Holding

A court‑ordered time limit does not create a vested right or settled expectation; the sanction must be decided according to the building rules and resolutions in force at the time of grant or refusal, and public interest prevails.

Summary

The Ganges Rope Co. applied to the Howrah Municipal Corporation for sanction to construct a seven‑storey building. The corporation failed to decide within the statutory 60‑day period, prompting the High Court to order a sanction up to the fourth floor and to allow the company to seek further sanction. After the corporation granted the fourth‑floor sanction, the company applied for three additional floors. While the application was pending, the West Bengal government amended the Howrah Municipal Corporation Building Rules, 1991, and the corporation passed a resolution restricting building heights on GT Road. The corporation refused the additional‑floor sanction. A Single Judge of the High Court upheld the refusal, but a Division Bench later granted the sanction, creating a dispute. The Supreme Court held that the court‑ordered time limit did not create a vested right or settled expectation for the company; the applicable law at the time of granting or refusing sanction is the law in force then, i.e., the amended rules and resolution, which serve public interest. Consequently, the Division Bench order was quashed and the Single Judge’s order restored.

Issues considered

Whether a court‑imposed time limit for deciding a building‑sanction application creates a vested right or settled expectation in favour of the applicant.
Whether the amendment of the Howrah Municipal Corporation Building Rules and the corporation’s resolution restricting building height can defeat the applicant’s claim to sanction for additional floors.
Whether the corporation’s refusal to grant sanction, in light of the amended rules, violates any statutory or public‑interest considerations.

Subjects

building sanctionvested rightsettled expectationmunicipal corporationamendment of building rulespublic interestheight restrictionstatutory interpretation

Judgment

A HOWRAH MUNICIPAL CORPN. AND ORS. 'f '
v.
GANGES ROPE CO. LTD. AND ORS.

DECEMBER 19, 2003

B [SHIVARAJ V. PATIL AND D.M. DHARMADHIKARI, JJ.]

Building Laws :

Howrah Municipal Corporation Act, 1980-Sections 175 and 215-
C Howrah Municipal CorporatiOn Building Rules, 1991-Sections 3, 4 and
20-Construction of multi-storied buildings-Sanction for construction
upto 7th floor-Grant of-Corporation not granting sanction within the
prescribed period and also within four weeks period granted by Court
which was further extended-High Court directing Corporation to grant
sanction upto 4th .floor and permitting Company to apply for further
D sanction beyond 4th floor if permissible-Grant of sanction upto 4th
floor-Application for sanction for construction. of additional jloors-
Rejection by Corporation, High Court expressing expectation for decision
on pending application with plan within four weeks-Subsequent amendment
to Building Rules and resolution of Corporation putting restriction on
E height of high rising building on GT road-Company claiming creation of
vested right to seek sanction irrespective of the amendment-Single Judge
of High Court rejecting Company's prayer in public interest, however
Division Bench directing grant of sanction for construction above 4th
floor-Held : Such 'settled expectation ' cannot create any vested right to
F obtain sanction-Claim based on alleged 'vested right' or 'settled
expectation' cannot be set up against statvtory provisions brought into
force by State Government by amending building rules and not by
Corporation against whom such vested right or settled expectation is being
enforced-Further, such settled expectation or vested right cannot be
countenanced against public interest and convenience sought to be served
G by amendment and resolution-Hence, order ofSingle Judge of High Court
restored and that of Division Bench quashed

Respondent-company applied for sanction for constructi~n of
multi-storied building· upto seven floors. Appellant-Corporation did
H not grant sanction within the prescribed period and also within four
1212
HOWRAH MUNICIPAL CORPN. v. GANGES ROPE CO. LTD. 1213

weeks period granted by the Court which was further extended. High A
Court then directed the Corporation to grant sanction upto 4th floor
level a_nd also permitted the Company to apply for further sanction
beyond 4th floor if permissible. Corporation granted sanction and
construction was completed upto 4th floor. Respondent then applied
for sanction for three additional floors with separate building plans B
which was rejected. Single Judge of High Court held that as the right
of the company was reserved to apply for sanction for further floors,
Corporation was bound to accept the construction plan and directed
the Corporation to pass appropriate orders within four weeks. Re-
spondent again approached the Corporation and as directed submitted C
the required papers and documents. While the matter was pending for
sanction for construction before the Corporation, State amended the
Howrah Municipal Corporation Building Rules, 1991 restricting height
of the buildings; consequent thereto Corporation passed a resolution
restriction height of the building on GT Road and the Corporation
refused to grant the permission. Single Judge of High Court held that D
the sanction for additional three floors cannot be granted as the
Building Rules have been amended and the resolution of the Corporation
restricts height of the building on GT Road. However, Division Bench
of High Court granted sanction for construction of three additional
floors. Hence the present appeal. E
Appellant-Corporation contended that order of the Court direct-
ing sanction within a specified pek'iod, did not create a vested right in
favour of the company to seek sanction for construction of additional
three floors, that the Division Bench of High Court erred in holding
that the unamended rules and regulations in force on the date of F
submission of the application seeking sanction for further construction,
would govern the matter of sanction and the subsequent amendment
cannot take away the alleged vested right for seeking sanction by the
company; that in view of the amendment to the Building Rules and the
consequent resolution taken by the Corporation restricting height of G
buildings on GT Road, Corporation had to refuse the sanction for
construction of three additional floors and this communication
although delayed, cannot be described as malicious or against public
interest; that it is denied th~t despite the order of the Court granting
four weeks, the application for sanction was deliberately not considered H
1214 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A by the Corporation; and that there was no time-bound mandate by the "l'.

court to the Corporation.

