Prasad Pandurang Tapkir v. The Assistant Director of Town Planning, Pune
Background
The appellants owned agricultural land near Pune and paid about Rs. 30.46 lakh as premium to the Town Planning authorities in 2012 to get extra Floor Space Index (FSI) for a group housing project. They later abandoned the housing plan and got permission instead to plot the land. Since they never used the extra FSI they had paid for, they sought a refund in 2015, but the authorities rejected it in 2020, saying there was no rule allowing such a refund, and the Bombay High Court upheld that rejection.
Decision Breakdown
The Supreme Court found the State's refusal arbitrary because the government did allow refunds of unused FSI premium for educational institutions, hospitals and star hotels, but not for residential projects: a distinction the Court found irrational and discriminatory, violating Article 14's guarantee against arbitrary State action. The Court held that since the appellants never benefited from the extra FSI, retaining their money was unfair, especially since there was no genuine delay on their part in seeking the refund. It allowed the appeal, set aside the High Court's judgment and the rejection order.
Lesson Learnt
When a citizen pays a government fee or premium for a privilege they end up not using, and the government has already carved out refund provisions for comparable situations, denying the refund on a technical or unreasoned distinction can be struck down as arbitrary under Article 14. The Court ordered a refund of Rs. 27.41 lakh (after a 10% administrative deduction) with 7% simple interest from the date of deposit.