2011 (12) TMI 770 - SC - Indian Laws

Summary

Issues Involved:
1. Scope and power of the New Okhla Industrial Development Authority (Development Authority) to permit non-residential use in residential sectors.
2. Legality of the Development Authority's actions regarding lease cancellations and notices for misuse of residential plots.
3. Compliance with statutory provisions, Master Plan, and Regulations by the Development Authority.
4. Validity of mixed-use permissions and public notices issued by the Development Authority.
5. Discriminatory actions and arbitrary decisions by the Development Authority.
6. Permissibility of professional activities (clinics, offices) in residential sectors.

Detailed Analysis:

1. Scope and Power of the Development Authority:
The primary issue was whether the Development Authority could permit non-residential uses in sectors earmarked for residential use in the Master Plan of the New Okhla Industrial Development Area. The Court found that the Development Authority's actions demonstrated widespread statutory violations and arbitrary power exercise. The authority must act vigilantly and uniformly, strictly following the law and considering the larger public interest.

2. Legality of Lease Cancellations and Notices:
The Development Authority had executed lease deeds with specific stipulations that the lessee must obey all directions and regulations. The lessees in question had violated these terms by using residential plots for commercial purposes. Notices were issued to lessees to stop the misuse, and upon non-compliance, lease deeds were canceled. The Court upheld these actions, emphasizing that residential plots could not be used for commercial activities without proper authorization.

3. Compliance with Statutory Provisions and Master Plan:
The Court examined the relevant provisions of the U.P. Industrial Area Development Act, 1976, and the Regulations framed thereunder. It emphasized that the Master Plan, prepared in accordance with the Act and Regulations, had legal sanction and was binding on all concerned. Any alteration to the Master Plan or Regulations must follow due process and cannot be done through executive orders. The Development Authority's actions permitting mixed-use without following the prescribed procedure were deemed illegal.

4. Validity of Mixed-Use Permissions and Public Notices:
The Development Authority had issued public notices proposing to permit mixed-use in residential sectors. However, these proposals were not finalized, and no legal amendments were made to the Master Plan or Regulations. The Court found that such actions lacked legal sanctity and were contrary to the statutory provisions. The Development Authority's power to permit different uses was limited by the Master Plan and Regulations, and any deviation required proper legal amendments.

5. Discriminatory Actions and Arbitrary Decisions:
The Court noted allegations of arbitrary and discriminatory actions by the Development Authority in issuing notices and canceling leases. It emphasized that the Development Authority must act fairly, judiciously, and uniformly. The doctrine of legitimate expectation did not apply as the public notices issued were not in accordance with law. The Development Authority's actions must be free of arbitrariness and consistent with the statutory provisions.

6. Permissibility of Professional Activities in Residential Sectors:
The Court addressed the issue of professional activities (e.g., clinics, offices) in residential sectors. It held that doctors, lawyers, and architects could use 30% of the ground floor area in their premises for professional activities, subject to charges determined by the Development Authority. Such use must comply with the terms of the lease deed, Master Plan, and Regulations.

Conclusion:
The Supreme Court disposed of the appeals with specific directions:
1. Commercial activities, including banks and nursing homes, are not permitted in residential sectors.
2. Such activities must cease within two months, and premises must be used for residential purposes only.
3. The Development Authority should consider requests for alternative spaces for commercial activities.
4. Professional activities are allowed within specified limits and subject to charges.
5. Non-compliance will result in sealing of premises and cancellation of leases.

The judgment emphasized strict adherence to the Master Plan, Regulations, and statutory provisions, ensuring that the Development Authority's actions align with the law and public interest.