Respondent-company contended that the Division Bench of High
Court was justified in holding that on the. order of High Court fixing
a period within which the Corporation had to decide the application
B for sanction for constructing additional floors, a vested right was
created in favour of the company to seek sanction; that the time bound
orders of the Court were not only disregarded but were deliberately
flouted for extraneous reasons; that the Corporation cannot refuse
sanction when it has deliberately delayed the processing of application
c for sanction beyond the period fixed by the Court and to allow the
application to be rendered infructuous as a result of the amendment
.to the Building Rules; that had the application for sanction decided
within the time allotted, the company would have got the sanction
order, and that Rules (3) and (4) making submission of fresh plan and
D application for sanction apply in normal circumstances but in the
instant case there was an order of the High Court reserving a 'liberty'
and a right to the company to seek sanction for further construction
above 4th floor.

Allowing the appeal, the Court
E
HELD : I. In the matter of sanction of building for construction
and restricting their height, the paramount consideration is public interest
and convenience and not the interest of a particular person or a party.
The sanction directed to be granted by Division Bench of High Court
F for construction of additional floors in favour of respondent is clearly
in violation of the amended Howrah Municipal Corporation Building
Rules, 1991 and the Resolution of the Corporation which restrict height •
of buildings on GT Road. This Court in its discretionary jurisdiction
under Article 136 of the Constitution cannot support the impugned
order. Single Judge of High Court was right in rejecting the prayer of
G the respondent company in public interest and the Division Bench of
High Court erred in directing grant of sanction for further construction
above four floors. Therefore, the order ofDivision Bench of High Court
is quashed and that of Single Judge is restored. 11234-B-FJ
~·.

H 2.1. The insistence on the part of the Corporation for documents
HOWRAH MUNICIPAL CORPN. v. GANGES ROPE CO. LTD. 1215

and additional information and fresh plan cannot be termed as A
malicious or a deliberate attempt on their part to delay the processing
of the application since by virtue of Rule 3 of the Building Rules for
re-erecting or making addition to the existing building, submission of
fresh plan for sanction was necessary and by Rule 4 fresh application
for sanction with plans. Further, the order th2t the applicant will not B
be 'prevented' from applying for further sanction cannot absolve the
applicant from the obligations prescribed in Rules 3 & 4 of the Building
Rules. The company complied with the necessary ,requirement~ but
thereafter, the Building Rules were amended by the State and restric-
tions have been imposed on Jteight of buildings on the GT Road. C
Therefore, the action· of the Corporation cannot be malicious. It can
have no bona fide or ma/a fide hand in it. After the amended Building
:Rules were notified, the Corporation on relevant ground of limited
resources for civic amentities in a congested city like Howrah, with the
approval of Mayor-in-Council, could legally impose legitimate
restrictions on the height of buildings, on specified wards, roads and D
localities. Further, the restrictions are not imposed only on GT Road
but there was several specified wards and areas in which restrictions
are applied. It cannot be accepted that such a legislative change and
consequent resolution came to be passed and got approved only to
frustrate the pending application of the company. (1231-A-D) E
2.2. It is undeniable that after the amendment of Howrah Munici-
pal Corporation Building Rules 1991 and the Resolution passed by the
Corporation thereunder restricting heights of buildings on specified
wards, roads and localities would apply to all pending, applications for
sanction. Regarding the case of the applicant seeking sanction who had F
approached the court and obtained consideration of its applications for
sanction within a specified period, in the various orders passed by High
Court in writ petitions successively filed by the company in an effort
to obtain early sanction for its additional construction of three floors
no mandate is issued to the Corporation to grant a sanction. High G
Court directed in the first order merely a 'liberty' or option to the
company to seek sanction for additional three floors. In the subsequent
order, an 'expectation' was expressed for decision of the pending
applications within a period of four weeks. Thus, there was an order
of High Court in favour of the company directing the Corporation to H
1216 SUPREME COURT REPORTS (2003] SUPP. 6 S.C.R.
"Y ',
A decide its pending applications for sanction within the allotted period
but non-compliance thereof by the Corporation cannot result in
creation of any vested right in favour of the company to obtain sanction
on the basis of the Building Rules as they stood on the date of making
application for sanction and regardless of the amendment introduced
B to the Building Rules. Neither the provisions of the Act nor general law
create any vested right. Conceding or accepting such a so-called vested
right of seeking sanction on the basis of unamended Building Rules,
as in force on tit~ date of application for sanction, would militate
against the very scheme of the Act contained in Chapter XU and the
C Building Rules which intend to regulate the building activities in a local
area for general public interest and convenience. It may be that the
Corporation did not adhere to the time limit fixed by the Court for
deciding the pending applications of the company but the Building
Rules with prohibition or restrictions on construction activities, as
applicable on the date of grant or refusal of sanction, would govern
D the subject matter and not the Building Rules as they existed on the
date of application for sanction. No discrimination can be made
between a party which had approached the court for consideration of
its application for sanction and obtained orders for decision of its
application within a specified time and other applicants whose
E applications are pending without any intervention or order of the
Court. [1232-A-H; 1233-A)

