Court’s Decision
The Bombay High Court Full Bench concluded that the law laid down by the Supreme Court in Shantistar Builders capping government nominee allotments at 5% under the Urban Land Ceiling and Regulation Act applies prospectively, not retrospectively. Consequently, it held that the petitioner, whose scheme was sanctioned in 1989 before the Shantistar judgment, cannot claim the benefit of restricting government quota from 30% to 5% and must comply with the original 30% surrender condition.
The reference was answered, and the matter was directed to be placed before the Division Bench for adjudication on merits, with the petitioner’s request for reducing the government allotment being denied at the reference stage.
Facts
The petitioner owned land in Kolhapur declared surplus under the Urban Land Ceiling Act, 1976. In 1989, the petitioner submitted a housing scheme under Section 20, which was sanctioned with a condition to surrender 30% of the constructed tenements to the government for weaker section housing. Due to delays, the petitioner sought an extension of time and invoked the Government Resolution dated 15 October 1997, which implemented the Shantistar Builders Supreme Court judgment recommending a 5% quota for government nominees.
The petitioner argued that since his scheme was pending and the 1997 GR applied, the government should restrict its allotment claim to 5% instead of 30%. However, the State rejected the request, citing that the Shantistar judgment applied prospectively, and imposed penalties for delays, leading to the present writ petition seeking parity with the 5% rule.
Issues
- Whether it is discriminatory and arbitrary for the State to deny the petitioner the benefit of the 5% cap under the Shantistar Builders judgment while enforcing a 30% quota under a pre-1990 sanctioned scheme.
- Whether the Shantistar Builders judgment governs the petitioner’s case where the scheme was sanctioned in 1989 but tenements were yet to be surrendered.
- Whether the guidelines modified by the Supreme Court in Shantistar Builders apply to all pending proceedings or only prospectively.
Petitioner’s Arguments
The petitioner argued that denying the 5% quota benefit while enforcing the 30% quota violated Article 14, as the facts of his case were identical to those in Shantistar Builders. He claimed the 1997 GR should apply to his pending scheme to ensure parity and fairness. He contended that there was no logical basis for a prospective-only application of the Supreme Court’s guidelines, and the denial of parity caused financial hardship and violated fundamental rights.
Respondent’s Arguments
The State argued that the Shantistar Builders judgment delivered in January 1990 was intended to apply prospectively, and several judgments of the Bombay High Court, including in Karmarahi Kanji Chandan and Sardar Dalip Singh, consistently held that the guidelines capping government allotments to 5% were prospective. The State contended that the petitioner’s scheme, sanctioned in 1989, was governed by the 30% surrender condition and that any reduction would contradict settled law and policy under the ULCR Act.
Analysis of the Law
The Court analysed:
- The Urban Land Ceiling Act, 1976, Section 20 exemptions, and conditions imposed therein, particularly regarding the percentage of constructed tenements to be surrendered.
- The Shantistar Builders judgment (1990), which recommended capping government allotments to 5% for weaker section housing, and the 1997 GR implementing this guideline.
- Judicial precedents consistently interpreting Shantistar Builders as applying prospectively, including:
- Karmarahi Kanji Chandan (1992)
- Sardar Dalip Singh (1998)
- Shantiniketan (AIR India) Co-op Housing Society (2001)
- Bansal Promoters and Builders (2004)
- Shridhar C. Shetty (2020)
The Court reaffirmed the settled principle that judgments modifying policy guidelines typically operate prospectively unless expressly stated otherwise, ensuring stability and predictability in law.
Precedent Analysis
- Shantistar Builders (1990) laid down guidelines capping government nominee allotments at 5% under the ULCR Act.
- Karmarahi Kanji Chandan (1992) and Sardar Dalip Singh (1998) held the guidelines were prospective.
- Shantiniketan Co-op Housing (2001) reaffirmed the prospective application.
- Shridhar C. Shetty (2020) 9 SCC 537 explicitly confirmed Shantistar guidelines apply prospectively, clarifying the legal position conclusively.
These precedents collectively shaped the Full Bench’s reasoning, rejecting retrospective application of the Shantistar guidelines.
Court’s Reasoning
The Full Bench held that:
- The prospective application of the Shantistar guidelines aligns with judicial discipline and fairness.
- The petitioner’s scheme, sanctioned in 1989 before the judgment, was bound by the 30% condition, and retrospective reduction would violate established law.
- The petitioner’s claim of discrimination under Article 14 was unfounded as differential treatment based on clear temporal cut-offs in judicial guidelines is legally permissible.
- Pending schemes do not equate to prospective application if the sanction was under the old policy framework.
The Court concluded that allowing retrospective application would disrupt the settled position under the ULCR Act and open floodgates for claims, affecting public policy implementation.
Conclusion
The Full Bench:
- Held that Shantistar Builders’ 5% guideline applies prospectively.
- Denied the petitioner’s request to limit the government’s allotment to 5% for a 1989 sanctioned scheme.
- Directed the registry to place the writ petition before the Division Bench for adjudication on merits in alignment with this reference order.
Implications
This judgment reinforces:
- The principle of prospective application of judicial guidelines unless expressly stated.
- The stability and predictability of government policy under the Urban Land Ceiling Act.
- A clear message to developers that policy changes via judgments will not disrupt past sanctioned conditions.
- A consistent approach aligning with Article 14 while respecting lawful cut-offs for policy shifts.
Short Notes on Cases Referred
- Shantistar Builders (1990): Guidelines capping government allotment at 5% under ULCR Act, held to apply prospectively.
- Karmarahi Kanji Chandan (1992), Sardar Dalip Singh (1998), and Shantiniketan Housing (2001): Reaffirmed prospective application.
- Shridhar C. Shetty (2020): Supreme Court held Shantistar guidelines operate prospectively, binding all pending ULCR cases.
These cases shaped the current decision, rejecting retrospective relief.
FAQs
1. Can builders reduce the government’s tenement share under ULCR based on Shantistar Builders judgment if the scheme was sanctioned before 1990?
No, the judgment applies prospectively, and pre-1990 sanctioned schemes remain governed by original surrender conditions.
2. Does Shantistar Builders judgment apply retrospectively to pending schemes under the ULCR Act?
No, consistent judicial interpretation confirms its prospective application only.
3. Why was the petitioner’s request to reduce the government’s share to 5% denied?
Because the scheme was sanctioned in 1989 before Shantistar Builders, and the law explicitly applies prospectively to maintain stability.