On September 13, 2024, the Supreme Court of India delivered a landmark judgment in the civil appeal filed by Kukreja Construction Company and others vs. SOM and others, which revolved around the interpretation of Development Control Regulations (DCR), particularly Regulation 34 read with Para 6 of Appendix VII. The judgment has significant implications for the real estate sector in Mumbai, especially regarding the rights of developers to claim Floor Space Index (FSI) or Transferable Development Rights (TDR) for constructing public amenities.
Background of the Case
The case stems from the earlier 2009 judgment of the Supreme Court in Godrej & Boyce Manufacturing Company Limited vs. State of Maharashtra (commonly referred to as “Godrej & Boyce I”). In that ruling, the Court held that developers who construct public amenities at their own cost are entitled to 100% FSI or TDR, equivalent to the area of the amenity developed. This was a departure from the earlier position, which limited such entitlement to 15% or 25% of the area of the constructed road.
In the present case, developers, including Kukreja Construction, approached the Court after the Mumbai Municipal Corporation declined to grant them 100% TDR as per the earlier Godrej ruling. Moreover, an amendment to Regulation 34 of the DCR, notified in November 2016, had effectively nullified Appendix VII, further complicating the claims.
Key Issues Addressed by the Supreme Court
The primary question before the Supreme Court was whether the amendments to Regulation 34, made in 2016, would apply retrospectively. Additionally, the issue of delay and laches—on which the Bombay High Court had earlier dismissed several writ petitions—was also a central point of contention.
The Supreme Court clarified that compensation in the form of FSI or TDR should be granted to developers who have constructed amenities, even if they did not formally request it. Article 300-A of the Constitution, which protects the right to property, places a duty on the state to ensure that landowners or developers are compensated without unnecessary delay.
Supreme Court’s Decision
The Court held that the Bombay High Court was wrong in dismissing the petitions on the grounds of delay and laches. It ruled that the Mumbai Municipal Corporation was responsible for the delay in complying with regulations and directed it to consider the claims of the appellants for additional FSI/TDR based on the judgment in Godrej & Boyce I. In particular, the Court asked the Corporation to review the nature of amenities constructed by Kukreja Construction Company and others before determining the additional TDR/FSI.
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Conclusion
This judgment reaffirms the right of developers to claim 100% FSI/TDR for constructing amenities, as established in Godrej & Boyce I. The ruling also underscores the importance of timely compliance by municipal bodies and ensures that real estate developers are not unfairly deprived of their entitlements due to delays by government authorities.