Holding

OCR 58, as amended in 2001 and clarified in 2003, is a valid exercise of the State’s power under the MRTP Act, does not breach Articles 14, 21 or 48‑A, and the sale of NTC mill lands does not violate the BIFR scheme; the writ petition is maintainable despite delay.

Summary

The case concerned the validity of Development Control Regulation 58 (OCR 58) under the Maharashtra Regional and Town Planning Act, 1966, its 2001 amendment and a 2003 clarification, as applied to sick, closed or modernising cotton‑textile mills in Bombay. The petitioners, a public‑interest group, challenged OCR 58 on grounds that it violated Articles 14, 21 and 48‑A of the Constitution, was ultra‑vires Section 37 of the MRTP Act, and that the sale of mill lands by the National Textile Corporation (NTC) contravened the BIFR scheme. The Supreme Court examined statutory interpretation principles, the purposive construction of the regulation, the role of environmental considerations, and the scope of judicial review of policy‑type legislation. It held that OCR 58, including its amendment and clarification, is intra‑vires, does not alter the character of the development plan, and is not unconstitutional; the clarification is not ultra‑vires Section 37. The Court also found that the sale of NTC mill lands was not contrary to the BIFR scheme and that the writ petition, despite delay, was maintainable. Consequently, the High Court’s judgment was set aside and the appeals were allowed.

Issues considered

The amendment of OCR 58 in 2001 and the 2003 clarification – whether they are ultra‑vires Section 37 of the MRTP Act and violate the Constitution (Arts 14, 21, 48‑A).
Whether OCR 58 applies to sick, closed or modernising cotton‑textile mills and the meaning of ‘open land’ and ‘balance FSI’.
Whether the sale of NTC mill lands contravenes the BIFR scheme and the Supreme Court orders of 2002 and 2005.
Whether the delay and laches of the petitioners justify dismissal of the public‑interest litigation.

Legislation cited

Constitution of Indias. Article 14, s. Article 21, s. Article 48‑A
Environment (Protection) Act, 1986s. Section 28(2)
Maharashtra Regional and Town Planning Act, 1966s. 14, s. 159, s. 21, s. 2(13A), s. 22, s. 2(27), s. 2(7), s. 2(9), s. 2(9‑A), s. 37, s. 38, s. 43, s. 45
Sick Industrial Companies (Special Provisions) Act, 1985s. 15, s. 32, s. 3(e)

Subjects

public interest litigationdevelopment control regulationsustainable developmentenvironmental lawconstitutional lawArticle 14Article 21Article 48‑AMaharashtra Regional and Town Planning ActSick Industrial Companies ActBIFR schemedelay and lachesland use planning

Judgment

•
A BOMBAY DYEING AND MFG. CO.LTD.
v.
• .
BOMBAY ENVIRONMENTAL ACTION GROUP AND ORS.

MARCH 7, 2006

B [S.B. SINHA AND P.P. NAOLEKAR, JJ.]

C
Maharashtra Regional and Town Planning Act, 1966 : Sections 2(7),
2(9), 2(9-A), 2(13AJ. 2(27), 14, 21, 22, 37, 38, 43, 45 and 159-Maharashtra
Development Control Regulations. 1991-Regulations 2(28), 2(48), 3, 9, 21,
32, 34, 51, 56-58:
-
Closure of Collon Textile Mills in Bombay due to continued strike by
workers-Lands of such milfr-- Development of-Amendment of Development
Regulation 58-Government !votijication clarifYing scope thereof-Validity
D of-Held, not ultra vires Section 37 of the 1966 Act-Nor violative of the
Constitution-Bo1h Regulation 58 and the clanficatory Notification not
contrary lo principles governing environmental aspects including principles
of sustainable and planned development vis-a-vis Article 21 of the
Constitution-Sick col/on mills taken over by NTC-Subsequently NTC itself
becoming sick-In terms of Rehabilitation Scheme framed by BIFR, NTC
E selling some of !he mills-Validity of--Sick lnriustrial Companies (Special
Provisions) Act, 1985---Sections 3(e), 15, 32-----Constitution of India, 1950,
Articles 14, 21 and 48A.

Maharashtra Development Control Regulations, 1991 :

F Regulation 58--Judicial Review of the Regulations-Permissibility of-
Held, judicial review permissible against legislative policy----Constitution of • •
India, 1950, Article 226.

Constitution of India, 1950 :

G Article 226--Writ petition-Filing of-Laches and delay-Held, writ
petition not to be dismissed only on ground of delay.

PIL--Scope of-Explained

H 920
BOMBAY DYEING AND MFG. CO.LTD. v. BOMBAY ENVIRONMENTAL ACTION GROUP 92 J

Interpretation of Statutes : A
Interpretation of Act and Regulations made thereunder-Doctrine of
contemporaneous exposition-Discussed-Maharashtra Regional and Town
Planning Act, 1966 and Development Control Regulations made thereunder.

Doctrines: · B
Doctrine of contemporaneous exposition-Applicability of-Discussed.
1~
' The question involved in these appeals is whether any synthesis
between environmental aspects and building regulation vis-a-vis the scheme
floated by the Board of Industrial and Financial Reconstruction (BIFR) c
in terms of the provisions of the Sick Industrial Companies (Special
Provisions) Act, 1985 (SICA) herein is possible.
'
On behalf of the Appellants and supporting respondents, it was
contended that Development Control Regulation 58 of 1991 (DCR 58), as
amended in 2001, would be applicable not only to a sick mill but also to a D
\c closed mill being unviable which had opted for revival/ modernization/
shifting, the original DCR 58 being not invalid, the mere grant of
••
additional benefits would not make it ultra vires; that the State could not
be said to have ignored various conflicting objectives while carrying out
the amendment in DCR 58; that the High Court, in exercise of its
jurisdiction of judicial review, could not have interfered with a policy
E
decision of the State; that the High Court committed a manifest error in
holding that the amended version of DCR 58 vis-a-vis the term 'open space'
would have the same meaning as was contemplated under DCR 58of1991;
that the High Court failed to appreciate that reading down of DCR.58
,.l. was impermissible in law; that the High Court ought to have taken into F
> ' consideration the past experience of the State necessitating amendment
of DCR; that the High Court failed to take note of the fact that the
committees appointed by the State also made recommendations that the
mill owners would be allowed to develop their lands; that two different
interpretations of DCR 58 having been found by the High Court to be possible,
it could not have arrived at a conclusion that clarificatory notification dated
G
28.03.2003 amounted to an amendment of'the Regulation and, thus, void; that
t' the impugned judgment is wholly unsustainable as several irrelevant factors,
e.g. deluge in the city of Born bay in 2005, were taken into consideration for
the purpose of interpretation of DCR 58; that the findings of the High Court
would lead to a radical discrimination between cotton textile mills and other H
922 SUPREME COURT REPORTS [2006) 2 S.C.R.

A industries which being not based on any rational criteria renders it
unconstitutional being violative of Article 14 of the Constitution of India; that
the High Court failed to take into consideration the fact that equity was in
favour of the appellants as they having already demolished the building as
having created third party interests, should not have been asked to go back to
the same position as was obtaining in the year 1991; that if the impugned
B judgment is upheld, several provisions of DCR 58, like clause (6) thereof
would become otiose and redundant and, thus, interpretation of the High Court
in respect of DCR 58 is unsustainable; that no foundational fact having been
laid in the writ petition to show as to how the clarification amounts to
amendment of DCR 58, the High Court committed a manifest error in arriving
C at a finding that the said Regulations are ultra vires Section 37 of the Act
and/or Article 21 of the Constitution of India; that the Respondent-writ
petitioners were guilty of serious delay and laches in filing the writ petition;
that the High Court in granting relief in favour of the writ petitioners
failed to take into consideration relevant factors and based its decision
on irrelevant factors and, thus, misdirected itself in law; that the judgment
D in Bombay Dyeing & Manufacturing Co. Ltd. v. Bombay Environmental Action
Group and Ors. (20051 5 SCC 61 being final and binding on the parties,
the High Court committed a serious illegality in interfering therewith; and '.
that BIFR scheme had wrongly been taken recourse to for the purpose of
construction of the Regulation.
E On behalf of Respondents 1 and 2, it was contended that DCR
broadly lays down a scheme of land uses and zoning, Clause 58 thereof as
amended in 200 I should be read in conformity with the provisions of the
MRTP Act; that the expression 'open land' as contained in DCR 58 must
be in!erpreted in such a manner as to enable the concerned authorities to
F sanction a building plan in terms of the extant regulations; that on a plain
construction of OCR 58 of2001, it has rightly been held by the High Court • •
that the intention of the State evidently was to give only double FSI and
not to diminish the stake of MCGM and MHADA in the mill land; that
interpretation of OCR 58 by the State has defeated the purport and object
G of the Act; that for the purpose of upholding the constitutionality ofDCR 58,
the same was required to be read down, failing which it is rendered
unconstitutional; that the effect and purpose of DCR 58 as clarified by the
state only having come to the notice of the writ petitioners in 2005 and as the
writ petition was filed by them immediately thereafter, the same was not liable
-
to be dismissed on the ground of delay and laches on their part; that in view
H of the subsequent events, this Court may lay down the principles for the
\
~
I '

BOMBAY DYEING AND MFG. CO. LTD."· BOMBAY ENVIRONMENT AL ACTION GROUP 923

· . purpose of moulding the reliefs and remit the matter to the High Court for A
consideration of the matter afresh; that MHADA and the MCGM having taken
different stands before the High Court, they should not be permitted to support
the State; and that all applications for grant of permission for development/
redevelopment were required to be considered having regard to the nature of
the land as would be existing after demolition of the existing structures.
B
Allowing the appeals, the Court

HELD: 1.1. While entertaining a public interest litigation of this
nature several aspects of public interest being involved, the Court should
find out as to how greater public interest should be subserved and for the C
said purpose a balance should be struck and harmony should be
maintained between several interests such as (a) consideration of ecology;
(b) interest of workers (c) interest of public sector institution, other
financial institutions, priority claimed due to workers; (d) advancement
of public interest in general and not only a particular aspect of public
interest; (e) interest and rights of owners; (f) the interest of a sick and D
closed industry; and (g) schemes framed by BIFR for revival of the
company. [973-F, GI

1.2. The courts in doing so would have to take into consideration a large
number of factors, some of which may be found to be competing with each
other. It may not be proper to give undue importance to one at the cost of the E
other which may ultimately be found to be vital and give effect to the intent
and purport for which the legislation was made. [973-H; 974-AI
Raunaq International Ltd. v. /. V.R. Constructions Ltd. & Ors., (1999] l
>
SCC 492; Ashok Lanka v. Rishi Dixit, [2005] 5 SCC 598; Guruvayoor
Devaswom Managing Committee v. C.K. Rajan, 12003] 7 SCC 546; Shivajirao F
Nilangekar Patil v. Dr. Mahesh Madhav Gosavi, (1987) 1SCC227; Chairman
& MD, BPL Ltd. v. S.P. Gururaja and Ors., 120031 8 SCC 567; KK. Bhalla
v. State of M.P. & Ors., (2006) 1 SCALE 238; Dr. B. Singh v. Union of India
and Ors., (2004) 3 SCC 363; Ashok Kumar Thakur v. State of Bihar & Ors.,
(1995) 5 SCC 403 and T.N. Godavarman Thirumu/pad v. Union of India and
Ors., (2006) 1 sec 10, relied on. G
1.3. Public interest litigations, have been entertained more frequently
¥
where a question of violation of the provisions of the statutes governing
the environment or ecology of the country has been brought to its notice in
the matter of depletion of forest a·reas and/or when the executive while H
SUPREME COURT REPORTS (2006] 2 S.C.R.
924
A exercising its administrative functions or making subordinate legislations
has interfered with the ecological balance with impunity. In the instant
case, the High Court of Bombay, therefore, cannot be faulted with for
entertaining the writ petition as a public interest litigation. [975-D, El

2. I. It is well-settled principle of law that in the absence of any
B context indicating a contrary intention, the same meaning would be
attached to the word used in the latter as is given to them in the earlier
statute. It is trite that the words or expression used in a statute before
and after amendment should be given the same meaning. When the
legislature uses the same words in a similar connection, it is to be presumed
C that in the absence of any context indicating a contrary intention, the same
meaning should attach to the words. [978-E, F)

2.2. It is well-known that when the statute makes a distinction
between the two phrases and one of the two is expressly deleted, it is
contrary to the cardinal principle of statutory construction to hold that
D what is deleted is brought back into the statute and finds place in words
which were already there in the first place. It is also a wellcsettled principle
of law that common sense construction rule should be taken recourse to ,
in certain cases. (979-B, DI
••
Compack (P) Ltd. v. CC£. [20051 8 SCC 300; Gurudevdatta VKSSS
E Maryadit v. State of Maharashtra, [200II 4 SCC 534; Dayal Singh v. Union
of India, 120031 2 SCC 593; Swedish Match AB v. Securities and Exchange
Board, India, (2004) I I SCC 641; Commr. Of Income-tax/Excess Profits Tax,
Bombay City v. Messrs. Bhogilal Laherchand including Batliboi and Co.,

F
Bombay, AIR (I954) SC 155; The Mangalore Electric Supply Co. Ltd. v. The
Commissioner of Income Tax, West Bengal, (197813 SCC 248; His Holiness
Kesavananda Bharati Sripadaga/varu v. State of Kera/a and Anr., [I973J 4
-
SCC 225 and Mis. Onkarla/ Nandlal v. State of Rajasthan and Anr.. [I9851
4 sec 404, relied on.
' .
K.L. Gupta & Ors. v. The Bombay Municipal Corporation and Ors..
G (1968) I SCR 274; Maruti Udyog Ltd. v. Ram Lal and Ors .. (20051 2 SCC
638; Reserve Bank of India v. Peerless General Finance and Investment Co.
Ltd., [I987) I SCC 424; Punjab Land Development and Reclamation Corpn. L

Ltd v. Presiding Officer, Labour Court, Chandigarh, [I99013 SCC 682; High
Court of Gujarat v. Gujarat Kishan Mazdoor Panchayat, (200314 SCC 712;
Indian Handicrafts Emporium and Ors. v. Union of India and Ors.. (20031 7
H
\.
BOMBAY DYEING AND MFG. CO.LTD.'· BOMBAY ENVIRONMENT AL ACTION GROUP 925

SCC 589; Deepal Girishbhai Soni and Ors. v. United India Insurance Co. A
Ltd., Baroda, 120041 5 SCC 385; Bairam Kumawat v. Union ofIndia and Ors.,
12003] 7 SCC 628; Pratap Singh v. State of Jharkhand andAnr., 120051 3
SCC 551; P.S. Sathappan (Dead) By LRS. v. Andhra Bank Ltd. and Ors.,
f2004J 11 SCC 672 and Venkata Subamma and Anr. v. Ramayya and Ors.,
AIR (1932) PC 92, referred to. B
Charles Bradlaugh v. Henry Lewis Clarke, (1883) 8 AC 354, referred
to.
\ 1
Francis Bennion 's Statutory Interpretation; Interpretation and
Application of Statutes: Reed Dickerson, p. I 35 and Hals bury 's Laws of C
England (Fourth Edition) Volume 44(/) (Re-issue), referred to.

3.1. A statute, it is well known, is to be read as a whole. Subordinate
legislation indisputably has to be read in the light of the provisions of the
Act whereunder it has been made. It, however, must be read having regard
to the purpose and object for which the statute is made. D
3.2. The MRTP Act provides for formulation of regional plans and
' development plan. The planning authority, before a plan is finalized, is required
I-!
to see that the provisions thereof have been fully complied with. The MRTP
Act provides for appointment of 11 town planning officer who possesses
requisite qualification. The MRTP Act lays down the matters which are E
mandatorily required to be considered by the planning authority in all the
stages, namely, survey, preparation, submission and sanction of development
plan. While doing so, it is bound to take into consideration a large number of
factors as specified therein. The State has been conferred with a special power
to frame development control regulations in terms of Section 159(2) of the
J. MRTP Act. Development Control Regulations have been framed in terms of F
... the said provisions. The State has furthermore been given a power to supervise
and maintain control over the planning authorities. Such control may be
exercised in more than one manner. The planning authority is not only
required to obtain statutory sanction and approval wherever applicable, but
the State, has also been conferred with a special power to make a development G
plan subject, of course, to the condition that the same shall not change the
character of such development plan.1980-A-El
~-
3.3. Section 22 of the MRTP Act provides for the contents of the
development plan, i.e., to be divided into several areas for allocating the use of
land for the purposes as, for example, residential or commercial, proposals H
926 SUPREME COURT REPORTS [2006] 2 S.C.R.

A for designation of land for public purposes, proposal for designation of areas ')..
for open spaces, playgrounds, stadia, zoological gardens, green belts, nature
reserves, sanctuaries, dairies, transports and communications, such as roads,
highways, parkways, railways, waterways, canals and airports, including their
extension and development, water supply, drainage, sewerage, etc. and
reservation of land for community facilities and services. Whereas designation
B and/ or reservation of areas for certain public purposes would vary from place
to place, it must take care of not only the public purposes but also several
others including open spaces. Water supply, drainage, sewerage, and other
public utilities including electricity and gas or highways or waterways,
schools, etc., however, would be considered to be equally important A planning
c authority, therefore, must take into consideration all the relevant factors,
although in a given case, one gets priority over the other. Ordinarily, it
would not be for the court to substitute its decision to that of the planning
authority unless an appropriate case is made out therefor. When, however,
question of public interest comes up, the court indisputably would try to
delicately balance the different factors, if possible. (980-E-H; 981-A(
D
3.4. Both open space as also the other factors relevant for making
the regulation would be in public interest. The question would, however,
be as to which is of greater public interest. Public interest, thus, would be ' '
a relevant factor also for interpretation of the statute. Public interest so
far as maintenance of ecology is concerned pertains to a constitutional
E
scheme comprising of Articles 14, 21, 48A and SIA(g) of the Constitution
of India, the other factors are no less significant. (981-B-C)

3.5. The amendment in 2001, therefore, must be interpreted having
regard to the provisions of the MRTP Act which professed increase in the
F ecological interest by providing more open space and not decreasing the same.
The amendments in the regulation must be construed in furtherance of the "
legislative policy and not in derogation thereof. But, while doing so, the past
experience of the State which paved the necessities for modifying the earlier
regulation should not be forgotten. (981-E-GI

G 3.6. A statutory scheme also by way of Section 22 clearly speaks
about open spaces. The Legislative Act confers guidelines which advocates
the necessity of environmental impact assessment. The State, when it
exercises its power under Section 37 of the MRTP Act is required to act '•
within the four-corners of the Act. Any modification or amendment must
address the environmental consequences together with other relevant factors.
H
\
'
""
BOMBAY DYEING AND MFG. CO.LTD. v. BOMBAY ENVIRONMENT AL ACTION GROUP 927
)1" As a logical corollary, it must also be determined as to whether the A
amendments amounted to a minor modification or substantive one. Literal
interpretation of the Act and the Rules would give rise to many anomalies. It
would not advance the object and purport of the Act. It would also create
difficulties in implementing the statutory scheme. [981-G, H; 982-A, BJ

T.N. Godavarman Thiruma/pad v. Union of India and Ors., (2002) 10 B
SCC 606; N.D. Jayal and Anr. v. Union of India and Ors., (2004) 9 SCC
362 and Ve/lore Citizens' Welfare Forum v. Union of India and Ors., (1996)
t. 5 sec 647, relied on.

4.1. A policy decision, as is well known, should not be lightly
interfered with. By reason of any legislation whether enacted by the
c
. legislature or by way of subordinate legislation, the State gives effect to
its legislative policy. Such legislation, however, must not be ultra vires the
Constitution. A subordinate legislation apart from being intra vires the
Constitution, should not also be ultra vires the parent Act under which it
has been made. A subordinate legislation, it is trite, must be reasonable D

. ')..
)
and in consonance with the legislative policy as also give effect to the
purport and object of the Act and in good faith. [982-C-E)

4.2. The parameters of judicial review in relation to a policy decision
would depend upon the nature as also the scope and object of the
legislation. No hard and fast rule can be laid down therefor. The court
E
normally would not, however, interfere with a policy decision which has
been made by experts in view of the fact that it does not possess such
expertise. [983-C-D)

4.3. However, this Court is not at all dealing with an economic policy F
_._
of the State, but a special planning statute of which economic factor is
~
only one of the components. Even then, it has no bearing with the economic
policy affecting the State or general public. DCR 58 deals with only a class
of people - who owned and possessed cotton textile mills and want revivaV
rehabilitation of their sick or closed textile mills or intend to modernize
or shift their mills. (984-D-E] G

4.4. Furthermore, interpretation of a town planning statute which
v has an environmental aspect leading to application of Articles 14 and 21
of the Constitution of India cannot be held to be within the exclusive
domain of the executive. There cannot be any doubt whatsoever, that the
H
928 SUPREME COURT REPORTS [2006] 2 S.C.R.
.,..
A validity and/or interpretation of a legislation must be resorted to within the
parameters of judicial review, but it is difficult to accept the contention that it
is totally excluded. [984-G, H; 985-AI

4.5. Unreasonableness is certainly a ground of striking down a
subordinate legislation. A presumption as to the constitutionality of a statute
B is also to be raised but it does not mean that the environmental factors can
altogether be omitted from consideration only because the executive has
construed the statute otherwise. [985-A-B)

4.6. Interpretation and application of constitutional and human
c rights had never been limited by this Court only to the black letter of law.
Expansive meaning of such rights had all along been given by the Courts
by taking recourse to creative interpretation which lead to creation of new
rights. (985-G)

4.7. In cases where constitutionality and/or interpretation of any
D legislation, be it made by the Parliament or an executive authority by way
of delegated legislation, is in question, it would be idle to contend that a
(
court of superior jurisdiction cannot exercise the power of judicial review.
·~
A distinction must be made between an executive decision laying down a
policy and executive decision in exercise of its legislation making power. A
legislation be it made by the Parliament/ Legislature or by the executive must
E
be interpreted within the parameters of the well-known principles enunciated
by this Court. Whether a legislation would be declared ultra vires or what
would be the effect and purport of a legislation upon interpretation thereof
will depend upon the legislation in question vis-a-vis the constitutional
provisions and other relevant factors. (986-C-FJ
F
PJ. Irani v. The State of Madras, (1962) 2 SCR 169; Mis. Punjab Tin
Supply Co., Chandigarh and Ors. v. Central Government and Ors., (1984) l
SCC 206; Secretary, Ministry a/Chemicals & Fertilizers, Government ofIndia
v. Cipla Ltd & Ors., (20031 7 SCC l; Manager. Reserve Bank of India,
Bangalore v. S. Mani and Ors., (2005) 5 SCC 100; Sonepat Cooperative Sugar
G Mills Ltd. v. Ajit Singh. [2005) .3 SCC 232; Cho/an Roadways Ltd v. G.
Thirugnanasambandam, (2005) 3 SCC 241; Anil Kumar Jha v. Union ofIndia,
(2005) 3 SCC 150; Rameswar Prasad & Ors. v. Union ofIndia & Anr., (2006)
l SCALE 385; Vineet Narain and Ors. v. Union of India and Anr., (1996) 2
..
SCC 199; Union of India and Anr. v. C. Dinakar, JPS and Ors., (20041 6
H SCC ll8; Kapila Hingorani v. State of Bihar. (20031 6 SCC l and Motor
\

"· BOMBAY DYEING AND MFG. CO. LTD.'· BOMBAY ENVIRONMENTAL ACTION GROUP 929

General Traders and Anr. v. State ofAndhra Pradesh and Ors., (1984) 1 SCC A
222 and John Vallamattom v. Union of India, {2003] 6 SCC 611, relied on.

Maharashtra State Board ofSecondary and Higher Secondary Education
and Anr. v. Paritosh Bhupesh Kumar Sheth and Ors., (1984) 4 SCC 27; R.K
Garg v. Union of India & Ors., (1981) 4 SCC 675; Ba/co Employees Union
v. Union of India, (2002] 2 SCC 333; State of Rajasthan & Ors. v. Basant B
Nahata, AIR (2005) SC 3401 and The Trustees of the Port of Madras v. Ml
s Aminchand Pyarelal and Ors., (1976( 3 SCC 167, referred to.

Huang and Ors. v. Secretary of State for the Home Department, (2005)
3 All. ER 435 and R. v. Secretary of State of the Home Department, ex. P C
Daly, (2001) 3 All ER 433, referred to.

5.1. Both the phrases "open lands" as also "balance FSI" contained
in DCR 58(l)(b) play significant role. The word "balance" is crucial which
would naturally mean FSI which is available to be utilized upon open land.
Such balance FSI must be apart from the existing FSI. Indisputably, the D
built-up area had consumed some FSI and, thus, when the expression
"balance FSI" is used, the same would mean additional built-up area. It
... contemplates that where the entire plot has been used by existing built-
up areas and some open land has been left out on the remaining non-built
up area of the plot additionally unconsumed FSI could be used. It is in
that sense separate. It is true that DCR 58(1) uses the word entire land · E
but the said expression is followed by the expression "built-up area".
"Balance FSI" in the aforementioned situation would not mean the FSI
which is involved for the purpose of construction of structures not only
on the open land which had been existing but also the land which had
become open by reason of the demolition of the existing structures. It is F
only in that sense that the State intended to give additional protection to
the mill owners. If open land is given its natural or dictionary meaning,
no distinction could be made in between DCR 58(1)(a) and DCR 58(1)(b),
.which ex facie would lead to an anomaly. (993-D-Gf

5.2. In view of the fact that the built up area was to be pr~tected in G
terms of sub-regulation (1) of DCR 58, a 'fortiori the ·land colnponent
thereof could be protected under clause (b) thereof. Thus, the same land
which was protected under clause (a) could not become shareable under
clause (b) which would render the distinction between the said provisions
otiose. Balance FSI on open lands or otherwise had also been used in sub-
regulation (5) of OCR 58. It also, thus, gives a significant clue to find out H
930 SUPREME COURT REPORTS [2006] 2 S.C.R.

