Chennai Metropolitan Development Authority v. D. Rajan Dev and Others
Background
A Chennai builder, D. Rajan Dev, applied in May 2011 for additional Floor Space Index (FSI) under the government's "Premium FSI Scheme" for a residential-cum-commercial project. By the time the Chennai Metropolitan Development Authority (CMDA) processed the application and the government finally approved it in May 2012, the land's official guideline value (used to calculate the FSI charge) had risen sharply. The builder argued he should pay based on the lower guideline value prevailing when he first applied, and the Madras High Court's Division Bench agreed with him, directing CMDA to recalculate charges at the earlier, lower rate.
Decision Breakdown
The Supreme Court held that no legal right accrues to a builder merely by filing an application: the right to the Premium FSI benefit arises only once the government actually grants approval, and charges must be calculated using the guideline value in force on that approval date, not the application date. The Court found no undue delay by CMDA or the government in processing the application, noting the builder himself had initially submitted a defective plan. It relied on its own recent precedent (Prestige Estates) holding that Premium FSI liability crystallises on the date of government approval. The High Court's judgment was set aside, the appeal was allowed, and CMDA was permitted to recover the balance Premium FSI charges from the builder.
Lesson Learnt
Merely submitting an application for a government permission or benefit does not create a vested right: the applicable rates, fees, or charges are generally those prevailing on the date the authority actually grants approval, not the date the application was filed, unless the authority itself caused unreasonable delay.