2.3. The context in which respondent-company claims a vested
right for sanction and has been accepted by Division Bench of High
Court, is not a right in relation to 'ownership or possession of any
F property' for which.the expression 'vest' is generally used, but on the
basis of Building Rules, as applicable to their case on the date of
making an application for sanction and the fixed period allotted by the
court for its consideration, it had a 'legitimate' or 'settled expectation'
to obtain the sanction. Such 'settled expectation', if any, did not create
G any vested right to obtain sanction. Respondent-company which has
no control over the manner of processing of application for sanction
by the Corporation cannot be blamed for delay but during pendency
of its application for sanction, if the State Government, in exercise of
its rule making power, amended the Building Rules and imposed
H restrictions on the heights of buildings on G.T. Road and other wards,
HOWRAH MUNICIPAL CORPN. v. GANGES ROPE CO.LTD. [DHARMADHIKARI, J.] 1217
such 'settled expectation' has been rendered impossible of fulfilment A
due to change in law. The claim based on the alleged 'vested right' or
'settled expectation' cannot be set up against statutory provisions
which were brought into force by the State Government by amending
the Building Rules and .not by the Corporation against whom such
'vested right' or 'settled expectation' is being sought to be enforced. B
The 'vested right' or 'settled expectation' has been nullified not only
by the Corporation but also by the State by amending the Building
Rules. Furthermore, such a 'settled expectation' or 'vested right'
cannot be countenanced against public interest and convenience which
are sought to be served by amendment of the Building Rules and the
resolution of the Corporation issued thereupon. [1233-C-H; 1234-A) C

Us.man Gani J. Khatri of Bombay v. Cantonment Board, [1992) 3
SCC 455; State of West Bengal v. Terra Firma Investment & Trading Pvt.
Ltd., [1995) 1 SCC 125 and Chet Ram Vashist v. Municipal Corporation
of Delhi & Anr., [1980) 4 sec 647, referred to. D
Judicial Dictionary (A complete Law Lexicon), Thirteenth Edition
by K.J. Aiyer, relied on.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 8561 of
1997. E:
From the Judgment and Order dated 5.9.97 of the Calcutta High Court
in A. No. 404/96 Arising out ofC.A. No. 3145/96 arising out of A.P.O.T.
No. 520 of 1996.

Tapas Ray, Dr. Rajeev B. Masodkar and L.C. Agrawala for the F
Appellants.

Shanti Bhushan, Sunil Kumar Jain, Manish Kumar, Ansar Ahmed
Chaudhary and S. Bo1thakur for the Respondents.

The Judgment of the Court wad deliered by
G

DHARMADHIKARI, J. : By this appeal, the Howrah Municipal
Corporation challenges the Division Bench judgment dated 05.9.1997 of
the High Court of Calcutta whereby it has reversed the judgment dated
6.8.1996 passed in Writ Petition No. 2561 of learned Single Judge ofthat H

•
<'
1218 SUPREME COURT REPORTS (2003] SUPP. 6 S.C.R.
,., '
A Court. The Division Bench has directed grnnt of sanction for construction
of three additional floors to the multi-storeyed complex which is already
constructed up to four floors belonging to respondent - Ganges Rope Co.
Ltd.

The learned Single Judge in his order found that although the sanction
B for construction for additional three floors to the existing complex, sought
by the respondent - company, was delayed by the Corporation without any
justification, its prayer for grant of sanction for additional three floors
cannot be granted as the Howrah Municipal Corporation Building Rules
1991 framed under the provisions of Howrah Municipal Corporation Act
c 1980 (for short "the Act") have been amended and the resolution of the
Corporation issued thereunder prohibit multi-storeyed construction above
one plus two floors on G.T. Road, Howrah.

The Division Bench of the High Court by the impugned judgment by
taking a contrary view has held that sanction for construction of the multi-
D
storeyed complex of respondent - company up to fourth floor having been
granted by orders of the High Court in the earlier Writ Petition with liberty
reserved in favour of the company to seek sanction up to 7th floor, it was
not open to the Corporation to refuse sanction only because after expiry
of the stipulated period of sixty days provided in the rules for grant of
E sanction or refusal and expiry of the extended period granted by the High
Court, Building. Rules have been amended prohibiting construction of
multi-storeyed buildings above third floor on the G.T. Road, Howrah.

Only few relevant dates and facts are necessary for deciding the
F controversial issue regarding sanction of additional three floors to the
multi-storied complex. The respondent-company first applied for sanction
for construction of its complex up to seven floors on 6. 7 .1992. Since the
sanction was not granted within the prescribed period of sixty days in
accordance with the Building Rules, it approached the High Court in Writ
Petition. The learned Singh Judge made the following directions in his
G order passed on 26.4.1993 :-

"I dispose of this application with a direction upon the Howrah
Mµnicipal Corporation authorities to consider and dispose of the
.......
petitioners' application for grant of sanction of the building plan
H submitted by them on 6th July, 1992, within a period of four

...
•
HOWRAH MUNICIPAL CORPN. v. GANGES ROPE CO.LTD. [DHARMADHIKARI, J.] I2 I9
weeks from date in accordance with the provisions of Howrah A
Municipal Corporation and the Building Rules.

In default, the parties are at liberty to mention the matter."

The period granted to the Corporation to decide the application for B
sanction was extended by a further period of three weeks by learned Judge
on 28.5; 1993. Since the Corporation did not either grant or refuse the
sanction even within the extended time, the respondent approached the
High Court again on 23 .12.1993. The Court passed the following order :-

"It appears that sanction of building Plan within Howrah Munici- C
pal area is permissible up to ground plan 4th floor level and as
contended on behalf of the petitioners even up to 7th floor level."

This submission made on behalf of the appellants is not disputed
on behalf of the Howrah Municipal Corporation.
D
Having regard to the above, I dispose of the application by
directing the Howrah Municipal Corporation to grant sanction to
the petitioners' Plan submitted on 6th July 1992 up to the 4th floor
level, if all the requirements are duly complied with by the writ
petitioners. Such sanction must be given by the Howrah Munici- E
pal Corporation within one month from the date of communica-
tion of this order. The Howrah Municipai Corporation is directed
to notify the petitioners the necessary sanctioning copies and the
same is to be deposited by the petitioners upon being so notified.

