissible. We are

however, unable to record our concurrence therewith by reason of

the factum of the issuance of the letter by the Director, Town

Planning Department in terms of provision of Rule 28.2 and the

entitlement follows therefrom.

The issue of res-judicata as urged by Mr. Dave need not detain

us for long since in our view, the doctrine or even constructive res

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 13

judicata cannot possibly be have any application in the contextual

facts.

The other aspect of the matter requiring consideration pertains

to the letter dated 31.12.1996 addressed to the Chief Officer,

Municipal Council, Panchgani by the Assistant Director, Town

Planning, Satara wherein the latter intimated the Municipal Council

that sanction should not be granted taking into consideration the

sanctioned development plan of the Panchgani city. The reason for

such a refusal as available therefrom has been stated to be:

"Area of the construction of the building of the first

floor and ground floor carried out at the said

premises i.e. total area of construction is more than

the construction area which is permissible and

sanctioned by the Hon'ble Director, Town

Planning, Maharashtra State, Pune vide letter

No.DS/Panchgani/Star Hotel/final Plot No.414-E,

T.P.S.3/TPV-2/3060/dated 13.6.95."

Needless to record and as noticed hereinbefore that the

Council acting on the basis of such an intimation rejected the plan

and issued the impugned notice. Even a cursory look at the sanction

letter dated 8/13.6.1995 belies the contents of the letter under

reference dated 31.12.1996. The sanction pertains to the additional

FSI vis-a vis the circular issued by the Government dated 7th

October, 1971. The sanction letter dated 8/13.6.1995 did not speak

of construction or grant of sanction pertaining to the ground and first

floor at the said premises. The Director, Town Planning by the

letter dated 8/13.6.1995 never sanctioned any construction area in

the ground and first floor at the same premises. As a matter of fact,

the letter under reference dated 31.12.1996 seems to be overriding

the order of the Director. Significantly, however the letter dated

31.12.1996 corroborates the stand of the appellants that there was in

fact a sanction by the Director, Town Planning vide letter dated

8/13.6.1995. While it is true that sanction was granted for additional

FSI as also increased height but there was never any mention or any

sanction conveyed for ground and the first floor construction in the

letter. It cannot thus but be termed to be the brain child of the

Assistant Director who has, in fact, superseded the order of the

Director - is this a permissible state of affairs? Mr. Deshpande

offered us an answer in silence! Obviously he does not have

anything else at his disposal to justify the issuance of the letter.

Provision No.28.2 of the Development Control Regulation has been

taken recourse to and the Assistant Director not been able to avoid

the same, simply recorded the factum of construction area on the

ground and first floor being in excess of the sanction granted by the

Director, Town Planning. The act or acts on the part of the

Assistant Director by reason of the contents of the letter dated

8/13.6.1995 cannot but be said to be wholly without jurisdiction and

consequently the action on the basis thereof as taken by the

Municipal Council cannot also be sustained.

The observations as noticed hereinbefore thus stands

supported by the municipality's own public notice This aspect of

the matter has also escaped the attention of the High court and as

such, the High Court fell into a clear error.

As regards the issue of deemed sanction, the High court

answered it in the negative recording therein that the appellants

were refused of any sanction though beyond the period as such

deemed sanction would not arise. Unfortunately, we cannot lend

our concurrence thereto. Panchgani Municipal Council being a

'C' Class Municipal Council of Maharashtra in its Standardised

Buildings Bye-laws, in particular, bye-law 9.2 records that while

the authority may sanction or refuse a proposal, there stands an

obligation on the part of the authority to communicate the

decision and where no orders are communicated within 60 days

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 13

from the date of submission of the plan either by way of a grant

or refusal thereto, the authority shall be deemed to have permitted

the proposed construction. In view of our observations noticed

hereinbefore, we are not inclined to go into this issue in any

detail suffice however to record that the submissions pertaining

to deemed sanction has substance and cannot be brushed aside in

a summary fashion. Eventual rejection does not have any manner

of correlation with deemed sanction - it is only that expiry of the

60 days that the sanction is deemed to be given, subsequent

rejection cannot thus affect any work of construction being

declared as unauthorised. The deeming provision saves such a

situation. As noticed above, we are not inclined to detain

ourselves any further on this score.

Incidentally, be it noted that even though at the initial stage

of hearing, environmental degradation was spoken of but the

same have not been adverted to at all at the time of final

submissions - the same were restricted to municipal violations.

Environmental Audit Report has not seen the light of the day.

Obviously, there would not be any such affectation and we also

thus do not feel it expedient to deal with that aspect of the matter.

In the view we have taken, we are unable to record our

concurrence with the submissions of both the Intervenors and

Municipal Council as well the State Government. The Appeals

are thus allowed. The order of the High Court stands set aside. It

is however made clear that in the event of there being any

infraction of the order of the Director pertaining to additional

F.S.I. and the height as relaxed by the Director and in the event of

there being any infraction of the Building Rules concerning the

ground and the first floor or the basement thereof, the

municipality would be at liberty to take appropriate steps in

accordance with law. We do feel it expedient to direct further

that the appellants should furnish a fresh undertaking as regards

the user of the basement in this Court within a period of four

weeks from the date of the availability of a copy of this judgment.

The Registry is directed to make available a copy of this

judgment to the appellants with utmost expedition.

No order however as to costs.