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The ambit and scope of power of New Okhla Industrial Development Authority (for short, the `Development Authority’) to permit users, other than residential, in the sectors specifically earmarked for `residential use’ in the Master Plan of the New Okhla Industrial Development Area (for short, the 2 `Development Area’) is the basic question that falls for consideration of this Court in this bunch of appeals= A few officers of the Development Authority cannot collectively act in violation of the law and frustrate the very object and purpose of the Master Plan in force, Regulations and provisions of the Act. 56. For the reasons afore-recorded, we would dispose of the appeals of the Development Authority, the appellants/occupiers/ lessees, interveners and occupants in the following terms:- 1. That banking or nursing homes or any other commercial activity is not permitted in Sector 19 and for that matter, in any sector, in the Development Area earmarked for `residential use’. 2. That the 21 banks and the nursing homes, which are operating in Sector 19 or any other residential sector, shall close their activity forthwith, stop misuse and put the premises to residential use alone, within two months from the date of pronouncement of this judgment. 3. That lessees of the plots shall ensure that the occupant banks, nursing homes, companies or persons carrying on any commercial activity in the residential sector should stop such activity and shift the same to the appropriate sectors i.e. commercial, commercial pockets in

English: Spice Mall Entrance, NOIDA

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1

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.6962 of 2005
R.K. Mittal & Ors. … Appellants
Versus
State of U.P. & Ors. …
Respondents
WITH
CIVIL APPEAL NO.6963 OF 2005
AND
CIVL APPEAL NOS.10535 &10536 OF 2011

(Arising out of SLP (C) No.24029 of 2005 and 9150 of 2007)

J U D G M E N T
Swatanter Kumar, J.
1. Leave granted in both the Special Leave Petitions.
2. The ambit and scope of power of New Okhla Industrial
Development Authority (for short, the `Development Authority’)
to permit users, other than residential, in the sectors
specifically earmarked for `residential use’ in the Master Plan of
the New Okhla Industrial Development Area (for short, the
2
`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 2005and 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 SLP (C) No.9150 of 2007,
after giving notice, it had passed an order requiring the parties
concerned to stop the misuse within the stipulated time, failing
which appropriate action in accordance with law, including
cancellation of the lease deed, would be taken. The facts and
3
circumstances in all the appeals and even the intervention
applications are somewhat similar. In any case, the common
question of law arising in all the appeals and applications is
whether the residential premises can be, wholly or partly, used
by the original allottee or even its transferee, for any purpose
other than residential? We do not consider it necessary to refer
to the facts of each case in greater detail, except the facts of the
lead case, i.e., Civil Appeal No.6962 of 2005, R.K. Mittal v. State
of U.P. However, wherever reference to certain additional facts
is called for, we would notice the same in the other cases as
well.
4. The Development Authority executed a lease deed dated 2nd
April, 1988 in favour of Shri Rajendra Kumar Srivastava in
relation to Plot No.778, Block A, Sector XIV, New Okhla
Industrial Development Area, District Ghaziabad, admeasuring
about 274.37 square meters as per the boundaries described in
the deed. Upon the plot, the lessee raised some construction
which remained unfinished. The lessee thereupon actually
transferred the plot in question along with unfinished
superstructure vide Transfer Deed dated 20th August, 1999 in
favour Shri R.K. Mittal, Shri Ashok Garg and Shri Sanjeev
Gupta, the appellants herein. The original lease deed contained
specific stipulations in regard to the lessee being obliged to
4
obey all the Rules, Regulations and Directions made by the
lessor. The lessee was to raise construction as per approved
plans and to use the premises only for the purpose for which it
was committed in terms of the lease and as per law. These
clauses of the lease deed read as under :
“(d) That the lessee will obey and submit to all

Directions issued or Regulations made by the

Lessor now existing or hereafter to exist so for as

the same are incidental to the possession of

immovable property or so far as they effect the

health, safety or convenience of the other

inhabitants of the place.
(e) That the Lessee will at his own cost erect on

the demised premises in accordance with the

plans, elevation and design and in a position to be

approved 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 XXX 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

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 relevant clauses of
the Transfer Deed read as under :
“10. That the Transferees shall complete the

construction of plot and shall obtain

Occupancy Certificate of Plot from Building

Cell, Noida within balance construction

period as per terms of lease deed of plot

which is upto 23.2.2000. Extension of time

for construction of plot and for obtaining

occupancy certificate will be granted as per

terms of lease deed of plot and as per then

prevailing extension policy of NOIDA.

11. That the Transferee shall be bound by the

terms and conditions of lease deed of plot

executed on 2.4.88, subject to the

amendments indicated in the Transfer

Memorandum.

XXX XXX XXX

15. That the Transferees shall put the property in

the use exclusively for residential purpose

and shall not use it for any purpose other

than residential.

