Featured image for Supreme Court Judgment dated 24-10-2019 in case of petitioner name Shree Ram Urban Infrastructure vs State of Maharashtra
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FSI Dispute in Mumbai: Supreme Court Rules in Favor of Shree Ram Urban Infrastructure Ltd.

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In a landmark judgment, the Supreme Court of India ruled in favor of Shree Ram Urban Infrastructure Ltd. (SRUIL) in a case concerning Floor Space Index (FSI) regulations, the legality of public parking lots (PPLs), and urban development in Mumbai. The dispute involved allegations of unauthorized construction, compliance with Development Control Regulations (DCR), and the role of the municipal corporation in sanctioning large-scale construction projects.

The case was initiated when Janhit Manch, a public interest group, challenged the legality of the construction undertaken by SRUIL, specifically focusing on the PPL and the residential building associated with it. The Bombay High Court had ruled against SRUIL, raising concerns over deemed permissions and compliance with regulatory frameworks. The Supreme Court, however, set aside the High Court’s ruling and directed the Municipal Corporation of Greater Mumbai (MCGM) to take over the PPL while ensuring the legality of floors 44 to 56 of the residential building.

Background of the Case

Shree Ram Urban Infrastructure Ltd. had embarked on a high-profile real estate project in Mumbai, which included both a high-rise residential tower and a PPL. The project was approved under DCR 33(24), which allows developers to construct public parking lots in exchange for additional FSI benefits.

The key issues in this case were:

  • Whether SRUIL had valid approvals for the public parking lot and whether the deemed permissions were legally sustainable.
  • Whether the additional FSI granted for the PPL was in accordance with the prevailing laws and regulations.
  • Whether the construction beyond the plinth level was unauthorized, as alleged by Janhit Manch and the State of Maharashtra.

Arguments by the Petitioner (SRUIL)

SRUIL made the following submissions in defense of its construction activities:

  • The project was approved through proper channels, and deemed permissions were obtained under DCR 6(4), which allows for automatic approvals if the municipal authorities fail to respond within the prescribed timeframe.
  • The PPL was constructed with an investment of Rs. 165 crores and was intended to be handed over to MCGM free of cost, as per the agreement.
  • The residential building’s FSI was calculated based on the incentives granted under the PPL scheme, which was legally valid and in compliance with the regulatory framework.
  • The construction had been completed and occupied, and any attempt to challenge its legality at this stage would cause undue hardship to the homebuyers.

Arguments by the Respondents (State of Maharashtra and Janhit Manch)

The respondents raised several objections to the validity of SRUIL’s claims:

  • The construction of the PPL exceeded the permissible limits, violating the guidelines under which the incentive FSI was granted.
  • The commencement certificate issued to SRUIL was valid only up to the plinth level, and any construction beyond that was unauthorized.
  • The incentive FSI granted for the PPL was improperly used to justify the construction of floors 44 to 56 in the residential building.
  • The entire approval process was riddled with procedural irregularities, raising concerns over transparency and adherence to municipal laws.

Supreme Court’s Observations

The Supreme Court thoroughly examined the facts and legal principles applicable to the case. The key observations made by the Court were:

  • The deemed permission under DCR 6(4) was validly obtained by SRUIL, and there was no legal infirmity in the approval process.
  • The circular issued by the State Government restricting PPL height to ground + four floors was struck down in previous cases and could not be applied retrospectively to SRUIL’s project.
  • The PIL filed by Janhit Manch was delayed by several years, raising doubts about the legitimacy of the challenge.
  • MCGM had a responsibility to take possession of the PPL and ensure that it was used for the public benefit.

Final Judgment

Based on its findings, the Supreme Court ruled in favor of SRUIL and set aside the Bombay High Court’s decision. The key aspects of the final ruling included:

  • The deemed permission for the PPL was upheld as legally valid.
  • MCGM was directed to take over the PPL and ensure its operationalization for public use.
  • The issue of floors 44-56 in the residential tower was left to MCGM to determine within a period of one month.
  • Janhit Manch’s PIL was dismissed, and the Court held that public interest litigation should not be used as a tool for delaying legitimate development projects.

Implications of the Judgment

The Supreme Court’s decision has far-reaching implications for real estate development and urban planning in Mumbai. It reinforces the principle that deemed permissions under DCR are legally binding and cannot be arbitrarily challenged years after construction is completed. It also sets a precedent for future disputes involving incentive FSI and the construction of public parking lots.

Furthermore, the judgment highlights the need for municipal corporations to take timely action in matters of urban planning and public infrastructure development. The failure of MCGM to act promptly in this case led to prolonged litigation and uncertainty for homebuyers and developers alike.

Conclusion

The Supreme Court’s ruling in Shree Ram Urban Infrastructure Ltd. v. State of Maharashtra underscores the importance of legal certainty in urban development. It ensures that projects approved under existing regulatory frameworks cannot be arbitrarily challenged after substantial investments have been made. By directing MCGM to take over the PPL, the Court has also reinforced the importance of public infrastructure in rapidly growing urban centers like Mumbai.


Petitioner Name: Shree Ram Urban Infrastructure Ltd..
Respondent Name: State of Maharashtra.
Judgment By: Justice Arun Mishra, Justice Vineet Saran.
Place Of Incident: Mumbai, Maharashtra.
Judgment Date: 24-10-2019.

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