A the meaning of balance FSI. Additional reason for the aforementioned
conclusion is that development or redevelopment of entire open land and
built up area of the premises referred to in DCR 58(1), in the event, the
findings of the High Court are accepted, there would not be any necessity
for the State to use two different words "open land" and "built-up area"
B separately and distinctly. 1993-H; 994-A-CI

5.3. The words "built-up area" find its source from the definition of
existing building. The existing built-up area was not to be shared and the
same if read with the word "existing'', it may be contrasted with a built-
up area additionally but separate and distinct from the old existing built-
C up area. The existing built-up area, thus, was sought to be protected which
would mean that they were sought to be protected from non-shareable land
component thereof. It is thus possible to come to the conclusion that the
obligation to share was intended to be absent only so long as no additional
built-up area was created. 1994-C-E)

D 5.4. In a case where the existing structure is demolished in part, the
balance FSI would be available but in relation to the entire open lands,
FSI has to be calculated taking into account the area of open land
appurtenant to the existing structures. Thus, no basic change had been ·~
effected in drafting the regulation to segregate newly built-up areas from
E existing built-up areas. It cannot be denied that the State intended to give
more benefits to the mill owners by reason of 2001 Regulations and, thus,
if after demolition of the entire structure the whole plot is treated to be
open land and FSI is calculated on the basis thereof the purport and object
of the amendment will be defoated. The fact that the State intended to
consider the matter relating to amendment having regard to the fact that
F there had hardly been any takers for the 1991 Scheme as it failed to
provide sufficient incentives, cannot be ignored. (994-E-G) •

5.5. The amendments carried out in the MRTP Act from time to time
and clearly the provisions of Sub-section (2) of Section 26 of the MRTP
Act point out that the State had been leaning towards environmental
G aspects but that was not the sole objective. The title of the regulation reads
as a modification to DCR 58. It was, therefore, not in substitution of the
resolution of 1991 nor was it framed by way of recasting thereof.
(994-H; 995-A-B)

5.6. In the marginal note, the expression "development or
H redevelopment" of land of cotton textile mills has been mentioned. What,
BOMBAY DYEING AND MFG. CO.LTD.>. BOMBAY ENVIRONMENT AL ACTION GROUP 93 J

therefore, in focus was the land of cotton textile mills. The expression. A
"land", thus, plays an important role. Although a marginal note may not
be determinative of the content of the provision, it may act as an intrinsic
aid to construction. (995-B-C)

5.7. The amendment of 1994 appears to be clarificatory in nature,
having regard to the fact that prior thereto the land owners could carry B
on demolition without prior intimation and/ or obtaining permission from
the corporation. The High Court, therefore, in its judgment wrongly laid
-'t.... undue emphasis thereupon. Furthermore, in DCR 58 the word
redevelopment had all along been used. By reason of the said amendment,
no different meaning which would not be in consonance with the object
should be attributed. Whatever that may mean, redevelopment
c
contemplates in its ordinary parlance a renewal or substitution of
development and involves pulling down of the structures. Development by
way of demolition cannot mean that DCR 58(1) would permit not just tbe
retention of the structure (shell) but also demolition of structure (shell).
The purpose for introducing the said amendment, therefore, was for a D
\._ different purpose and could not have been used for the purpose of
construction of DCR 58. [995-C-H; 996-A]
~ '
5.8. It is true that the lands of different mills had different built-up
areas. Balance FSI was required to be calculated on the basis thereof. The
extent of vacant land available for the purpose of distribution would E
indisputably depend upon the extent of structures which had been standing
on the lands but the same is a fortuitous circumstance. Only because in a
given case, the extent of the area to be given to MHADA or MCGM would
be comparativ~ly less than the case of land belonging to other mills, the
.. same by itself cannot be a ground for construing DCR 58 differently. F
Furthermore, in Note (iv) of DCR 58(1)(b) itself, it is categorically stated
~

that land would become open by demolishing the existing structure which
also points to the fact that the contentions of the Respondents - Writ
Petitioners are not correct in view of the fact that if the land after
demolition was already subsumed under open land, it was not necessary

- y
to deal with the same subject specifically with land which had become open G
on demolition. It is also interesting to note that in DCR 58(6)(a) the words
"reconstruction after demolition of existing structures limited to the extent
cf the built up area of the demolished structure... " have been used with
reference to "development/ redevelopment of the entire open land and/
or built up area of premises... " It is, thus, clear that the expression "open H
-.'
932 SUPREME COURT REPORTS [2006] 2 S.C.R.

A lands" is meant to connote lands other than lands available after
demolition of existing structures. (997-F-H; 998-A-CJ
...
5.9. The extent of open land to be shared by the owners with MCGM
and MHAOA would depend upon the built up area of the structure which
existed on site. The share of MCGM and MHAOA, therefore, would vary
B from case to case and, thus, one cannot determine the question keeping
in view only the case of one mill and not the others. This Court does not
agree with the approach of the High Court in interpreting the
aforementioned provisions having regard to certain other factors, namely,
deluge in Bombay in the year 2005 as also the requirements of the entire
C population of Bombay from environmental aspect. Such factors cannot be
taken into consideration for interpretation of a statute. One cannot look
to a statute with a coloured glass, but has to consider the provisions as
the legislature thought. The same should be subject, of course, to the
constitutional and other limitations. (1001-E-HJ

D Smt. Nandini Satpathy v. P.L. Dani and Anr. AIR (1978) SC 1025,
referred to.

Lennon v. Gibson, (1919) AC 709 at 7ll, referred to.

Craies on Statute law. Seventh Edn. p.141 and G.P. Singh's Principles
E of Statutory Interpretation, Ninth Edn. p.258, referred to.
6.1. If it is to be construed that a scheme made by BIFR is the
condition precedent for applicability of OCR 58 by reason whereof the
benefit conferred thereunder would not be availa'ble in like cases for no
apparent reasons whatsoever particularly when it was the intention of the
F State that all categories of the m.ills which require rehabilitation, revival
or modernization should be brought within the purview of OCR 58.
[1003-0-EJ

6.2. Indisputably, there may be closed mills which have not been
referred to BIFR or otherwise not capable of being referred to. The spirit
G of making OCR 58 was for revival and/or rehabilitation of the cotton
textile mills. Revival of closed mill was also, thus, a component part of
the scheme behind framing of OCR 58. It may be true that in terms of
sub-regulation (l) of OCR 58 recommendation of the BIFR is contemplated
but recommendation of BIFR would be necessary where it is otherwise
-
H available. If it is insisted that the recommendation by BIFR was mandatory
~
I

-
L BOMBAY DYEING AND MFG. CO.LTD.'· BOMBAY ENVIRONMENTAL ACTION GROUP 933

-:,: even for closed mill, much of the significance for using the words 'and/or A
closed' after the word 'sick' is lost. A closed mill would mean a mill in
respect whereof closure has been effected in accordance with law. Such
closure can be effected in accordance with law in terms of the provisions
of the Industrial Disputes Act. Before effecting a closure under the
Industrial Disputes Act, notice has to be given to the State and in certain
cases its prior permission is also required to be obtained. Thus, all cases,
B
which entail closure of an industry; would be within the knowledge of the
State. The State through its machinery can furthermore verify the
-t,.
genuineness or otherwise of such closure. In such a case, even in terms of
the provisions of the Industrial Disputes Act having regard to the purport
and object for which the same had been enacted, the authorities thereunder c
as also for the State a duty is cast to restore back the industrial peace.
[1003-F-H; 1004-A-B)

~·
State of Rajasthan & Anr. v. Mohammed Ayub Naz, (2006) 1 SCALE
79, relied on.

Halsbury's laws of England (Fourth Edition) Vol. (44) I (Re-issue), D
~- referred to.
~ .
7. DCR 58(6) is adjunct to the other provisions. Although on some
occasions, OCR 58(2) may apply without DCR 58(6), yet there is no such
.. machinery so far as sick mills are concerned. It is, therefore, difficult to
E.
comprehend that those mills which are sick but not referred to BIFR also
can take advantage of sub-regulation (6). How an industrial undertaking
belonging to a company which is sick should be determined to be so as
laid down under the provisions of SICA. Only in a case \\'.here a company
is sick in terms of the 1985 Act, an industrial undertaking belonging to it
..._ may be subject matter of the provisions thereof. The State forthat matter F
,l neither has any statutory power or competence to deal with sick
undertakings. Furthermore, the extent to which such sick company
requires protection to the extent of the sickness of the industrial
undertaking cannot also be gone into by the State or for that matter by
any other authority apart from BIFR. (1005-B-DJ
G
8. For the purpose of change of user of the lands, previous approval
of the Commissioner to a layout plan in accordance with the Scheme
-(
ap.p.roved by the Government is necessary. In terms of the said provision,
Clause (a) of sub-regulation (1) thereto shall apply as regard utilization
of the built-""p area and clause (b) shall apply in relation to development
__,) of open lands and balance FSI exceeds 30% of the open land and for H
934 SUPREME COURT REPORTS [2006] 2 S.C.R.

-
t:-
A balance FSI clause (b) of sub·-regulation (1) shall apply. Sub-regulation ~

(3) applies in respect of the cotton textile mills which intend to shift with
the permission of the competent authorities and in accordance with the
scheme approved by the Government. In terms of the said provision also,
•
Clauses (a) and (b) of sub-regulation (I) of DCR 58 would apply in regard
to the development or redevelopment of its land after shifting. Sub-
B

-
Regulation ( 4) provides that in case of modernization and shifting,
recommendation by BIFR would not be mandatory which implies that such
recommendation shall be mandatory. DCR 58(3) provides fof shifting.
Shifting of industries outside the town is encouraged.
(1006-G-H; 1007-A-B(
c 9.1. Both in Regulations 56 and 57 cotton textile mills had expressly
been excluded from a general power to convert the user into a residential
or commercial purpose. If such a provision was required to be made in
making an exception in relation to the cotton textile mill, it was not
necessary for the State to frame the regulation in its present form. Sub-
D regulation (6) specifically refers to sick and/ or closed or requiring
modernization on the same land. Such cases would, thus, bring within its
purview only closed mills which had not been referred to BIFR but the
change of user, must be confined to DCR 58 itself and not under DCR 56.
•
Such a construction does not cause any injustice to any party. If an

E
industrial undertaking is really sick within the provisions of the 1985 Act,
for the purpose of availing the benefits under DCR 58, it can refer the
-
question to BIFR and once a scheme is framed as regard revival and/or
rehabilitation, the owner of the mill can take recourse thereto. The lands
of the cotton textile mills, thus, although become open lands available but
therefor they cannot be used for purposes specified in 1-2 Zone. Sub-
F regulation (6) of DCR 58 must be read in sharp contrast to Sub-regulation
(3)(c) of Regulation 56 and Sub-regulation 4(c) of Regulation 57 which
permits a change of user to industrial lands other than lands of cotton
textile mills. Sub-regulation (6) of DCR 58 although contains no power to
change of user but the same had been provided in other clauses. If it is
not held that sub-regulation (6) contains the power to change user in
G respect of existing structures, a 'fortiori it may not be possible to give effect
thereto as there would be no power to user of change of land under existing
structures. [1007-H; 1008-A-El -..
9.2. So far as NTC mills are concerned, development had taken place
as a package of measure recommended by BIFR. Indisputably, the same
H would come within the purview of sub-regulation (l) of OCR 58 but in ,_
BOMBAY DYEING AND MFG. CO.LTD.'· BOMBAY ENVIRONMENT AL ACTION GROUP 935

A certain cases sub-regulation (6).also may be attracted. Each of the relevant A
sub-regulations of DCR 58 confers regulatory power upon the
Commissioner of the State. Development or redevelopment in terms of sub-
regulations (1), (2), (3) and.(5) are required to be made in terms of a layout
plan as approved by the Commissioner and in case of modernization as
per the scheme approved by the State. As the said provisions, contain a
safeguard, namely, prior approval of the Commissioner, all the mill owners
B
irrespective of the fact that they fall in different categories in terms of
the regulations would, thus, be entitled to take benefit of clause (6) subject
+" to strict compliance of other provisions. [1008-E-G)

10.1. It is no doubt true that Articles 14, 21, 48-A of the Constitution
of India must be applied both in relation to an executive action as also in c
relation to a legislation, however, although the facet of reasonableness is
a constitutional principle and adherence thereto being a constitutional duty
may apply, the degree and the extent to which such application would be
made indisputably would be different. Judicial review of administrative
action and judicial review of legislation stand on a different footing. What D
\_
is permissible for the court in case of judicial review of administrative
> ,, action may not be permissible while exercising the power of judicial review
of legislation. It may, however, be a different thing to contend that the
legislation had been enacted without constitutional principles in mind. The
real question is whether the constitutional mandates had been complied
with in making such legislation. (1010-B-E) E
10.2. It cannot be said that before making DCR 58 in the year 2001,
it was obligatory on the part of the State to accept in toto the
recommendations made by the Expert Committees who had undertaken
certain exercises; the equities should have been adjusted and the provisions
F
.. ... of the pollution laws including the provisions of sub-section (2) of Section
28 of the MRTP Act should have been considered. A presumption arises
as regards the constitutionality of a statute. Such a presumption would
also arise in a case of subordinate legislation. A subordinate legislation,
however, shall be susceptible or vulnerable to challenge not only on the
ground that the same offends Articles 14, 21 read with Article 48-A of G
the Constitution of India but also that the provisions of the MRTP Act
are unreasonable. (1011-A-C)
y
10.3. In the instant case, the State appointed two committees. They
have been taken into consideration by the State, may albeit be only in part.
The State might not have agreed with the entirety of the report. The State
H
A
936 SUPREME COURT REPORTS [2006) 2 S.C.R.

might have taken into consideration other factors which would subserve
the purport and object of the regulation. But, it will be difficult for us to
... -
~·

arrive at a finding that the environmental aspects had totally been ignored.
To what extent, DCR 58 would be commensurate with the ideal ecological
'
condition as is suggested by the experts is one thing but it is another thing
to say that no consideration at all in this behalf had been made by it. The
B State in its affidavit categorically stated that the said reports had fallen
for consideration and had been accepted by it but in the third affidavit it
has merely been stated that the State intended to give more than what
was suggested in the said report. It has been accepted by the parties that
certain suggestions have been accepted in toto and the provisions have been
.....
c amended pursuant thereto or in furtherance thereof. The Ranjit
Deshmukh Committee, not only visited some mills but also took recourse
to the consultative process. Eiven the Charles Correa Committee visited
all the public sector textile mills. While taking the said reports into
consideration, the State acquainted itself with the existing ground realities
as they then existed. For the purpose of striking down a legislation on the
-
D ground of infraction of the Constitutional provisions, the court would not
exercise its jurisdiction only because the recommendations of the j

committees had not been acc1~pted in toto but would do so inter alia on ~

the ground as to whether they otherwise violate the constitutional
principles. (1011-C-G(
E
10.4. Arbitrariness on the part of the legislature so as to make the
legislation violative of Article 14 of the Constitution should ordinarily be
manifest arbitrariness. What would be arbitrary exercise of legislative
power would depend upon the provisions of the statute vis-_-vis the
purpose and object thereof. (1012-A-B)
•
F ...
10.5. The amendment to OCR 58 was carried out IO years after the
original DCR 58 was introduced. Before doing so, due consultative process
as laid down in Section 37 of the MRTP Act which involves suggestions
and objections from public and the concerned statutory authorities was
taken recourse to. Consideration of the same by Dy. Director of Town
G Planning and thereafter promulgation of the same in the form of direct
regulation establishes that the same is not ex facie arbitrary in nature,
particularly when most of the suggestions of the said Committees were ·~

accepted. A statute may not be ultra vires Article 48-A itself if it is not
otherwise offensive of Articles 14 and 21 of the Constitution of India.
What, however, cannot be done for striking down legislation can certainly
H
BOMBAY DYEING AND MFG. CO.LTD."- BOMBAY ENVIRONMENTAL ACTION GROUP 93 7

____ be done for striking down executive a_ction. (1012-H; 1013-A-DJ A
10.6. Ecological factors indisputably are very relevant considerations
in construing a town planning statute. The court normally would lean in
favour of environmental protection in view of the creative interpretation
made by this Court in finding a right of environmental including right to
clear water, air, etc. under Article 21 of the Constitution of India. But, in B
this case, this Court .is not dealing with a similar problem. It must be borne
in mind while interpreti!lg DCR 58 that there exists a stark distinction
between the interpretation of planning and zoning statutes enforcing
ecology vis-a-vis industrial effluents and hazardous industries and those
re_latl"iig to com:e·rted efforts at rehabilitating the industry. It is around C
this pivot that interpretation must revolve. (1013-D-F(

-
10.7. Ecology in terms of DCR 58 has not been marginalized. The
statute does not prescribe any fixed norm. It provides for guidelines. It
has not been shown that the said guidelines have been violated. The
environmental aspect considered in DCR 58 may not be to everybody's D
satisfaction but the regulation in question has to be interpreted having
regard to the purport and object for which the same was enacted, meaning
. '
thereby, a holistic approach to a large number of problems. QCR 58 was
made in a special situation. In any other situation, probably this Court

- might have interpreted a similar provision differently. But, DCR 58 seeks
·to strike a balance between different public interests. The State has its own
·limitations. DCR 58 cannot be struck down solely on the ground that the
interest of the common citizen (from the ecological point of view) has been
E

-
affected, unless its actions are considered to be unfair. (1013-F-GJ

10.8. The State indeed in making the regulation intended to solve a F
longstanding problem wherewith it was beset. The State while framing the
aforementioned regulation had to deal with various objectives in mind. It
might have taken recourse to trial and error method. It started with an
experiment in the year 1991 but having failed therein it introduced a new
policy. The State considered the same to be fair on its part. (1014-B-CI
G
10.9. A substantive law as also delegated legislation raises a
presumption of constitutionality. Attempt is, thus, required to be made
for upholding the same. Sale of lands belonging to mills which are
absolutely unviable and/or those which are lying closed for one reason or

- the other as also those who intend to modernize their mills and/or shifting
H
SUPREME COURT REPORTS [2006) 2 S.C.R.
938
A the same and/ or part of it mm;t be kept for consideration in the matter
of interpretation of OCR 58. Thus, it cannot be held that OCR 58 is
unconstitutional. I1014-E-G I

Sharma Transport v. Government of Andhra Pradesh, (2002) 2 SCC
188; Khoday Distillery v. State of Karnataka, [19961 10 SCC 304; Otis
B Elevator Employees' Union S. Reg and Ors. v. Union ofIndia and Ors., (2003)
12 SCC 68; KK. Bhalla v. State of MP. & Ors., (2006) l SCALE 238; S.N.
Chandrashekar and Anr. v. State of Karna/aka and Ors. JT (2006) 2 SC 202
and Forward Construction Co. and Ors. v. Prabhat Manda/ (Regd), Andheri
and Ors., (1986) l SCC 100, relied on.
c Om Prakash and Ors. v. State of U.P. and Ors., (2004) 3 SCC 402,
referred to.

American Jurisprudence 2d, vol. 82, p. 496, referred to.

I 1.1. Clarification was issued having regard to a letter of MCGM
-
D dated 28.08.2001 to the Urban Development Department stating as to how
it understood OCR 58 of 2001 which was confirmed by the Urban
Development Department. Thus, although at one point of time they
interpreted OCR in the same manner as that of the State; only much later
they raised a doubt which was bona fide. Only with a view to clear the air
E of doubt, the clarification was issued by the State. It is interesting to note
that in paragraph 23 of the writ petition, the writ petitioners treated the
purported reduction in area attributable to OCR 58 as amended in 2001
and not because of any purported change brought about by clarification

F
made in 2003. [1015-F-G)

l 1.2. Furthermore, it is one thing to say that the clarification is
beyond the statutory power of the State or plainly contrary to the ,.
-
regulations, the effect whereof is required to be determined, but it is
another thing to say that while doing so the State gives out its mind as to
what it meant thereby as an author of the regulations. The grievance of
G the writ petitioner respondents primarily in that behalf is that in terms
of the said clarification, reconstruction on land made available after
demolition of the existing structure is to be in terms of sub-regulation (6)
of OCR 58 and the user thereof is proposed to be changed from industrial
to commercial or residential under sub-regulation (l)(a)(iii). [1016-A-B) ,

H 11.3. If some mill owners claim the right to change of user under
sub-regulation (6) alone, the same would be in the teeth of the
BOMBAY DYEING AND MFG. CO.LTD.''· BOMBAY ENVIRONMENT AL ACTION GROUP 93 9
interpretation of DCR 58. It cannot be said that by taking recourse to the A
said power of clarification the State has improperly exercised its power.
Reference to resolution dated 27.08.2003 passed by MCGM, does not have
the effect of clarification being set at naught for DCR 58. Similarly, the
letter dated 24.07 .2003 issued by the Chief Executive Officer of MHADA
to the Housing Board or the State Government also does not talk about B
the incorrectness or otherwise of the clarification issued by the State but
as regards the effect of DCR of 2001. (1016-D-EJ

12. The principle of contemporaneous exposition cannot be said to
have universal application. Each case must be considered on its own facts.
An executive construction is entitled to respect but is not beyond the pale C
of judicial review. [1019-G-H]

Union of India and Anr. v. Azadi Bachao Ando/an and Anr., [2004) 10
SCC 1; Baleshwar Bagarti v. Bhagirathi Dass !LR (1908) 35 Cal. 701;
Collector of Central Excise, Vadodara v. Dhiren Chemical Industries [2002]
2 SCC 127; Kalyani Packaging Industry v. Union of India and Anr,. (2004]
6 SCC 719; Municipal Corpn for City ofPune v. Bh11rat Forge Co. Ltd (1995) D
3 SCC 434; Ajay Gandhi v. B. Singh, (2004] 2 SCC 120 and Jamshed N.
Guzdar v. State of Maharashtra (20051 2 SCC 591, referred to.
,; .
Gullick v. West Norfolk Area Health Authority, (1986) AC 112, referred
to.
E
13. A development plan is an organic document. in the sense that
periodic changes are contemplated thereby. A development plan is
required to be changed every 20 years. Such changes are to be brought
about keeping in view the past experience of the planning authority and
the intended future development of the town. While, therefore, interpreting F
the words "change in the character of plan" the question would be as to
whether the change in the character is referable to alteration of the entire
plan. The change in the character would, therefore, necessarily mean the
change in the basic feature thereof and the entire plan as a whole wherefor
the same must be read in totality. In this case, the changes made have not
brought about any significant changes so as to come to a conclusion that G
its basic features are altered. Thus, the clarification issued by the State is
not violative of Section 37 of the MRTP Act. (1023-B-D)

Bangalore Medical Trust v. B.S. Muddappa & Ors., (1991) 4 SCC 54;
Forward Construction Company v. Prabhat Manda/, (1986( l SCC 100; Puran
Lal v. President of India, (1962] 1 SCR 688; MA. Panshikar v. State of H
940 SUPREME COURT REPORTS [2006] 2 S.C.R.

A Maharashtra through its Urban Development Department & Anr., (2002) S
BCR 318; Pune Municipal Corporation and Anr. v. Promoters and Builders
Association and Anr.. (2004) 10 SCC 796 and Balakrishna H. Sawant and
Ors. v. Sangli, Miraj & Kupwad City Municipal Corpn. and Ors., (20051 3
sec 61, referred to.
B Legg v. Ilea [197213 All ER 177, referred to.

14.l. The development of the doctrine of sustainable development
indeed is a welcome feature but while emphasizing the need of ecological
impact, a delicate balance between it and the necessity for development
must be struck. Whereas it is not possible to ignore inter-generational
C interest, it is also not possible to ignore the dire need which the society
urgently requires. In a case of this nature, an endeavour should be made
in giving effect to the intention of the legislature. For the satd purpose, it
is necessary to ascertain the object the iegislature seeks to achieve. It may
also be necessary to address questions as regards the nature of the statute.
(1029-A-C)
D
14.2. The main purpose of the legislation is revival of industry inter
alia. by modernisation and shifting of industr)" Article 21 guarantees a
right to a decent environment and, thus, what should be the parameters
therefor would essentially be a legislative policy. Undoubtedly, different
E criteria may be laid down to achieve different purposes. When the
discretionary power under a statute is arbitrarily exercised, evidently the
court will not tolerate the same and strike it down. DCR 58, however, ex
facie does not impair sustainable development of the town of Bombay.
(1029-D-EJ

F Ve/lore Citizens' Welfare Forum v. Union of India and Ors., (19961 5
SCC 647; Intellectual Forum, Tirupathi v. State of A.P. & Ors., JT (2006) 2
SC 568; A.P. Pollution Control Board v. Prof M. V. Nayudu (Retd) and Ors.,
[1999) 2 SCC 718; Narmada Bachao Ando/an v. Union of India and Ors.,
(2000110 SCC 664; MC. Mehta v. Union of India and Ors., (1996) 4 SCC
351; M.C. Mehta v. Union ofIndia and Ors., (2004) 6 SCC 588; M.C. Mehta
G v. Union of India and Ors., (2005) 2 SCC 186; M.C. Mehta v. Kamal Nath
and Ors., [1997) I SCC 388; Consumer Education & Research Society v.
Union of India and Ors., [20001 2 SCC 599; Sushanta Tagore and Ors. v.
Union of India and Ors., [20051 3 SCC 16; Indian Handicrafts Emporium ·-y
and Ors. v. Union of India and Ors., [2003) 7 SCC 589; Virender Gaur and
H Ors v. State of Haryana and Ors. [1995) 2 SCC 577 and Friends Colony
A
BOMBAY DYEING AND MFG. CO.LTD.'· BO.MBA Y ENVIRONMENTAL ACTION GROUP 941
Development Committee v. State of Orissa and Ors., (2004) 8 SCC 733, relied A

- x on.

South Bucks District Council v. Porter Chichester District Council v.
Searle and Ors., [2003) 3 All ER I, referred to.

15.1. If Regulation prior to 1991 was implemented, the average of B
the Green Areas would have come to 8.33% whereas after 1991, it comes
to 8.16%. It is difficult to agree with the contentions of the writ petitioners
that there had been substantial reduction in green area. It must also be
placed on record that civic load in respect of residential construction so
far as land occupied by the mill owners was more than the present ratio
of FSI at 1.33%. FSI given for construction of buildings to MHADA itself c
would be 1.596 i.e. almost 1.6%. (1037-D-E]

15.2. Thus, it is evident that the purported reduction in green area
compared to pre-1991 situation, would not create much difference so far
as maintenance of the ecological balance is concerned by giving effect to
2001 Regulations vis-a-vis the 1991 Regulations. (1037-F-G) D
Padma v. Hirata/ Motilal Desarda and Ors., (2002)...7 SCC 564, referred
le.
to.
; '
16.1. An integrated plan was set out for sale of lands in terms whereof
lands situate in other mills were kept aside to provide open lands which E
may be required in the event the writ petition filed by the Writ Petitioners
- Re_s~~ndents was allowed. Negotiations were held between the purchasers
and:.NTC as regards sale of the said land. Several queries were made by
the intending purchasers which were duly answered. Specific assurances
were given to the bidders by NTC that deficiencies in open space shall be
.made good by making available equivalent open space from its other mills F
.... in the vicinity, in the event the writ petition was allowed. Clarifications
-> were also issued to the effect that NTC was committed to sell lands
specified in respect of each mill as well as specified in FSI as approved by
the Bombay Municipal Corporation and, thus, any extra surrendering of
land, if any occasion arises therefor, would be borne by it. It was
G
furthermore clarified that "assuming that the court decides otherwise, then
NTC has other mills to offer as far as the share of MHADA and MCGM
'.
is concerned and NTC will take care of the interest of the purchasers".
..,-
An undertaking had also been given by it in the High Court. (1040-B-E]
. 16.2. It is not in dispute that in the special leave petition wherein H
942 SUPREME COURT REPORTS [2006] 2 S.C.R.

A the High Court's order·dated 27.09.2002 was passed, the parties therein
were not concerned with the sale of any mill lands or for enforcement and/
or interpretation of any regulation framed under the MRTP Act. The said
observations were made while entertaining an application filed on behalf
of the workmen and not for any other purpose. The observations were
B not made for the purpose of determination of any of the issues involved
in the matter. It could not, thus, be treated to be a direction on the part
of this Court. The question of the sale of mill lands by NTC could be held
to be invalid if the same had been effected contrary to the direction of
this Court and not otherwise. (1042-C-DJ

C NTC (IDA) Employees Association v. Union of India & Ors., [SLP No.
16732 of 1997 Order dated 7.5.1999), referred to.