XXX XXX XXX

17. That the terms and conditions amended by

the NOIDA AUTHORITY from time to time

shall be binding on the Transferees

aforesaid.”
6. After completing the construction, the appellants appear to
have rented out the premises to Andhra Bank and Akariti
Infotech. As such, both the bank and the company had been
carrying on their business from the premises in question. The
6
Development Authority, on 18th January, 2001 and 22nd
February, 2001 issued notices to both Andhra Bank and Akariti
Infotech to stop commercial use in the said premises within 30
days, failing which action would be taken as per the lease deed.
In these notices, it was also stated that there was encroachment
in violation of the prescribed building byelaws and the use of
residential plot for commercial purpose was in violation of the
provisions of the lease deed of the plot. Invoking the provisions
of the U.P. Industrial Area Development Act, 1976 (for short,
`the Act’),the Development Authority gave them opportunity to
file objections. To these notices, the appellants not only filed
objections but also appeared before the Development Authority
and contended that the Development Authority, in furtherance
to the proposal to permit running of consulting clinics, banks
and guest houses in the residential areas, had permitted such
use on the main roads, on payment of 30 per cent of the
existing residential rate on per square meter area of plot per
annum and had invited suggestions from the general public.
Reliance was also placed on certain 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
7
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 Authority for clarification.

In view of the above stated facts and after

listening to the petitioner, it is ordered that

representation pleadings of the petitioner Allottee

of Residential Plot No.A-778, Sector-19 stand

rejected and the petitioner is also directed to

ensure vacation of bank branch and infotec office

from the residential premises and restore the

building according to prescribed building bye-law

within 4 months (Four Months) from the date of

service of this order.

7. As the Petitioner has evaded compliance of

terms of lease deed for nearly five months on one

pretext or the other, he is also informed that in

case of failure to restore the land use of plot within

stipulated period, the Authority shall be free to

take further action under law WITHOUT FURTHER

NOTICE.

Orders regarding penalty for misuse of

premises will be passed separately.”
7. Aggrieved from the aforesaid order, the appellants filed a
writ petition before the High Court of Judicature at Allahabad.
The writ petition preferred by the appellants came to be
8
dismissed vide order dated 19th January, 2002. It was noticed
by the High Court and rightly so, that the Development
Authority had invited some suggestions for change of user of
residential plots to commercial or mixed user on certain terms
and conditions, by bringing certain changes/amendments in its
byelaws and policy decisions. This remained at an interim stage
and no final decision was taken by any competent authority in
accordance with the provisions of the Act. The Development
Authority had not undertaken any exercise for the said
amendment in accordance with law and had not even sought
the approval of the State Government, as required under the
law, for change of user or amendment of the byelaws, Master
Plan, etc. In fact, the provisions directing forfeiture of property
under Section 14 of the Act and imposition of penalty for
misuse in terms of Section 15 of the Act were in force. Relying
upon judgment of this Court in Munshi Ram v. Union of
India[(2000) 7 SCC 22], the High Court not only dismissed the
writ petition but also directed the Development Authority to
take immediate and strong action against those who have
started using residential plots, wholly or partially, for other
non-residential uses. The appellants, feeling dissatisfied by the
judgment of the High Court, have preferred the present appeal
before this Court. In order to complete the factual matrix of the
9
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, namely, Oriental Bank
of Commerce, Sector 27, Noida and Vijaya Bank, Sector 19,
Noida had obtained such permission for a period of five years
and three years respectively since 1995 and 1994. These
banks had not obtained any permission or renewal thereafter.
10
Show cause notices had been issued to all the banks to wind
up their activities from these areas. In para 10 of the affidavit,
it had been stated that the Development Authority `has taken a
firm decision to evict all the banks from the residential sectors
and notices have been issued to all these 21 banks without
exception’. A definite averment has also been made in this
affidavit that the functioning of the banks in the residential
sectors caused inconvenience and disturbance to the public at
large and the Development Authority has earmarked specific
areas for making land available to the banks to carry on their
commercial activities. They have allotted land to several banks
in commercial-cum-institutional and commercial portion of
industrial and institutional sectors. Option was given to the 21
banks to function in these areas and that if they would apply
for the same, the Development Authority shall consider their
cases sympathetically. The Development Authority, specifically
and with emphasis, reiterated that banking activities cannot be
allowed in residential plots of the residential sector. Another
affidavit was filed on behalf of the Development Authority in
March 2011, wherein a clear stand was taken that as per the
Master Plan, Sector 19 of the Development Area is a residential
sector, where the land use is residential alone, neither
commercial nor mixed. List of 43 properties in Sector 19, Noida
11
was filed as Annexure-1, where non-residential activities,
including banking and medical clinics, were being carried on
while Annexure-2 related to other 11 properties being used for
other non-residential purposes in Sector 19 itself. There are
institutional plots in Sector 19, which had been allotted by the
Development Authority for running of nursing homes or
commercial activity. An office order was issued on or about 14th
May, 2009, in relation to Guest Houses, by the Chief Executive
Officer of the Development Authority. However, the same is
stated to have been withdrawn immediately thereafter. In other
words, according to the respondents, there is no order or
sanction operative and binding as 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
12
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 acquire land in the industrial development

area, by agreement or through proceedings

under the Land Acquisition Act, 1894 for the

purposes, of this Act;
(b) to prepare a plan for the development of the

industrial development area;
(c) to demarcate and develop sites for industrial,

commercial and residential purposes

according to the plan;
(d) to provide infra-structure for industrial,

commercial and residential purposes;
(e) to provide amenities;
(f) to allocate and transfer either by way of sale

