of U.P. & Ors Vs. Smt. Malti Kaul &
Anr  INSC 989 (21 August 1996)
K. Ramaswamy, K.G.B. Pattanaik (J)
WITH C.A. No.11539 of 1996 and SLP (C) No.27591 AND
C.A.Nos.9534-35 OF 1995 and 9729-47 OF 1995.
O R D
for intervention is dismissed.
granted in the Special Leave Petition.
appeals arise form the judgment of the Allahabad High Court dated April 21,
1995 declaring that the appellants are devoid of power to levy the development
fee under the U.P. Urban Planning and Development Act, 1973 [II of 1973] as
amended from time to time [for short, the "Act"].
undisputed facts are that the appellant authority was constituted under Section
of the Act as a development authority. When the respondents filed plans for
grant of sanction a demand was made of them to deposit the development fee.
Calling the demands in question the above appeals came to be filed.
Consequently declaration was made. In addition, the High Court also found that
the demands for malva charges (stacking charges) and water charges were violative
of principles of natural justice.
it directed the appellants to give opportunity of being heard to the
respondents and then levy charges.
the decision in question these appeals have come to be filed. The High Court
concluded that there is no provision in the Act or the Rules made thereunder,
to demand and collect the development fee.
view to appreciate the contentions of the counsel on either side and the
findings recorded by the High Court, it is necessary to consider the relevant
provisions of the Act.
4 contemplates that the State Government may, notification in the Gazette,
constitute, for the purpose of the Act, an authority called "Development
Authority" for any development area. "Development" has been
defined in Section 2 (e) with its grammatical variations, to mean the carrying
out of building, engineering, mining or other operations in, on, over or under
land, or the making of any material change in any building or land, and
Area" has been defined in Section 2 (f) to mean any area declared to be
development area under Section 3. It has been empowered, where the Government
in exercise of the Power under Section 3 has declared that any area within the
State requires to be developed according to the plan, to declare such area to
be a development area. Section 7 envisages the objects of the authority and
gives power to the developing authority to acquire, hold, manage or dispose of
a Land and any other property, to carry out building, engineering, mining and
other operations, to execute works in connection with the supply of water and
electricity, to dispose of sewage and to provide and maintain other services
and amenities and generally to do anything necessary or expedient for purposes
of such development and for purposes incidental thereto. "Amenity"
has been so defined in Section 2 (a) as to include road, water supply, street
lighting, drainage, sewerage, public works and such other convenience as the
State Government may, by notification in the Gazette specify to be an amenity
for the purposes of the Act. The expression "engineering operations"
has been defined under Section 2 (h) and includes the formation or laying out
means of access to a road or the lying out of means of water supply.
"Means of access" has been defined under Section 2 (i) and include
any means of access, whether private or public, for vehicles or for foot
passengers, and includes a road.
would thus be seen that the development authority has been enjoined to
undertake the development of the development area including providing amenities
or carrying out engineering operations or providing means of access as
envisaged under the Act or any other amenities that may be specified by a
notification by the State Government as part of development plans undertaken
under the Act Section 14 in chapter v on "Development of Lands" gives
power to the developing authority and provides that after coming into force of
the plan in any development area, no development shall be undertaken or carried
out or continued in that area unless such development is also in accordance
with the plans. Under sub-section (1) thereof, after the declaration of any
area as development area under Section 3, no development shall be undertaken or
carried out or continued in that area by any person or body (including a
department of Government) unless permission for such development has been
obtained in writing from the Vice- Chairman in accordance with the provisions
of the Act.
before development is undertaken in accordance with the plan by any person or a
body including the department of the Government, he is enjoined to obtain in
writing from the Vice-Chairman sanction for development in accordance with the
provisions of the Act. When the Levy of the development fee was charged on the
respondents, they came to question the power of the authority.
question, therefore, is: whether such a power is traceable to the provisions of
the Act? Section 33 of the Act gives power to the development authority to
provide amenities or carry out development authority to provide amenities or
carry out development at the cast of owner in the event of his default and to
Levy cess in certain cases.