17.1. While passing the order dated 11.05.2005, this Court merely
noted the terms of the BIFR scheme. It did not issue any direction to the
effect that the sale of the mill land should be effected strictly in terms
D thereof or in a particular manner. The BIFR scheme evidently was
referred to as this Court noticed that even statutory authorities constituted
under a Parliamentary Act found it necessary to direct sale of the mill
lands in public interest. While considering a writ petition on an
environmental issue, the focus of the court should have been confined
thereto. It was impermissible for the High Court to examine the BIFR
E scheme as if the environmental issues were considered therein.
(1043-F-H; 1044-A[

17.2. The BIFR exercises its jurisdiction under a statute; the objects
whereof are distinct and different from a town planning scheme. The BIFR
F is not a town planner. It is not a development authority. It has nothing to
do with the town planning or development scheme or maintenance of
ecological balance. The BIFR was concerned only with the manner in
which sick industrial undertaking should be made to revive. Before passing
the said order, it was required to hear all concerned, namely, the
management, the workmen, the financial institutions, banks etc. as also
G the operating agencies. It did so. (1044-A-C)

17.3. BIFR appointed IDBI as an operating agency. The authorities
were concerned with obtaining maximum amount by way of sale of mill
lands. It was in any event not concerned with the interpretation and/or
applicability of the provisions of the MRTP Act or the Regulation framed
H thereunder. BIFR was not concerned with the interpretation of DCR 58
/'

BOMBAY DYEING AND MFG. CO.LTD.•. BOMBAY ENVIRONMENT AL ACTION GROUP 943
and, thus, only because this Court in its aforementioned orders dated A
>' 27.09.2002 and 11.05.2005 had referred thereto, the same would not mean
that thereby any direction was issued either directly or indirectly that the
sale of the lands pertaining to cotton textile mills must strictly be conducted
in accordance with the said scheme. This Court merely asked the
authorities to effect sale of mill land upon following the scheme framed
by BIFR and in accordance with the procedure laid down therefor. This B
Court in its order dated 11.5.2005 categorically observed that if the
transactions in respect of mills are not allowed to be completed, the scheme
framed by the BIFR would come to a standstill resulting in accrual of
't,
liability of a huge amount. by way of interest payable by NTC to the
financial institutions besides other hardships which may be caused to c
various other persons including the workers. The scheme framed by the
BIFR, therefore, was taken to be a relevant factor only for the purpose
of determining the issues involved in the appeal which arose out of an
interim order. It was only in that situation mention was made to the
scheme framed by the BIFR and not for any other purpose. This Court,
.merely intended to give effect to the consensus arrived at the bar that an D
undertaking by the NTC to the effect that'the order of this High Court
~ would be complied with by way of adjustment of lands from other mills
)
would subserve the interest of justice. The validity or otherwise of the
transaction of sales of seven mills of NTC were, thus, not open to a further
determination by the High Court. (1044-C-H) E
17.4. The BIFR scheme did not postulate that the surrender of lands
to MCGM and MHADA should be out of the lands of each individual mill
itself and not out of the lands of some other mills. The BIFR had no
occasion to say so nor could it do so having regard to the provisions
contained in DCR 58. The writ petitioner-respondents have nowhere F
.... denied or disputed that the seven mills which were put up for sale were
J.
unviable ones. The lands pertaining to the mills were found to be surplus.
For the purpose of giving effect to the scheme framed by BIFR,
indisputably an Asset Sale Committee was constituted to discharge the
functions of overseeing the sale of surplus assets of the said mills. It is
furthermore not in dispute that an Integrated Development Scheme was G
framed by NTC with the assistance of the architects which was submitted
...- to MCGM and the same was duly approved. Sanction of sale of two mills
" out of seven mills was not granted evidently in view of the pendency of
the writ petition. The BIFR scheme or the said Integrated Development
Scheme framed by_NTC was not in question in the writ petition. Even when
H
944 SUPREME COURT REPORTS [2006) 2 S.C.R.

A the interlocutory application was being heard, no submission was made
as regard violation of the BIFR scheme or the aforementioned order dated
27.09.2002. Before this Court as also the High Court the question which
arose was as to whether sufficient lands were available in the event the
-
writ petition was to be allowed. (1045-B-F)

B Saraf Chandra Mishra and Ors. v. State of Orissa and Ors., (2006] 1
SCC 638 and State of Karnataka and Ors. v. C. Lalitha, (2006) 1 SCALE
73, relied on.

18. It is not in dispute that the writ petitioners merely filed an
C affidavit on 12th July, 2005 before the High Court alleging that the sale
of surplus land by NTC was in violation of this Court's order and/ or the
scheme framed by the BIFR. If the prayer in the writ petition had not
been amended, it is beyond comprehension on what premise the High
Court proceeded to consider the question as regards the alleged violation
of the order of this Court, as also the BIFR Scheme by NTC for the
D purpose of setting aside the sale. In a collateral proceeding, the High Court,
could not issue any direction which would not only be contrary to a
statutory scheme but defeasive of the purport and object for which SICA
was enacted. Furthermore, it was none of the concern of the writ
petitioners - Respondents as to how BIFR calculated the financial viability
by way of sale of surplus land by NTC. It was equally impermissible for
E the High Court to consider as to whether despite there being a provision
for multi-mill aggregation in terms of DCR 2001, the same had been taken
into consideration under BIFR Scheme or not. For the purpose of
considering the validity or otherwise of the sale in terms of BIFR Scheme
itself, ASC was appointed wherein a member of the BIFR was also
F represented. Therefore, the judgment of the High Court in this behalf is
not correct. (1048-C-FJ ..
19. The purchasers of the cotton textile mills of the NTC cannot be
made to suffer for no fault on their part and, thus, the High Court
committed a manifest error in that behalf. (1050-CJ
G
Gurjoginder Singh v. Jaswant Kaur (Smt.) and Anr., (1994) 2 SCC 368;
Janak Raj v. Gurdial Singh and Anr., (1967) 2 SCR 77 and Padanathil
Ruqmini Amma v. P.K. Abdulla, (1996) 7 SCC 668, referred to. ·r

Zain-ul-Abdin Khan v. Muhammad Asghar Ali Khan, 15 IA 12, referred
H to.
./
j .,

BOMBAY DYEING AND MFG. CO.LTD. v. BOMBAY ENVIRONMENT AL ACTION GROUP 945

- ·. 20.1. Delay and laches on the part of the writ petitioners indisputably
·has a role to play in the matter of grant of reliefs in a writ petition. This
Court in a large number of decisions has categorically laid down that
A'•·

where by reason of delay and/ or laches on the part of the writ petitioners
the parties altered their positions and/ or third parties interests have been
created, public interest litigations may be summarily dismissed. Delay B
although may not be the sole ground for dismissing a public interest
litigation in some cases and, thus, each case must be considered having
regard to the facts and circumstances obtaining therein, the underlying
equitable principles cannot be ignored. As regards applicability of the said
principles, public interest litigations are no exceptions. (1052-A-C)

20.2. This Court does not intend to lay down a law that delay or
c
laches alone should be the sole ground for throwing out a public interest
litigation irrespective of the merit of the matter or the stage thereof.
Keeping in view the magnitude of public interest, the court may consider
the desirability to relax the rigours of the accepted norms. This Court does
not accept the explanation in this regard sought to be offered by the writ D
petitioners. There is no doubt that the writ petitioners are guilty of serious
,; . delay and laches on their part. (1053-C-DJ

20.3. As this Court has considered the matter on merits, evidently,
the writ petition is not dismissed on the ground of delay and Iaches alone
but taken the same as one of the factors in determining the questions raised E
before this Court. (1054-C-DJ

Chairman & MD, BPL Ltd v. S.P. Gururaja and Ors., [2003) 8 SCC
567; Narmada Bachao Ando/an v. Union of India, (2000) 10 SCC 664; R. &
M Trust v. Koramangala Residents Vigilance Group, (2005) 3 SCC 91 and p
State of Maharashtra v. Digambar, [19951 4 SCC 683, relied on.

Mis Lohia Machines v. Union of India, AIR (1985) SC 421,
distinguished.

Proprietary Articles Trade Association v. AG of Canada (1931) AC 310 G
and Attorney General of the Commonwealth of Australia v. Queen 95 CLR
529, referred to. ·

21. As regards the workers' dues, in terms of the Regulations, the
entire amount is to be deposited in the funds specially created therfor. It
is the Committee appointed by the State alone which can spend the H
946 SUPREME COURT REPORTS [2006] 2 S.C.R.

A amount. The priority as regard disbursal of such amount has categorically
been laid down in the regulation itself. If the fund created is not being
expended for the purposes mentioned therein, a separate cause of action .·
will arise therefor. Guidelines for the Committee are also not necessary
to be laid down. In any event, this Court is not called upon nor is it
necessary to make any attempt in that regard. However, if any occasion
B arises for any of the parties in this behalf, the aggrieved party indisputably
would be at liberty to agitate the same before appropriate forums.
[1056-C-E)

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1519 of2006.
c From the Final Judgment and Order dated 17.10.2005 of the Bombay
High Court in PIL Writ Petition No. 482/2005.

WITH

D C.A. Nos. 1528, 1545, 1541, 1532, 1540, 1550, 1520, 1536, 1521.
1515, 1538, 1518, 1523, 1543, 1517, 1522, 1530, 1534, 1526 and 1516 of
2006.

Ravi M. Kadam, Adv. Gen., Soli J. Sorabjee, Ram Jethmalani, Arun
Jaitley, F.S. Nariman, Uday U. Lalit, Girish Godbole, Mukul Rohtagi, Dr.
E Rajiv Dhawan, Dr. Abhishek Manu Singhvi, T.R. Andhyarujina, R.F. Nariman,
K.K. Venugopal, Dr. V.V. Tulzapurkar, V.A. Mohta, K.K. Singhvi, Harish
N. Salve, Iqbal Chagla, M.L. Verma, Colin Gonsalves, Dinesh Dwivedi,
Janak Dwarkadas, J.J. Bhat, Percy Ghandy, Ms. Shahrukh Kathawala, Salesh,
C. Rashikant, R.N. Karanjawala, Ms. Ruby Singh Ahuja, Ms. Kanika
Agnihotri, Debmalya Banerjee, Ms. Manik Karanjawala, Ravinder Narain,
F Pallav Sishodia, Pravin Bahadur, Ms. Meghalee Barthakur, Ms. Nupur Singh,
Rajan Narain, Shivaji M. Jadhav, Himanshu Gupta, Brij Kishor Sah, Parimal
K. Shroff, Ms. Bina Gupta, Ms. Rakhi Ray, Ms. Inklee Barooah, C. Rashikant,
Shailesh, Gopal Jain, Venkatesh Dhond, P.H. Parekh, Lalit Chauhan, Sumit
Goel, Shyam Mehta, Bhavesh Panjwani (for Mis. P.H. Parekh & Co.), Ms.
G Meena H. Doshi, Ms. B. Sunita Rao, Amit Bhandari. Sushi Kr. Pathak, U.A.
Rana, Sadeep Khare!, Ms. Srabonee Roy (for M/s. Gagrat & Co.), Ravi
Gandhi, Dhaval Vussonji, Pratap Venugopal, E. Venu Kumar, Hurshad V.
Hameed (for M/s. K.J. John & Co.), Anil Menon, S.U.K. Sagar, Ms. Bina
Madhavan, Ambuj Agrawal (for M/s. Lawyer's Knit & Co.), Dhaval Mehta,
Mrs. Rekha Palli, Venkatesh Dhand, Shailesh Kalambi, Pritesh Kapoor, Ms.
H Pumima Bhat Kak, Gopal Jain, C. Reshmikant, S.K. Srivastav, Santosh Paul,

1
BOMBAY DYEING AND MFG. CO LTD., BOMBAY ENVIRONMENTAL ACTION GROUP [SINHA,!.] 947
.. ,.:.,.,,!' M.K. Dava, Farrukh Rasheed, Ujjainwala S.H., Rakesh Katana, D.N. Mishra,
Jay Savla, Gautam Patel, Parag Kabadi, Lynn Periera, Sharan Jagtiani, Devansh
A

Mohta, Ms. Reena Bagga, Ms. Meenakshi Ogra, Ms. Meenakshi, Satya Mitra,
M.N. Shroff, Ms. Anuradha Singh, Ms. Apama Bhat, Ravindra K. Adsure,
Sambhaji S. Shinde, V.N. Raghupathy, Anirudha P. Mayee, Mukesh Verma,
Ashok B. Jain, D.T. Devale, Manish Shanker, Pankaj K. Singh, Ashish Mohan,
Yash Pal Dhingra, N.M. Ganguly, Vinay Navare, Naresh Kumar, C.S. Ashri,
B
Prashant Bhushan, Vishal Gupta, Rohit Kumar Singh, Ms. Sumeet Sharma,
Vikas Mehta, Mahesh Agarwal, Manu Krishnan and E.C. Agrawala for the
appearing parties.

The Judgment of the Court was delivered by
c
S.B. SINHA, J. Leave granted in all SLPs.

INTRODUCTION

Whether any synthesis between environmental aspects and building
. regulation vis-a-vis the scheme floated by the Board of Industrial and Financial
Reconstruction (for short 'BIFR') in terms of the provisions of the Sick
D
\..-
,J Industrial Companies (Special Provisions) Act, 1985 (for short, 'SICA') herein
is possible is the core question involved in these appeals.

BACKGROUND FACTS
E
The First Respondent herein is a public charitable trust. Its aims and
objects, inter alia, are to look after the environment in all respects. It had
allegedly initiated and/or participated in matters of environmental importance
as regard preservation and improvement wherefor it had moved the court in

.A
.. public interest on several occasions. The Second Respondent herein is said
to be the honorary Secretary of the First Respondent and served in various F
committees appointed by the Central and State Governments as also by the
Bombay High Court.

The said respondents filed a writ petition questioning the validity of
Development Control Regulation No. 58 (OCR 58) framed by the State of
· Maharashtra in terms of the Maharashtra Regional and Town Planning Act,
G
1966 [for short "the MRTP Act"]. The Respondents in the writ application,
...;
< some of whom are Appellants herein, were/ are owners of various cotton
textile mills.

DCR 58 admittedly was made by the State of Maharashtra with a view
H
948 SUPREME COURT REPORTS [2006] 2 S.C.R.

A to deal with the situation arising out of closure and/or unviability of various •,
cotton textile mills occasioned inter alia by reason of a strike resorted to by
the workers thereof.

WRIT PROCEEDINGS

B The writ petition questioning the validity of OCR 58 by the First and
Second Respondents was filed allegedly to protect the interests of the residents
of Mumbai and to improve the quality of life in the town of Mumbai which
is said to have drastically been deteriorated during the last fifteen years as
also for preventing further serious damage to the town planning and ecology
C so as to avoid an irretrievable breakdown of the city. The main thrust of the
writ petitioners was to ensure "open spaces" for the city and to provide the
crying need of space for public housing.

In the said writ petition, apart from the State of Maharashtra, the
Municipal Corporation of Greater Mumbai (MCGM), the Maharashtra Housing
D and Area Development Authority (MHAOA), the National Textile Corporation
(NTC) North Maharashtra and South Maharashtra were impleaded as
respondents. Before the High Court, a large number of mill owners and
others who allegedly have invested a huge sum on the lands of the mill
owners or otherwise interested in implementation of OCR 58 of 2001 filed
applications for their impleadment as parties therein which were opposed by
E the writ petitioner- respondents. The said applicants were, however, allowed
to intervene in the matter. It is, however, not in dispute that the purchasers
from National Textile Corporation were not impleaded as parties therein who
are now before us. On or about 2.6.2005, the writ petitions-Respondents took
out a Chamber Summons seeking to amend the writ petition. The proposed
p amendments inter alia related to:
•
"(i) a challenge to the clarification dated 28th March, 2003 issued by
Respondent No. 3 on the ground that the same seeks to permit
residential user and is therefore an amendment of OCR 58 of 200 I;
and
G (ii) the alleged requirement of Environmental Impact Assessment (EIA)
in pursuance of notification dated 27th January, 1994 as amended by
notification dated 7th July, 2004 issued under the provisions of the
Environment Protection Act."

H The said Chamber Summons was allowed by an order dated 7.7.2005
BOMBAY DYEING AND MFG. CO. LTD.''· BOMBAY ENVIRONMENT AL ACTION GROUP [SINHA,J.] 949
,y directing: A
"We are fully satisfied that the amendments sought are necessary
and essential in the above Petition especially when the above petition
is a PIL petition, which is yet to be admitted. The Respondents will
have full opportunity to deal with these amendments by filing an
additional affidavit in reply. Under these circumstances, Chamber B
Summons is made absolute in terms of prayer clause (a), Amendment
,,
to be carried out on or before 16.7.2005 ...
•7,
HIGH COURT JUDGMENT

The aforementioned writ petition was allowed by the Bombay High c
Court on 18.02.2005. By its judgment, the Division Bench of the High Court,
inter alia, held :

(i) DCR 58 should be construed having regard to the importance of
open space and public space;
D
(ii) By reason of the 200 l amendment, no substantial change had
~
J
been made and the amendments carried out therein must be
construed having regard to the expression 'development' which
included 'demolition of structures'.
(iii) DCR 58 as amended must be harmoniously construed so as to
E
uphold the constitutionality thereof. The expression 'open space'
would take within its ambit the same space as was obtaining after
demolition.
(iv) DCR 58, if not construed in the manner as contended by the writ
petitioners would render it ultra vires Articles 14, 21 and 48-A of
_..
~
the Constitution of India.
F
(v) Sales carried out by the National Textile Corporation were contrary
to the scheme framed by BIFR as also the orders of this Court
dated 05.05.2005
(vi) NTC as a State should have taken steps to modernize its mills or G
start other textile mills. It could not act like a private mill owner.
~ Its high profits should not be expended towards anything which
would be contrary to the objectives for which the Acts of 1974
and 1994 were enacted, as also the scheme of the BIFR and the
orders of this Court.
H
950 SUPREME COURT REPORTS [2006) 2 S.C.R.

A (vii) Doctrine of prospective overruling has no application in the instant
case. "
(viii) The High Court refused to dismiss the public interest litigation on
the ground of delay in view of the enormity of the issues involved.
In support of the said contention, it principally relied on the
B decision of this Court in Mis. lohia Machines v. Union of India,
AIR (1985) SC 421].

(ix) It concluded:
.t.
·r
"(a) In amended OCR 58(1 )(b), "open lands" would include lands
after demolition of structures.
c
(b) Clarification dated 28th March, 2003 is clearly violative of Section
37 of MRTP Act and Article 21 of the Constitution of India.

(c) The issue whether the amended OCR 58 is contrary to Section 37
"
of MRTP Act or Article 21 of the Constitution of India, is kept open.
D
(d) All the constructions carried out by various Developers are clearly
~
in violation of ElA Notification as amended on 7th July, 2004, as
admittedly none of them have obtained clearance from Ministry of
Environment and Forests.

E (e) All sales of Mill lands carried out by NTC are clearly contrary to
the Supreme Court orders dated I Ith May, 2005 and 27th September,
2002 and contrary to the sanctioned BIFR schemes."

Upon taking into consideration the provisions of the 1994 Amendment
Act and SICA, it was held:
F ~
(i) State also has a stake in the mills because they meet the
requirements of cheap and quality cloth and furthermore provide
..
work and livelihood to many.

(ii) An ecological imbalance would be created by proliferation of
high-rise structures in Girangaon area, which was essentially
G planned for commercial and industrial activities.

(iii) OCR 58 facilitates the implementation of measures for revival, -"
rehabilitation and modernisation of closed, sick and potentially
viable sick mills and must, thus, be construed as such.

H (iv) NTC should take all such measures as are necessary to protect
-;i,

BOMBAY DYEING AND MFG. CO. LTD.'· BOMBAY ENVIRONMENT AL ACTION GROUP [SINHAJ) 951

~
,y and encourage the industry and not contrary thereto or inconsistent A
therewith.
(v) It was necessary to amend DC Regulations to confer additional
rights and incentives to enable NTC and the mill owners revive
the mills.
(vi) The Commissioner has discretion to permit utilisation of existing B
built up area and open lands as well as the balance FSI.

;J~
(vii) NTC has a statutory obligation to revive, rehabilitate, or modernise
the mills.
(viii) Commissioner has the power to allow re-construction and c
•.
demolition of existing structures, but re-construction is limited to
the extent of built up area of the demolished structures .
(ix) Combination of properties whether under common ownership or
otherwise and joint development is permitted provided FSI is in
balance.
D
(x) If the textile mill has shifted or the owner establishes a diversified
>--
; industry then further obligation is cast to offer on priority in the
re-located mill or diversified industry, as the case may be,
employment to the workers.
(xi) Fruits and benefits of development and re-development cannot be E
retained by owners but they have to be passed on to .those who
are legitimately entitled thereto.
(xii) Monies are required to be put in Escrow Account.
(xiii) It is a complete and comprehensive code so far as development
...
, and re-development of lands of cotton textile mills is concerned. F
~
Mill owners must not be allowed to trade in the properties owned
by it.
(xiv) The scheme is very much workable as the regulation allows enough
free play to meet the obligations towards workers and financial
institutions. G
(xv) The intent is to control the development and re-development by
'f making comprehensive regulatory measures, the portions becoming
vacant after demolition of existing built-up areas have to be
included in the concept "open lands."
• H
952 SUPREME COURT REPORTS [2006] 2 S.C.R.

A As regards, the clarification made by the State dated 28.3.2003, it was
opined that the same amounts to amendment of OCR 58 and, thus, not being
a clarification simpliciter in terms of OCR 62(3 ), the same was unsustainable.
The said clarification was also ultra vires Article 21 of the Constitution of
India.

B As regards non-complianc<: of the notification dated 07 .07 .2004, it was
observed that none of the mills obtained clearance as per the EIA Notification
in spite of High Court's directions to do so and had been carrying on
construction activities. MCGM as also the State of Maharashtra did not take
any effective step to ensure compliance of the EIA notification. Even the
C public hearings conducted by the Maharashtra Pollution Control Board were
not done satisfactorily. It directed that the public hearings be conducted by
the Ministry of Environment and Forests itself, keeping in view the enormity
of ecological imbalance and environmental degradation and also keeping in
mind 'Precautionary Principle' and the principle of 'sustainable development.'

D In its judgment, the High Court furthermore opined:

(i) MCGM has not ensured at al!, while sanctioning the building ~
plans, compliance of the provisions relating to public amenities. '
(ii) No step for compliance with EIA Notification had been taken
ever by MCGM ..
E
(iii) MCGM did not ensure furthermore that all the Mill owners provide
free housing of 225 Square feet to the occupants. Despite
mandatory nature of DCR 58 (7) none of the sanctioned plans
provide for any housing for the mill workers/occupants.

F (iv) MCGM has not ensured surrendering of lands for "open spaces"
and "public housing" as per amended OCR 58, although any
construction could commence only after physical surrender of
lands as "open spaces" and "public housings."
(v) Since, MCGM had completely abdicated all its basic functions,
G State of Maharashtra was ordered to take immediate remedial
measures.

SUBMISSIONS

We have heard a large number of counsel appearing for the parties.
H Submissions of the learned counsel appearing for the Appellants and supporting .
BOMBAY DYEING AND MFG. CO. LTD."· BOMBAY ENVIRONMENT AL ACTION GROUP [SINHA.I.) 953

respondents are as under: A

Re: DCR 58

(A) DCR 58, as amended in 200 I, shall apply not only to a sick mill
but also to a closed mill being unviable which had opted for
revival/ modernization/shifting. The original DCR 58 being not B
invalid, the mere grant of additional benefits would not make it
ultra vires.

,7, (B) The State cannot be said to have ignored various conflicting
objectives while carrying out the amendment in DCR 58.

(C) The High Court, in exercise of its jurisdiction of judicial review, C
could not have interfered with a policy decision of the State.

(D) The High Court committed a manifest error in holding that the
amended v~rsion of DCR 58 vis a vis the term 'open space'
would have the same meaning as was contemplated under DCR
58 of 1991. D
;>. (E) The High Court failed to appreciate that reading down ofDCR 58
; was impermissible in law.

·(F) The High Court ought to have taken into consideration the past
experience of the State necessitating amendinent of DCR. E
(G) The High Court furthermore failed to take note of the fact that the
committees appointed by the State also made recommendations
that the mill owners would be allowed to develop their lands.

(H) Two different interpretations of DCR 58 having been found by
the High Court to be possible, it could not have arrived at a F
conclusion that clarificatory notification dated 28.03 .2003
amounted to an amendment of the Regulation and, thus, void.

(I) The impugned judgment is wholly unsustainable as several
irrelevant factors, e.g. deluge in the city of Bombay in 2005, were
taken into consideration for the purpose of interpretation of DCR G
58.

(J) The findings of the High Court would lead to a radical
discrimination between cotton textile mills and other industries
which being not based on any rational criteria renders it
unconstitutional being violative of Article 14 of the Constitution H
954 SUPREME COURT REPORTS (2006] 2 S.C.R.

A
-
of India.
(K) The High Court fail,ed to take into consideration the fact that the
equity was in favour of the appellants herein as they having already
demolished the building as having created third party interests,
should not have been asked to go back to the same position as
B was obtaining in the year 1991.
(L) If the impugned judgment is upheld, several provisions of DCR
58, as for example, clause (6) thereof would become otiose and
redundant and, thus, interpretation of the High Court in respect of .T,
DCR 58 is unsustainable.
C (M) No foundational fact having been laid in the writ petition to show
as to how the clarification amounts to amendment of DCR 58, the
High Court committed a manifest error in arriving at a finding
that the said Regulations are ultra vires Section 37 of the Act and/
or Article 21 of the Constitution of India.
D (N) The Respondent-writ petitioners were guilty of serious aelay and
!aches in filling of the writ petition and thus it was liable to be
not dismissed in limine.

Re: Validity of sales of 5 mills by NTC

E (a) The High Court in granting relief in favour of the writ petitioners
failed to take into consideration relevant factors and based its
decision on irrelevant factors and, thus, misdirected itself in law.
(b) The judgment of this Court in Bombay Dyeing & Manufacturing
Co. Ltd. v. Bombay Environmental Action Group and Ors., [2005)
F 5 SCC 61 being final and binding on the parties, the High Court
committed a serious illegality in interfering therewith.
..
(c) BIFR scheme had wrongly been taken recourse to for the purpose
of construction of the Regulation.

G Submissions of Writ Petitioners Respondents No. 1-2
(I) DCR broadly lays down a scheme of land uses and zoning, Clause
58 thereof as amended in 200 I should be read in conformity with
y
the provisions of the MRTP Act.
(2) The expression 'open land' as contained in DCR 58 must be
H
~
BOMBAY DYEING AND MFG. CO.LTD. v BOMBAY ENVIRONMENT AL ACTION GROUP [SINHA, J.) 955
interpreted in such a manner so as to enable the concerned A
., /\' authorities to sanction a building plan in terms of the extant
regulations.

(3) On a plain construction of DCR 58 of 2001, it bas rightly been
'!
held by the High Court that the intention of the State evidently
was to give only double FSI and not to diminish the stake of B
MCGM and MHADA in the mill land.

(4) Interpretation of DCR 58 by the State has defeated the purport
and object of the Act.
.• ,1_· (5) For the purpose of upholding the constitutionality of DCR 58, the
same was required to be read down, failing which it is rendered c
unconstitutional.
(6) The effect and purpose of DCR 58 as clarified by the state only
having come to the notice of the writ petitioners in 2005 and as
the writ petition was filed by them immediately thereafter, the
same was not liable to be dismissed on the ground of delay and D
!aches on their part.
>- (7) In view of the subsequent events, this Court may lay down the
I principles for the purpose of moulding the reliefs and remit the
matter to the High Court for consideration of the matter afresh.
E
(8) MHADA and the MCGM having taken different stands before
the High Court, that they should not be permitted to support the
State before this Court.
(9) All applications for grant of permission for development/
' redevelopment was required to be considered having regard to
F
the nature of the land as would be existing after demolition of the
>,.,
existing structures.
JI

STATUTORY SCHEME

Bombay Town Planning Act, 1954 replaced the Bombay Town Planning
Act 1915 which became applicable to the entire State of Maharashtra including
G
the town of Mumbai.
~

-..,-- In the year, 1966, the legislature of the State of Maharashtra with a
view to make provisions for planning and development and use of land in
regions established for that purpose and for constitution of Regional Planning H
'
956 SUPREME COURT REPORTS [2006) 2 S.C.R.

A Boards therefor and for other purposes mentioned in the preamble thereto
enacted the MRTP Act repealing and replacing the Bombay Town Planning
Act, 1954. It came into force with effect from I Ith January, 1967.

