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Civil Property & InheritanceSupreme Court of India

Godrej and Boyce Manufacturing Company Limited vs. The Municipal Corporation of Greater Mumbai & Ors.

Civil AppealDecided 8 May 2023
Civil Appeal No. 9021 of 2014
V. Ramasubramanian · Pankaj Mithal

Background

Godrej and Boyce owned land in Mumbai that Greater Mumbai's Development Plan had reserved for a "Recreation Ground." Under Section 126(1)(b) of the Maharashtra Regional and Town Planning Act, when such reserved land is surrendered to the municipal corporation, the owner can be compensated with Transferable Development Rights (TDR) equal to the surrendered area, plus "Additional TDR" if the owner also develops or constructs the amenity itself on the surrendered land at its own cost. Godrej surrendered the land in 1994-95, completed certain site works (cutting, levelling, filling, storm-water drains) through its architects, handed over possession in December 1995, and received a Development Rights Certificate (DRC) for ordinary TDR in January 1996, but no request for Additional TDR was made at that stage. Only in April 1998, after a builder (Mayfair Housing, represented by the company's later-appointed attorney) had separately sought and obtained permission in late 1996 to "develop and maintain" the ground, did Godrej apply for Additional TDR; this was rejected in 1998 citing a restrictive 1996 municipal circular, and again in 2010 after that circular was struck down in unrelated litigation. The Bombay High Court dismissed Godrej's writ petition, holding both that the 12-year delay amounted to abandonment of the claim and that, on the facts, Godrej had never actually developed the "amenity" (as opposed to merely doing preparatory site work to get the land accepted for ordinary TDR).

Decision Breakdown

The Supreme Court disagreed with the High Court on the delay/abandonment point, holding that since the company's own earlier TDR-circular dispute over a different property was pending before the Supreme Court until 2009, Godrej's right to claim Additional TDR was reasonably "in suspended animation" during that period, so the wait could not be treated as abandonment. However, on the core factual question, the Court closely traced the correspondence and found that all the site work done before December 1995 (cutting, levelling, storm-water drains) was undertaken solely to persuade the Corporation to accept the land surrender and grant ordinary TDR, not as "development of the amenity" for Additional TDR purposes, since Godrej's own application form at that time had explicitly answered "does not arise" to the question of whether it proposed to build the amenity under the relevant clause. It was only after Mayfair Housing entered the picture in November 1996, sought permission to develop and maintain the ground, and was given two powers of attorney by Godrej in December 1996, that a claim for Additional TDR first surfaced, but the Corporation had expressly told Mayfair Housing it would not be entitled to any TDR for that later development work. The Court held this sequence made clear that no genuine "development of amenity" (as legally required for Additional TDR) had been carried out by the original owner, upholding the High Court's factual finding on this point and dismissing the appeal, with no order as to costs.

Lesson Learnt

In compensation schemes with multiple, distinct conditions (like ordinary TDR for surrendering land versus Additional TDR for separately developing an amenity on it), the specific representations a party makes in the contemporaneous paperwork, such as explicitly disclaiming an intention to build the amenity, can be decisive years later in showing what was really being claimed and when, regardless of how the land eventually looks.

Godrej and Boyce Manufacturing Company Limited vs. The Municipal Corporation of Greater Mumbai & Ors. – Legal Case Shots | LegalAware