Court’s decision
The Bombay High Court upheld the validity of the Notification dated 7 October 2024 issued under Section 37(1AA)(c) of the Maharashtra Regional and Town Planning Act, 1966, inserting Clause 10.16 into the Unified Development Control and Promotion Regulations for Panvel Municipal Corporation. The Court held that the amendment permitting utilisation of 75% of the permissible TDR component on payment of premium is within the State’s statutory powers and does not alter the character of the development plan. All writ petitions challenging the notification were dismissed.
Facts
The impugned Notification inserted Clause 10.16 into the UDCPR, applicable to Panvel Municipal Corporation, allowing 75% of the total permissible TDR component under Table 6G to be utilised upon payment of premium at 60% of the Annual Statement of Rates, with the balance 25% mandatorily to be utilised as TDR. The clause was expressly made temporary, to operate until sanction of the final Development Plan under Section 31(1) of the MRTP Act.
As recorded on pages 4–9 of the judgment, the proposal followed representations highlighting inadequate TDR generation in Panvel, where approximately 76.08% of the municipal area lacked a sanctioned development plan, leading to supply-demand imbalance and alleged cartelisation. Objections were invited, hearings conducted, and a report forwarded to the Director of Town Planning before issuance of the final notification.
Issues
The principal issue was whether Clause 10.16, permitting utilisation of 75% TDR component on payment of premium, was ultra vires Sections 22(m), 37(1AA), and 126 of the MRTP Act.
The Court also examined whether the amendment violated Articles 14, 19, 265, or 300A of the Constitution by allegedly diluting the value of TDR and extinguishing landowners’ statutory choice under Section 126.
A further issue concerned whether due process under Section 37(1AA) had been complied with before effecting the modification.
Petitioners’ arguments
The petitioners contended that Section 126 of the MRTP Act incentivises voluntary surrender of land in exchange for TDR, and that the impugned clause diluted the economic value of TDR, rendering compensation illusory. They argued that by permitting 75% of the TDR component to be generated through payment of premium, the amendment effectively increased base FSI and altered the development plan’s substratum.
It was further submitted that premium could not be levied on utilisation of TDR in the absence of express statutory authority, and that the UDCPR, as delegated legislation, could not transgress the parent Act. Allegations of arbitrariness and violation of Article 300A were also raised.
Respondents’ arguments
The State defended the amendment as a policy measure addressing acute imbalance in TDR supply within Panvel. It submitted that Clause 10.16 merely provides an additional option and does not compel developers to avoid market TDR. The balance 25% TDR component remains mandatory.
It was argued that Section 22(m), as amended retrospectively, expressly empowers imposition of fees, charges and premium. The amendment does not alter the total permissible FSI of 3.00 and only modifies the source from which TDR may be procured.
The State asserted that the procedural requirements under Section 37(1AA) — including publication, hearing, forwarding of objections, and consultation with the Director of Town Planning — were strictly followed.
Analysis of the law
The Court reiterated that UDCPR provisions constitute delegated legislation and enjoy a presumption of validity. Judicial review is confined to examining whether the rule conforms to the parent statute and whether it is manifestly arbitrary.
Section 37(1AA) permits urgent modification of a development plan in public interest, provided it does not change its character. The Court found that the amendment does not increase total FSI but maintains the 3.00 FSI cap, with permissible TDR of 1.40 remaining intact.
Section 22(m), as amended, authorises regulation of development and imposition of fees, charges, and premium. The Court held that the amendment modifies the “source” of TDR, not the concept itself, and therefore falls within statutory competence.
Precedent analysis
The Court relied on Indian Express Newspapers (Bombay) Pvt. Ltd. v. Union of India to reiterate that subordinate legislation can be struck down only if ultra vires or manifestly arbitrary.
It referred to Dental Council of India v. Biyani Shikshan Samiti and State of T.N. v. P. Krishnamurthy to outline the limited grounds of challenge to delegated legislation.
The Full Bench decision in Shree Vinayak Builders was cited to clarify that acquisition under Section 126(1)(a) and (b) requires mutual agreement and is not unilateral. The Court held that Clause 10.16 does not extinguish that statutory choice.
Court’s reasoning
The Court found that due process under Section 37(1AA) was meticulously followed. Notices were issued, objections invited, hearings conducted, and consultation with the Director of Town Planning undertaken before issuance of the final notification.
It rejected the contention that TDR value is guaranteed by statute. Neither the MRTP Act nor the UDCPR prescribes a fixed valuation mechanism; TDR operates within market forces. A regulatory measure affecting commercial expectations does not, by itself, violate Article 14 or 300A.
The Court clarified that the amendment does not impose a tax within Article 265 but permits payment of premium for sourcing part of the TDR component from the planning authority. The balance 25% remains mandatorily market-based.
Conclusion
The Bombay High Court upheld the impugned Notification dated 7 October 2024 and dismissed all writ petitions. It held that Clause 10.16 neither alters the character of the development plan nor violates the MRTP Act or constitutional guarantees. The amendment is a valid policy intervention within the State’s delegated legislative powers.
Implications
This ruling affirms the State’s authority to recalibrate TDR mechanisms through delegated legislation to address market distortions and planning imbalances.
For landowners, the decision clarifies that TDR value is not statutorily fixed and remains subject to market dynamics. For developers, it introduces an alternative route for sourcing TDR components pending finalisation of Panvel’s Development Plan.
The judgment reinforces judicial restraint in reviewing town-planning policy decisions unless manifest arbitrariness or statutory transgression is demonstrated.
Case law references
- Indian Express Newspapers (Bombay) Pvt. Ltd. v. Union of India (1985) 1 SCC 641 – Subordinate legislation can be struck down only if ultra vires or manifestly arbitrary.
- Dental Council of India v. Biyani Shikshan Samiti (2022) 6 SCC 65 – Judicial review of delegated legislation is limited to statutory and constitutional grounds.
- State of T.N. v. P. Krishnamurthy (2006) 4 SCC 517 – Enumerated grounds to challenge subordinate legislation.
- Shree Vinayak Builders (Full Bench, Bombay High Court) – Acquisition under Section 126(1)(a) and (b) requires mutual agreement.
FAQs
1. Does Clause 10.16 increase FSI in Panvel?
No. The total permissible FSI of 3.00 remains unchanged. The amendment only allows 75% of the TDR component to be sourced upon payment of premium.
2. Is TDR value guaranteed under the MRTP Act?
No. The Act does not prescribe a fixed value for TDR. Its valuation is governed by market forces.
3. Can the State levy premium for development rights?
Yes. Section 22(m) of the MRTP Act authorises imposition of fees, charges and premium through development control regulations.