. MRTP Act provides for formulation of regional plans and development
plans. Definitions of some of the expressions which are relevant for our
B purpose are as under:

2(7) "Development" with its grammatical variations means the carrying
out of buildings, engineering, mining or other operations in, or over,
or under, land or the making of any material change, in any building
r.
or land or in the use of any building or land or any material or •
c structural change in any heritage; building or its precincts and includes
demolition of any existing building structure or erection or part of
such building, structure of erection; and reclamation, redevelopment
and lay-out and sub-division of any land; and "to develop" shall be
construed accordingly;
D 2(9) "Development plan" means a plan for the development or re-
development of the area within the jurisdiction of a planning Authority
and includes revision of a development plan and proposals of a special .A
planning Authority for development of land within its jurisdiction;

2(9A) "development right" means right to carry out development or
E to develop the land or building or both and shall include the
transferable development right in the form of right to utilise the Floor
Space Index of land utilisable either on the remainder of the land -0r
partially reserved for a public purpose or elsewhere, as the final
Development Control Regulations in this behalf provide;
F
2(13A) "Floor Space Index" means the quotient or the ratio of the
combined gross floor area to the total area of the plot, viz.: - ,;

..
"Total covered area of all floors
Floor Space Index =
Plot area
G
Section 2(27) defines regulations made under Section 159 of the MRTP
Act and includes zoning and other regulations made as part of a regional {

plan, development plan or town planning scheme. The land-use maps and the
development control rules/regulations together comprise the development plan "
under Section 22. The land-use map indicates the zone in which a piece of
H
land falls, in regard whereto the permissible uses are specified in the rules/
BOMBAY DYEING AND MFG. CO.LTD. v. BOMBAY ENVIRONMENTAL ACTION GROUP [SINHA,J.] 95 7

regulations. In each of such zonal plan, although the industrial areas have A
>·, been delineated separately but existence of each of the cotton textile mills
therein has specifically been shown which evidently shows that cotton textile
mills had been given a special status.

The regional plan is drawn up by the State Government in terms of
Section 14 read with Section 17 of the MRTP Act. Section 14 inter alia B
mandates specification of land uses, i.e., residential, industrial, agricultural,
etc., reservation for open spaces, gardens, etc., reservation and conservation
of areas of natural scenery as also infrastructure such as transport, water
supply, drainage, sewerage, etc.

Section 21 mandates drafting of a Development Plan by every Planning C
Authority for the area within its jurisdiction.

Section 22 lays out the contents of such development plan indicating
the manner of use and- development of land. As far as possible, the same is
to provide for:- D
(a) Allocation of land for residential, industrial, commercial,
agricultural uses, etc;
(b) Designation of land for public purposes;
•,
(c) Designation of areas for open spaces, playgrounds, stadia, E
zoological gardens, green belts, nature reserves, sanctuaries and
dairies;
(d) Transport and communication;

(e) Public utilities and amenities;

(t) Reservation of land for community facilities and services.
F

.A Section 37 permits modification ofa Development Plan by the Planning
Authority or in cases of urgency by the State Government in exercise of its
power under Sub-section IAA of Section 37 which reads as under:

"(IAA) (a) Notwithstanding anything contained in sub-sections (I), G
(IA) and (2), where the State Government is satisfied that in the
pub/ ic interest it is nepessary to carry out urgently a modification of
any part of, or any proposal made in, a final Development Plan of
such a nature that it will not change the character ofsuch Development
Plan, the State Government may, on its own, publish a notice in the H
),'

958 SUPREME COURT REPORTS [2006) 2 S.C.R.

A Official Gazette, and in such other manner as may be determined by
it, inviting objections and suggestions from any person with respect
to the proposed modification not later than one month from the date
-;...
--
of such notice, and shall also serve notice on all persons affected by
the proposed modifications and the Planning Authority.

B [Emphasis supplied)

Section 38 provides for periodic revisions of the development plan
making it mandatory to revise the same at least once in every 20 years.
~

Section 43 restricts change in use or development of land without the
c written permission of the Planning Authority. Such application is required to
be made in terms of Section 44 of the Act.

Section 45 confers power to grant such permission whereas Section 46
makes it mandatory for the planning authority to have due regard to the
provisions of the draft of final plan or a sanctioned plan.
D
Section 159 of the MRTI' Act empowers any Regional Board or
Development Authority to make regulations consistent with the provisions
'
thereof or the rules made thereunder inter alia to carry out the pm:poses
thereof. Sub-section (2) of Section 159 empowers the State Government to
.
make special development control regulations consistent therewith and the
E rules made thereunder to carry out the purpose of executing a Special Township
Project and such regulations may be a part of Development Control Regulations
or Development Plan or Regional Plan, as the case may be.

In terms of the MRTP Act, Development Control Rules (DCR), 1967
F were framed. The State Government took a policy decision to frame new
DCR in 1990 wherefor suggestions I opinions from the public were invited.
,/

The State of Maharashtra in exercise of its power conferred on it "
under Section 159(2) of the MRTP Act framed the Development Control
Regulations, 1991 (for short "the 1991 Regulations"). The Development Plan
G had been notified in the year 1981 and the Development Control Regulations
formed a part thereof. The said regulations, indisputably, were framed upon
carrying out the requisite formalities.
'(
The expression "existing building" is defined ii) Regulation 2(28) to
mean "a building or structure existing authorisedly before the commencement
H of these regulations. The expression Floor Space Index (FSI) is defined under
··')_
BOMBAY DYEING AND MFG. CO. LTD. 1•. BOMBAY ENVIRONMENTAL ACTION GROUP [SINHA,!.) 959

_,y
Regulation 2(42) to mean "the quotient of the ratio of the combined gross A
floor area of all floors, excepting areas specifically exempted under these
Regulations to the total area of the plot. Regulation 3( I) makes the regulations
applicable to "all development, redevelopment, erection and/ or re-erection
of a building, change of user, etc., as well as to the design, construction,
reconstruction, and additions and alterations to a building".
B
Regulation 3(2) reads as under:

"Part construction where the whole or part of a building is demolished
,J, or altered or reconstructed/ removed, except where otherwise
specifically stipulated, these regulations apply only to the extent of
the work involved." c
In terms of Regulation 21 whenever more than one building is proposed
on any land or where the land development measures more than 1000 sq. m.
in a residential, commercial or industrial zone, it is mandatory to prepare a
lay-out plan. A lay-out plan would also be necessary where sub-divisions are
· . required to be made. Such plan inter alia has to include "a table indicating
D
the size, area and use of all the plots in the sub-division/lay-out plan". It
,'>..
should also contain "a statement indicating the total area of the site area
I
utilized under roads, open spaces for parks, playgrounds, recreation spaces
and development plan designations, reservations and allocations, schools,
shopping and other public places along with their percentage with reference E
to the total area of the site ....."

Land uses have been provided for in Regulati on 9 stating that uses of
all lands should be regulated in regard to type and manner of development/
redevelopment as specified in Table 4. In Table 4 inter alia the following
,.. uses have been mentioned: F
;.
(a) Residential
(b) Commercial
(c} Industrial
G
(d) Transportation

(e) Public and semi-public

Regulation 32 read with Table -14 prescribes the floor space indices in
relation to the town of Bombay stating that for residential zone, it would be
1.33 whereas for the service zone it would be 1.00. H
960 SUPREME COURT REPORTS [2006] 2 S.C.R.

A Item 3 of Table 14 specifies different zones stating:

"Service Industrial Zone (I-1)

General Industrial Zone (1-2)

B Special Industrial Zone (I-3)

(a) For users permissible in the 1.00
zone in the Island City and in
Suburbs and Extended Suburbs
1.00
c (b) Textile Mills - 1.00
Island City and Suburbs and
Extended Suburbs.
In the case of reconstruction,
modernization or renovation,
D
where a textile activity is to be
continued, the FSI shall not exceed
1.33 in the Island City and 1.00 in
the Suburbs and Extended
Suburbs."
E Regulation 34 provides for available Transferable Development Rights
(TDR) if the development potential i;>f a plot is separated from the land. TDR
so granted can be alienated \ in the manner prescribed by the regulation.
Regulation 35, in the matter of calculating the floor space index built up area
in respect of a plot, requires exclusion of certain areas for large plots in
F residential and commercial zones, i.e., plots exceeding 2500 sq. m. approx.,
i.e., I 5% of the area has to be excluded for recreational amenity, open space,
etc.

Regulation 51(1) speaks of ancillary uses. Regulation 52 provides that
what could be done in terms of Regulation 51 can be done also in terms of
G Regulation 52; whereas Regulation 53 provides that what could be done in
terms of Regulations 51 and 52 could be done also in terms of Regulation 53.
Regulation 54(1 )(i) provides for industries in C-2 zone wherein also
commercial uses as specified therein are permissible.

Regulations 56 to 58 provide for user of land for industrial zones.
H
BOMBAY DYEING AND MFG. CO.LTD.'· BOMBAY ENVIRONMENTAL ACTION GROUP [SINHA,J.) 961

Regulation 56 of the 1991 Regulations provides for the General A
Industries Zone (I-2 Zone) which includes any building or part of a building
or structure in which products or materials of all kinds and properties are
fabricated, assembled or processed. Sub-regulation (2) of Regulation 56, inter
alia, enumerates textile' manufacture except manufacture of rope, bandage,
net and embroidery using electric power upto 37.5 KW.
B
It is not disputed that all the mill lands fall in either residential or 1-2
Zones. The 1-2 zones permits buildings and premises to be used for industrial
and accessory uses except one category under sub-regulation (2) of Regulation
56 new textile mills cannot be constructed in the said areas. Sub-regulation
(3) of Regulation 56 contains a non-obstante clause providing that service C
industries and service industrial estates shall be permitted in the General
Industries Zone. Sub-regulations 3(b), 3(c) and 3(d) of Regulation 56 read as
under:

"(b) With the previous approval of Commissioner and on such
conditions as deemed appropriate by him, the existing or newly built- D
up area of unit, in the General Industrial Zone (Zone I-2), (including
industrial estates) excluding that of cotton textile mills, may be
permitted to be utilized for an office or commercial purposes as a part
of a package of measures recommended by the Board of Industrial
and Financial Reconstruction (BIFR), Financial Institutions and
Commissionerate of Industries for the revival/ rehabilitation of E
potentially viable sick industrial units.

(c) With the previous approval of the Commissioner, any open land
or lands or industrial lands, in the General Industrial Zone (I-2 Zone)
be permitted to be utilized for any of the permissible users in the
Residential Zone (R-1 Zone) or the Residential Zone with shop line F
(R-2 Zone) or for those in the Local Commercial Zone (C-1 Zone)
subject to the following.

(d) With the previous approval of the Commissioner, and subject to
such terms as may be stipulated by him, open land in existing
industrially zoned land or space, excluding land or space of cotton G
textile mills, which is unoccupied or is surplus to requirement of the
industry's use may be permitted to be utilized for office or commercial
purposes but excluding warehousing."

Sub-regulation (4) of Regulation 56 deals with other uses in the General H
962 SUPREME COURT REPORTS [2006) 2 S.C.R.

A Industrial Zone.

Regulation 57 of the 1991 Regulations provides for Special Industrial
Zone known as 1-3 Zone. Manufacture of textile goods do not come within
the purview thereof. In terms of the said Regulation, similar restrictions on
land user have been provided except service industries and service industrial
B estates. Change of user is allowed for lands other than lands of cotton textile
mills.

Regulation 57(4)(c) is in pari materia with Regulation 56(3)(c). t
r-.

C LEGAL HISTORY OF DCR 58
OCR 58 of 1991 provided for development or redevelopment of lands
of cotton textile mills; in terms whereof, modernization of mills and
development of surplus lands in the manner specified therein was to be
promoted. It, furthermore, provided for development of mill lands as a part
D of package of BIFR approved rehabilitation schemes and also for
modernization and shifting thereof. Pursuant to the said Regulation, the cotton
textile mill owners could give one of the options out of the following: ~

(i) The mill owners could continue to operate their mills even though
it was running into losses. This was the status quo option which
E entailed no land being surrendered to MHADA as well as for
public greens.

(ii) The second option entailed retaining the outer shell of the mill
structures and building commercial structures within the mill
structure.

F (iii) The third option entailed two steps. The first step was raising of
construction within the old structure and the second step was to
construct on the part of open spaces.
(iv) The fourth option ensured demolition of the entire old structures
and sharing the entire mill lands in approximately three equal
G proportions. The first part would remain with the mill owner
which he would be entitled to redevelop. The second part would
go to MHADA and the third part would go to public greens.

In terms of the said offer, only two mills exercised the second option
and three opted for the third. Nobody had opted for the fourth option ·
H presumably because pursuant thereto about 2/3rd of the land possessed by the
~OMBAY DYEING AND MFG. CO. LTD. v. BOMBAY ENVIRONMENTAL ACTION GROUP [SINHA, J.) 963

owner of the mill was required to be surrendered. A
DCR 58 provides for a complete code. A distinction, therein has been
., .
made between cotton textile mills on the one hand and non-cotton textile
mills, on the other.

In 2001, DCR 58 was amended/ modified. DCR 58 as amended in the B
year 2001 reads as under:

., . "58. Development or redevelopment of lands of cotton textile mills;
'·~
(1) Lands of sick and/or closed cotton textile mills. - With the
previous approval of the Commissioner to a layout prepared for C
development or redevelopment of the entire open land built-up area
of the premises of a sick and/or closed cotton textile mill, and on
such conditions deemed appropriate and specified by him, and as a
part of a package of measures recommended by the Financial
Institutions and Commissionerate of Industries for the revival/
rehabilitation of a potentially viable sick and/or closed mill, the D
Commissioner may allow;

(a) The existing built-up areas to be utilised-

(i) for the same cotton textile or related user subject to observance of
all other Regulations; E
(ii) for diversified industrial users in accordance with the industrial
location policy, with office space only ancillary to and required for
such users, subject to and observance of all other Regulations;

-
(iii) for commercial purposes, as permitted under these Regulations;
.... F
(b) Open lands and balance FSl shall be used as in the Table below:
Sr. Extent Percentage Percentage to Percentage to
No. to be earmar- be earmarked be earmarked &
"! ked for recr- and handed marked & to be
ation Ground over for dev- developed for G
/Garcjen, Play opment by residential or
ground or any MHADA for commercial
other open public housing user to be
user as spec- /(for mill developed
ified by the worker's hous- (including
H
964 SUPREME COURT REPORTS (2006] 2 S.C.R.

A Commissioner ing as per users perm is- ...
guidelines ssible in res-
approved by idential or
Government to commercial
be shared zone as per
equally) these Regulat-
B ions) or
diversified
industrial users ~

as per Industrial '
Location Policy)
c to be developed
by the owner
(I) (2) (3) (4) (5)

I. Upto and 33 27 40
inclusive
D of Ha.
2. Between 5 -'
Ha. and "
JJ 34 33
upto 10 Ha.
3. Over 10 Ha. 33 37 30
E Note

(i) In addition to the land to be earmarked for recreation ground/
garden/play ground or any other open user as in column (3) of the
above Table, open spaces, public amenities and utilities for the lands
shown in columns (4) and (5) of the above Table as otherwise required
...
F under these Regulations shall also be provided.

(ii) Segregating distance as required under these Regulations shall be
....
provided within the lands intended to be used for residential/
commercial users.

G (iii) The owner of the land will be entitled to Development Rights in
accordance with the Regulations for grant of Transferable Development
Rights as in Appendix VII in respect of the lands ·earmarked and '{

handed over as per column (4) of the above Table. Notwithstanding
anything contained in these Regulations, Development Rights in
respect of the land earmarked and handed over as per column (3)
H
BOMBi>.Y OYEINGAND MFG. CO.LID. v. BOMBAY ENVIRONMENT AL ACTION GROUP (SINHA,!.] 965

,y shall be available to the owner of land for utilisation in the land as A
per column (5) or as Transferable Development Rights as aforesaid.

(iv) Where FSI is in balance but open land is not available, for the
purposes of column (3) and ( 4) of the above Table, land will be made
open by demolishing the existing structures to the extent necessary
and made available accordingly. B
~

(v) Where the lands accruing as per columns (3) and (4) are, in the
opinion of the Commissioner of such small sizes that they do not
,·r admit of separate specific uses provided for in the said columns, he
may, with the prior approval of Government, earmark the said lands
for the use as provided in column (3). c
(vi) It shall be permissible for the owners of the land to submit a
composite scheme for the development or redevelopment of lands of
different cotton textile mills, whether under common ownership or
otherwise upon which the lands comprised in the scheme shall be
considered by the Commissioner in an integrated manner. D
)c. (2) Lands of cotton textile mills for purpose of modernisation:- With
I the previous approval of the Commissioner to a layout prepared for
development or redevelopment of the entire open land and/or built-
up area of the premises of a cotton textile mill which is not sick or
closed, but requiring modernisation on the same land as approved by E
the competent authorities, such development or redevelopment shall
be permitted by the Commissioner, subject to the condition that it
. shall also be in accordance with scheme approved by Government
provided that with regard to the utilisation of built-up area, the
provisions of Clause (a) of Sub-Regulation (I) of this Regulation F
;.c shall apply and, if the development of open lands and balance FSI
exceeds 30 per cent of the open land and balance FSI, the provisions
of Clause (b) of sub-regulation (I) of this Regulation shall apply.

Notes:

(i) The exemption of 30 per cent as specified above may be availed G
of in phases, provided that, taking into account all phases, it is not
y exceeded in aggregate.

(ii) In the case of more than one cotton textile .mill owned by the
same company, the exemption of 30 per cent as specified above may
H
SUPREME COURT REPORTS (2006) 2 S.C.R.
966
A be pennitted to be consolidated and implemented on any of the said
cotton textile mill lands within Mumbai provided, and to the extent,
FSI is in balance in the receiving mill land.

(3) Lands of cotton textile mills after shifting:

If a cotton textile mill is to be shifted out side Greater Bombay but
B
within the State, with due pennission of the competent authorities,
and in accordance with a scheme approved by Government, the
provisions of Sub-clauses (a) and (b) of sub-regulation (I) of its
Regulation shall also apply in regard to the development or
redevelopment of its land after shifting.
c (4) The condition of recommendation by the Board of Industrial and
Financial Reconstruction (BIFR) shall not be mandatory in the case
of the type referred to in sub-regulations (2) and (3) above.

(5) Notwithstanding anything contained above, the Commissioner may
D allow additional development to the extent of the balance FSI on
open lands or otherwise by the cotton textile mill itself for the same
cotton textile or related user.

(6) With the previous approval of the Commissioner to a layout
prepared for development or redevelopment of the entire open land
E and/or built up area of the premises of a cotton textile mill which is
either sick and/or closed or requiring modernisation on the same
land, the Commissioner may allow,:

(a) Reconstruction after demolition of existing structures limited to
the extent of the built up area of the demolished structures, including
F by aggregating in one or more structures the built up areas of the
demolished structures;

(b) Multi-mills aggregation of the built up areas of existing structures
where an integrated scheme for demolition and reconstruction of the
existing structures of more than one mill, whether under common
G ownership or otherwise, is duly submitted, provided that FSI is in
balance in the receiving mill land.

(7) Notwithstanding anything contained above-(a) if and when the
built up areas of a cotton textile mill occupied for residential purposes
as on the 1st of January 2000 developed or Page 359 redeveloped, it
- .
H shall be obligatory on the part of the land owner to provide to the
BOMBAY DYEING AND MFG. CO.LTD. v. BOMBAY ENVIRONMENT AL. ACTION GROUP [SINHA.I.] 967
occupants in lieu of each tenement covered by the development or A
·-~ redevelopment scheme, free of cost, an alternative tenement of the
size of 225 sq. ft. carpet area;

(b) if and when a cotton textile mill is shifted or the mill owner
establishes a diversified industry, he shall offer on priority in the
relocated mill or the diversified industry, as the case may be, B
employment to the worker or at least one member of the family of the
worker in the employ of the mill on the Ist January 2000 who possesses
the requisite qualification or skills for the job;
•t
(c) for the purpose of Clause (b) above, the cotton textile mill owner
shall undertake and complete training of candidates for employment c
before the recruitment of personnel and starting of the relocated mill
or diversified industry takes place.

8(a) Funds accruing to a sick and/or closed· cotton textile mill or a
cotton textile mill requiring modernisation or a cotton textile mill to
be shifted, from the utilisation of.built up areas as per Clause (a) of D
sub-regulation (I) and as per Clauses (a) and (b) of sub-regulation (6)
.....
or from the sale of Transferable Development Rights in respect of the
t
land as per columns (3) and (4) of the Table contained in Clause (b)
of sub-regulation (I) or from the development by the owner of the
land as per column (5), together with FSI on account of the land as
E
per column (3), shall be credited to an escrow account to be operated
as hereinafter provided.

(b) The funds credited to the escrow account shall be utilised only for
the revival/rehabilitation or modernisation or shifting of the cotton
textile mill, as the case may be, provided that the said funds may also F
;lt be utilised for payment of worker's dues, payments under Voluntary
... Retirement Schemes (VRS), repayment of loans of banks and financial
institution taken for the revival/rehabilitation or modernisation of the
cotton textile mill or for its shifting outside Greater Mumbai but
within the State.
G
9(a) In order to oversee the due implementation of the package of
measure recommended by the Board of Industrial and Financial
;,, >
Reconstruction (BIFR) for the revival/rehabilitation of a potentially
sick and/or closed textile mill, or schemes approved by Government
for the modernisation or shifting of cotton textile mills, and the
H
968 SUPREME COURT REPORTS (2006] 2 S. C.R.

A pennissions for development or redevelopment of lands of cotton
textile mills granted by the Commissioner under this Regulation, the 1.

Government. shall appoint a Monitoring Committee under the
chainnanship of a retired High Court Judge with one representative
each of the cotton textile mill owners, recognised trade union of
cotton textile mill workers, the Commissioner and the Government as
B members.

(b) The Commissioner shall provide to the Monitoring Committee the
services of a Secretary and other required staff and also the necessary
facilities for its functioning.

C (c) Without prejudiced to the generaility of the functions provided for
in Clause (a) of this sub-regulation, the Monitoring Committee shall,-

(i) lay down guidelines for the transparent disposal by sale otherwise
of built up space, open lands and balance FSI by the cotton textile
mills;
D
(ii) lay down guidelines for the opening operation and closure of
escrow accounts;

(iii) approve proposals for the withdrawal and application of funds
from the escrow accounts:
E (iv) monitor the implementation of the provisions of this Regulation
as regards housing, alternative employment and related training of
cotton textile mill workers.

(d) The Monitoring Committee shall have the powers issuing and
enforcing notices and attendance in the manner of a Civil Court.
F
(e) Every direction or decision of the Monitoring Committee shall be
final and conclusive and binding on all concerned.

(f) The Monitoring Committee shall detennine for itself the procedures
and modalities of its functioning."
G
REASONS FOR AMENDMENT

We may, at this juncture, take notice of the stand taken by the State 1.
before the High Court. The State of Maharashtra filed several affidavits before
the Bombay High Court stating the backdrop of events leading to amendment
H in 200 I. It is accepted that the State appointed several committees to make
BOMBAY DYEING AND MFG. CO.LTD. v. BOMBAY ENVIRONMENT AL ACTION GROUP [SINHA, J.) 969

an in depth study of the matter. In an affidavit affirmed by one Shri Ramanand A
-~ Tiwari, Principal Secretary, Urban Development Department, Government of
Maharashtra, on 22nd March, 2005, it was stated:

"I say that the deteriorating condition of the textile units and need to
have sites for public purpose and public housing, prompted
Government to have a policy which threw open these lands for B
development or redevelopment to facilitate revival and modernization
of mills. Thus, in the year 1991, when the Revised Development
.- 't - Control Regulations were sanctioned, Regulation 58 for development
of mill land and premises for cotton textile mills was introduced for
the first time."
c
In the said affidavit, it was categorically stated that a committee under
the Chairmanship of the then Minister for Textiles, Shri Ranjit Deshmukh
was constituted on or about 27th March, 2000. The report by the said
Committee was submitted on 6.7.2000. It was stated that the Government
duly considered the report of the said Committee and the Cabinet approved D
,..__
its recommendations on 11.10.2000.

DCR 58 was modified upon following the procedure under Section
37(1AA) of the MRTP Act and in terms of the decision of the Cabinet.
However, in a second affidavit affirmed by Shri Ramanand Tiwari on 10th
August, 2005, some clarification as regard the stand of the State was given. E
While meeting the contentions raised by the Writ Petitioners, it was stated:

"I say that a reference to the Ranjit Deshmukh Committee has been
made in my earlier affidavit dated 22nd March, 2005. I say that in the
said affidavit, the genesis of the amended Regualtion 58 have been
elaborately stated. I say that the Petitioner's contention that the said F
* report has not been disclosed by the State, is totally unjustified and
unwarranted. I say that when a mention of the said report has been
made in my earlier affidavit, the Petitioners could have sought a copy
of the said report from the State. Since the Petitioners have never
done so as it can be presumed that the Petitioners already have a copy
G
of the said report in their possession but are only putting a pretence
that they do not have a copy. It is also unbelievable that the Petitioners
'::.t- who otherwise have all the relevant information including various
reports on which they rely in the petition as filed as well as the
amended petition do not have a copy of the said Ranjit Deshmukh
Committee Report. In any event, the State has no objection to H

rW
970 SUPREME COURT REPORTS [2006] 2 S.C.R.

A furnishing a copy of the report of the Ranjit Deshmukh Committee if
the Petitioners so desire."

The deponent of the said affidwit further denied and disputed the
contention raised on behalf of the petitioner that the Government intended to
side with the private developers at the cost of the city as a whole and had not
B made any amendment in furtherance of the Charles Correa Committee Report.
It was stated:

" .. .I say that as stated in my earlier affidavit dated 22.3.2005, the
State Government has culled out certain recommendations of the
.f .
Correa Committee as also certain recommendations of the Ranjit
c Deshmukh Committee whilst coming to a conclusion the need for,
and thereafter incorporating suitable amendments to the said OCR
58."

The said stand of the State, however, underwent some change when the
D same deponent in his third affidavit dated 17th August, 2005 in purported
clarification of the earlier stand of the State stated:

"I am making this further affidavit in order to explain the position
with regard to the change made with regard to Regulation 58(1Xb)
and the clarification issued on March 28, 2003. The Ranjit Deshmukh
Committee gave its report on July 06, 2000. Thereafter, the report
E was circulated to all the concerned departments, the Urban
Development Department, the Labour Department, the Textile
Department and the Industries Department. A detailed Cabinet note
was prepared for consideration by the Cabinet which not only included
the recommendations of the Ranjit Deshmukh Committee report but
F also specifically the views of the various departments. On this aspect,
the views of the Urban Development Department were that in view •
of the prevailing regulation 58 which required sharing of lands after
demolition under Regulation 58(1)(b) the Mill Owners were not willing
to come forward with proposals since the same would not be viable
for them. It was the view of the Department that in order to make
G revival feasible and possible the area available after demolition of
existing structure should be excluded from computation of the land
to be shared. After the Cabinet decision, the then Secretary whilst
formulating the amendments and the proposed modification to
regulation 58 specifically included the deletion of the words beginning
H with "lands after demolition" upto "scheme to" and substitution thereof
BOMBAY DYEING AND MFG. CO. LTD."· BOMBAY ENVIRONMENTAL ACTION GROUP [SINHA.I.] 97 J

· by the words "balance FSI shall''. This was the subject matter of Item A
(A-6) of schedule I to the Public Notice which was issued on
November 29, 2000."

Evidently, the Charles Correa Committee Report had not been given
effect to, but the same as would appear hereinafter had been taken note of
by the Deshmukh Committee. B
A fourth affidavit again came to be filed by the same deponent on 29th

.. ''
"' August, 2005 .

REPORTS OF THE TWO COMMITTEES RELEVANCE
c
It may also be of some interest to refer to the report of the two
Committees.