or lease or otherwise plots of land for

industrial, commercial or residential

purposes;
(g) to regulate the erection of buildings and

setting up of industries; and
(h) to lay down the purpose for which a

particular site or plot of land shall be used,

namely for industrial or commercial or

residential purpose or any other specified

purpose in such area.”
13
9. In terms of Section 8 of the Act, for the purposes of proper
planning and development of the industrial development area,
the Authority had the power to issue directions, as it consider
necessary, regarding the factors stated therein, including
restriction of use on any site for a purpose other than for which
it has been allocated. Every transferee in whose favour the land
was transferred was bound to comply with the directions issued
as expeditiously as possible and was obliged to erect the
building or to take such necessary steps to comply with the
directions in accordance with Section 8(2) of the Act. No person
could raise construction, erect or occupy the building in
contravention of the building regulations. The Authority has
been vested with the powers to make regulations with the
previous approval of the State Government in terms of Section
19 of the Act, while the State Government may, by notification,
frame Rules for the purposes of the Act as contemplated under
Section 18 of the Act.
10. Section 2(d) of the Act defines `Industrial Development Area’
to be an area declared as such by the State Government by
notification. Section 6(2)(b) requires the Authority to prepare a
plan for the development of an industrial development area
while Section 6(2)(h) enjoins the Authority to lay down the
14
purpose for which a particular site or plot of land shall be used,
namely for industrial or commercial or residential or any other
specified purpose. 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 other uses incidental to residential uses.”
11. The expression `Sector’ has also been defined in Regulation
15
2(l) to mean any one of the divisions in which the industrial
development area or part thereof may be divided, for the
purposes of development under the Act. Regulation 3 enjoins
upon the Authority a duty to prepare a Draft Plan for industrial
development areas in terms of Regulation 3(1) to 3(6). Under
Regulation 4, the Plan has to include sector plans into which
such industrial area has been divided. It should also depict the
residential use by allocating the area of land for housing, for
different and defined densities and plotted development for
different categories of households in terms of Regulation 4(1)(b)
(ii). Similarly, it should also state the commercial use, public
use, agricultural use and other purposes as the Authority may
deem fit. The procedure for finalization of the Draft Plan is also
contemplated under Chapter III, Regulations 5 to 11 of the
Regulations. The Regulations postulate that the Authority,
after preparation of the Draft Plan, shall, by public notice,
invite objections and suggestions to be filed before the date
notified but not earlier than 30 days from the date of
publication. A proper enquiry and hearing is contemplated
whereafter the Draft Plan is to be finalized in terms of
Regulation 9 and the date of commencement of the Plan is to be
specified in terms of Regulation 10. The Authority has the
power to amend the Plans but this power to amend is restricted
16
in its scope. Regulation 11 empowers the Authority to do so,
but no such amendment can be made which would result in
important alteration in the character of the Plan and which do
not relate to the extent of land use or standards of population
density. Even thereafter, it is required to follow the prescribed
procedure. Regulation 11 reads as under: –
“11. Amendment of the Plan. – (1) The

Authority may make such amendments in the Plan

which do not effect important alteration in the

character of the Plan and which do not relate to

the extent of land use or standards of population

density.
(2) Before making any amendment in the Plan

under sub-section (1), the Authority shall publish

a notice in at least one newspaper having

circulation in the development are inviting

objections and suggestions from any affected

person with regard to the proposed amendment

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
17
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 thereunder by the Development Authority, the
Development Authority has also framed building regulations
and directions, which are termed as `The New Okhla Industrial
Development Area Building Regulations and Directions, 2006
(for short `Regulations 2006)’. These have been primarily
framed as byelaws in relation to the constructions, restrictions
thereof and type of user. Under Regulation 3.12 (h), a
residential building is explained as under: –
“(h) `Residential building’ refers to any building in