This order will not prevent the petitioners from applying for
F
further sanction if the same at all permissible at a later date. The
application is thus disposed of "

(Italics to add emphasis)
G
It is not in dispute that after the order dated 23.12.1993 on grant of
sanction by the Corporation, construction in the Building Complex up to
4th level has been completed. On the basis of the above order in which
liberty was given to the present respondent company to apply for further
sanction to construct beyond 4th floor up to 7th floor, further sanction was H
1220 SUPREME COURT REPORTS [2003) SUPP. 6 S.C.R.
·-:;.
A sought by letter dated 27th May, 1994, addressed to the Corporation with
separate building plans for three additional floors.

Since the Corporation did not accept the application and communi-
cated no order of sanction, the respondent-company again approached the
High Court. Learned Single Judge of the High Court in his order dated
B 24.6.1994, by referring and reproducing the earlier order of the High Court
dated 23.12.1993, held that as the right to the company was reserved to
apply for sanction for further floors, the Corporation was bound to accept
the construction plan. The learned Judge directed that on the application
with plan submitted for construction of three additional floors, the Corpo-
c ration should pass appropriate orders within four weeks from the date of
submission of the plan and receipt of copy of the order.

Armed with the above order, the company again approached the
Corporation by letter dated 28.6.1994 to grant sanction of construction of
D three additional floors. The Corporation wrote back on 28. 7 .1994 demanding
from the company submission of fresh plans. Second letter dated 19.9.1994
was also addressed by the Corporation to the Company requiring submis-
sion of requisite number of prints of proposal, tax clearance certificate,
previous sanctioned plan, indemnity bond for deep foundation work,
proposal plans approved by Fire Service Authority and other documents
E showing permission for 'change of use'. The company al~ng with the letter '
dated l 0.8.1994 complied with the directions and submitted the required
papers and documents.

When the application for sanction for construction of additional three
F floors, filed by respondent company was pending for sanction with the
Corporation, the Government of West Bengal by Notification published in
the Calcutta Gazette (Extraordinary) dated 15. 7.1994, in exercise of powers
under section 215 of the Act amended the 'Building Rules' restricting
height of high rising buildings to the prescribed level depending upon the
width of the street on which the building is proposed to be constructed.
G
This restriction on the height of the building proportionate to the width of
the street was prescribed in table under sub-rule (1) Rule 20. For streets
including G.T. Road with width up to 18-20 meters, the permissible height
of buildings prescribed is 36 metres. The permissible· construction, there- .....-:--
fore, for G.T. Highways could be up to 36 metres i.e; about 11 to 12 floors.
H >--
HOWRAH MUNICIPAL CORPN. v. GANGES ROPE CO.LTD. [DHARMADHIKARI, J.] 1221

Under amended sub-rule (3) of Rule 20, however, the Commissioner, with A
approval of Mayor-in-Council was granted power to restrict the height of
high rising buildings in specified areas and wards keeping in view the
limited civic amenities. Sub-rule (3) of Rule 20, as amended by Notifica-
tion dated 15.7.1994, needs to be reproduced as Corporation has placed
heavy reliance on the same to justify refusal of sanction :- B
"Notwithstanding anything contained in sub-rules (I) and (2), if
the Commissioner, having regard to (a) the existing water supply,
sewerage and drainage system in any ward or part thereof, or (b)
the traffic carrying capacity of a street in any ward or part thereof,
or (c) the density of population of that area, or (d) the commercial C
activity of that area, or (e) the conditions of the existing building,
is of the opinion that the erection of any building exceeding I 0
metres in height or execution of any work in such ward or part
thereof will put additional burden on the existing civic services,
he may sanction erection of such building or execution of such D
work subject to such restrictions ofheight and F.A.R. or conditions
including uses as he may deem fit to impose, provided that no
such action shall be taken by the Commissioner without the prior
approval of the Mayor-in-Council. "

In exercise of powers under sub-rule (3) of Rule (20) (as amended E
with effect from 15.7.1994) with due approval of Mayor-in-Council, the
Commissioner of the Corporation imposed a restriction on construction of
buildings exceeding ten metres in height in the prescribed wards and streets
which include GT Road on which the respondent seeks sanction for
construction of additional three floors. The relevant resolution of the F
Corporation dated 02.9 .1994 in its relevant parts reads thus :

"Having regard to -

... 1. The existing water supply, sewerage and drainage system in G
any Ward or part thereof, or

2. The traffic carrying capacity of a street in any ward or part
thereof, or

3. The density of population of that area or H
1222 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A 4. The commercial activity of that area or

5. The conditions of the existing building, it is unanimously
felt that erection of any building exceeding 10 mts. in height
in the following Ward/Street will put additional burden to
existing civic services and therefore following decision is
B taken in terms of Rule 20(3) of amended H.M.C. Building
Rules:

(a) The height of the building is to be restricted within 10
metres in the Ward Nos. 12 to 16, 29 to 31 and 33 to
c 40.

(b) In case ofG. T. Road facing South to North ofany order
Wards other than above in item (1) restriction of new
building proposals upto JO metre of height to be
imposed upon the holdings which fall within 50 metres
D to both sides of the road. But in practising so, when a
holding is affected pa1tly, in that case the entire holding
should be considered as affected holding.

(c) In cases of holdings with reference to Kona Express
E Highway & l 00' HIT Road from Beliapole to Natabar
Paul Road crossing they should also be dealt with as
per Item (2) above.

Decision

F The above mentioned orders of Mayor dated 10.7.94 in
regard to amendments of H.M.C. Building Rules, 1991 permis-
sible height of Building, Flpor Area Ratio & conditions including
uses is confirmed.

G Certified to be true copy of the origin.