The State of Maharashtra appointed a committee headed by Shri Charles
Correa, Architect/ Planner in 1996. The development under 1991 Regulation
was put on hold from 1996 to 200 I. Jn Part I of the Report, the Committee D
lamented that out of the 53 mills, they could gain access only to 26 mills.
They advocated for aggregation of mills. They identified those which were
viable or considered viable and suggested that the lands of unviable mills
should be disposed of. It proposed a holistic development qf the mill lands.
It also noticed the need for leaving open spaces. It took into consideration E
other factors, namely, transport, urban form, open spaces and employment
generation. As regard open spaces, it stated: ·

"The Public Open Spaces proposed (see fig 23) vary in size from
large Maidans .to small Neighbourhood Parks, so that a variety of
different open-air activities can take place. Jn front of the Railway F
Stations, large Pedestrian plazas have been proposed, surrounded by
shopping arcades (so that the people can pick up their vegetables and
other purchases on their way home a classic pattern found all over
Mumbai). Then again, the principal roads can be widened and lined
with trees, so that they are converted into leafy boulevards."
G
A second committee was constituted but it did not submit any report.
Another Committee was constituted under the Chairmanship of Shri Ranjit
Deshmukh, the then Minister for Textiles and included a representative of all
the Ministries and Departments concerned including the Urban Development
Department. The Committee appointed a sub-committee. The sub-committee H
972 SUPREME COURT REPORTS [2006) 2 S.C.R.

A inter alia took into consideration the recommendations of the Charles Correa
I .
Study Group, prevailing provisions belonging to textile mills, prevailing state
of affairs with respect thereto, demands of the National Textile Industries
Board. It also held discussions with various bodies including the mill workers
and mill owners as also MPs and MLAs of the town of Mumbai. It, however,
B carried out actual site inspection of some textile mills only. The Committee
recommended:

"Since rule 58( I )(a) contains the term ;'newly built-up", it is presumed
that it permits new construction. But, carrying out such new
construction means using the balance Floor Space Index and
consequently using the adjoining open space. Thus, using open space
c in this manner under the provisions of rule 58(1 )(a) means indirectly
to override the provisions of rule 58(1 )(b ). Hence, in order to more
clearly distinguish the boundary line between rule 58(1)(a) and 58(1Xb)
following amendments are required to be carried out in this rule
under section 37.
D
(a) The words "or newly" in rule 58(1)(a) should be excluded.

(b) The words "permissible FSI and" in rule 58(1)(a)(i) should
be excludecj.

(c) The words "FSC of 1.00 and" in rule 58(l)(a)(ii) should be
E excluded.

Upon making aforesaid changes the rule 58(1 )(a) shall be limited to
the extent of new use of the existing buildings of the mills only and
exercise of rule 58(1)(b) shall be regarding development of the
available open lands and land becoming vacant upon demolition of
F the existing buildings. However, such development shall be subject
to permissible FSI."

Jn Paragraph 19.1, it made some suggestions for giving encouragement
to revival of mills stating:
-
G " ... Hence the provisions of rule 58( I )(b) should be made more
attractive and in order to promote revival, the mills owners should be
permitted to use the development rights of the open lands, to be
{
handed over to municipal corporation, in the lands of their share as
per column (5) of the aforesaid Table (even if such lands are situate
H in Mumbai island) and for this purpose the prevailing provision of
BOMBAY DYEING AND MFG. CO. LTD.'· BOMBAY ENVIRONMENT AL ACTION GROUP [SINHA, J.] 973

rule 58( I )(b) should be amended as per section 3 7. Such A
recommendation is also made by the Korea (sic Correa) Study Group."

It furthermore encouraged modernization of mills. It suggested certain
incidental amendments also.

From what has been noticed hereinbefore, it is evident that as per the B
suggestion ofRanjit Deshmukh Committee the words ''or newly" were omitted
as according to it, it may give rise to a lot of confusion. From paragraph 18.8

. -r . of the report also, it appears that the said Committee suggested use of different
language, namely, "lands after demolition of structure". We find from the
said report that the Committee suggested a draft in respect of DCR 58(1 )(b)
of the Regulations. It is in that context, we may have to consider the second C
affidavit affirmed by Shri Ramanand Tiwari when he stated that the Cabinet
had approved the report albeit not in its entirety.

The draft regulations thereafter were notified for considering the
objections thereto, if any. Several objections were filed, they were considered D
by the appropriate authority including the planning authority.

Evidently, the said two reports were considered by the Cabinet but it
intended to give more to the mill owners than what was recommended inter
alia by introducing sub-regulation (6) of DCR 58. The intent and purport of
the State is apparent from DCR 58. It accepted a major part of the E
recommendations of the Deshmukh Committee but thought that the mill owners
should be given something more.

PUBLIC INTEREST LITIGATION : SCOPE OF

While entertaining a public interest litigation of this nature several F
aspects of public interest being involved, the Court should find out as to how
greater public interest should be subserved and for the said purpose a balance
should be struck and harmony should be maintained between several interests
such as (a) consideration of ecology; (b) interest of workers (c) interest of
public sector institution, other financial institutions, priority claimed due to G
workers; (d) advancement of public interest in general and not only a particular
aspect of public interest; (e) interest and rights of owners; (f) the interest of
a sick and closed industry; and (g) schemes framed by BIFR for revival of
the company.

The courts in doing so would have to take into consideration a large H
(
974 SUPREME COURT REPORTS [2006] 2 S.C.R.

A number of factors, some of which may be found to be competing with each
..
other. It may not be proper to give undue importance to one at the cost of
the other which may ultimately be found to be vital and give effect to the
intent and purport for which the legislation was made.

Scope of Public Interest Litigations in view of several decisions of this
B Court has its own limitations. We would hereinafter notice a few of them.
In Raunaq International Ltd. v. /. V.R. Constructions Ltd & Ors., [1999]
1 SCC 492, this Court highlighted that the public interest litigation should
not be a mere cloak. The court niust be satisfied that there is some element
.• .
of public interest involved in entertaining such a petition. The court also
C cautioned that before entertaining a writ petition and passing an interim order
overwhelming public interest should be taken into consideration therefor. It
was further observed :

" .... It is important to bear in mind that by court intervention, the
proposed project may be considerably delayed thus escalating the
D
cost far more than any saving which the court would ultimately effect
in public money by deciding the dispute in favour of one tenderer or
the other tenderer. Therefore, unless the court is satisfied that there
is a substantial amount of public interest, or the transaction is entered
into ma/a fide, the court should not intervene under Article 226 in
E disputes between two rival tenderers."

In Ashok Lanka v. Rishi Dixit, [2005] 5 SCC 598, this Court opined:

" .. .it is well settled that even in a case where a petitioner might have
moved the Court in his private interest and for redressal of personal
F grievances, the Court in furtherance of the public interest may treat
it necessary to enquire into the state of affairs of the subject of litigation
in the interest of justice."

This was also the view taken in Guruvayoor Devaswom Managing
Committee v. C.K. Rajan, [2003] 7 SCC 546 at para 50, Shivajirao Ni/angekar
G Patil v. Dr. Mahesh Madhav Gosavi, [1987] I SCC 227 and Chairman &
MD, BPL Ltd. v. S.P. Gururaja and Ors., [2003) 8 SCC 567.

In K.K. Bhalla v. State of MP. & Ors., [2006] 1 SCALE 238, it was ·(
stated:

H "The Appellant has brought to the notice of the High Court that a
BOMBAY DYEING AND MFG. CO.LTD. v. BOMBAY ENVIRONMENT AL ACTION GROUP [SINHA,!.] 97 5

malady has been prevailing in the department of the State of Madhya A
~Y
Pradesh and the JOA. It may be true that the Appellant did not file
any application questioning similar allotments but it is well-settled if
an illegality is brought to the notice of the court, it can in certain
situations exercise its power of judicial review suo motu"

This Court times without number, however, has laid down the law as B
regard limited scope of public interest litigation. It sounded note of caution
for entertaining public interest litigation in service matters [See Dr. B. Singh
v. Union of India and Ors., [2004] 3 SCC 363, in questioning the validity or
' t.
otherwise of a statute or when a statute is enacted in violation of the direction
of a superior court [See Ashok Kumar Thakur v. State of Bihar & Ors.,
[I 995] 5 SCC 403 ]. But, we cannot also shut our eyes to the fact that this
c
Court has entertained a large number of public interest litigations for protection
of environmental and/ or ecology. [See. MC. Mehta group of cases and T.N.
Godavarman Thirumulpad v. Union of India and Ors., .[2006] I SCC I]

Public interest litigations, thus, have been entertained more frequently D
where a question of violation of the provisions of the statutes governing the
'-- environmental or ecology of the country has been brought to its notice in the
matter of depletion of forest areas and/ or when the executive while exercising
its administrative functions or making subordinate legislations has interfered
with the ecological balance with impunity. The High Court of Bombay,
therefore, cannot be faulted with for entertaining the writ petition as a public E
interest litigation.

PRINCIPLES OF INTERPRETATION

Before us, the learned counsel appearing for the parties have relied on
,j several principles of interpretation of statute. F

The golden rule of interpretation is that unless literal meaning given to
a document leads to anomaly or absurdity, the principles of literal interpretation
should be adhered to. [See Compack (P) Ltd. v. CCE, [2005] 8 SCC 300,
Gurudevdatta VKSSS Maryadit v. State of Maharashtra, [2001] 4 SCC 534,
G
Dayal Singh v. Union of India, [2003] 2 SCC 593 and Swedish Match AB v.
Securities and Exchange Board, India, [2004] 11 SCC 641].
y
The learned Judges of the High Court as also this Court have been
taken through the provisions of the MRTP Act, those of the DCR and in
particular DCR 58 as framed in 1991 as well as in 2001 times without H
976 SUPREME COURT REPORTS [2006] 2 S.C.R.

A number. With the assistance of different counsel appearing for different
+
purpose, we have read, re-read and re-read several provisions. Before us,
several principles, canons and rules of interpretation have been emphasized.
We have not only been W<:en through various decisions of this Court but also
various authorities and treatises dealing with the subject of interpretation of
B statutes.

We have also been asked by the learned counsel- for the parties to
interpret the impugned legislation in the light of constitutional scheme and in
particular Articles 14 and 21 of the Constitution of India, the provisions of •
the MRTP Act, the doctrine of sustainable development and various other
C principles. In the aforementioned situation, it is not possible for us to take
recourse to the golden rule.

As would appear from the discussions made hereinafter, we are, however,
of the opinion that for correct interpretation of DCR 58, the principles of
purposive interpretation should be applied.
D
In Francis Bennion's Statutory Interpretation, purposive construction
has been described in the following manner:

'A purposive construction of an enactment is one which gives effect
to the legislative purpose by (a) following the literal meaning of the
E enactment where that meaning is in accordance with the legislative
purpose (in this Code called a purposive-and-literal construction), or
(b) applying a strained meaning where the literal meaning is not in
accordance with the legislative purpose (in the Code called a purposive-
and-strained construction).'

F In K.l. Gupta & Ors. v. The Bombay Municipal Corporation and Ors ..
[ 1968) I SCR 274, it was stated:

" ... Before examining the contentions on the points of law raised in
this case, it is necessary to appreciate what the Act sought to achieve
and why it was brought on the statute book. In order to do this, it is
G necessary to take stock of the position at the time of its enactment so
that attention may be focussed on the situation calling for a remedy
and how the legislature sought to tackle it ... "
...
However, the pith of this statement has now found form in the doctrine
of purposive construction, as accepted by this Court in several cases.
H
BOMBAY DYEING AND MFG. CO. l TD. v. BOMBAY ENVIRONMENT AL ACTION GROUP [SINHA, J.) 977

In Maruti Udyog Ltd v. Ram Lal and Ors., [2005] 2 SCC 638, while A
interpreting the provisions of Industrial Disputes Act, 1947, the rule of
purposive construction was followed.

In Reserve Bank of India v. Peerless General Finance and Investment
Co. Ltd., [1987] I SCC 424 this Court stated:
B
is
" .. Jf a statute looked at, in the context of its enactment, with the
glasses of the statute-maker, provided by such context, its scheme,
the sections, clauses, phrases and words may take colour and appear
,t different than when the statute is looked at without the glasses provided
by the context. With these glasses we must look at the Act as a whole
and discover what each section, each clause, each phrase and ·each C
word is meant and designed to say as to fit into the scheme of the
entire Act..."

In 'The Interpretation and Application of Statutes', Reed Dickerson, at
p.135 discussed the subject while dealing with the importance of context of D
the statute in the following tenns: I
I
' ... The essence of the language is to reflect, express, and perhaps
even affect the conceptual matrix of established ideas and values that
identifies the culture to which it belongs. For this reason, language
has been called "conceptual map of human experience".' E
In Punjab Land Development and Reclamation Corpn. Ltd. v. Presiding
Officer, Labour Court, Chandigarh, [1990] 3 SCC 682, this Court referred to
the following passage from Hans Kelsen's Pure Theory Law of Law:

" ... The legal act applying a legal norm may be perfonned in such a F
way that it confonns (a) with the one or the other of the different
I meanings of the legal nonn, (b) with the will of the norm-creating
authority that is to be determined somehow, (c) with the expression
which the nonn-creating authority has chosen, (d) with the one or the
other of the contradictory nonns, or (e) the concrete case to which the
two contradictory norms refer may be decided under the assumption G
that the two contradictory norms annul each other. In all these cases,
the law to be applied constitutes only a frame within which several
''f applications are possible, whereby every act is legal that stays within
the frame."

[See also High Court of Gujarat v. Gujarat Kishan Mazdoor Panchayat, H
978 SUPREME COURT REPORTS [2006] 2 S.C.R.

A (2003] 4 SCC 712, Indian Handicrafts Emporium and Ors. v. Union of India
and Ors., (2003) 7 SCC 589 and Deepal Girishbhai Soni and Ors. v. United
India Insurance Co. Ltd., Baroda, (2004) 5 SCC 385, para 56]

In Bairam Kumawat v. Union of India and Ors., [2003] 7 SCC 628,
this Court held that if special purpose is to be served even by a special
B statute, the same may not always be given any narrow and pedantic, literal
and lexical construction nor doctrine of strict construction should always be
adhered to.

In Pratap Singh v. State ofJharkhand and Anr., [2005] 3 SCC 551, this
Court emphasized assignment of contextual meaning to a statute having regard
C to the constitutional as well as international law operating in the field. Strict
adherence to the procedure, subject to just exceptions, was highlighted therein.

However, in P.S. Sathappan (Dead) By LRS. v. Andhra Bank Ltd and
Ors., (2004) 11 SCC 672, it was observed that in the guise of purposive
D construction one cannot interpret a section in a manner which would lead to
a conflict between two sub-sections of the same section.

Having noticed the principles of purposive construction, we may take
note of certain other principles which are necessary to be considered for
proper interpretation of OCR 58.
E
It is well-settled principle of law that in the absence of any context
indicating a contrary intention, the same meaning would be attached to the.
word used in the latter as is given to them in the earlier statute. It is trite that
the words or expression used in a statute before and after amendment should
be given the same meaning. When the legislature uses the same words in a
F similar connection, it is to be presumed that in the absence of any context
indicating a contrary intention, the same meaning should attach to the words.

In Venkata Subamma and Anr. v. Ramayya and Ors., AIR (1932) PC
92, it is stated that an Act should be interpreted having regard to its history
and the meaning given to a word cannot be read in a different way than what
G was interpreted in the earlier repealed section.

It is also a fundamental proposition of construction that the effect of
deletion of words must receive serious consideration while interpreting a
statute as this has been repeatedly affirmed by this Court in a series of
H judgments. [See Commr. Of Jncome-tax/E,xcess Profits Tax, Bombay City v.
j
BOMBAY DYEING AND MFG. CO. LTD. v. BOMBAY ENVIRONMENTAL ACTION GROUP[SINHA.I.] 979

Messrs. Bhogilal laherchand including Batliboi and Co., Bombay, AIR (1954) A
SC 155, The Mangalore Electric Supply Co. Ltd v. The Commissioner of
Income Tax, West Bengal, (1978] 3 SCC 248, His Holiness Kesavananda
Bharati Sripadagalvaru v. State of Kera/a and Anr., [1973) 4 SCC 225 and
Mis. Onkarlal Nandlal v. State of Rajasthan and Anr., [1985] 4 SCC 404].

It is furthennore well~known that when the statute makes a distinction B
between the two phrases and one of the two is expressly deleted, it is contrary
to the cardinal principle of statutory construction to hold that what is deleted
t ·t.
is brought back into the statute and finds place in words which were already
there in the first place.

In Charles Bradlaugh v. Henry lewis Clarke, (1883) 8 AC 354, Lord C
Watson as regards conscious omission from the statute stated the law, thus:

"I see no reason to suppose that all these omissions were accidental,
and as little reason to suppose that the enactments with regard to
personal disabilities were intentionally left out, whilst the express D
mention made of common infonners was omitted through accident or
inadvertence."

It is also a well-settled principle of law that common sense construction
rule should be taken recourse to in certain cases as has been adumbrated in
Halsbury's Laws of England (Fourth Edition) Volume 44(1) (Reissue). We E
would refer to the said principle in some details later.

INTERPRETATION OF ACT AND REGULATIONS

OCR 58 has been attempted to be interpreted in more than one manner
by the learned counsel appearing for the parties. F
OCR 58 was made to revive and resurrect neighbourhood~, foster
development, regenerate lands which had become sterile, encourage the shifting
of textile mills (thereby reducing the attendant strain and industrial activity
places on civil amenities) and pay off chronic arrears and dues of workers,
banks institutions, statutory dues, etc. In its operation and implementation G
new OCR 58 would also unlock large real estate and make it available to
residents.

A statute, it is well known, is to be read as a whole. Subordinate
legislation indisputably has to be read in the light of the provisions of the Act
whereunder it has been made. It, however, must be read having regard to the H
980 SUPREME COURT REPORTS [2006] 2 S.C.R.

A purpose and object for which the statute is made.
The MRTP Act provides for formulation of regional plans and
development plan. The planning authority, before a plan is finalized, is required
to see that the provisions thereof have been fully complied with. The MRTP
Act provides for appointment of a town planning officer who possesses
B requisite qualification.

The MRTP Act lays down the matters which are mandatorily required
to be considered by the planning authority in all the stages, namely, survey,
preparation, submission and sanction of development plan. While doing so,
C it is bound to take into consideration a large number of factors as specified
therein. The State has been conferred with a special power to frame
development control regulations in terms of Section 159(2) of the MRTP
Act. Development Control Regulations have been framed in terms of the said
provisions. The State has furthermore been given a power to supervise and
maintain control over the planning authorities. Such control may be exercised
D in more than one manner. The planning authority is not only required to
obtain statutory sanction and approval wherever applicable, but the State, has
also been conferred with a special power to make a development plan subject,
of course, to the condition that the same shall not change the character of
such development plan.

E Section 22 of the MRTP Act provides for the contents of the development
plan, i.e., to be divided into several areas for allocating the use of land for
the purposes as, for example. residential or commercial, proposals for
designation of land for public purposes, proposal for designation of areas for
open spaces, playgrounds, stadia, zoological gardens, green belts, nature
F reserves, sanctuaries, dairies, transports and communications, such as roads,
highways, parkways, railways, waterways, canals and airports, including their
extension and development, water supply, drainage, sewerage, etc. and
reservation of land for community facilities and services. Whereas designation
and/ or reservation of areas for certain public purposes would vary from
place to place, ut must take care of not only the public purposes but also
G several others including open spaces. Water supply, drainage, sewerage, and
other public utilities including electricity and gas or highways or waterways,
schools, etc., however, would be considered to be equally important.

A planning authority, therefore, must take into consideration all the
relevant factors, although in a given case, one gets priority over the. other.
H Ordinarily, it would not be for the court 'to substitute its decision to that of
BOMBAY DYEING AND MFG. CO.LTD. v. BOMBAY ENVIRONMENT AL ACTION GROUP [SINHA.!.] 981

~ ,. the planning authority unless an appropriate case is made out therefor. When,
however, question of public interest comes up, the court indisputably would
A

try to delicately balance the different factors, if possible.

Both open space as also the other factors relevant for making the
regulation would be in public interest The question would, however, be as
to which is of greater public interest. Public interest, thus, would be a relevant B
factor also for interpretation of the statute. Public interest so far as maintenance
of ecology is concerned pertains to a constitutional scheme comprising of
t Articles 14, 21, 48A and 51A(g) of the Constitution of India, the other
" factors are no less significant. [See also T.N. Godavarman Thirumalpad v.
Union of India and Ors., [2002] 10 SCC 606, N.D. Jayal and Anr. v. Union
of India and Ors., [2004] 9 SCC 362 and Ve/lore Citizens' Welfare Forum
c
v. Union of India and Ors., (1996] 5 SCC 647]. All concerned, namely,
operating agencies, the State Government, the National Textile Mills as also
BIFR interpreting the said regulation opined that sharing of land is imperative,
but the question remains, to what extent? Whether radical changes were
made in the year 2003, when the State made the aforementioned clarification D
would again be a question which is required to be posed and answered. Was
).
such a clarification in consonance with the reports of Charles Correa
Committee and the Ranjit Deshmukh Committee? Did 2000 acres of vacant
land which would have been otherwise available come down to 50 acres?
Had any balance been struck between the original concept of sharing of lands
E
by Bombay Municipal Corporation, MHADA and the mill owners? It is in
the aforementioned backdrop, the nature of change must be considered. The
amendment in 2001, therefore, must be interpreted having regard to the
provisions of the MRTP Act which professed increase in the ecological interest
. by providing more open space and not decreasing the same, but again the
question would be "was there any reduction"? The amendments in the F
~
regulation must be construed in furtherance of the legislative policy and not
in derogation thereof. But, while doing so, the past experience of the State
which paved the necessities for modifying the earlier regulation should not
be forgotten.

A statutory scheme herein also by way of Section 22 clearly speaks G
about open spaces. The Legislative Act confers guidelines which advocates
the necessity of environmental impact assessment. The State, when it exercises
"'·f
its power under Section 37 of the MRTP Act is required to act within the
four-comers of the Act. Any modification or amendment must address the
"L
·'-. environmental consequences together with other relevant factors. H
982 SUPREME COURT REPORTS [2006) 2 S.C.R.

A As a logical corollary, it must also be detennined as to whether the
amendments amounted to a minor modification or substantive one. Literal
interpretation of the Act and the Rules would give rise to many anomalies.
It would not advance the object and purport of the Act. It would also create
difficulties in implementing th~ statutory scheme.

B Having said so, we have no other option but, as indicated hereinbefore,
to take recourse to the principles of purposive construction and interpret
DCR 58 in accordance with the scope and object of the Act. For the said
purpose, we may also have to consider various aspects of the matter. We
would make an attempt in this behalf.
c SCOPE OF JUDICIAL REVIEW V/S-fii;-VIS LEGISLATIVE POLICY
A policy decision, as is well known, should not be lightly interfered
with but it is difficult to accept the submissions made on behalf of the learned
counsel appearing on behalf of the Appellants that the courts cannot exercise
· D their power of judicial review at all. By reason of any legislation whether
enacted by the legislature or by way of subordinate legislation, the State
gives effect to its legislative policy. Such legislation, however, must not be
ultra vires the Constitution. A subordinate legislation apart from being intra
vires the Constitution, should not also be ultra vires the parent Act under
which it has been made. A subordinate legislation, it is trite, must be reasonable
E and in consonance with the legislative policy as also give effect to the purport
and object of the Act and in good faith.

In P.J. Irani v. The State of Madras, [ 1962] 2 SCR 169, this Court has
clearly held that a subordinate legislation can be challenged not only on the
F ground that it is contrary to the provisions of the Act or other statutes; but
also if it is violative of the legislative object. The provisions of the subordinate •
legislation can also be challenged if the reasons assigned therefor are not
gennane or otherwise mala fide. The said decision has been followed in a
large number of cases by this Court. [see also Mis. Punjab Tin Supply Co.,
Chandigarh and Ors. V. Central Government and Ors., [1984] l sec 206].
G
It is interesting to note that in Secretary, Ministry of Chemicals &
Fertilizers, Government of India v. Cipla ltd. & Ors., [2003) 7 SCC I, this
Court opined : · "'

"It is axiomatic that the contents of a policy document cannot be
H read and interpreted as statutory provisions. Too much of legalism
BOMBAY DYEING AND MFG. CO. LTD. v. BOMBAY ENVIRONMENT AL ACTION GROUP [SINHA,!.] 98)

cannot be imported in understanding the scope and meaning of the A
clauses contained in policy formulations. At the same time, the Central
Government which combines the dual role of policy-maker and the
delegate of legislative power, cannot at its sweet will and pleasure
give a go-by to the policy guidelines evolved by itself in the matter
of selection of drugs for price control. The Government itself stressed B
on the need to evolve and adopt transparent criteria to be applied
across the board so as to minimize the scope for subjective approach
and therefore came forward with specific criteria. It is nobody's case
that for any good reasons, the policy or norms have been changed or
have become impracticable of compliance."

[Emphasis supplied]
c
The parameters of judicial review in relation to a policy decision would
depend upon the nature as also the scope and object of the legislation. No
hard and fast rule can be laid down therefor. The court normally would not,
however, interfere with a policy decision which has been made by experts in D
view of the fact that it does not possess such expertise.

Divergent opinions, however, have been expressed by the authorities in
this behalf. The scope and extent of judicial review of legislation, it is trite,
would vary from case to case.
E
Reliance has been placed by the Appellants on Maharashtra State Board
of Secondary and Higher Secondary Education and Anr. v. Paritosh Bhupesh
Kumar Sheth and Ors., [1984] 4 SCC 27 wherein this Court was concerned
with a regulation laying down the terms and conditions for revaluating the
answer papers. Indisputably, there exists a distinction between regulations,
rules and bye-laws. The sources of framing regulations and bye-laws are F
different and distinct but the same, in our opinion, would not mean that the
court will have no jurisdiction to interfere with any policy decision, legislative
or otherwise.

In R.K. Garg v. Union of India & Ors., [1981] 4 SCC 675. this Court G
noticed that the legislature is presumed to understand and correctly appreciate
the needs of its own people, but the same again would not mean that judicial
"--< · review of legislation is impermissible.

In Ba/co Employees Union v. Union of India, [2002] 2 SCC 333, this
Court while dealing with new economic policies of the elected government H
984 SUPREME COURT REPORTS [2006] 2 S.C.R.

A held:

" ... Any such change may result in adversely affecting some vested
interests. Unless any illegality is committed in the execution of the
policy or the same is contrary to law or ma/a fide, a decision bringing
about change cannot per se be interfered with by the court.
B
Wisdom and advisability of economic policies are ordinarily not
amenable to judicial review unless it can be demonstrated that the
policy is contrary to any statutory provision or the Constitution. In
other words, it is not for the courts to consider relative merits of
different economic policies and consider whether a wiser or better
c one can be evolved. For testing the correctness of a policy, the
appropriate forum is Parliament and not the courts ... "

The embargo as regard exercise of power of judicial review may not be
beyond the aforementioned dicta.

D Here, however, we are not at all dealing with an economic policy of the
State, but a special planning statute of which economic factor is only one of
the components. Even then, it has no bearing with the economic policy
affecting the State or general public. OCR 58 deals with only a class of
people who owned and possessed cotton textile mills and want revival/
E rehabilitation of their sick or closed textile mills or intend to modernize or
shift their mills.

We may notice that in State of Rajas than & Ors. v. Basant Nahata AIR
(2005) SC 340 I, it was pointed out :

'The contention raised to the effect that this Court would not
F interfere with the policy decision is again devoid of any merit. A
legislative policy must conform to the provisions of the constitutional
mandates. Even otherwise a policy decision can be subjected to judicial
review"

G Furthermore, interpretation of a town planning statute which has an
environmental aspect leading to application of Articles 14 and 21 of the
Constitution of India cannot be held to be within the exclusive domain of the
executive.