which sleeping accommodation is provided for

normal residential purpose with or without

cooking or dining or both facilities and includes

one or two or multi family dwelling, lodging or

rooming houses, dormitories, apartment houses,

flats and hostels.”
14. In distinction to the `residential building’, an `industrial
building’ is the building or part thereof, in which product or
materials of all counts and properties are fabricated,
assembled, manufactured etc. An `institutional building’ refers
to a building or a part of a building which is used for purposes
18
such as medical or other treatment or care of persons suffering
from physical or mental illness, disease or infirmity and
includes hospital, institutions and sanitaria etc. while a
`business building’ refers to a building or part of a building
which is used for transaction of business like Banks,
Commercial office, etc. In other words, each building proposed
to be used for a definite purpose has to meet different
standards, FAR (Floor Area Ratio) and byelaws. These
purposes are incapable of being confused with each other or
even used interchangeably. Respective purposes have been
defined in unambiguous terms in the byelaws, having distinct
implications.
15. It does not appear to be the scheme of the provisions of the
Act, the Regulations and the bye laws, including the
Regulations, 2006 that each of these purposes or buildings can
be understood or used interchangeably. In fact, each has
distinct features and it does not lie in the jurisdiction of the
Development Authority to permit such conversion in users,
beyond the scope of the Master Plan, the byelaws and the
statutory provisions. Regulation 3.22 of the Regulations, 2006
explain the word `conversion’ to mean the change of an
occupancy or change in building structure or part thereof,
resulting into change of space or use requiring additional
19
occupancy certificate.
16. The change in user of the building is, therefore, violative
not only of the Regulations, byelaws and 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
20
allotted in the developed sector to farmers under a
Rehabilitation Scheme had permitted establishment of guest
houses, restaurants, banks, professional offices, day care
centres etc. vide notification dated 4th December, 2010.
18. It is also the contention of the appellants that neither the
byelaws, rules and regulations nor the layout plan of the
Development Authority, in any manner, impede or place any
kind of bar on carrying out banking activity in the residential
sectors.
19. While relying upon the judgments of this Court in the case
of Hari Rao Vs. N. Govindachari & Ors. [(2005) 7 SCC 643], and
Dev Brat Sharma Vs. Jagjit Mehta [(1990) Supp. SCC 724], it
was contended that such use does not amount to change of
user as it is permissible to carry out professional or clinical
activity in the residential houses and, therefore, the notice of
termination issued and/or cancellation of the lease deeds,
being arbitrary and without application of mind, was vitiated in
law.
20. Lastly, it was contended that as there is inadequacy of
space for banks, clinics and other commercial offices in the
Development Area, the present user is need-based and is in the
larger public interest. According to the appellants, the number
of plots for the banks is not sufficient to meet the needs of the
21
public in the residential sectors and no alternative spaces are
available for relocation of the banks. The lease rent and other
charges payable to the Development Authority for both these
categories have a considerable difference. Thus, it has the
impact of creating heavy liability and inconvenience to the
appellants, particularly if they are forced to shift to commercial
or institutional sectors/pockets.
21. On the contra, the contention on behalf of the Development
Authority is that banking activity is impermissible in the
residential sectors. It causes inconvenience to public and
disturbance to the residents. Referring to the Meeting dated
17th December, 2002 of the Committee of the Officers, the stand
taken is that banking activity cannot be allowed in the
residential portions of the residential sectors and to this effect,
a notice was also published.
22. Further, the contention is that the power of the
Development Authority to demarcate and develop sites, to lay
down the purpose for which a particular site or plot of land
shall be used, is controlled by the specific provisions of the Act
and the Regulations framed thereunder. 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
22
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 clear law
in force and that law is neither similar in purpose nor
linguistically identical to the Rent Restriction Acts of the
respective States. The change of user, in the case in hand, has
to be seen in light of the Master Plan, the Regulations and the
provisions of the Act. What may not be change of user under
the Rent Restriction Act, as the rights of the parties therein are
23
governed by the contract between the parties and the grounds
of eviction taken by them, may be a change of user within the
scope of development Plan and the Regulations.
24. In light of the contentions raised, first of all, it will be
appropriate for this Court to examine the scheme of the Act and
the Regulations in question. Under the provisions of the Act,
the Development Authority is obliged to notify an industrial
development area. The very object of the Development
Authority is to secure the planned development of the
industrial development area and the first and foremost step in
this direction is to prepare a Plan for development of the
industrial development area. This development Plan is to
demarcate and develop sites for industrial, commercial and
residential purposes. The land which falls within the
jurisdiction of the Development Authority and is part of the
development Plan can be transferred in terms of Section 7 of
the Act by auction, allotment or otherwise, on such terms and
conditions as the Development Authority may state and subject
to any rules that may be made thereunder. No person can
erect or occupy any building in an industrial development area
in contravention to any building Regulation. Under Section
6(2) of the Act, the Development Authority is empowered to
make Regulations to regulate the erection of the buildings and
24
Section 6(2)(b) specifically authorizes the Development
Authority to make regulation providing for the layout Plan of
the building, whether industrial, commercial or residential.
The transfer of the land has to be as per the terms and
conditions contained in the lease deed executed by the
Development Authority in favour of the transferee. But this all
has to be subject to the provisions of the Act and the
Regulations framed thereunder. It has to be clearly understood
that the lease deed has to be in consonance with law and
cannot be in conflict with the provisions of the law. Section 14
of the Act empowers the Development Authority to resume 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
25
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. The different kinds of uses, therefore, have to be
understood only in terms of the explanation or meaning given
to them under the Regulations. If unduly wide meaning is
given to the expression `residential use’, then it is bound to
cause overlap between the other uses. It would cause
unnecessary confusion. Thus, each use has to be understood
as per its plain language and there is no need for the
Development Authority or, for that matter, even for the courts,
to expand the meaning given to such expressions. The
expression `such other use incidental to residential use’ in
Regulation 2(1)(k) has to take its colour from the use of the
building for human habitation. In other words, the latter part
of the Regulation has to be read ejusdem generis to the earlier
part of that Regulation.
25. The development Plan has to be prepared in accordance
with the provisions of the Act and the Regulations framed
26
thereunder. As already noticed, the Development Authority
has to prepare the Draft Plan, give public notice thereof, invite
objections and thereupon conduct an inquiry and hearing as
contemplated under the law, before preparing a final
development Plan. This final development Plan is a statutory
requirement which has to be prepared as ordained under the
provisions of Section 6(2)(b) of the Act read with Regulations 5
to 11 of the Regulations. This Plan necessarily provides for a
particular use or purpose of any area/site, namely industrial,
commercial institutional or residential. The notified
development Plan has a legal sanction and provisions contained
therein are mandatory in nature. They are incapable of being
altered or varied without following the due process prescribed
in law. Reference can be made to the judgment of this Court
in the case of NOIDA Entrepreneurs Association v. NOIDA & Ors.
[(2011) 6 SCC 527]. Further, this Court, in the case of NDMC &
Ors. v. Tanvi Trading and Credit Private Limited and Ors.
[(2008) 8 SCC 765], not only took the view that even the interim
guidelines issued in relation to Luytens’ Building Zone till
finalization of the Master Plan for Delhi would have statutory
force and be treated mandatory, but also that such guidelines,
so far as consistent with the Master Plan, would continue to be
binding even after coming into force of the Master Plan.
27
26. It has to be noticed at this stage that the development Plan
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 & 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 contrary to the
stipulated user except by amendment of Master Plan, after due
consideration of the provisions of the Act and the Rules.
28
Inaction by the Government authorities means permitting the
unauthorized use, contrary to law.
28. The authorities while reconsidering such matters are
expected to act reasonably and cautiously. They deal with
larger public interest and, therefore, have a responsibility to act
with greater degree of sensitivity and proper application of
mind. If the Development Authority aids the violation of the
statutory provisions, it will be a perversity in the discharge of
statutory obligations on the part of the Development Authority.
The public interest, as codified in the statutory regulations and
the provisions of the Act, should control the conduct of the
Development Authority and its decision making process, rather
than popular public demand guiding the exercise of its
discretion, that too, in a somewhat arbitrary manner. To
illustrate the dimensions of exercise of such powers, we may
refer to the judgment of this Court in the case of Bangalore
Medical Trust v. B.S. Mudappa & Ors. [(1991) 4 SCC 54],
wherein this Court was concerned with the provisions of the
Bangalore Development Authority Act, 1976 with particular
reference to Sections 33, 38 and 38(A) of that Act. A site
intended for a public park was sought to be converted into a
hospital/nursing home, under the garb of the latter being a
`civic amenity’. This Court formed the view that such
29
conversion of an open space reserved under the scheme for a
public park into a civic amenity site by constructing hospital
and allotment of the site to persons or body of persons, was
opposed to the objects of the Act and would be ultra vires the
same. This Court held as under:-
“46. …….No one howsoever high can arrogate to