Sd/-
Secretary,
Howrah Municipal Corporation"

H (Underlining for pointed attention)
HOWRAH MUNICIPAL CORPN. v. GANGES ROPE CO.LTD. [DHARMADHIKARI, J.] 1223

On the basis of the amended Rule 20 which came into force with A
effect from 15.7.1994 and the consequential resolution dated 18.7.1994 of
Corporation which was taken with the approval of Mayor-in-Council, the
Corporation by letter dated I 6.9. I 994 informed the respondent company
that in view of the restrictions imposed on the height of buildings on GT
Road, the sanction sought by them for additional three floors cannot be B
granted. The proposal for futiher construction, therefore was "treated as
cancelled."

Learned counsel appearing for the Corporation in assailing the
impugned order of the Division Bench contends that in view of the
amendment introduced by the State of West Bengal to the Building Rules C
and the consequent resolution taken by the Corporation restricting height
of buildings on GT Road, the Corporation had no option but to refuse the
sanction for construction of three additional floors and this communication
of the Corporation although delayed, cannot be described as malicious or
against public interest. It is also contended on behalf of the Corporation D
that on the orders of the Court directing sanction within a specified period,
no vested right was created in favour of the company to seek sanction for
construction of additional three floors. The Division Bench was clearly in
error in coming to the conclusion that the unamended rules and regulations
in force on the date of submission of the application seeking sanction for E
further construction, would govern the matter of sanction and the subse-
quent amendment to the Building Rules cannot take away the alleged
vested right for seeking sanction by the company.

Learned counsel argued that a claim for such vested right for sanction F
for construction was negatived in comparable circumstances in two
decisions of this Court viz. Usman Gani J. Khatri ofBombay v. Cantonment
Board, (1992] 3 SCC 455 and State of West Bengal v. Terra Firma
Investment & Trading Pvt. Ltd., [1995] l SCC 125.

On the other side learned counsel appearing for the respondent - G
company took this Court through the various orders made by the High
Court from time to time successive Writ Petitions filed by the company.
The provisions of the Act and the Building Rules were read to contend that
the Division Bench was fully justified in coming to the conclusion that on
the date the High Court allowed the company to submit plans for sanction H
1224 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.
A for construction of additional three floors and fixed a period within which
the Corporation had to decide the application for sanction, a vested right
had been created in favour of the company to seek sanction on the basis
of the unamended Building Rules as they existed. It is argued that on the
basis of subsequent amendment to the rules, it is not open to the
B Corporation to refuse sanction when the Corporation is found to have
maliciously and for extraneous reasons delayed the processing of application
for sanction much beyond the period fixed for the purpose by the last order
of the High Court in the earlier writ petition.

Learned counsel submits that had the application for sanction submit-
C ted with plans by the company for constructing three addirional floors been
decided within the time allotted by the High Court, the company would
naturally have got the order of sanction because by that date the amended
Building Rules and the consequent resolution of the Corporation restricting
height of buildings on G.T. Road had not come into force.
D The main question that falls for consideration before us is whether,
by the order of the Court in which a period was fixed for the corporation
to take a decision on the application for sanction for construction of
additional floors, any vested right has been created in favour of the
company to seek sanction for the construction of additional three floors
E irrespective of subsequent amendment to the Building Rules and the
resolution of the Corporation putting restrictions on the height of high
rising buildings on GT Road.

The subject of sanction of construction is governed by the provisions
F of the Act, Rules and Regulations as also the Resolution oftbe Corporation
which was taken with approval of Mayor-in-Council. The statutory
provisions regulating sanction for construction within the municipal area
are intended to ensure proper administration of the area and provide proper
civic amenities to it. The paramount considerations ofregulatory provisions
G for construction activities are public interest and convenience. On the
subject of seeking sanction for construction, no vested right can be claimed ..
by any citizen divorced from public interest or public convenience.

To decide on the justification of the claim raised on behalf of the
company that the order of Court fixing a time limit for the Corporation to
H decide its application for sanction creates a vested right, it would be
HOWRAH MUNICIPAL CORPN. v. GANGES ROPE CO.LTD. [DHARMADHIKARI, J.] 1225

necessary to examine the relevant provisions of the Act, Rules and the A
Regulations. Chapter XII of the Act contains provisions regulating sanction
for construction or erection of buildings in the area within the limits of the
Corporation. Section 173 states : "No person shall use any place of land
as a site for erection of a new building except in accordance with the
provisions of this Act and the regulations made under this Act in relation B
to such erection of building.'' Section 174 requires : "Every person who
intends to erect a building shall apply for sanction by giving notice in
writing of his intention to the Commissioner in such form and containing
such information or document as may be prescribed." Section 175 reads:-

"Section 175. The Commissioner shall sanction the erection of C
building ordinarily within a period of sixty days unless any
further information or document be called for or sanction be
refused in the meantime on such grounds as may be prescribed."
[Emphasis added]
D
What is to be noted from Section 175 (quoted above) is that a period
of sixty days is not a firm outer limit as the words "sixty days" are prefixed
. by the word "ordinarily." It is also to be noted that the provisions of the
Act under consideration, compared with other Corporatio11 Acts of other
States, do not provide for 'deemed sanction' or 'deemed rejection' after E
expiry of the prescribed period fixed for deciding the application for
sanction.

In the case of Chet Ram Vas/.iist v. Municipal Corporation of Delhi
& Anr., (1980] 4 sec 647, the provisions contained in Section 313 of the F
Delhi Municipal Corporation Act, 1957 came up for consideration where
not only a period of sixty days was prescribed for according or disallowing
sanction for construction but proviso under sub-section (5) of that section
further provided that in no case, passing of orders on the application for
sanction shall be delayed beyond sixty days after necessary information
demanded by the Corporation has been received. Even on such specifica- G
tion of fixed period, this Court held :-

. ''Sub-sections (3) and (5) of Section 313 prescribed a period
within which the Standing Committee is expected to deal with the
application made under sub-section (1). But neither sub-section H
1,.