There cannot be any doubt whatsoever, that the validity and/or
H interpretation of a legislation must be resorted to within the parameters of
-
BOMBAY DYEING AND MFG. CO.LTD. ''·BOMBAY ENVIRONMENT AL ACTION GROUP[SINHA,J.) 985

.• \ judicial review, but it is difficult to accept the contention that it is totally A
excluded.

Unreasonableness is certainly a ground of striking down a subordinate
legislation. A presumption as to the constitutionality of a statute is also to be
raised but it does not mean that the environmental factors can altogether be
omitted from consideration only because the executive has construed the B
statute otherwise.

It is interesting to note that the scope of judicial review is now being
expanded in different jurisdictions. Even judicial review on facts has been
held to be permissible in law. [See Manager, Reserve Bank of India, Bangalore C
v. S. Mani and Ors., [2005] 5 SCC 100, Sonepat Cooperative Sugar Mills
Ltd v. Ajit Singh, [2005] 3 SCC 232 and Cho/an Roadways Ltd. v. G.
Thirugnanasambandam, [2005] 3 SCC 241 ].

In Anil Kumar Jha v. Union of India, [2005] 3 SCC 150, it was held
that in an appropriate case, the Supreme Court may even interfere with a D
political decision including an action of the Speaker or Governor of the State
although it may amount to entering into a political thicket. [See also Rameswar
Prasad & Ors. v. Union of India & Anr., (2006) I SCALE 385].

Furthermore, there are innumerable cases where this Court has even
issued directions despite the fact that the field is covered by some statute or E
subordinate legislation. Such directions issued are clear pointers to show that
when a question involving greater public interest or public good including
enforcement of fundamental right arises, this Court bestowed enormous·
consideration to public interest. [See Vineet Narain and Ors. v. Union of
India and Anr., [1996] 2 SCC 199, Union of India and Anr. v. C. Dinakar,
JPS and Ors., [2004] 6 SCC 118 and Kapila Hingorani v. State of Bihar, F
[20031 6 sec 1J.

Such directions have more often than not been issued even where the
question involved relates to enforcement of a human right or environmental
aspects. Interpretation and application of constitutional and human rights had G
never been limited by this Court only to the black letter of law. Expansive
meaning of such rights had all along been given by the Courts by taking
recourse to creative interpretation which lead to creation of new rights. By
way of example, we may point out that by interpreting Article 21, this Court

- has created new rights including right to environmental protection.
H
986 SUPREME COURT REPORTS [2006) 2 S.C.R.

A The Wednesbury principles to which r~ference has been made in The
Trustees of the Port of Madras v. Mis Aminchand Pyarelal and Ors., (1976]
3 sec 167 in some jurisdiction are being held to be not applicable in view
of the development in constitutional law in this behalf. [See e.g. Huang and
Ors. v. Secretary of State for the Home Department, [2005] 3 All. ER 435,
wherein referring to R. v. Secretary of State of the Home Department, ex. P
B Daly, [200 l] 3 All ER 433, it was held that in certain cases, the adjudicator
may require to conduct a judicial exercise which is not merely more intrusive
than Wednesbury, but involves a full-blown merits judgment, which is yet
more than Ex p. Daly requires on a judicial review where the court has to.
decide a proportionality issue. Law is never static; it changes with the change
C of time. [See Motor General Traders and Anr. v. State of Andhra Pradesh
and Ors., [1984] l SCC 222 and John Va//amattom v. Union of India, [2003]
6 sec 6111.

For the foregoing reasons, we are of the opinion that in cases where
constitutionality and/ or interpretation of any legislation, be it made by the
D Parliament or an executive authority by way of delegated legislation, is in
question. it would be idle to contend that a court of superior jurisdiction
cannot exercise the power of judicial review. A distinction must be made
between an executive decision laying down a policy and executive decision •
in exercise of its legislative making power. A legislation be it made by the
E Parliament/ Legislature or by the executive must be interpreted within the
parameters of the well-known principles enunciated by this Court. Whether
a legislation would be declared ultra vires or what would be the effect and
purport of a legislation upon interpretation thereof will depend upon the
legislation in question vis-' -vis the constitutional provisions and other relevant
factors. We would have to bear some of the aforementioned principles in
F mind while adverting to the rival contentions raised at the bar in regard to
interpretation of OCR 58' as well as constitutionality thereof. ·•

DCR 58: INTERPRETATION

For the purpose of interpretation of OCR 58, it may be beneficial to
G notice the changes effected by 200 I Regulations vis-a-vis 1991 Regulations:

H
BOMBAY DYEING AND MFG. CO.LTD.'' BOMBAY ENVIRONMENTAL ACTIONGROUP[SINHA,l] 987

Old DCR 58 New DCR 58 A
58. Development or redevelopment 58. Development or redevelopment
of lands of cotton textile mills; of lands of cotton textile mills;

( l) Lands of sick and/or closed cotton ( 1) Lands of sick and/or closed
textile mills. - With the previous cotton textile mills. - With the B
• approval of the Commissioner to a previous approval of the
. layout prepared for development or Commissioner to a layout prepared
redevelopment of the entire open land for development or redevelopment
built-up area of the premises of a sick of the entire open land built-up area
and/or closed cotton textile mill, and of the premises of a sick and/or
on such conditions deemed closed cotton textile mill, and on C
appropriate and specified by him, and such conditions deemed appropriate
as a part of a package of measures and specified by him, and as a part
recommended by the Board of of a package of measures
Industrial and Financial recommended by the Financial
Reconstruction (BIFR); Financial Institutions and Commissionerate of D
Institutions and Commissionerate of Industries for the revival/
Industries for the revival/ rehabilitation of a potentially viable
rehabilitation of a potentially viable sick and/or closed mill, the
sick mill, the Commissioner may Commissioner may allow;
allow;
E
(a) The existing or newly built-up (a) The existing built-up areas to
areas to be utilised- be utilised-

(i) for the same cotton textile or {i) for the same cotton textile or
related user subject to permissible FSI related user subject to observance
and observance of all other of all other Regulations; F
Regulations;

(ii) for diversified industrial users in (ii) for diversified industrial users
accordance with the industrial in accordance with the industrial
location policy, with office space location policy, with office space G
only ancillary to and required for only ancillary to and required for
such users, subject to FSI of 1.00 and such users, subject to and
observance of all other Regulations; observance of all other Regulations;

(iii) for commercial purposes, as (iii) for commercial purposes, as
permitted under these Regulations: permitted under these Regulations; H
988 SUPREME COURT REPORTS (2006) 2 S.C.R.

A Provided that in the Island City, the Provided that in the Island City, the
1
area used for office purposes shall area used for office purposes shall
not exceed that used earlier for the not exceed that used earlier for the
same purpose. same purpose.

(b) Open lands and lands after (b) Open lands and balance FSI shall
B demolition of existing structures in be used as in the Table below
case of a redevelopment scheme to
be used as in the Table below
y

A bare comparison of the said provisions would show that in sub-
C regulation (I) of OCR 58, the language remains the same. However, in clause
(a) thereof the words "or newly" have been omitted in the 2001 Regulations.
Clause (a) of sub-regulation '(l) provides for change of user in relation to the
existing built-up area, subject to the recommendations of BIFR as a package.
The question as to whether the mills which are closed but were not referred
D to BIFR come within the purview of the said clause would be dealt with a
little later.
J
Sub-regulation (I) of OCR 58 provides for an approval of the
Commissioner to a layout prepared for the development or redevelopment of
the entire open land as well as built-up area of the premises of a sick and/
E or closed textile mill. For the purpose of grant of sanction as regards change
of user, the Commissioner may specify certain conditions as it may deem
appropriate. Such an approval was sought to be a part of the measure of the
package recommended by BIFR for the revival/rehabilitation of a potentially
viable sick mill. Only if such conditions are specified, clause (a) shall apply
which provides for change of user relating to existing built-up area.
F
We have noticed hereinbefore that Regulation 56(3)(b) and Regulation
57(4 )(c) also makes specific provisions for grant of change of user in respect
of sick mills as a part of a package of measures recommended by BIFR.

The drastic changes have, however, been made in clause (b) of Sub-
G regulation (I) of OCR 58. It refers to a case of redevelopment. In clause (b)
the words "after demolition of existing structures in case of a redevelopment
scheme" have been deleted.
. ',,r

OCR 58 as made in 199 I consisted of four different concepts:

H (I) Existing built up areas;
BOMBAY DYEING AND MFG. CO. l TD.,. BOMBAY ENVIRONMENT AL ACTION GROUP [SINHA, J.] 989

(2) Newly built up areas in OCR 58( I)(a); A
(3) Open land and
(4) Lands after demolition of existing structures in the case of a
redevelopment scheme in OCR 58(1)(b).

It is not in dispute that the scheme framed thereunder did not work or B
in any event did not work to the satisfaction of all the mill owners and other
players including the State.
.•. 'y

In view of the limited options contained therein and the consequences
flowing therefrom in terms of the Old Regulations a mill owner could

(i)
c
continue to use the existing cotton textile mill;
(ii) redevelop the existing structure without changing its shell and
without touching the open land in which event, no sharing of land
or structure was necessary;
(iii) retain existing structure and develop the open land in which event D
\. the mill owners were required to share 2/3rd of the open land
used;
(iv) demolish the existing structures and develop the entire land,
meaning thereby, the open land as also the land available after
demolition of the existing structure in which event sharing of E
entire land was contemplattd.

We have noticed that only five mills opted in terms of the old Regulation.
Hardly any development took place. Thus, most textile mills continued with
status quo. Closed mills remained closed, workers had not been paid their
wages, banks and financial institutions did not receive back their dues. Even F
t
the statutory dues and taxes continued to mount. The structures might have
become more dilapidated and ten years went down the line in the
aforementioned scenario. Even otherwise, mills like Phoenix Mills retained
more than I00 years old shell and glassed it up and even in the said shell,
malls, supermarkets, night clubs and restaurants were constructed. Thus, it G
resulted in unplanned and unregulated development. It is in that situation, the
State might have thought that workable changes are necessary wherefor, after
"1' taking into consideration some reports, they had come out with a draft. When
. the draft was published in terms of Section 37(1AA) of the MRTP Act, 24
objections were received. The writ petitioners admittedly were not amongst
them. The said objections were placed before the planning authorities. The H
990 SUPREME COURT REPORTS [2006] 2 S.C.R.

A Bombay Municipal Corporation had also put inputs as a planning authority.
~
Only thereafter the matter went back to the State.

The effect of amendment in clause (b) must be seen from the Table
appended thereto. In tenns of the Old Regulation in respect of land covering
more than 10 hectares, for green area 33% land was to be set apart, and for
B MHADA 37% thereof, whereas the owner retained 30%. Under the new
OCR 58, admittedly the owner of the mill at least obtains construction rights
over 63% of the land as the land in tenns ofColumn 3 gets loaded in Column
5. The mill owner furthennore even according to the writ petitioners gets .
TOR of 37%. Open land in clause (b) is what is not covered by the built-up
c area. The balance FSI, indisputably, is not open area.

The meaning of 'open land' must be construed as land other than land
required to sustain the built up area. We may now attempt to understand the
effect of FSI having regard to a concrete example. If the area of a plot is
1000 sq. m., applying the FSI of 1.33, a person will be entitled to construct
D a built up area of 1330 sq. m. If he intends to build a two-storeyed building,
he will utilize 665 sq. m. of land whereas in a case of ground plus four
storeyed building, he will be using 266 sq. m. of land and in case of nine
storeyed structure, he will be using only 133 sq. m.

The greater the height of the building, more lands will be available
E either by way of public green or private green as also for MHADA. However,
in such a case, the plinth area will vary significantly. Whereas in the first
case, it would be 665 sq. m., in the third case, it would only be 133 sq.m.
although the built up area remains the same.

Taking the illustration as mentioned hereinbefore, the open land in
F each case shall vary. Thus, open land would not mean land occupied by the
t
plinth but would mean land other than that is necessary to sustain the built
up area.

We do not accept the contention of Mr. Salve that clause (b) applies to
open land as also lands after demolition of existing structure in case of a
G
redevelopment scheme and only because the words "and lands after demolition
of existing structures" had been deleted, the same may not be of much
significance inasmuch as clause (b) of the new regulations will have to be . ,r
construed in the light of clause (a). It will bear repetition to state that whereas
clause (a) refers to change of user in relation to the existing built-up area,
H clause (b) provides for open lands. The manner in which the development
)

j

BOMBAY DYEING AND MFG. CO.LTD. v. BOMBAY ENVIRONMENTAL ACTION GROUP [SINHA, l.] 991
A
-\ and/ or redevelopment should take place has been clubbed in sub-regulation
(I) of DCR 58 read with sub-regulation (6) thereof. For proper interpretation,
all the relevant provisions are required to be read harmoniously.

DCR 58(1 )(a) deals with a case of non-sharing of a land as is evident
from the fact that no sharing percentage is provided therein. It, therefore,
envisages change of user for the three purposes mentioned therein, in the B
event the existing built-up area is utilized. In terms of the said provision, the
internal area of such structure remains the same although they can be
" redesignated or reconstructed. The only benefit conferred by reason thereof
is grant of change of user indicated therein. The State while making this
regulation contemplated that the change of user would enable earning of
additional sums of money from the assets which were unproductive. Clause
c
(b), however, expressly provides for sharing of land as specified in the Table
therein. The question, however, is as to what would be the extent of open
land available on the spot.

Existing built-up area, in our view, would not be open land. We have D
\,
also to take note of the fact that the newly built-up area, as existing in the
old clause (a) of sub-Regulation (I) of OCR 58 has been omitted, the effect
whereof would be noticed a little later.

We are not oblivious of the fact that the word "and" has been used
twice in sub-regulation ( 1) of OCR 58. It ordinarily shall be read conjunctively E
and not disjunctively. However, for the purpose of giving effect to the said
provisions, the rule of purposive construction is required to be taken recourse
to. Sub-regulation (I) speaks of entire open land as well as built-up area. It
speaks of the necessity of having the recommendation of BIFR as a package
of measures. Such recommendations must be for the revival/rehabilitation of
't- F
a potentially viable sick mill. The provisions, therefore, may not apply to a
mill which is neither sick nor otherwise not potentially viable, subject, of
course, to the explanation contained in Note (vi) appended thereto as also
sub-regulation (6) thereof.

For the aforementioned purpose, let us at this juncture also notice the G
tables appended to clause (b) of sub-Regulation (1) of DCR 58.
~.,~
Column (2) of the Table refers to the extent of land. Column (3) provides
. for percentage to be earmarked for recreation ground/ garden, playground or
any other open user as specified by the Commissioner. Column (4) refers to
percentage to be earmarked and handed over for development by MHAOA H
992 SUPREME COURT REPORTS (2006] 2 S.C.R.

A for public housing/ for mill worker's housing as per guidelines approved by
the Government to be shared equally. Column (5) provides for percentage to
be earmarked and to be developed for residential or commercial user (including
users permissible in residential or commercial zone as per these regulations
or diversified industrial users as per Industrial Location Policy) to be developed
B by the owner.

There is no change in Note (i) or Note (ii). Changes have been made
in Note (iii) and Notes (iv), (v) and (vi) have been added. Interestingly, from
Note (iii), after the words "Transferable Development Rights as in Appendix
VII" and before the words "in respect of the lands earmarked for open spaces
C in column (3)", the expression "only" has been omitted. Thus, whereas earlier
transferable development rights could be granted only for the purpose of the
open lands which were to be handed over to MCGM, i.e., about 33%, now
apart from that, development rights in respect of lands earmarked and handed
over as per Column (3) have been made available to the mill owners for
utilization thereof as per Column (5) as TDR as aforesaid. The mill owner,
D therefore, gets FSI of 1.33. He, furthermore. gets corresponding TOR to be
utilized in the sub-urbs area or to sell the same. The idea appears to be to
give more FSI and TOR to the person who surrenders the lands.

Things, however, may be different in a case where the mill owner
demolishes a portion of the existing structure and construct new areas so as
E to be called 'newly built-up' area on that part of the land remaining the other
part of the structure that it will come within the purview of clause (a) inasmuch
as approval for development would be necessary for the newly built-up area
for change of user. In such a case, requirements of clause (b) were not
required to be complied with as it would squarely fall within the purview of
p clause (a).
The omission of the words "or newly'' from clause (a) provides for a
guideline. If the entire structure is to be demolished, the newly built-up area
will have to be in terms of clause (b) read with sub-regulation (6). Such
newly built-up structure, having regard to omission from clause (a) would
G have no role to play if no built-up area existed. Thus, all new constructions
including constructions on lands after demolition of the existing structure and
new constructions whether under a development or redevelopment scheme
would be covered by clause (b) read with sub-regulation (6) thereof. If new
constructions are raised, FSI, in a case of such development or redevelopment,
H being covered by clause (b) would be for the entire plot, except the built-up
BOMBAY DYEING AND MFG. CO.LTD.''· BOMBAY ENVIRONMENTAL ACTION GROUP [SINHA, J.] 993

area which was existing, FSI having regard to its statutory definition would, A
thus, have to be calculated having regard to the ratio of the total construction
to the area of the plot except the land component of the existing built up area.

There is no dispute as regard grant of better facility to the mill owners
through TOR. The only dispute is what meaning should be attributed to the
expression 'balance FSI'. B
In order to detennine whether vital changes have been effected by way
'r of the amendment of 2001, both the sub-clauses of sub-regulation (1) would
be necessary to be taken into consideration for construing the words "balance
FSI".
c
The expression "balance" would mean "apart from" which in turn would
mean apart from the area for which protection has already been given.

Balance FSI would, thus, mean FSI which is available for construction
after excluding the FSI relatable to an already consumed by the existing D
built-up structure.
\
Both the phrases "open lands" as also "balance FSI" contained in OCR
;
58(1 )(b) play significant role. The word "balance" is crucial which would
naturally mean FSJ which is available to be utilized upon open land. Such
balance FSI must be apart from the existing FSI. Indisputably, the built-up E
area had consumed some FSI and, thus, when the expression "balance .FSI"
is used, the same would mean additional built-up area. It contemplates that
where the entire plot has been used by existing built-up areas and some open
land has been left out on the remaining non-built up area of the plot additionally
unconsumed FSI could be used. It is in that sense separate. It is true that OCR
58( 1) uses the word entire land but the said expression is followed by the F
expression "built-up area". "Balance FSI" in the aforementioned situation
would not mean the FSI which is involved for the purpose of construction of
structures not only on the open land which had been existing but also the
land which had become open by reason of the demolition of the existing
structures. It is only in that sense, as would be amplified from the discussions G
made hereinafter that the State intended to give additional protection to the
mill owners. If open land is given its natural or dictionary meaning, no
distinction could be made in between OCR 58(1)(a) and OCR 58(l)(b), which
ex facie would lead to an anomaly.

In view of the fact that the built up area was to be protected in 'tenns H
994 SUPREME COURT REPORTS [2006) 2 S.C.R.
.,
A of sub-regulation (I) of OCR 58, a'fortiori the land component thereof could
be protected under clause (b) thereof. Thus, the same land which was protected >- •

under clause (a) could not become shareable under clause (b) which would
render the distinction between the said provisions otiose. Balance FSJ on
open lands or _otherwise had also been used in sub-regulation (5) of OCR 58.
It also, thus, gives a significant clue to find out the meaning of balance FSI.
B Additional reason for the aforementioned conclusion is that development or
redevelopment of entire open land and built up area of the premises referred
to in OCR 58(1 ), in the event. the findings of the High Court are accepted,
there would not be any necessity for the State to use two different words •
"open land" and "built-up area" separately and distinctly.
c The words "built-up area" find its source from the definition of existing
building, as noticed herein before. The existing built-up area was not to be·
shared and the same if read with the word "existing", it may be contrasted
with a built-up area additionally but separate and distinct from the old existing
built-up area. The existing built-up area, thus, was sought to be protected
D which would mean that they were sought to be protected from non-shareable
land component thereof. It is thus possible to come to the conclusion that the
obligation to share was intended to be absent only so long as no additional
built-up area was created.

In a case where the existing structure is demolished in part, the balance
E FSI would be available but in relation to the entire open lands, FSI has to be
calculated taking into account the area of open land appurtenant to the existing
structures. Thus, no basic change had been effected in drafting the regulation
to segregate newly built-up areas from existing built-up areas. It cannot be
denied that the State intended to give more benefits to the mill owners by
F reason of 200 I Regulations and, thus, if after demolition of the entire structure
the whole plot is treated to be open land and FSJ is calculated on the basis 1
thereof the purport and object of the amendment will be defeated. The fact
that the State intended to consider the matter relating to amendment having
regard to the fact that there had hardly been any takers for the 1991 Scheme
as it failed to provide sufficient incentives, cannot be ignored.
G
Indisputably, though, the Regulations made by the State which is a
piece of subordinate legislation should be read in the light of the statutory
scheme made under the legislative act as also having regard to the constitutional ,...
scheme as contained in Articles 14, 24, 48-A and 51-A(g) of the Constitution
oflndia, but while doing so the effect and purport for which such amendment
.H were brought about cannot be lost sight of. The amendments carried out in
f
BOMBAY DYEING AND MFG. CO.LTD.,. BOMBAY ENVIRONMENT AL ACTION GROUP [SINHA, J.] 995

• ~ the MRTP Act from time to time and clearly the provisions of Sub-section A
(2) of Section 26 of the MRTP Act point out that the State had been leaning
towards environmental aspects but that was not the sole objective.

The title of the regulation reads as a modification to DCR 58. It was,
therefore, not in substitution of the resolution of 1991 nor was it framed by
way of recasting thereof. B
In the marginal note, the expression "development or redevelopment"
\o r of land of cotton textile mills has been mentioned. What, therefore, in focus
was the land of cotton textile mills. The expression "land", thus, plays an
important role. Although a marginal note may not be determinative of the C
content of the provision, it may act as an intrinsic aid to construction. [See
Smt. Nandini Satpathy v. P.L. Dani and Anr., AIR (I 978) SC 1025, para 33].

The expression "development or redevelopment" in the marginal note
does not advance the contention of the writ petitioners that DCR 58 does not
frame change of user to non-textile mill users. Indisputably, having regard to D
the provisions of the entire Regulation, OCR 58 is a special provision. It is
a self-contained code. It provides for a large number of things. The State
while making the said legislation was required to provide for almost all the
eventualities in respect of the different categories of cotton textile mills. They
could be, apart from the sick mills referred to BIFR; (a) closed, (b) non-
closed mills intending to modernization, (c) non-closed mills intending to E
shifting, (d) sick mills which have not been referred to BIFR under SICA
and, thus, no scheme wherefor was made. There were multiple options and
one mill or the other may fall in more than one category. A closed mill may
come within the purview of DCR 58(l)(a) or 58(l)(b) or 58(6). Some of the
NTC mills also may come within one or more categories. It is possible and F
in fact some of the mill owners had opted for one or more of the multiple
options of development/ redevelopment activity in terms of the said regulation.
By way of example, Ruby Mill opted for both modernization and shifting and
permission had been granted therefor. The fact that DCR 58 is a self-contained
code is evident from sub-regulation (8) which provides that funds accruing
to a sick, closed or mill requiring modernization or shifting shall be credited G
to an escrow account, which shall be utilized only for revival/ rehabilitation,
modernization or shifting of the industry. Sub-regulation (9) provides a
mechanism for putting this into place. The State, not only endeavoured to
take care of needs ()f various categories of cotton textile mills but also made ·-
attempts to find out a solution having regard to the fact that the 1991 H
Regulations did not work. By framing DCR 58, therefore, a mechanism was
996 SUPREME COURT REPORTS (2006] 2 S.C.R.

A sought to be provided for achieving the purpose of providing some relief to
J..
all players in the field.
II
The said Regulations were framed under Section 22(m) of the MRTP
Act for controlling and regulating the use and development of land. They are
not, and cannot be, treated to be provisions for compulsory. acquisition of
B land. It also does not provide for reservation and/ or designation in a
development plan.

In sub-regulation (I) of OCR 58, the phrase "lands of sick and/ or ~

closed cotton textile mills" has been used. The same phrase has been used in
Regulations 58(6), 58(8){a) and 58(9)(a). OCR 58(1) read with DCR 58 (4)
c although postulates recommendations by BIFR, the words "closed mills" also
find place both in Regulations 58(1) and 58(6). We have heretobefore noticed
the statutory meaning attributed to the expression "exiting building".

DCR 58(1)(a) deals with existing structure which could have been
D subjected to modification internally. OCR 58( I)(b) deals with the rest of it,
namely, open land. Under old regulation, the expression "open land'' would
mean such lands which were required to sustain built-up area. The concept
finds place in OCR 58(6). In terms of OCR 58( I )(a), thus, no demolition is
contemplated which in tum would mean that no sharing of land also is
contemplated, i.e., the land owners are not required to surrender any land.
E However, it contemplates change of user. It contemplates:
(i) the old cotton textile mills may continue to operate;
(ii) Alternatively, it may take recourse to "related user", i.e., user
related to such mills.
F (iii) It could also take recourse to "diversified industrial user", meaning
thereby, user other than cotton textile mill and would include
uses for other industries in terms of the industrial location.

It is not in dispute that a long list of industries is contained in the said
policy. It could further be used for commercial purpose and the same having
G regard to the regulations would also include residential purposes.

In terms of OCR 58(l)(a), there could be no demolition and only the
existing structures, namely, those which were existing prior to coming into
force of the said Regulation should be developed by utilizing the existing
structure which could not either be demolished or reconstructed or relocated. .,.
H
BOMBAY DYEING AND MFG. CO. LTD. v. BOMBAY ENVIRONMENT AL ACTION GROUP [SINHA. J.] 997
~ \ The contention of Mr. Salve that the word "demolition" brought about A
by reason of 1994 amendment in Section 2(7) of the MRTP Act plays a
significant role also cannot be accepted for more than one reason.

The amendment of 1994 appears to be clarificatory in nature, having
regard to the fact that prior thereto the land owners could carry on demolition
without prior intimation and/ or obtaining permission from the corporation. B
The High Court, therefore, in its judgment wrongly laid undue emphasis
} thereupon.

Furthermore, in OCR 58 the word redevelopment had all along been
used. By reason of the said amendment, no different meaning which would
not be in consonance with the object should be attributed. Whatever that may c
mean, redevelopment contemplates in its ordinary parlance a renewal or
substitution of development and involves pulling down of the structures.
Development by way of demolition cannot mean that OCR 58(1) would
permit not just the retention of the structure (shell) but also demolition of
structure (shell). The purpose for introducing the said amendment, therefore, D
was for a different purpose and could not have been used for the purpose of
}
" construction of OCR 58.

It has not been disputed that keeping in view of the fact that the structures
of the mills had been built long long time back. they had sprawling existing
structures. Ranjit Deshmukh Committee Report does not categorically state E
that the balance FSI has to be calculated only from the operi land which was
available before demolition and not from the land which became open by
reason of demolition of structures existing thereon.

It is true that the lands of different mills had different built-up areas.
't Balance FSI was required to be calculated on the basis thereof. The extent of F
vacant land available for the purpose of distribution would indisputably depend
upon the extent of structures which had been standing on the lands but the
same is a fortuitous circumstance. Only because in a given case, the extent
"' of the area to be given to MHADA or MCGM would be comparatively less
than the case of land belonging to other mills, the same by itself cannot be G
a ground for construing DCR 58 differently.

"'. Furthermore, in Note (iv) of DCR 58(l)(b) itself, it is categorically
stated that land would become open by demolishing the existing structure
which also points to the fact that the contentions of the Respondents Writ
... Petitioners are not correct in view of the fact that if the land after demolition H
998 SUPREME COURT REPORTS [20061 2 S.C.R.