himself or assume without any authorisation

express or implied in law a discretion to ignore

the rules and deviate from rationality by

adopting a strained or distorted interpretation

as it renders the action ultra vires and bad in

law. Where the law requires an authority to act

or decide, `if it appears to it necessary’ or if he is

`of opinion that a particular act should be done’

then it is implicit that it should be done

objectively, fairly and reasonably. Decisions

affecting public interest or the necessity of doing

it in the light of guidance 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
30
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 which empowered the
Authority to alter the scheme, where it appeared to the
Authority that an improvement could be made in the scheme.
In other words, the power given to the Authority has to be
construed in strict terms and it cannot be exercised in a
manner which will run contrary to the scheme of the Act and
which would defeat the very object of the Act and the
Regulations.
30. The jurisdiction of the Development Authority has to be
seen on the touchstone of proper exercise of power within its
legal limitations while giving full effect to the statutory
provisions. This Court in the case of S.N. Chandrashekar &
Anr. v. State of Karnataka & Ors. [(2006) 3 SCC 208], referred
with approval to judgments of the High Courts, applying the
rule of strict construction to the terminology used and while
interpreting the words `commerce’ and `commercial’ held that
intra category changes could be permitted only in accordance
with law and Section 14-A of that Act. Even if the change of
user is consented to by the residents of the area, it would be no
31
ground to permit such a change in violation of the Regulations.
This Court stated the law as follows:-

“27. The Planning Authority has no power to permit

change in the land use from the Outline

Development Plan and the Regulations. Sub-section

(1) of Section 14, as it then existed, categorically

stated, that every change in the land use, inter alia,

must conform to the Outline Development Plan and

the Regulations which would indisputably mean

that it must conform to the Zoning Regulations.

