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Uttar Bhartiya Rajak Samaj Panchayat Banganga Rajak Samaj Co-operative Housing Society (Proposed) & Anr. v. The State of Maharashtra Through Secretary & Ors.

Civil Appeal · 2020 INSC 122Decided 31 Jan 2020
Civil Appeal Nos. 887-888 of 2020
Justice Mohan M. Shantanagoudar · Justice R. Subhash Reddy

Background

A housing society of slum dwellers and its appointed developer had been issued a Letter of Intent (LOI) in 2005 to redevelop a plot in Mumbai under a Slum Rehabilitation Scheme, but the plot fell within a Coastal Regulation Zone requiring separate clearance. While that clearance was pending, the Maharashtra Government introduced a new rule in 2008 requiring developers to pay a 25% premium on government-owned land used for such schemes, and authorities demanded over Rs. 8.47 crore in premium from the appellants. The appellants challenged this demand, arguing the delay in clearance (not their fault) should not expose them to a rule introduced after their original LOI.

Decision Breakdown

The Supreme Court held that the LOI was expressly valid for only three months, and since the appellants never took steps to formally keep it alive while awaiting coastal clearance, the LOI could not shield them from the new premium rule introduced in 2008. Because the LOI had lapsed, the appellants were bound by the government's 2008 resolution requiring payment of 25% premium under the Ready Reckoner rates. The Court found no illegality in the High Court's dismissal of the writ petition and the review petition, and dismissed the appeals.

Lesson Learnt

A regulatory approval or permit with an express validity period does not survive indefinitely just because of external delays; if a person wants to preserve such rights while clearances are pending elsewhere, they must take active steps to keep the approval alive rather than assuming it stays valid by default.

Official source (sci.gov.in)View Judgment (PDF)

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