sub-section (1) thereof, if the Authority is satisfied, after conducting the
inquiry as contemplated therein or upon report from any of its officers or
other information in its possession, that any amenity in relation to any land
in development area has not been provided in relation to that land which, in
the opinion of the authority ought to have ben or ought to be provided or that
any development of the land of for which permission, approval or sanction has
been obtained under the Act or under any other law in force before the Act came
into force, has not been carried out then after giving an opportunity to the
owners of the land or persons providing or responsible for providing the
amenity a reasonable opportunity to show cause, it may impose the development
charges. Sub-section (2) contemplates that if any amenity is not provided or
any such development is not carried out within the time specified in the order,
then the Authority may itself provide the amenity or carry out the development
or have it provided or carried out through such agency as it deems fit.
operation of sub-section (3), all expenses incurred in that behalf by the
development authority or the agency are to be recovered in the manner indicated
in sub-section (4) and the following sections the details of which are not
material for the purpose of this case.
41 envisages control by the State Government in implementation of the
provisions of the Act. Under sub- section (1) thereof, the Authority the
Chairman or the Vice- Chairman shall carry out such direction as may be issued
to it/his from time to time by the State Government for the efficient
administration of this Act. Section 56 gives power to make regulations under
the Act. Sub-section (1) thereof provides that any Authority may with the
previous approval of the State Government, make regulations, not inconsistent
with this Act and the rules made thereunder, for the administration of the
affairs of the Authority.
the general power is available under Section 56 for the Authority to make
regulations for the administration of the affairs of the authority. In
particular sub-section (2) thereof provides that despite the generality of the
power given in sub-section (1) specific power has been given by way of regulations
as enumerated thereunder. Clause i) which is a residuary clause provides for
any other matter which has to be or may be prescribed by the regulations.
operation of Section 59, any orders issued under the predecessor Acts which are
not inconsistent with the provisions of the Act shall continue to be in
Section 14 of the Uttar Pradesh (Regulation of Building Operations) Act 1958
[Predecessor Act] which is pari materia with Section 14 of the Act, regulations
have been made which are not inconsistent with that of Section of plans and
statements. Condition (vii) provide that the applicant has entered into an
agreement with the local body concerned for the development of the land and for
provision of other amenities and has either deposited the full estimated cast
of the development and provision of other amenities with that local body in
advance or has given to it a bank guarantee equivalent to such cost, or has
entered into an agreement with the local body, providing that the full cost thereof
may be realised by it out of the sale- proceeds of the plots that any such
agreement between the applicant and the local body may provide for any part of
the development and provision of other amenities being carried out by the
applicant himself, however, that in respect of any such part he shall give
adequate security to the local body to secure that he shall carry out such part
of the development and provide other amenities in accordance with the approved
standards and specifications to the satisfaction of the Controlling Authority.
Under the second proviso also, power has been given to secure mortgage of the
entire land to be developed in favour of the local authority as a condition for
granting sanction with an agreement for providing the amenities and if the
plots are to be released for sale by the mortgagor then the amount has to be
paid as prescribed thereunder, the details of which are not material for the
purpose of this case.
reading of these provisions, would clearly indicate that in a development area
when an owner or body or a department of the government undertakes to develop
the land, two options are open to the development authority namely, either it
may itself undertake to provide amenities or other means of access, engineering
corporations as provided under the Act or as a condition to grant sanction it
can call upon the person who undertakes development or the body of the
developers who undertake development to deposit the amount required for such
development or providing amenities etc.
light of direction 7 of the directions issued in the regulations the owner or
the body or the developer is enjoined either to deposit the amount demanded or
give bank guarantee or mortgage the property in favour of the Development
Authority so that it could secure sufficient security in advance for overseeing
the development including providing amenities as a scheme of the development as
per the sanction. It is settled law that levy of fee is a compulsory exaction
for services rendered as quid Pro quo.