28. The provisions of the Act are to be read with the

Regulations, and so read, the construction of

Sections 14 and 15 will lead to only one conclusion,

namely, such changes in the land use must be

within the Outline Development Plan and the

Zoning Regulations. If running of a hotel or a

restaurant was not permissible both under clauses

(a) and (b) of the Zoning Regulations in a residential

area, such change in the land use could not have

been permitted under Section 14 read with Section

15 of the Act. It is precisely for that reason, Section

14-A was introduced.”
31. Even in the case of ITC Ltd. v. State of Uttar Pradesh & Ors.
[(2011) 7 SCC 493], this Court declined to accept the contention
that where the State Government had treated the hotels as an
`industry’ even in such cases, the same could 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
32
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 & Ors. v. Delhi Development Authority & 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 authorities could only establish a
public park and nothing else, as such conversion would
amount to misuse of power.
33. All the above judgments clearly show that it is not merely at
the discretion of the Development Authority concerned to
designate user of a site and then alter the same without
following due process of law. Even where such an exercise is
required to be undertaken by the Development Authority, there
also it is expected of the Development Authority to act for the
betterment of the public and strictly in accordance with the
Plans and the statutory provisions. It cannot take recourse to
its powers and use its discretion contrary to such provisions
33
and that too, to frustrate the very object of the Act. Exercise of
power ought not to be destructive of the provisions of the Act
and the Plans, having the force of law. We would hasten to add
that even where the requisite prescribed procedure is followed,
still the discretion should be exercised sparingly for achieving
the object of the statute and not to completely vary or destruct
the purpose for which the sector has been earmarked.
34. A decision which is sought to be taken by the Development
Authority in the garb of a policy decision matter, if not in
conformity to the Master Plan, the Regulations and provisions
of the Act in force, would be an action extra jus. The
Development Authority is to act in adherence to the provisions
of the law regulating such user or construction. The laconic
result of a collective reading of the afore-referred statutory
provisions is that the Development Authority or its officers,
have no power to vary the user and spaces prescribed in the
Master Plan, except by amending the relevant laws and that
too, for a proper object and purpose. Any decision, as a policy
matter or otherwise, for any extent of public convenience, shall
be vitiated, if it is not supported by the authority. The Courts
would examine what is the sensible way to deal with this
situation, so as to give effect to the presumed purpose of the
34
legislation. The provisions in question should be construed on
their plain reading, supporting the structure of the legislative
intent and its purpose. The rule of schematic interpretation
would come into play in such situations and the concerned
Development Authority cannot be permitted to overreach the
procedure prescribed by law, with designs not acceptable in
law.
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
35
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 kind.
36. In the case of Shabi Construction Company v. City &
Industrial Development Corporation & Anr. [(1995) 4 SCC 301],
this Court held that, prior sanction of the State Government
being the sine qua non for a final development Plan, as also for
minor modifications thereof, under Sections 31 and 37 of the
Maharashtra Regional and Town Planning Act, 1966, the
agreement entered into with the Planning Authority so far as it
relates to increased Floor Space Index (FSI) did not and could
not bestow any legal right upon the appellant. To put it
conversely, only on sanction by the State Government, could
the inchoate right under the agreement crystallize into a legally
enforceable right in favour of the appellant.
37. Still, in another case of K.K. Bhalla v. State of M.P. & Ors.
[(2006) 3 SCC 581], this Court did not approve and attach any
validity to the action of the Chief Minister directing and calling
for a proposal from the said Development Authority to make
36
allotment for development of an industrial area on concessional
terms and held that the purpose for which the allotments were
made might be well-meaning, but the allotments, being
contrary to the mandatory provisions of the Act and the Rules
were void and of no effect, being illegal.
38. Similarly, in the present case, the action of the
Development Authority in permitting mixed user was in
apparent violation of the statutory provisions in the Master
Plan.
39. Establishment of banks and nursing homes in the
residential sectors meant for residential use alone is
unequivocal violation of the statutory provisions in the Master
Plan.
40. Reverting to the case in hand, we may notice that the lease
deed executed in favour of the predecessor-in-interest of R.K.
Mittal and the other appellants had contained specific
stipulations that the lessee will obey and submit to all
directions issued, existing or thereafter to exist, as obeyed by
the lessor. The erection of the structure was also to be in
accordance with the approved plans. Clause (h) of the lease
deed specifically provides that the constructed building shall be
used only for the purpose of residential, residential-cum-
37
medical or surgical clinic and for no other purpose, that too
subject to such terms as are imposed by the lessor.
41. The transfer deed which was executed in favour of the
present appellants, with the approval of the Development
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
38
Authority. This also provided for levying certain additional
charges for granting such permission. Based on this proposal,
it is stated that a public notice was issued and objections were
invited.
43. The matter rested at that. This was not finalized. In other
words, no final decision was taken by the Development
Authority in consonance with the provisions of the Act to
permit such user in the residential sector. We, in fact, are
unable to understand why such action was initiated by the
authorities concerned, in face of the statutory provisions of the
Act, Regulations and the Master Plan in force. It is a settled
position of law that no authority can exercise the power vested
in it, contrary to law. In the present case, there appears to be
no proper data collected or study carried out by the
Development Authority even for mooting such a proposal, much
less amending the Plan or the Regulations. It is a matter of
regret that the Development Authority is dealing with such
serious matters in such a casual manner. Either way, this
certainly affected the rights of the parties adversely. It is not
only the rights of individuals which are to be examined by the
authorities concerned, but also the effect of such amendment
on the residential sector as a whole which is one of the relevant
factors to be considered.
39
44. The running of a bank or a commercial business by a
company in the residential sector is certainly not permissible.
In fact, it is in patent violation of the Master Plan, Regulations
and the provisions of the Act. We see no power vested in the
Development Authority to permit such user and ignore the
misuse for such a long period.
45. We may notice that only in two cases i.e. Oriental Bank of
Commerce (Sector 27, Noida) and Vijaya Bank (Sector-19,
Noida), the permission for running a bank in the residential
sector was granted for a period of five years and three years,
respectively. This permission came to end few years back and
was admittedly never renewed or extended. Even this initial
grant of permission is a case of lack of legal authority and is
contrary to the provisions of law. It is not the case of anyone
before us that the Development Authority had granted
permission for running a bank/commercial activity or nursing
home in the residential sector. A survey had been conducted