~
A was already subsumed under open land, it was not necessary to deal with the
same subject specifically with land which had become open on demolition.
It is also interesting to note that in OCR 58(6)(a) the words ·'reconstruction
after demolition of existing structures limited to the extent of the built up
area of the demolished structure" have been used with reference to
"development/ redevelopment of the entire open land and/ or built up area of
B premises" which would also go to show that in the event, the interpretation
as advocated by Mr. Salve is accepted, such detailed and specific references
to the specific contingency of openness of land arising after and upon •
demolition or reconstruction done after demolition would become wholly
meaningless.
c It is, thus, clear that the expression "open lands" is meant to connote
lands other than lands available after demolition of existing structures. [See
Lennon v. Gibson, (1919) AC 709 at 711, Craies on Statute Law. Seventh
Edition, page 141 and G.P. Singh's Principles of Statutory Interpretation,
Ninth edition, page 258].
D
Having said so, let us take a re-look at sub-regulation (6) of OCR 58.
Sub clauses (a) and (b) of sub-regulation (6) refer to built-up areas which
would mean that such area which the owner of the mill had built whether
existing or after demolition. The statute contemplates retention of the built-
up area that means the same area which the owner could retain had the
E building been not demolished. The area which the structure had occupied is
intended to be left with the mill owner. However, how much area would be
allowed to be retained, would inevitably differ from mill to mill. Sub-regulation
(6) merely provides for a guiding principle that the owners of the mill would
be permitted to retain the existing structure and built-up area; precisely that
F is the concept of sub-regulation (6). In other words, rebuilding to the same t
effect or aggregation between different plots is permitted so long the existing
built up area is dt:molished and the same would not require sharing of any
land thereunder, provided of course that existing built up area is not enhanced.
OCR 58(6) is carved out of OCR 58(l)(b). In terms of it only the construction
is permitted for the same area for the purpose of reconstruction. It is also
G worth noticing that both old and new regulation speak of retention of same
structure. OCR 58(6), thus, confers an additional benefit in respect of cases
falling within OCR 58(l)(a) allowing inter a/ia:
,,
(a) demolition which it could not do under OCR 58( I )(a);

H (b) it does not require any sharing for which benefit was also available
BOMBAY DYEING AND MFG. CO.LTD .... BOMBAY ENVIRONMENTAL ACTION GROUP (SINHA. l] 999

under DCR 58(1)(a); A
(c) built up area remaining the same, the shape, size and nature of
the existing structure could be changed which could not be done
under DCR 58(1)(a);

(d) The second part of sub-regulation (6) permits aggregation on the
same single mill plot, which was not available under DCR 58(1)(a), B
subject of course to the existing built up area remaining the same.

- The contention of BEAG is that the implementation of DCR 58 would
lead to a disastrous result and in this behalf our attention was drawn to a
sanctioned plan in respect of Mill No. 4 to show that the consequences
thereof would be that the share of MCGM and MHADA would come to
C

662.61 sq. m. and 542.13 sq. m. respectively, although the plot area of Mill
No. 4 is 58,458.36 sq. m. We do not find any merit in the said contention as
keeping in view of our finding aforementioned, the built up area was required
to be deducted therefrom. With a view to examine the said contention, we
may hereinbelow notice some charts in respect of Mill No. I and Mill No. D
4:

Mill No. I

Existing Development
E
PLOT AREA 47,730.28 SQ.M.
(EXCL. SET BACK AREA)
EXIST. PLINTH AREA 22,950.58 SQ.M.
RA TIO OF GROUND COVER 48.08%
EXISTING R.G. AREA ALMOST NIL F
Proposed Development
PLOT AREA
(EXCL. SET BACK AREA) 47,730.28 SQ.M.
PROP. PLINTH AREA 3,980.00 SQ.M. G
RA TIO OF GROUND COVER 8.34%
LAYOUT R.G. DCR 21 11,910.00 SQ.
M. M.C.G.M. 4,058.65 SQ.M.
R.G. + M.C.G.M. 15,968.65 (33.5%)
H
1000 SUPREME COURT REPORTS (2006] 2 S.C.R.

A Computation of Open Land j. •

I. PLOT AREA 47,730.28 SQ.M.
(EXCL. SET BACK AREA)
2. LAND COMPONENT OF 47,123.67 SQ.M.
EXISTING B.U. AREA 1.33
B UNDER DCR 58(6)
i.e. EXISTING BU AREA
PERMISSIBLE FSI 35,437.29 SQ.M.
f
3. BALANCE OPEN LAND 12,298.99 SQ.M.
TO BE SHARED UNDER DCR
c (i)
58(l)(b)
SHARE OF MCGM (33%) 4,058.67 SQ.M.
(ii) SHARE OF MHADA (27%) 3,320.73 SQ.M.
(iii) SHARE OF OWNER (40%) 4.919.60 SQ.M.
OWNER'S HOLDING [2+ 3(iii)] 40,356.89 SQ.M.

D
Mill No. 4
Existing Development

PLOT AREA
E (EXCLU. SET BACK AREA) 58,458.36 SQ. M.
EXIST. PLINTH AREA 39,304.83
RATIO OF GROUND COVER 67.20%
EXISTING R.G. AREA ALMOST NIL

F Proposed Development

PLOT AREA
(EXCL. SET BACK AREA) 58,458.36 SQ.M.
PROP. PLINTH AREA 10.789.40 SQ.M.
G RA TIO OF GROUND COVER 18.45%
LAYOUT R.G. DCR 21 17.423.51
M.C.G.M. 662.61 SQ.M.
R.G. + M.C.G.M. 18086.12 SQ.M.
H

...
BOMBAY DYEING AND MFG. co.LTD.,. BOMBAY ENVIRONMENTAL ACTION GROUP (SINHA, J.] I 00 I

Computation of Open Land A
I. PLOT AREA 58,458.36 SQ.M.
(EXCL. SET BACK AREA)
2. LAND COMPONENT OF 75,079.11 SQ.M.
EXISTING B.U. AREA 1.33
B
UNDER. DCR 58(6)
i.e. EXISTING BU AREA
PERMISSIBLE FSI 56,450.46 SQ.M. 3.
3. BALANCE OPEN LAND 2,007 .90 SQ.M.
TO BE SHARED UNDER OCR
58(l)(b) c
(i) SHARE OF MCGM (33%) 662.61 SQ.M.
(ii) . SHARE OF MHDA (27%) 542.13 SQ.M.
(iii) SHARE OF ONER (40%) 803.16 SQ.M.
OWNER'S HOLDING [2+3(iii)] 57253.62 SQ.M.
For computing the extent of the land required to be shared, the plinth
D
area will have no relevance. So far as Mill No. 4 is concerned, having regard
to the existing built up area, the share of MCGM and MHADA would be on
a low side, but it is evident that so far as Mill No. I is concerned, whereas
the plot area was only 47, 730.28 sq. m., having regard to the built up area,
the share ofMCGM and M_HADA would come to 4,058.67 sq. m. and 3,320.73 E
sq. m. respectively. These are indicative of the fact that the extent of open
land to be shared by the owners with MCGM and MHADA would depend
upon the built up area of the structure which existed on site. The share of
MCGM and MHADA, therefore, would vary from case to case and, thus, we
cannot determine the question keeping in view only the case of one mill and F
not the others.

We do not furthermore agree with the approach of the High Court in
interpreting the aforementioned provisions having regard to certain other
factors, namely, deluge in Bombay in the year 2005 as also the requirements
of the entire population of Bombay from environmental aspect. Such factors G.
cannot be taken into consideration for interpretation of a statute. We cannot
look to a statute with a coloured glass, we have to consider the provisions as
the legislature thought. The same should be subject, of course, to the
constitutional and other limitations.

At this juncture, we may consider the cases of the closed milis. H
1002 SUPREME COURT REPORTS [2006] 2 S.C.R.

A CLOSED INDUSTRIES
.. -
No specific provision has been made for industries which are closed
but for one. reason or the other had not been referred to BIFR. A mill may
be closed although the company which owns it and having other businesses
or other properties is not sick company in terms of SICA. From its other
B resources, it can modernize or shift the industry. But, there may be a case
where the mill is the only property, if it lies closed and no action is taken for
its revival, the same may defeat the purpose for which DCR 58 was made,
or the company although as such is not sick but finds it difficult to arrange

-
+
funds for revival of the closed mill. The doctrine of purposive interpretation
C in such a case has to be applied. The expression "sick and/ or closed" used
in sub-regulation (I) of DCR 58 must be read as disjunctive and not
conjunctive.

Furthermore, in this behalf the principles of common sense construction,
as noticed hereinbefore, should be taken recours~ to. In Halsbury's Laws of
D England (Fourth Edition) Volume 44(1) (Reissue). the law is stated in the
following terms:

"1392. Commonsense Construction Rule. It is a rule of the common
law, which may be referred to as the commonsense construction rule,
that when considering, in relation to the facts of the instant case,
E which of the opposing constructions of the enactment would give
effect to the legislative intention, the court should presume that the
..
legislator intended common sense to be used in construing the
enactment.

1477. Nature of presumption against absurdity. It is presumed that
F Parliament intend that the court, when considering, in relation to the
facts of the instant case, which of the opposing constructions of an
enactment corresponds to its legal meaning, should find against a •
construction which produces an absurd result, since this is unlikely to
have been intended by Parliament. Here 'absurd' means contrary to
sense and reason, so in this context the term 'absurd' is used to
G include a result which is unworkable or impracticable, inconvenient,
anomalous or illogical, futile or pointless, artificial or productive of
a disproportionate counter-mischief.

1480. Presumption against anomalous or illogical result. It is presumed
that Parliament intends that the Court, when considering, in relation
H
1
BOMBAY DYEING AND MFG. CO. LTD ' BOMBAY ENVIRONMENT AL ACTION GROUP [SINHA, J.] \ 00)

1 to the facts of the instant case, which of the opposing constructions A
.. ' of an enactment corresponds to its legal meaning, should find against
a construction that creates an anomaly or otherwise produces an
irrational or illogical result. The presumption may be applicable where
on one construction a benefit is not available in like cases, or a
detriment is not imposed in like cases, or the decision would tum on
an immaterial distinction or an anomaly would be created in legal
B
doctrine. Where each of the constructions contended for involves
some anomaly then, in so far as the court uses anomaly as a test, it
has to balance the effect of each construction and determine which
~
i anomaly is greater. It may be possible to avoid the anomaly by the
< exercise of a discretion. It may be, however, that the anomaly is c
clearly intended, when effect must be given to the intention. The
court will pay little attention to a proclaimed anomaly if it is purely

.. hypothetical, and unlikely to arise in practice."

If such an interpretation is not given, a very valuable asset would be
rendered sterile. If it is to be construed that a scheme made by BIFR is the D
condition precedent for applicability of DCR 58. by reason whereof the benefit
conferred thereunder would not be available in like cases for no apparent
>.
reasons whatsoever particularly when it was the intention of the State that all
~
categories of the mills which require rehabilitation, revival or modernization
should be brought within the purview of DCR 58.
.. It is, thus, not possible to accept Mr. Salve's submission that even a
E

closed mill although not covered under DCR 58 may be utilized for purposed
mentioned in Regulation 56.

Indisputably, there may be closed mills which have not been referred F
to BIFR or otherwise not capable of being referred to. The spirit of making
"'· DCR 58 was to revival and/ or rehabilitation· of the cotton textile mills.
Revival of closed mill was also, thus, a component part of the scheme behind
framing of DCR 58. It may be true that in terms of sub-regulation (I) of DCR
58 recommendation of the BIFR is contemplated but recommendation of
BIFR would be necessary where it is otherwise available. If it is insisted that G
the recommendation by BIFR was mandatory even for closed mill, much of
the significance for using the words 'and/or closed' after the word 'sick' is
lost. A closed mill would mean a mill in respect whereof closure has been
effected in accordance with law. Such closure can be effected in accordance

-
with law in terms of the provisions of the Industrial Disputes Act. Before H
1004 SUPREME COURT REPORTS [2006] 2 S.C.R.

A effecting a closure under the Industrial Disputes Act, notice has to be given
to the State and in certain cases its prior pennission is also required to be
obtained. Thus, all cases, which entail closure of an industry, would be within
the knowledge of the State. The State through its machinery can furthermore
verify the genuineness or otherwise of such closure. In such a case, even in
B tenns of the provisions of the Industrial Disputes Act having regard to the
purport and object for which the same had been enacted, the authorities
thereunder as also for the State a duty is cast to restore back the industrial
peace. [See State of Rajasthan and Anr. v. Mohammed Ayuh Naz, (2006) I
SCALE 79].

C SICK MILLS
SICA is a special statute. It is an Act made by the Parliament. It was
enacted in the public interest so as to make special provisions with a view to
securing the timely detection of sick and potentially sick companies owning
industrial undertakings, the speedy determination by a Board of experts of
D the preventive, ameliorative, remedial and other measures which need to be
taken with respect to such companies, the expeditious enforcement of the
measures so detennined and for matters connected therewith or incidental
thereto. SICA was enacted for giving effect to the policy of the State towards
securing the principles specified in clauses (b) and (c) of Article 39 of the
E Constitution of India. It would prevail over other statutes including MRTP
and the Regulations framed thereunder.

Section 3(e) of SICA defines "industrial company" to mean "a company
which owns 01.1e or more industrial undertakings." "Industrial undertakings"
has been defined in· Section 3(t) of SICA. "Sick industrial company" has
F been defined in Section 3(o) of SICA to mean "an industrial company (being
a company registered for not less than five years) which has at the end of any
financial year accumulated losses equal to or exceeding its entire net worth".
Section 15 of SICA provides for reference to a Board where an industrial
company has become a sick industrial company for detennination of the
measures which should be adopted with respect thereto. Section 17 provides
G for the power of Board to make suitable orders on the completion of inquiry.
Various provisions have been laid down in Chapter III of SICA enabling the
Board to issue several directions. Section 32 of SICA provides for a non-
obstante clause stating that the provisions thereof shall prevail notwithstanding
anything contained in any other law for the time being in force or in the
H Memorandum or Articles of Association of an industrial company or in any

-
BOMBAY DYEING AND MFG. CO. LTD.•·. BOMBAY ENVIRONMENTAL ACTION GROUP [SINHA, J.] ) 005

other instrument having effect by virtue of any law except enactments specified A
"· \ therein.

The question as regards the interpretation df the sick industries contained
in sub-regulation (6) of DCR 58 must be considered from that perspective.

DCR 58(6) is adjunct to the other provisions. Although on some B
occasions, DCR 58(2) may apply without DCR 58(6). However, there is no
such machinery so far as sick mills are concerned, it is, therefore, difficult
to comprehend that those mills which are sick but not referred to BIFR also
t can take advantage of sub-regulation (6). How an industrial undertaking
' belonging to a company which is sick should be determined to be so as laid
down under the provisions of SICA. Only in a case where a company is sick c
in terms of the 1985 Act, an industrial undertaking belonging to it may be
subject matter of the provisions thereof. The State for that matter neither has
any statutory power or competence to deal with sick undertakings. Furthermore,
the extent to which such sick company requires protection to the extent of the
sickness of the industrial undertaking cannot also be gone into by the State D

.. \
or for that matter by any other authority apart from BIFR.

MODERNIZATION! SHIFTING

Sub-regulation (2) of DCR 58 deals with cases requiring modernization.
For invoking the said provision, certain steps are required to be taken which E
are as under:

(i) Application for Scheme of Modernization to Government
(Competent Authority i.e. Corporation and Textile Department,
Government of Maharashtra) as per DCR 58(2) read with
58(6)(a)(b) as the case may be. F
"'· (ii) Scrutiny by the Department of Textiles.
(iii) Approval to Scheme by Government (with direction to approach
MCGM for further approval as per Regulation 58(2) read with
58(6)(a)(b ).
G
(iv) Application by Owner to Municipal Commissioner for a layout
prepared for development or redevelopment of the entire open
- i
land and/ or built up areas of the premises of mill. With regard
to the utilization of built up area (if reconstruction, aggregation
is proposed then it has to be read with 58(6)(a)(b) as the case may
H
1006 SUPREME COURT REPORTS [2006] 2 S.C.R.

A be), the provisions of clause (a) of sub-regulation 1 of these
regulations shall apply and if the development of open lands and
I '
balance FSl exceeds 30% of the open land and balance FSl, the
provision of clause (b) sub-regulation I of this regulation shall
apply.

B As per Notes (ii) in case of more than one cotton textile mills owned
by the same company, the exemption of 30%, as specified above,
may be permitted to be consolidated.

Permission for development or redevelopment granted as per 58(2)
read with 58(6)(a)(b).
c (v) Ready for Implementation for Scheme of Modernization.
(vi) As per 58(8)(a)(b) Funds accruing in ESCROW Account,
monitored by Monitoring Committee as per OCR 58(9)(a).

If it fulfills the said requirements, it becomes entitled to utilization of
D open land and FSl to the extent of 30% of the balance FSI available. Under
1991 Regulation, the mill owners in terms of the similar provision was entitled
to the exemption of 15% which by reason of 2001 Regulations had been
raised to 30%. Furthermore, for providing the incentive for modernization
where there exists more than one textile mill, the exemption may also be
E consolidated on any of the mill land subject to the extent of balance FSJ in
the receiving land without having to share land as would be evident from
Note (ii) appended thereto.

However, sub-regulation (6) of DCR 58 may not be available to an
applicant intending to modernize its mill where aggregation is not resorted to
F and no demolition of the existing built up area is involved as also open lands/
balance FSI are utilized for additional constructions as per OCR 58( I)(b) but
in appropriate cases, evidently it has to share.

For the purpose of change of user of the lands, previous approval of the
Commissioner to a layout plan in accordance with the Scheme approved by
G the Government is necessary. In terms of the said provision, Clause (a) of
Sub-regulation (I) thereto shall apply as regard utilization of the built-up area
and clause (b) shall apply in relation to development of open lands and
balance FSI exceeds 30% of the open land and for balance FSI clause (b) of
sub-regulation (I) shall apply. Sub-regulation (3) applies in respect of the
H cotton textile mills which intend to shift with the permission of the competent
BOMBAY DYEING AND MFG. CO. LTD. v. BOMBAY ENVIRONMENTAL ACTION GROUP [SINHA, J.] J007

authorities and in accordance with the scheme approved by the Government. A
·- \ In terms of the said provision also, Clauses (a) and (b) of sub-regulation (!)
of DCR 58 would apply in regard to the development or redevelopment of
its land after shifting. Sub-Regulation (4) provides that in case of modernization
and shifting, recommendation by BIFR would not be mandatory which implies
that such recommendation shall be mandatory.
B
OCR 58(3) provides for shifting. Shifting of industries outside the town
is encouraged.

•~ Ruby Mills Limited, which is one of the Appellants in civil appeal
arising out ofSLP (C) No. 23634 of2005, is one of the companies which had
opted for shifting. It had, however, made a scheme for shifting-cum- c
modernization under the said provisions as also commercial development of
a portion of its textile mill land.

OTHER REGULATIONS
D
Sub-regulation (5) provides for additional development to the extent of
\ balance FSI on open lands or otherwise by the cotton textile mill itself not
J only for the same cotton textile but also for related user. The calculation of
FSI indisputably would be in terins of the Appendix VII.

Sub-regulation (6) provides for multi-mill aggregation. This provision E
in certain respects is to be considered with Note (vi) of sub-regulation (1) of
DCR 58. The aforementioned clause cannot be read in isolation. It has to be
read in conjunction with the other regulations. It would apply to a case which
might have otherwise been covered by sub-regulations (!), (2), (3) and (5).
But the same would not mean that a part of sub-regulation (I) and a part of
sub-regulation (2) cannot be applied in a given case. Although sub-regulation F
~
(6) does not specifically refer to the recommendations of BIFR as imperative
where the other sub-regulations are applicable, sub-regulation (6) cannot be
read as a 'stand alone' clause.

The writ petitioners contended that sub-regulation (6) should be read
independently so that its benefit may not become obtainable while obtaining
G
benefit under one or the other sub-regulation. Such a construction would
defeat the other provisions of the regulation. We have noticed hereinbefore
-t
that Regulations 56 and 57 deal with industries located in 1-2 and 1-3 zones.
Both in Regulations 56 and 57 cotton textile mills had expressly been excluded
from a general power to convert the user into a residential or commercial H
)-

1008 SUPREME COURT REPORTS [2006] 2 S.C.R.

A purpose. If such a provision was required to be made in making an exception
in relation to the cotton textile mill, it was not necessary for the State to I .
frame the regulation in its present form. If sub-regulation (6) of DCR 58 is
read in the manner suggested by the learned counsel for the Respondents,
other parts of DCR 58 would have been unnecessary. Sub-regulation (6)
specifically refers to sick and/ or closed or requiring modernization on the
B same land. Such cases would, thus, bring within its purview only closed mills
which had not been referred to BIFR but the change of user, must be confined
to DCR 58 itself and not under DCR 56. The construction that we have put
on DCR 58(6), furthermore, does not cause any injustice to any party. If an ~

industrial undertaking is really sick within the provisions of the 1985 Act, for
c the purpose of availing the benefits under DCR 58, it can refer the question
to BIFR and once a scheme is framed as regard revival and/ or rehabilitation,
the owner of the mill can take recourse thereto. The lands of the cotton textile
mills, thus, although become open lands available but therefor they cannot be
used for purposes specified in 1-2 Zone. Sub-regulation (6) of DCR 58 must
be read in sharp contrast to Sub-regulation (3)(c) of Regulation 56 and Sub-
D regulation 4(c) of Regulation 57 which permits a change of user to industrial
lands other than lands of cotton textile mills. Sub-regulation (6) of DCR 58
although contains no power to change of user but the same had been provided
in other clauses. If it is not held that sub-regulation (6) contains the power ....
to change user in respect of existing structures, a'fortiori it may not be
E possible to give effect thereto as there would be no power to user of change
of land under existing structures.

So far as NTC mills are concerned, development had taken place as a ·-
package of measure recommended by BIFR. Indisputably, the same would
come within the purview of sub-regulation ( 1) of OCR 58 but in certain cases
F sub-regulation (6) also may be attracted. Each of the relevant sub-regulations
of DCR 58 confers regulatory power upon the Commissioner of the State. ~

Development or redevelopment in terms of sub-regulatitms ( 1), (2), (3) and
(5) are required to be made in terms of a layout plan as approved by the
Commissioner and in case of modernization as per the scheme approved by
the State. As the said provisions, contain a safeguard, namely, prior approval
G of the Commissioner, all the mill owners irrespective of the fact that they fall
in different categories in terms of the regulations would, thus, be entitled to
take benefit of clause (6) subject to strict compliance of other provisions.

H
BOMBAY DYEING AND MFG. CO.LTD.'· BOMBAY ENVIRONMENT AL ACTION GROUP [SINHA,!.) ) 009

CONSTITUTIONALITY OF DCR 58 A
The constitutionality of DCR 58 had been questioned principally on
three grounds, namely, it is violative of: (i) Article 21; (ii) Article 14; and
(iii) it is not in consonance with Article 48-A of the Constitution of India.
The High Court, however, read DCR 58 on the touchstone of Article 21 as
also Article 48-A of the Constitution of India. B
The High Court did not go into the question of its constitutionality. It
~
.. proceeded on the basis that if the said provision is read down, the same
would render the provision constitutional. It is no doubt true that a planning
regulation which requires to meet environmental challenges may not be
interpreted in the same fashion as economic legislation. But whether it is c
necessary to apply the strict scrutiny test or not, would depend upon the
statute. The State, while exercising its power to make a subordinate legislation,
may or may not obtain expert opinion. But invariably the Court would satisfy
itself as to whether relevant factors as laid down in the legislative act had
been taken into consideration. D

; "' The question, however, raised in these appeals is as to whether
requirements to obtain such expert opinion so as to enable the court to look
at the quality of the input both with reference to its source as also the scope
thereof is mandatory in nature. In this case, in our opinion, the said question
need not be gone into in great detail. We would, however, broadly consider E
the same. The court ordinarily is required to consider the constitutionality of
the subordinate legislation within the accepted norms. We have hereto before,
noticed the parameters of judicial review. The question raised, therefore, will
have to be considered having regard thereto.

f- A matter involving environmental challenges may have to be considered F
""' by a superior court depending upon the fact as to whether the impugned
action is a legislative action or an executive action. In case of an executive
action, the court can look into and consider several factors, namely,

(i) Whether the discretion conferred upon the statutory authority had
·-· been property exercised; G
(ii) Whether exercise of such discretion is in consonance with the
-· provisions of the Act;

(iii) Whether while taking such action, the executive government had
..
taken into consideration the purport and object of the Act; H
1010 SUPREME COURT REPORTS [2006) 2 S.C.R.

A (iv) Whether the same subserved other relevant factors which would
affect the public in large;
(v) Whether the principles of sustainable development which have
become part of our constitutional law have been taken into
consideration; and
B (vi) Whether in arriving at such a decision, both substantive due process
and procedural due process had been complied with.

It would, however, unless an appropriate case is made out, be difficult
to apply the aforementioned principles in the case of a legislative act. It is no
C doubt true that Articles 14, 21, 48-A of the Constitution of India must be
applied both in relation to an executive action as also in relation to a legislation,
however, although the facet of reasonableness is a constitutional principle
and adherence thereto being a constitutional duty may apply, the degree and
the extent to which such application would be made indisputably would be
different. Judicial review of administrative action and judicial review of
D legislation stand on a different footing. What is permissible for the court in
case of judicial review of administrative action may not be permissible while
exercising the power of judicial review of legislation.

It may, however, be a different thing to contend that the legislation had
been enacted without constitutional principles in mind. The real question is
E whether the constitutional mandates had been complied with in making such
legislation.

We do not agree with the contention of Mr. Jethmalani, that Article 21
of the Constitution of India should be literally construed as was done in A.K.
Gopa/an v. State of Madras, [1950] SCR 88. In view of the fact that the
F factors governing the quality of life have been included in the expression
"life" contained in Article 21 by reason of creative interpretation of the said ..
provision by this Court, is it possible to argue that Article 21 does not provide
for an absolute immunity? Article 21 does not only refer to the necessity to
comply with procedural requirements, but also substantive rights of a citizen.
G It aims at preventive measures as well as payment of compensation in cases
human rights of a citizen are violated. So far as the question of compliance
of the procedural due process is concerned, it was conceded before the High
Court by the writ petitioners Respondents that the procedural requirements·
laid down in provisions of Section 37 of the MRTP Act had been complied
with.
H
I
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BOMBAY DYEING AND MFG. co. LTD.,._ BOMBAY ENVIRONMENT AL ACTION GROUP [SINHA,l] 1011

We, however, are unable to uphold the contention of Mr. Salve, as at A
present adviSed, that before making DCR 58 in the year 2001, it was obligatory
on the part of the State to accept in toto the recommendations made by the
Expert Committees who had undertaken certain exercises; the equities should
.have been adjusted and the provisions of the pollution laws including the
provisions of sub-section (2) of Section 28 of the MRTP Act should have B
been considered. A presumption arises as regards the constitutionality of a
statute. Such a presumption would also arise in a case of subordinate
legislation. As indicated hereinbefore, a subordinate legislation, however,
shall be susceptible or vulnerable to challenge not only on the ground that the
same offends Articles 14, 21 read with Article 48-A of the Constitution of
India but also that the provisions of the MRTP Act are unreasonable. C
In the instant case, the State appointed two committees. They have
been taken into consideration by the State, may albeit be only in part. The
State might not have agreed with the entirety of the report. The State might
have taken into consideration other factors which would subserve the purport
and object of the regulation. But, it will be difficult for us to arrive at a D
finding that the environmental aspects had totally been ignored. To what
extent, DCR 58 would be commensurate with the ideal ecological condition
as is suggested by the experts is one thing but it is another thing to say that
no consideration at all in this behalf had been made by it. The State in its
affidavit categorically stated that the said reports had fallen for consideration E
and had been accepted by it but in the third affidavit it has merely been stated
that the State intended to give more than what was suggested in the said
report. It has been accepted by the parties that certain suggestions have been
accepted in toto and the provisions have been amended pursuant thereto or
in furtherance thereof.
F
The Ranjit Deshmukh Committee, not only visited some mills but also
took recourse to the consultative process. Even the Charles Correa Committee
visited all the public sector textile mills. While taking the said reports into
consideration, the State acquainted itself with the existing ground realities as
they then existed.
G
For the purpose of striking down a legislation on the ground of infraction
of the Constitutional provisions, the court would not exercise its jurisdiction
only because the recommendations of the committees had not been accepted
in toto but would do so inter alia on the ground as to whether they otherwise
violate the constitutional principles.
H
1012 SUPREME COURT REPORTS f2006] 2 S.C.R.