seen that the Development Authority is enjoined under the Act to undertake
planned development of the development area in accordance with the provisions
of the Act. When it undertakes such a development it carries out the
development as per the plan either itself or through any person or body which
undertakes to develop the land in accordance with the sanction plan in which
case necessary conditions to safeguard providing the amenities are required to
considered, we hold that Act specifically gives such a power. It is true that
under Article 265 of the Constitution no tax can be levied without any
authority of law. There is on the proposition of law. There is no quarrel on
the proposition of law. In this case, from a reading of the aforesaid
provisions it clear that the statute, instead of prescribing the rate of
developmental charges itself, has given power to the rule-making authority to
regulate the collection of and payment for development fee. It is seen that
under the direction which is not inconsistent with the provisions of the Act,
it indicate the method and the manner in which the collection is to be secured
so as to see that the area is developed in a planned manner as per the
sanctions given by the competent authority. The High Court, therefore, was
clearly in error in holding that there is no provision under the Act or the
Rules to levy the development fee.
High court has relied upon the judgment of this Court in Ahmedabad Development
vs. Pasawalla [(1992(3) SCR 328]. The said ratio has no application to the
facts in this case. In that case, it was found as a fact that there was no
express provision for levy and demand of the developmental charges. They sought
to rely on the doctrine of ejusdem generis as a source to levy the development
fee. The High Court having noticed that the authority under Section 19 has the
heads enumerated in subsection (1) of Section 91 as the source of funds. This
Court found that the doctrine of ejusdem generis cannot be applied to levy and
charge of development fee.
Hingir-Rampur Coal Co.Ltd. vs. The State of Orissa [(1961) 2 SCR 537], a
Constitution Bench of this Court has held that a fee is levied essentially for
services rendered and there must be an element of quid pro quo between the
person who pays it and the public authority that impose it. The public
authority had the power to levy fee in respect of the service rendered.
Therefore, compulsory exaction by levy of fee was not ultra vires the power of
sought to be contended for the respondents by the learned counsel that there is
no express provision and that neither Section 33 or Section 41 can be fallen
back upon to levy development fee. It is true that express mention is not made
either in Section 33 or Section 41: but when Section 14 and Section 56(2) are
read together, it gives right and power to the sanctioning authority to impose
a condition to the grant of sanction for execution of the plan in a development
area by imposing the condition of either payment in advance towards the cost of
the amenities or means of access etc, or give bank guarantee or mortgage the
plot which is to be development etc, as enumerated hereinbefore. Therefore, the
learned counsel is not right in contending that there is no provision under the
Act to demand payment or bank guarantee towards the development charges of the
High Court has pointed out that the appellants have no power to demand stacking
charges (malva charges) or water charges in advance even before starting the
construction. We are of the view that the High Court is right in that behalf.
when any person uses any public place or street for stacking the material for
construction, it would be obvious that such person is required to obtain prior
permission for user and as a condition he has to pay the necessary fee
prescribed in that behalf or when he uses the water for construction of the
building, necessarily he has to pay the water charges as per the prevailing
rates. But that would be a matter as and when the material was stacked on the
public street or at the public place or water was in fact used. Therefore, the authority
have no power to levy in advance the charges for stacking the material or user
of the water.
to be seen that as regards the Agra Development Authority's deemed for payment
of Rs.17.33.245/-, the direction issued by the Division Bench is that the
respondent should give bank guarantee at the rate of Rs.180/- per sq. mtr. and
to undertake to pay the balance amount on his succeeding in that appeal now
pending in this Court. In view of the above law, the learned counsel has
rightly undertaken to give the bank guarantee for the amount demanded at the
rate of Rs.500/- per sq.mtr. i n the impugned demand which works out to Rs.17,33,245/-.
We are informed that he has already given the bank guarantee at the rate of
Rs.180/- per sq.mtr. After deduction of the amount of that bank guarantee, for
the balance amount also he should give the bank guarantee, for the balance
amount also he should give the bank guarantee. On his giving the guarantee for
the balance amount, the Agra Development Authority would release the sanction
of the pain for execution. The bank guarantee will remain in force and should
be kept alive till the development of the area and satisfactory completion
certificate is issued by the competent authority in accordance with the rules.
In the event of his completing the development and providing all the amenities
according to the sanctioned plan, the bank guarantee given would get
appeals are accordingly allowed, but, in the circumstances, without costs.