under the orders of the Court dated 3rd March, 2011. As per
this survey, a number of banks and nursing homes were 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
40
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 and is neither commercial nor mixed. As per
the Master Plan, its primary use is `residential’ where plots are
planned for residential purpose alone. It is, therefore,
abundantly clear from the pleadings on record that commercial
activity of any kind in the residential sector is impermissible.
These pleadings are in conformity with the statutory provisions
and the Master Plan.
47. All the cases where banks, nursing homes or any
41
commercial activity is being carried on, particularly like the
appellants’ case, where a bank and company are running their
offices in the residential sectors would amount to change of
user and thus be impermissible. The officers of the
Development Authority should refrain from carving out
exceptions to the implementation of the Master Plan and the
Regulations in force, that too without the authority of law. For
taking up any exercise for change of user or such similar
conditions, amendment to the relevant Regulations, Master
Plan and if needed, the provisions of the Act, is a condition
precedent. It should be ensured that such exercise would
further the cause and object of the Act and would not be
destructive to the scheme of the development. We have no
hesitation in our minds in holding that no such jurisdiction or
authority vests in the officers of the Development Authority to
permit change of user in its discretion and in violation of the
law in force.
48. Another important aspect is that the Development
Authority had taken a policy decision and had earmarked
specific areas where land was made available to the banks to
carry on their commercial activities in the commercial pockets
of the industrial or institutional sectors. This land was being
provided at a concessional rate and a number of banks had
42
taken advantage of this scheme to get the lands allotted to
them in the appropriate sectors. They have been given lands in
the commercial and even in the commercial pockets of the
industrial or institutional sector. However, the 21 banks
functioning in the residential sectors have not even opted to
apply under the said scheme. If they would apply, the
Development Authority has taken onto itself to consider the
same sympathetically. This Scheme was opened on 20th June,
2011 and closed on 11th July, 2011. 26 commercial plots were
offered for allotment under this Scheme in different sectors and
plots were even reserved 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 & Anr. v. Mange Ram Sharma & Anr., SLP (C) No.
24029/2005. In this case, according to the Development
Authority, the lessee is running a 20 bedded hospital with all
43
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 consultancy only in an area of
28.42 square metres on the ground floor and rest of the
premises is being used entirely for residential purposes. It is
also denied that any hospital is being run from the premises.
According to them, the order dated 15th October, 1994
terminating the lease is contrary to law and they have also
submitted an undertaking that the premises will not be used
for any purpose other than residential. According to the
applicant/respondent in terms of the lease deed, such a user is
permissible. The respondents being doctors, are carrying out
their professional activity in a limited portion and as such, they
have also placed on record a list of hospitals being operated
from residential blocks which have even been empanelled by
the appellant Development Authority. The Development
Authority is acting arbitrarily and not taking any action against
those persons, though they have executed the lease deed with
44
the same terms and conditions as the appellant’s. In this case,
this Court had appointed a local Commissioner to visit the
premises. As per report of the Commissioner dated
20thSeptember, 2003, the premises in question is a corner plot
in front of 30 metres wide road and had two gates. There is a
sign board displaying `Sharma Clinic and Medical Surgical
Centre’. Names of the doctors have also been displayed on the
sign boards on the boundary wall. There is a reception
counter which is attended to by a nurse. On ground floor, the
basement was still under construction. Major part of the
ground floor was being used as medical clinic. There were four
cabins used by different doctors of different specialties. The
first floor is being used for residential purposes. The second
floor is being partly used for residential purposes while there is
also an office on that floor. None of the parties had filed
objections to this report of the Local Commissioner and,
therefore, there is no reason for us not to accept the same.
Even as per the report of the Local Commissioner, the house is
being used for medical-cum-surgical clinic and is not merely a
consultant’s clinic. Use of a major part of the ground floor for
running the medical centre obviously is not permissible in
accordance with the provisions of the Act and the Regulations.
The Development Authority is expected to take proper action at
45
the earliest. Even if we reject the case of the appellant
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 and surgical
activity on a commercial scale. Thus, we find that action of the
Development Authority was justifiable.
46
52. One of the allegations against the Development Authority is
that they have acted arbitrarily and discriminatorily in issuance
of notices, in passing of orders of cancellation of the lease deed
and/or even in imposing other restrictions in relation to the
properties in question. It is their contention that commercial
activity, nursing homes and banks are operating in a large
number of residential houses but the Development Authority
has adopted a policy of pick and choose and has not acted
uniformly even in that regard. Certain instances have been
mentioned. Instances of banks have been mentioned in the
case of R.K. Mittal (supra), while nursing homes have been
mentioned in the case of Mange Ram (supra). We are unable to
grant approval to this discriminatory policy of the Development
Authority. They are expected to act fairly and judiciously in
such matters. The action of the Development Authority should
be free of arbitrariness and must be applied uniformly. The
ground of legitimate expectation taken by the lessees on the
premise that public notice had been issued by the Development
Authority proposing to permit mixed user in the residential
sector binds the Authority. Firstly, the action of the
Development Authority in issuing the notices is not in
accordance with law. Secondly, this argument is without any
substance and is misconceived. The doctrine of reasonable
47
expectation has no applicability to the present case and there
cannot be any waiver of statutory provisions as well. The user
of a sector is provided under the Master Plan and in
furtherance to Regulations and the provisions of the Act. It is
incapable of being administratively or executively altered. The
lessees, who have changed the user contrary to law, are liable
to be proceeded against as per the terms of the lease deed and
the provisions of the Act.
53. The Master Plan and the Zonal plan specify the user as
residential and therefore these plots cannot be used for any
other purpose. The Plans have a binding effect in law. If the
scheme/Master Plan is being nullified by arbitrary acts and in
excess and derogation of the power of the Development
Authority under law, the Court will intervene and would direct
such authorities to take appropriate action and wherever
necessary 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 Others [(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
48
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 & Ors. v. State of Haryana & Ors. [(1995) 2 SCC
577], wherein this Court was concerned with the issue whether
Dharmshala should be permitted to be constructed upon the
land which was reserved as open space under the plan. This
Court, while noticing the impact on environment, right to
hygienic environment and protection of the residents, observed
as under:-