)
1226 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R. t
A declares that if the Standing Committee does not deal with the
application within the prescribed period of sixty days it will be
deemed that sanction has been accorded. The statute merely
requires the Standiilg Committee to consider the application
within sixty days. It stops short of indicating what will be the
result ifthe Standing Committee fails to do so. If it intended that
B
the failure of the Standing Committee to deal with the matter
within the prescribed period should imply a deemed sanction it
would have said so. They are two distinct things, the failure of
the Standing Committee to deal with the application within sixty
days and that the failure should give rise to a right in the applicant
c to claim that sanction has been accorded. The second does not
necessary follow from the first. A right created by legal fiction
is ordinarily the product of express legislation. It seems to us that
when sub-section (3) declares that the Standing Committee shall
within sixty days of receipt of the application deal with it, and
D when the proviso to sub-section (5) declares that the Standing
Committee shall not in any case delay the passing of orders for
more than sixty days the statute merely prescribes a standard of
time within which it expects the Standing Committee to dispose
of the matter. It is a standard which the statute considers to be
E reasonable. But non-compliance does not result in a deemed
sanction to the lay-out plan."
t
The provisions of the Act, therefore, contemplate an express sanction
to be granted by the Corporation before any person can be allowed to
construct or erect a building. Thus, in ordinary course, merely by submis-
F sion of application for sanction for construction, no vested right is created
in favour of any party by statutory operation of the provisions. The
question then is whether such a vested right can be deemed to have been
created by the fixation of time limit by the Court in its order for considering
the applica~ion for sanction. In th~ order dated 23.12.1993 sanction was
G granted for construction up to 4th floor level and for further construction
it was observed thus :

"This order will not prevent the petitioners from applying for
further sanction if the same at all permissible at a later date."

H After the above order, the company applied for sanction of additional
HOWRAH MUNICIPAL COR.PN. v. GANGES ROPE CO.LTD. [DHARMAOHIKARI, J.] 1227
ll'llt" three floors. The stand to the company, as contained in letters, addressed A
to the Corporation, appears of be that it was entitled to seek sanction on
the same application which it had earlier filed with plans for seven floors
and on which under the orders of the courts in the first writ petition,
sanction was granted up to four floors. The Corporation sent replies :md
sought documents and additional information from the company. It was
B
insisting on the company to submit fresh application for sanction with plans
of three additional floors to their existing construction. This insistence on
the part of the Corporation cannot be termed as malicious or a deliberate
attempt on their part to delay the processing of the application. Rule 3 of
the Building Rules supports the stand of the Corporation that for re-erecting
or making addition to the existing building, submission of fresh plan for c
sanction was necessary. Rule 3 reads :

"Rule 3. Prohibition of building without sanction :-

(1) No person shall erect a new building or re-erect or make
D
addition to, or alteration of, any building or cause the same to be
done without obtaining s~nction from the Commissioner and
where necessary, a development permit from the concerned
authority under the West Bengal Town and Country (Planning and
Development) Act, 1979."
E
Rule 4 further reinforces requirement of a fresh application for
sanction with Plans for additional three floors. Rules 4 reads thus :-

"Rule 4. Notice for erection or alteration ofa building:- ( l) every
person who intends to make a new building on any site, whether F
previously built upon or not, or re-erect or make additions to, or
r alteration of, any building shall apply for sanction by giving
notice in writing to the Commissioner."

On behalf of the company it was argued that Rules (3) & (4) apply
in normal circumstances but in this case there was an order of the High G
Court reserving a 'liberty' and a right to the company to seek sanction for
further construction above 4th floor.

-./' It is not possible frr the court to read more into the order dated
23.12.1993 whereby the couit merely observed that the applic~nt will not H
1228 SUPREME COURT REPORTS [2003) SUPP. 6 S.C.R.

A be 'prevented' from applying for further s2nction. This one observation
cannot be read to absolve the applicant from the obligations prescribed in
Rules 3 & 4 of the Building Rules.

On a subsequent approach by the respondent - company to the High
B Court, by order dated 24.6.1994, learned Single Judge merely 'expected'
the Corporation to pass the appropriate orders on the pending application
for sanction of additional floors to the company within a period of four
weeks. The relevant part of the order states :-

"It is expected that the Howrah Municipal Corporation shall pass
c appropriate orders within four weeks from the date of submission
of the Plan and receipt of copy of the order."

According to the company, on the expiry of period of four weeks
fixed by order dated 24.6.1994, there was no justification for the Corpo-
D ration to keep the application for sanction pending an<l to allow it to be
rendered infructuous as a result of the amendment to the Building Rules
which came into force by Gazette Notification on 15.7.1994. On behalf of
the Corporation it is denied that despite the order of the court granting four
weeks, the application for sanction was deliberately not considered by the
E Corporation. It is submitted that there wa" no time-bound mandate by the
court to the Corporation.

In our considered opinion, by the order of the Court dated 2.3.12.1993
observing that the petitioner is 'not prevented from applying' for further
sanction of additional floors above fourth floor and the 'expectation'
F expressed in the subsequent order of the Court dated 24.6.1994, from the
Corporation to· decide the pending application for sanction within four
weeks, no vested right in favour of the respondent - company can be said
to have been created to obtain sanction on the unamended rules, as they
existed on the date of their second application.
G
It has beer urged very forcefully that the sanction has to be granted
un the basis of Building Rules prevailing at the time of submission of the
application for sanction. In the case of Usman Gani (supra), the High Court
negatived a similar contention and this Court affirmed the same by
H observing thus :
HOWRAH MUNICIPAL CORPN. v. GANGES ROPE CO. LTD. (DHARMADHIKARI, J.] 1229

"In any case, the High Court is right in taking the view that the A
building plan can only be sanctioned according to the building
regulations prevailing at the time of sanctioning ofsuch building
plans. At present the statutory bye:Jaws published on 30.4.1988
are in force and the fresh building plans to be submitted by the
petitioners, if any, shall now be governed by these bye-laws and B
not by any other bye-Jaws or schemes which are no longer in force
now.