“11. It is seen that the open lands, vested in the

Municipality, were meant for the public amenity to

the residents of the locality to maintain ecology,

sanitation, recreation, playground and ventilation

purposes. The buildings directed to be constructed

necessarily affect the health and the environment

adversely, sanitation and other effects on the

residents in the locality. Therefore, the order

passed by the Government and the action taken
49
pursuant thereto by the Municipality would clearly

defeat the purpose of the scheme. Shri D.V. Sehgal,

learned Senior Counsel, again contended that two

decades have passed by and that, therefore, the

Municipality is entitled to use the land for any

purpose. We are unable to accept the self-

destructive argument to put a premium on

inaction. The land having been taken from the

citizens for a public purpose, the Municipality is

required to use the land for the protection or

preservation of hygienic conditions of the local

residents in particular and the people in general

and not for any other purpose. Equally acceptance

of the argument of Shri V.C. Mahajan encourages

pre-emptive action and conduct, deliberately

chartered out to frustrate the proceedings and to

make the result fait accompli. We are unable to

accept the argument of fait accompli on the

touchstone of prospective operation of our order.”
54. An ancillary question that comes up for consideration is as
to how much area can be permitted to be used by a doctor to
run his clinic or by a lawyer or architect to run their offices in
the residential sector. If other conditions are satisfied, then as
the law stands today, according to the Development Authority,
they can be permitted to use 30 per cent of the Floor Area Ratio
(FAR) of the ground floor for their clinics/offices. Reference
can also be made to the judgment of this Court in the case of
Delhi Pradesh Citizen Council Vs. Union of India & Anr. [(2006) 6
SCC 305] wherein similar directions were issued. We are not
only relying upon the precedents of this Court, but such an
approach would also be permissible in face of the Regulations,
50
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 justification,
whatsoever, for the respondents to act arbitrarily in treating
equals who are similarly placed as unequals. There is also no
justification for the Development Authority to issue a public
51
notice in the fashion in which it has done. A few officers of the
Development Authority cannot collectively act in violation of the
law and frustrate the very object and purpose of the Master
Plan in force, Regulations and provisions of the Act.
56. For the reasons afore-recorded, we would dispose of the
appeals of the Development Authority, the
appellants/occupiers/ lessees, interveners and occupants in
the following terms:-
1. That banking or nursing homes or any other commercial
activity is not permitted in Sector 19 and for that matter,
in any sector, in the Development Area earmarked for
`residential use’.
2. That the 21 banks and the nursing homes, which are
operating in Sector 19 or any other residential sector,
shall close their activity forthwith, stop misuse and put
the premises to residential use alone, within two months
from the date of pronouncement of this judgment.
3. That lessees of the plots shall ensure that the occupant
banks, nursing homes, companies or persons carrying on
any commercial activity in the residential sector should
stop such activity and shift the same to the appropriate
sectors i.e. commercial, commercial pockets in
52
industrial/institutional area and specified pockets for
commercial use within the residential sector, strictly
earmarked for that activity in the development Plan,
Regulations and provisions of the Act.
4. That the Development Authority shall consider the request
for allotment of alternative spaces to the banks and the
persons carrying on other commercial activities, with
priority and expeditiousness.
5. That the Doctors, Lawyers and Architects can use 30 per
cent of the area on the ground floor in their premises in
residential sector for running their clinics/offices.
6. That for such use, the lawyers, architects and doctors
shall be liable to pay such charges as may be determined
by the Development Authority in accordance with law and
after granting an opportunity of being heard. The affected
parties would be at liberty to raise objections before the
Development Authority that no charges are payable for
such users as per the law in force.
7. In the event the lessee or the occupant fails to stop the
offending activity and/or shift to alternate premises within
the time granted in this judgment. The Development
53
Authority shall seal the premises and proceed to cancel
the lease deed without any further delay, where it has not
already cancelled the lease deed.
8. Wherever the Development Authority has already passed
the orders cancelling the lease deeds, such orders shall be
kept in abeyance for a period of two months from today. In
the event the misuse is not stopped within a period of two
months in terms of this judgment, then besides sealing of
the premises, these orders of cancellation shall stand
automatically revived and would come into force without
further reference to any Court. In the event the misuse is
completely stopped in all respects, the orders passed by
the authorities shall stand quashed and the property
would stand restored to the lessees.
9. These orders shall apply to all cases, where the order of
termination of lease has been passed by the Development
Authority irrespective of whether the same has been
quashed and/or writs of the lessees dismissed by any
Court of competent jurisdiction and even if such judgment
is in appeal before this Court.
10. The orders in terms of this judgment shall be passed by
an officer not below the rank of Commissioner. This
54
order shall be passed after giving an opportunity to the
parties of being heard by such officer. This direction shall
relate only to the determination of charges, if any, payable
by the lessee or occupant for the period when the
commercial activity was being carried on in the premises
in question.
57. The appeals are disposed of in the above terms, with no
order as to costs.
……………………………..J.

(Swatanter Kumar)

……………………………..J.

(Ranjana Prakash

Desai)

New Delhi;

December 05, 2011

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