If we consider a reverse case where building regulations are
amended more favourably to the builders before sanctioning of
building plans already submitted, the builders would certainly C
claim and get advantage of the regulations amended to their
benefit."

(underlining to add emphasis)

This Court, thus, has taken a view that the Building Rules or D
Regulations prevailing at the time of sanction would govern the subject of
sanction and not the Rules an·d Regulations existing on the date of
application for sanction. This Court has envisaged a reverse situation that
if subsequent to the making of the application for sanction, Building Rules,
on the date of sanction, have been amendec! more favourably in favour of E
the person or party seeking sanction, would it then be possible for the
Corporation to say that because the more favourable Rules containing
conditions came into force subsequent to the submission of application for
sanction, it would not be available to the person or party applying.
F
The decision in Gani J Khatri (supra) was followed by this Court
in the case of State of West Bengal v. Terra Firma Investment and Trading
Pvt. Ltd., [1995] I SCC 125. That case arose as a result of amendment
introduced in the Act in the year 1990 restricting building heights within
limits of Calcutta Municipal Corporation to 13.5 metres. Applications· for
sanction pending for construction with height above 13.5. metres were G
rejected because of the above restriction. In that case also the applicants
claimed a vested _right to get their plans passed and sanctioned as they were
s1..1bmitted prior to the amendment made to Calcutta Municipal Corporation
Act in 1990. This Court on examining the object in restricting height of
buildings in the city of Calcutta due to limited resources for civic amenities H
1230 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A upheld the Amendment Act and negatived the claim of vested right set up
by the applicants on the basis of unamended provisions and building
regulations. Relying on the decision of Usman Gani J Khatri (supra), this
Court observed :-

"How can the respondent claim an absolute or vested right to get
B his plan passed by Writ ofa Court merely on the ground that such
plan had been submitted by him prior to 18.12.1989? By mere
submission of a plan for construction of a building which has not
been. passed by the competent authority no right accrues. The
learned Single Judge of the High Court should have examined this
c aspect of the matter as to what right the respondent had acquired
by submission of the plan for construction of high rise building
before its application was rejected by the st(!.tutory provision."

This court further observed :-
D "It is well settled that no malice can be imputed to the legislature.
Any legislative provision can be held to be invalid only on
grounds like invalip legislation incompetence or being violative
of any Constitutional provisions."

E Relying on Usman Gani's case (supra), this Court reiterated that
'builders do not acquire any legal right in respect of the plans until
sanctioned in their favour'.

Learned counsel appearing for the respondent company tried to
F distinguish the decisions in the cast's of Usman Gani and Terra Pharma
(supra) stating that in the present case the vested light arose because of .
'
a time bound order of the Court. It is argued t~at the time bound orders
of the Court were not only disregarded but, as has been found by the High
Court, deliberately flouted for extraneous reasons. It is submitted that the
claim of sanction for additional three floors available to the company on
G the date of submission of application for sanction with plans could aot have
been frustrated by the Corporation by deliberate delay in processing the
application and raising pleas and objections to the plan.

We do not find that there was any deliberate delay on the part of the
H Corporation. We have found that the stand of the Corporation, on the basis
HOWRAH MUNICIPAL CORPN. v. GANGES ROPE CO.LTD. [DHARMADHIKARI, J.] 1231

of Building Rules, cannot be held to be erroneous that for seeking three A
additional floors, the company was required to file fresh application for
sanction with necessary particulars, documents, plans and enclosures. The
company complied with the necessary requirements but thereafter, the
Building Rules were amended and restrictions have been imposed on
height of buildings on the GT Road. It cannot, therefore, be held that the B
action of the Corporation is malicious. The Building Rules were amended
by the State and the Corporation can have no bona fide or ma/a fide hand
in it. After the amended Building Rules were notified, the Corporation on
relevant ground of limited resources for civic amenities in a congested city
like Howrah, with the approval of Mayor-in-Council, could legally impose
legitimate restrictions on the height of buildings, on specified wards roads C
and localities. It is to be noted from the retevant resolution of the
Corporation that restrictions with regard to the height of buildings are not
imposed only on GT Road but there are several specified wards and areas
in which such restrictions are applied. This Court cannot accept that such
a legislative charge and consequent resolution came to be passed and got D
approved only to frustrate the pending application of the company.

We have examined the provisions of section 175 of the Act fixing
'ordinarily' period of 'sixty days' for granting or refusing sanction. We
have also examined Rule 13 of the Building Rules which also prescribes E
a period of 'sixty days' from the date of application for grant or refusal
of sanction for construction. Neither the provisions of the Act nor the
Rules, however, provide for 'deemed sanction' or 'deemed refusal' on the
expiry of sixty days' period. Therefore, without express sanction, no
construction is permissible contrary to the provisions in Chapter XII of the
Act and Rule 3 of the Building Rules which prohibit 'construction or F
erection of new building or addition or alteration to any existing building'
without obtaining sanction for construction.

The above stated legal position is not disputed on behalf of the
respondent -· co1npany. What is being contended is that the order of the G
High Court fixing a period for the Corporation to decide its pending
application for sanction creates a vested right in faovur of the applicant
company to seek sanction for its additional proposed construction on the
basis of Building Rules, as they stood prior to the amendment introduced
to the Building Rules and the consequent Resolution of the Corporation H
1232 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A restricting the height of buildings on G.T. Road. lt is undeniable that after
the amendment of the Building Rules and the Resolution passed by the
Corporation thereunder restrictions imposed on· heights of buildings on
specified wards, roads and localities would apply to all pending applica-
tions for sanction. The question is whether any exception can be made to
B the case of the applicant seeking sanction who had approached the court
and obtained consideration of its applications for sanction within a
specified period. We have extracted above, the various orders passed by
the High Court in writ petitions successively filed by the company in an
effort to obtain early sanction for its additional construction of three floors
C on the buildings in its multi-storeyed complex already complete up to 4th
floor. In none of the orders of the High Court, there is a mandate issued
to the Corporation to grant a sanction. What was directed by the High Court
in the first order was merely a 'liberty' or option to the company to seek
sanction for additional three floors. In the subsequent order, an 'expecta-
tion' was expressed for decision of the pending applications within a period
D of four weeks. There was, thus, in favour of the company an order of the
High Court directing the Corporation to decide its pending applications for
sanction within the allotted period but non-compliance thereof by the
Corporation can not result in creation of any vested right in favour of the
company to obtain sanction on the basis of the Building Rules as they stood
E on the date of making application for sanction and regardless of the
amendment introduced to the Building Rules. Neither the provisions of the
Act nor general law creates any vested right, as claimed by the applicant
- company for grant of sanction or for consideration of its application for
grant of sanction on the then existing Building Rules as were applicable
F on the date of application. Conceding or accepting such a so-called vested
right of seeking sanction on the basis of unamended Building Rules, as in
force on the date of application for sanction, would militate against the very
scheme of the Act contained in Chapter XII and the Building Rules which
intend to regulate the building activities in a local area for general public
interest and convenience. It may be that the Corporation did not adhere to
G the time limit fixed by the court for deciding the pending applications of
the company but we have no manner of doubt that the Building Rules with
prohibition or restriction on construction activities as applicable on the date
of grant or refusal of sanction would govern the subject matter and not the
Building Rules as they existed on the date of application for sanction. No
H discrimination can be made between a party which had approached the
HOWRAH MUNICIPAL CORPN. i·. GANGES R!OPE CO.LTD. [DHARMADHIKARI, J.) 1233

court for consideration of its application for sanction and obtained orders A
for decision of its application within a specified time and other applicants
whose applications are pending without any intervention or order of the
COUit.

The argument advanced on the basis of so-called creation of vested B
right for obtaining sanction on the basis of the Building Rules (unamended)
as they were on the date of submission of the application and the order
of the High Court fixing a period for decision of the same, is misconceived.
The word 'vest' is normally used where an immediate fixed right in present
or future enjoyment in respect of a property is created. With the long usage
the said word 'vest' has also acquired a meaning as ".an absolute or C
indefeasible right" (See K.J Aiyer 's 'Judicial Dictiona1y' (A complete Law
Lexicon), Thirteenth Edition). The context in which respondent- company
claims a vested right for sanction and which .has been accepted by the
Division Bench of the High Court, is not a right in relation· to 'ownership
or possession of any property' for which the expression 'vest' is generally D
a
· used. What we can understand from the claim of 'vested right' set up
by the respondent-company is that on the basis of Building Rules, as
applicable to their case on the date of making an application for sanction
and the· fixed period allotted by the court for .its consideration, it had a
'legitimate' or 'settled expectation' to obtain the sanction. In our consid- E
ered opinion, such 'settled expectation', if ahy, did not create any vested
right to obtain sanction. True it is that the respondent -company which can
have no coritrol over the manrier of processing of application for sanction
by the Corporation cannot be. blamed for delay but during pendency of its
application for sanction, if the State Government, in exercise of its rule
making power, amended the Building Rules and imposed restrictions on F
the heights of building on G.T. Road and other wards, such 'settled
expectation has been rendered impossible for fulfilment due to change in
law. The claim based on the alleged 'vested right' or 'settled expectation'
cannot be set up against statutory provisions which were brought into force
by the State Government by amending the Building Rules al1c:f not by the G
Corporation against whom.such 'vested right' or 'settled expectation' is
being sought to be enforced. The 'vested right':·or 'settled expectation' has
been nullified not only by the Corporation but al.so.· by the. State by
amending the Building Rules. Besides this, such a 'settled expectation' or
so-called 'vested right' carinotbe countenanc.ed against public interest and H
1234 SUPREME COURT REPORTS (2003] SUPP. 6 S.C.R.

A convenience which are sought to be served by amendment of the Building
Rules and the resolution of the Corporation issued thereupon.

In the matter of sanction of buildings for construction and restricting
their height, the paramount consideration is public interest and convenience
B and not the interest of a particular person or a party. The sanction now
directed to be granted by the High Court for construction of additional
floors in favour of respondent is clearly in violation of the amended
Building Rules-<Wd the Resolution ofthe.Corp~ratioq. which restrict heigh~
of buildings on GT Road: This Court in its discretionary jurisdiction. under·' ··
Articie ) 36 :ofthe Constitution cannot support the impugned order Qfthe ..
·C High Court of making an exception in favour of the respondent - company
by issuing directions for grant of sanction for construction of building with
height in violation of the amended Building Rules and the resolution of
the Corporation passed consequent thereupon.

D For all the above reasons, in our opinion, the learned Single Judge
was right in rejecting the prayer of the. respondent company in public
interest and the Division Bench of the High Court committed an error in
directing grant of sanction for further construction above four floors to the
respondent company in clear violation of the existing building rules and
E the resolution of the Corporation.

In the result, the appeal preferred by the Corporation succeeds and
is allowed. The impugned order of the Division bench of the High Court
dated 5.9.1997 is hereby quashed and that of the. learned Single Judge
restored. In the circumstance, however, we shall direct the parties to bear
F their own costs in this appeal.

N.J. Appeal allowed.