A Arbitrariness on the part of the legislature so as to make the legislation f •

violative of Article 14 of the Constitution should ordinarily be manifest
arbitrariness. What would be arbitrary exercise of legislative power would
depend upon the provisions of the statute vis-a-vis the purpose and object
thereof. [See Sharma Transport v. Government of Andhra Pradesh. (2002] 2
SCC 188, para 25, Khoday Distillery v. State of Karnataka, (1996] I0 SCC
B 304 and Otis Elevator Employees' Union S. Reg. and Ors. v. Union of India
and Ors., (2003] 12 SCC 68, para 17].
;
In Om Prakash and Ors. v. State of U.P. and Ors., (2004] 3 SCC 402,
this Court has held that the test of reasonableness is nothing substantially
C different from social engineering, balancing of interests or any other formulae
which modem sociological theories suggest as an answer to the problem of
judicial interference.

In Cipla Ltd. (supra), this Court in relation to a legislation while
interpreting the statutory provisions on the touchstone of Article 14 of the
D Constitution of India, was of the opinion:

" ........ the Government exercising its delegated legislative power should
make a real and earnest attempt to apply the criteria laid down by
itself. The delegated legislation that follows the policy formulation
should be broadly and substantially in conformity with that policy,
E otherwise it would be vulnerable to attack on the ground of
arbitrariness resuiting in violation of Article 14."

It was further opined:

" .... Broadly, the subordinate law-making authority is guided by the
F policy and objectives of the primary legislation disclosed by the
preamble and other provisions. The delegated legislation need not be
modelled on a set pattern or prefixed guidelines. However, where the
delegate goes a step further, draws up and announces a rational policy
in keeping with the purposes of the enabling legislation and even lays
down specific criteria to promote the policy, the criteria so evolved ·
G become the guideposts for its legislative action. In that sense, its
freedom of classification will be regulated by the self-evolved criteria
and there should be demonstrable justification for deviating
therefrom ...."

The amendment to DCR 58 was carried out I 0 years after the original
H
'
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BOMBAY DYEING AND MFG. CO. LTD. v. BOMBAY ENVIRONMENT AL ACTION GROUP [SINHA, I.) JQJ3

( OCR 58 was introduced. Before doing so, due consultative process as laid A
... ·~ down in Section 37 of the MRTP which involves suggestions and objections
from public and the concerned statutory authorities was taken r~course to.
Consideration of the same by Dy. Director of Town Planning and thereafter
promulgation of the same in the form of direct regulation establishes that the
same is not ex facie arbitrary in nature, particularly when most of the
suggestions of the said Committees were accepted.
B

So far as the argument based on violation of Article 48-A of the
...:, Constitution is concerned, the provisions thereof are required to be construed
' as a part of the principle contained in Article 14 of the Constitution of India.
A statute may not be ultra vires Article 48-A itself if it is not otherwise
offensive of Articles 14 and 21 of the Constitution of India. What, however,
c
cannot be done for striking down legislation can certainly be done for striking
down executive action. (See K.K. Bhalla v. State of MP. & Ors., (2006) I
SCALE 238 and S.N. Chandrashekar and Anr. v. State of Karnataka and
Ors., JT (2006) 2 SC 202].
D
Ecological factors indisputably are very relevant considerations in
\.. construing a town planning statute. The court normally would lead in favour
I of environmental protection in view of the creatjve interpretation made by
this Court in finding a right of environmental including right to clear water,
air, etc. under Article 21 of the Constitution of India. But, in this case, we
are not dealing with a similar problem. It must be borne in mind while E
interpreting DCR 58 that there exists a stark distinction between the
interpretation of planning and zoning statutes enforcing ecology vis-' -vis
industrial effluents and hazardous industries and those relating to concerted
efforts at rehabilitating the industry. It is around this pivot that interpretation
must revolve. It is also interesting to note that in American Jurisprudence 2d, F
wherein at page 496 of vol. 82, it is stated that zoning laws should be
construed strictly in favour of the property owners and that they should not
be extended by implication to include restrictions not clearly prescribed.
Ecology in terms of DCR 58 has not been marginalized. The statute does not
prescribe any fixed norm. It provides for guidelines. It has not been shown
that the said guidelines have been violated. The environmental aspect G
considered in DCR 58 may not be to everybody's satisfaction but the regulation
in question has to be interpreted having regard to the purport and object for
't.~
which the same was enacted, meaning thereby, a holistic approach to a large
number of problems.

. H
1014 SUPREME COURT REPORTS [2006] 2 S.C.R.

A OCR 58 was made in a special situation. In any other situation, probably
this Court might have interpreted a similar provision differently. But, OCR • ,.
58 seeks to strike a balance between different public interest. The State has
its own limitations. OCR 58 cannot be struck down solely on the ground that
the interest of the common citizen (from the ecological point of view) has
B been affected, unless its actions are considered to be unfair.

The State indeed in making the regulation intended to solve a
longstanding problem wherewith it was beset. The State while framing the
aforementioned regulation had to deal with various objectives in mind. It
might have taken recourse to trial and error method. It started with an '
C experiment in the year 1991 but having failed therein it introduced a new
policy. The State considered the same to be fair on its part.

We must take notice·of the fact that the 1991 Regulation failed to
achieve the desired objective forcing the State to take a conscious policy
decision, which according to it, would satisfy everybody's need. All players
D may not feel happy as evidently a group of workers and the writ petitioners
are not. Even the Bombay Municipal Corporation and MHADA had shown
its reservation but the same by itself would not resist us in any manner in
arriving at a correct interpretation. In Forward Construction Co. and Ors. v.
Prabhat Manda/ (Regd), Andheri and Ors .. (1986] I SCC 100, it was clearly
recognized that in a given case there can be more than one public interest and
E these interests can be in conflict with each other. The law maker has to make
his choice and preferring one to the other is inevitable.

A substantive law as also delegated legislation raises a presumption of
constitutionality. Attempt is, thus, required to be made for upholding the
same.
F
Sale of lands belonging to mills which are absolutely unviable and/ or
those which are lying closed for one reason or the other as also those who
intend to modernize their mills and/ or shifting the same and/ or part of it
must be kept for consideration in the matter of interpretation of DCR 58.
G
Applying the principles which can be culled down from the
aforementioned decisions, we are unable to hold that OCR 58 is
unconstitutional.

H
BOMBAY DYEING AND MFG. CO.LTD.,., BOMBAY ENVIRONMENTAL ACTION GROUP [SINHA,!.) JQJ5

CLARIFJCA TJON A
The State of Maharashtra admittedly issued a clarifica~ion on 28.03.2003.
It did so in purported exercise of its power under sub-regulation (2) of
Regulation 63 of Regulations. The High Court held the said clarification to
be ultra vires Section 37 of the Act' on the premise that by reason thereof,
amendment to the regulation had been carried out. B
As of fact we may, however, notice that the State of Maharashtra started
granting approvals in tenns of DCR 58 of 2001 much prior to 28.03.2003.
It is, therefore, not correct to contend that the penn ission had been granted
after issuance of the said clarification. In tenns of such approvals, combined
pennission had been granted invoking one or more sub-regulations of OCR C
58.

However, the submission of the learned counsel appearing on behalf of
the Appellants to the effect that the said clarification is binding and conclusive
upon all concerned cannot be accepted. No interpretation of a State can be D
said to be binding on courts. It may have a persuasive value. The court in
certain situations, in the event two interpretations are possible including the
} one as interpreted by the State, may accept the latter but the same would not
mean that once a statutory power of interpretation or clarification had been
exercised by the State, the court's hands are tied. In fact, the learned Advocate
General appearing on behalf of the State of Maharashtra accepted the said E
legal position.

We may, however, place on record that similar interpretation must be
held to have been made by MCGM as it granted sanction in respect of several
plans in the line of interpretation made by the State. The clarification was
issued having regard to a letter of MCGM dated 28.08.2001 to the Urban F
Development Department stating as to how it understood DCR 58 of 2001
which was confirmed by the Urban Development Department. Thus, although
at one point of time they interpreted DCR in the same manner as that of the
State; only muc!'t later they raised a doubt which was bona fide. Only with
a view to clear the air of doubt, the clarification was issued by the State. G

It is interesting to note that in paragraph 23 of the writ petition, the writ
petitioners treated the purported reduction in area attributable to DCR 58 as
amended in 200 I and not because of any purported change brought about by
clarification made in 2003.
H
1016 SUPREME COURT REPORTS [2006] 2 S.C.R.

A Furthermore, it is one thing to say that the clarification is beyond the
statutory power of the State or plainly contrary to the regulations, the effect f J

whereof is required to be determined, but it is another thing to say that while
doing so the State gives out its mind as to what it meant thereby as an author
of the regulations. The grievance of the writ petitioner respondents primarily
in that behalf is that in terms of the said clarification, reconstruction on land
B made available after demolition of the existing structure is to be in terms of
sub-regulation (6) of OCR 58 and the user thereof is proposed to be changed
from industrial to commercial or residential under sub-regulation ( 1)(a)(iii).

J
We have interpreted the aforementioned provision independently and
C we agree that such construction of OCR 58 was possible. But, we also do not
agree therewith in its entirety as has been indicated hereinbefore.

The writ petitioners intend to construe sub-regulation (6) of OCR 58,
as a stand alone clause, with which for the reasons stated hereinbefore, we
do not agree. If some mill owners claim the right to change of user under
D sub-regulation ( 6) alone, the same would be in the teeth of the interpretation
of OCR 58. It cannot be said that by taking recourse to the said power of
clarification the State has improperly exercised its power. Reference to
resolution dated 27.08.2003 passed by MCGM, does not have the effect of
clarification being set at naught for DCR 58. Similarly, the letter dated
24.07 .2003 issued by the Chief Executive Officer of MHAOA to the Housing
E Board or the State Government also does not talk about the incorrectness or
otherwise of the clarification issued by the State but as regards the effect of
OCR of 200 I. MAHOA before us categorically stated that it would abide by
the decision of the State of Maharashtra despite the letter dated 24.07 .2003,
which was made the only basis for filing the affidavit before the High Court.
F Mr. Singhvi appearing for MCGH did not raise any contention contrary to
that of the State.

According to Mr. Chagla, the clarification made by the State will have
the following legal effects:

(i) Excluding lands after demolition of existing structures;
G
(ii) Excluding the land required to support the FSI of existing built
up areas;
,.
(iii) Introducing change of user in OCR 58(6)

(iv) Altering the meaning of"existing built up areas" in OCR 58(l)(a).
H
BOMBAY DYEING AND MFG. CO. LTD.>'. BOMBAY ENVIRONMENT AL ACTION GROUP[SlNHA,J.] j QJ 7

(v) Pennitting residential user under OCR 58(1 )(a)(iii); A
(vi) Obviating surrender of land under OCR 58(6) in respect of newly
built up areas despite change of user.

(vii) Dispensing with prerequisite of BIFR in OCR 58(1).

Most of the contentions raised by Mr. Chagla stand answered by our B
findings recorded hereinbefore. They may, however, be briefly dealt with in
seriatim.

(i) The exclusion of land after demolition of existing structure was
not brought about by 2003 clarification for the first time but it is
apparent from 2001 Regulations themselves. We have heretobefore C
held that OCR 58 as interpreted by the State was valid to a large
extent.

(ii) As permissions as regard the layout plans had been given,
sanctioning building plans by the statutory authorities and/or
approval of scheme by the State Government in 2001 and 2002, D
.. i.e., after OCR 58 came into force and much prior to the 2003
clarification, no change as such was brought about thereby.
I
(iii) If sub-regulation (6) of OCR 58 is to be read along with other
regulations, the stand of the State must be held to be correct.
Reading of sub-regulation (6) with other parts of OCR 58 is not E
only for the purpose of change of user but also as regard the
restrictions and limitations imposed thereby. It is, therefore, not
correct to contend that the approach of the State was to somehow
find an interpretation that furthered the purpose of not requiring
sharing of land by the land owners and by reason of the
clarification that end was attained substantially. F
(iv) & (v) These submissions are not dependent upon 2003 clarification.
The meaning of the words "entire land" and "built up area" vis-
·-vis pennissibility of residential user arose from 2001 Regulations
which had merely been reiterated in 2003 clarification.
G
(vi) OCR 58( 6) itself contemplates absence of sharing obligation so
long as there was no increase in the built up area of the existing
' -· structure. The 2003 clarification of the State is in tune therewith.
(vii) The expression 'sick' used in sub-regulation (6) must necessarily
be those industries which were are referred to BIFR and not any
H
1018 SUPREME COURT REPORTS (2006] 2 S.C.R.

A other sick mill, as the State or any other statutory authority under
regulations are not authorized to determine as to whether a mill
is sick or not or the extent thereof and/ or remedial measures
therefor within the meaning of the provisions of the said
regulations.

B CONTEMPORANEOUS EXPOS/TOI EXECUTIVE CONSTRUCT/ON
It was contended by the petitioners before us that the High Court ought
to have applied the doctrine of contemporanea exposito while interpreting
OCR 58 of2001 and the Clarification of2003. We have indicated hereinbefore
that we do not agree with the said contention but as the learned counsel
C appearing for the appellants have relied upon some decisions of this Court,
the same may be noticed at this juncture.

In Union of India and Anr. v. Azadi Bachao Ando/an and Anr., [2004]
10 SCC 1, this court was concerned with a statutory power exercised by the
D Board of Direct Taxes in issuing directions to the Income Tax Officers as to
how they should deal with the cases falling within the purview of lndo-
Mauritius Double Taxation Avoidance Convention, 1983. The Court itself
held that the principles adopted in interpretation of treaties are not the same
as those in interpretation of a statutory legislation on the ground that the
principle which needs to be kept in mind in the interpretation of the provisions
E of an international treaty, including one for double taxation relief, is that
treaties are negotiated and entered into at a political level and have several
considerations as their basis; whereas a statute has to be interpreted keeping
in mind the well known principles or canons of interpretation of statutes.

It is in the aforementioned context the court therein took recourse to
F the doctrine of contemporanea expositio. The court itself referred to a decision
of the Calcutta High Court in Baleshwar Bagarti v. Bhagirathi Dass, ILR
( 1908) 35 Cal. 701 wherein it was held that the court interpreting the statute
would give much weight to the interpretation. The said decision, therefore,
is not an authority for the proposition that the court has no jurisdiction to take
G a contrary view.
It is interesting to note that the Bench referred to a judgment of the
Constitution Bench of this Court in Collector of Central Excise, Vadodara v.
Dhiren Chemical Industries, (2002] 2 SCC 127, wherein S.N. Variava, J. was
a party. Therein, it was laid down :
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BOMBAY DYEING AND MFG. CO.LTD.•. BOMBAY ENVIRONMENTAL ACTION GROUP [SINHA, J.] j QJ9

"I I. We. need to make it clear that, regardless of the interpretation A
;
i that we have placed on the said phrase, if there are circulars which
have been issued by the Central Board of Excise and Customs which
place a different interpretation upon the said phrase, that interpretation
will be binding upon the Revenue."

However, in Kalyani Packaging Industry v. Union of India and Anr., B
[2004] 6 SCC 719, Variava, J. explained the said decision and clarified that
in a case of conflict between circulars of the Board and the judgment of the
.J, court, the latter will prevail.

It is also of some interest to note that House of Lords in Gullick v. West
Norfolk Area Health Authority, (1986) AC 112 opined that an incorrect c
statement of the law appearing in a circular can be struck down.

In Municipal Corpn. for City of Pune v. Bharat Forge Co. Ltd., [1995]
3 sec 434, it ~as stated:

"What has been stated relating to "executive construction" or "practical D
.\ construction" which has been relied on by the learned Advocate
}
General, would not persuade us to agree with him in this submission,
though it may be permissible to take note of post-enactment history
to find out as to how an enactment was understood on the principle
of "contemporanea expositio" E
[See also Ajay Gandhi v. B. Singh, (2004] 2 SCC 120]

In Jamshed N. Guzdar v. State of Maharashtra, (2005] 2 SCC 591, it
is stated:

)'· " ... We are afraid, when it comes to interpretation of the Constitution, F
it is not permissible to place reliance on contemporanea expositio to
the extent urged. Interpretation of the Constitution is the sole
prerogative of the constitutional courts and the stand taken by the
executive in a particular case cannot determine the true interpretation
of the Constitution ... " G
From what we have noticed hereinbefore, it is abundantly clear that the
' -~ principle of contemporaneous expositio cannot be said to have universal
application. Each case must be considered on its own facts. An executive
construction is entitled to respect but is not beyond the pale of judicial review.
H
1020 SUPREME COURT REPORTS (2006] 2 S.C.R.

A ARE REGULATIONS AND CLARFICIATION ULTRA VIRES SECTION 37
OF THE MRTP ACT ? r•
We may, with a view to examine the said question more closely, take
note of the following facts which more or less are undisputed. Certain plots
were reserved and uses were designated for specified purposes in the
B development plan. The mill lands are constituted in wards of the Bombay
Municipal Corporation, namely, A, E, F (South), F (North), G(South), G(North)
and L. The lands of the mills were designated as 1-2, 1-3 or Residential
(Retention Activity) Zones. The contention of the writ petitioners is that OCR ,._
58 changes the character of development plan which would include all
C regulations framed under the MRTP Act. Section 37 (!AA) of the MRTP Act
itself suggests that the changes would be of such nature that would not
change the character of such development plan which would be otherwise
permissible in terms of Section 37. Fundamental changes or even very
significant changes would not normally apply to such a situation. It has not
been suggested that while effecting the change of user, designation of uses
D for specified purposes would change. The identified reservation for open
spaces in the development plan did not include mill lands. In spite of
modification, the mill lands are not to be included in any such reservation.
To the said extent, there would not be any change at all. Another question
which has been raised is as to whether major modification has been effected
E although Section 37 contemplates only minor changes.

It is axiomatic that for the said purpose Section 37 of the MRTP Act
must be read in the context of Section 22-A thereof which provides for
substantial changes.

It is also to be borne in mind that whereas the heading of Section 37,
F prior to amendment, provided for minor modification, the word "minor" has
been deleted and in that view of the matter emphasis should be laid on the
fact or as to whether such modification alters the basic character of the
development of Greater Bombay or not. It would give rise to a further question,
namely, as to whether by reason thereof a radical transformation has taken
G place as regards its basic features, including its identity, which a'fortiori
would mean as to whether the modified development plan stands unrecognized
from the original one. Such a conclusion could have been arrived at if a
green area has been eliminated or a green area has been allotted to be used
for commercial purposes as was the case in Bangalore Medical Trust v. B.S.
Muddappa and Ors., (1991) 4 SCC 54. In that case, this Court, while
H construing the Town Planning Act, opined that reservation of open spaces for
~
BOMBAY DYEING AND MFG. CO. LTD."· BOMBAY ENVIRONMENTAL ACTION GROUP (SINHA, J) ) 02 J

., i .parks and playgrounds is universally recognized as a legitimate exercise of A
statutory power rationally related to the protection of the residents of the
locality from the ill-effects of urbanization stating:

"The statutes in force in India and abroad reserving open spaces for
parks and playgrounds are the legislative attempt to eliminate the
misery of disreputable housing condition caused by urbanisation. B
Crowded urban areas tend to spread disease, crime and immorality .. "

Here, the court was considering the question as to whether discretion
-1\
vested in the executive head had correctly been exercised or not. We are not
concerned with such a question in the instant case. If certain number of sites
were reserved in the development plan for public purposes and change of c
user had been effected as for example, whether some of the green areas had
been converted to commercial uses, the matter might have been different.

The terms 'modification' or 'change' have often been the subjects of
judicial interpretation.
D
The meaning of the expression "change" came up for consideration in
.\
Forward Construction Company v. Prabhat Manda/ (1986] I SCC 100,
~
wherein after noticing its dictionary meaning, it was observed:

" ... So, the general meaning of the word "change" in the two dictionaries
is "to make or become different, to transform or convert". If the user E
was to be completely or substantially changed only then the prior
modification of the development plan was necessary."

The question as regard the process of modification of a plan came up
for consideration in Legg v. Ilea [1972] 3 All ER 177 wherein it was stated:
F
" ... the process involved in modification is thus one of alteration and
it must be considered how radical the alteration is. The alteration may
consist of additions or subtractions or other changes in what is already
there or, no doubt, any combination of these. But, throughout, there
must, I think, be the continued existence of what in substance is the
G
original entity. Once one reaches a stage of wholesale rejection and
replacement, the process must cease to be one of modification ... "
., -{
Yet again in Puran Lal v. President ofIndia, [1962] I SCR 688], it was
stated:
H
1022 SUPREME COURT REPORTS (2006] 2 S.C.R.

A "The word modification means the action of making changes in an
object without altering its essential nature or character ..."

Mr. Chagla strongly relied upon a decision of a Division Bench decision
[Coram Justice B.P. Singh, CJ (as His Lordship then was) and Justice Ranjana
Desai] of the Bombay High Court in MA. Panshikar v. State of Maharashtra
B through its Urban Development Department & Anr., (2002) 5 BCR 3 18
wherein the Bench observed that Section 37(1AA) empowers the State to
effect changes both minor and even major so long it does not change the
character of the plan. In that case itself the Bench held that the modification ;..
in question did not bring about a change in the character of development plan
C on account of the increased FSI specified therein.
Reliance has also been placed by Mr. Chagla on Pune Municipal
Corporation and Anr. v. Promoters and Builders Association and Anr., [2004)
I0 SCC 796 wherein while interpreting Section 37 of the Act a passing
reference was made that such changes should be minor in nature. This Court
D therein did not consider the amendment carried out in the marginal note
thereof. In that case, the State Government while allowing a proposal for
modification submitted by Pune Municipal Corporation added some words /
which were challenged on the ground that the same was beyond the powers
of the State Government under Section 37. Such a contention was upheld by
the High Court. This Court, however, reversed the said decision. In the said
E decision, the meaning and scope of the phrase "character of plan" did not
directly or indirectly fall for consideration. The expression "minor changes"
were used by this Court only for holding that the State Government exercises
wide discretion. The said words were not used for detennination of the scope
and ambit of the phrase "character of the plan''.
F Reliance has also been placed by Mr. Chagla upon a decision of this
Court in Balakrishna H. Sawant and Ors. v. Sangli. Mira) & Kupwad City
Municipal Corpn. and Ors., [2005) 3 SCC 61 wherein also a case of this
nature did not fall for consideration.

We may place on record that the total area affected by the change on
G
an average would be approximately 3.07% of the total area of the wards and
the mill lands occupy only 0.6% of the entire land area of Bombay.

When the question as regard validity or otherwise of the 1991
Regulations came up for consideration before the Bombay High Court, Sujata
H Manohar, J. (as the learned Judge then was) speaking for the Division Bench
/

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BOMBAY DYEING AND MFG. CO. LTD.''· BOMBAY ENVIRONMENTAL ACTION GROUP (SINHA, l.] j Q2J

-;
in Nivara Hakk Samiti (WP No. 963 of 1991] wherein the writ petitioners A
• i also were parties observed that the word "modification" being somewhat
indefinite in its ambit must be distinguished from a radical illustration. A
development plan is an organic document in the sense that periodic changes
are contemplated thereby.

A development plan is required to be changed every 20 years. Such B
changes are to be brought about keeping in view the past experience of the
planning authority and the intended future development of the town. While,
;., therefore, interpreting the words "change in the character of plan" the question
would be as to whether the change in the character is referable to alteration
of the entire plan. The change in the character would, therefore, necessarily
mean the change in the basic feature thereof and the entire plan as a whole
c
wherefor the same must be read in totality. In this case, the changes made do
not brought about any significant changes so as to come to a conclusion that
its basic features are altered.

For the reasons aforementioned, we are of the considered view that the D
clarification issued by the State is not violative of Section 37 of the MRTP
-\ Act.
~
SUSTAINABLE DEVELOPMENT AND PLANNED DEVELOPMENT VIS-@-
VIS ARTICLE 21 OF THE CONSTITUTION OF INDIA
E
It is often felt that in the process of encouraging development the
environment gets sidelined. However, with major threats to the environment,
such as climate change, depletion of natural resources, the entrophication of
water systems and biodiversity and global warming, the need to protect the
environment has become a priority. At the same time, it is also necessary to
promote development. The harmonization of the two needs has led to the
F
~
concept of sustainable development, so much so that it has become the most
significant and focal point of environmental legislation and judicial decisions
relating to the same. Sustainable development, simply put, is a process in
which development can be sustained over generations. Brundtland Report
defines 'sustainable development' as development that meets the needs of the G
present generations without compromising the ability of the future generations
to meet their own needs. Making the concept of sustainable development
' 1
' operational for public policies raises important challenges that involve complex
synergies and trade offs.
H
1024 SUPREME COURT REPORTS [2006] 2 S.C.R.

A The Indian judiciary has time and again recognised this principle as
being a fundamental concept of Indian law.

In Ve/lore Citizens' Welfare Forum v. Union of India and Ors .. [ 1996]
5 SCC 647, this Cou_rt laid down the salient principles of sustainable
development consisting of the Precautionary Principle and the Polluter Pays
B Principle being its essential features stating:

"The "Precautionary Principle" in the context of the municipal law
means: (i) Environmental measures by the State Government and the
statutory authorities must anticipate, prevent and attack the causes of
environmental degradation. (ii) Where there are threats of serious and
c irreversible damage, lack of scientific certainty should not be used as
a reason for postponing measures to prevent environmental
degradation. (iii) The "onus of proof' is on the actor or the developer/
industrialist to show that his action is environmentally benign. 12.
'The Polluter Pays Principle" has been held to be a sound principle
D by this Court in Indian Council for Enviro-Legal Action v. Union of
India. The Court observed: (SCC p. 246, para 65)

·' ... we are of the opinion that any principle evolved in this behalf
should be simple, practical and suited to the conditions obtaining in
this country".
E The Court ruled that: (SCC p. 246, para 65)

" ... once the activity carried on is hazardous or inherently dangerous,
the person carrying on such activity is liable to make good the loss
caused to any other person by his activity irrespective of the fact
whether he took reasonable care while carrying on his activity. The
F
rule is premised upon the very nature of the activity carried on".

Consequently the polluting industries are "absolutely liable to
compensate for the harm caused by them to villagers in the affected
area, to the soil and to the underground water and hence, they are
bound to take all necessary measures to remove sludge and other.
G
pollutants lying in the affected areas". The ''Polluter Pays Principle"
as interpreted by this Court means that the absolute liability for harm
to the environment extends not only to compensate the victims of
pollution but also the cost of restoring the environmental degradation.
Remediation of the damaged environment is part of the process of
H
BOMBAY DYEING AND MFG. CO. LTD." BOMBAY ENVIRONMENTAL ACTION GROUP (SINHA,!.) j 025

"Sustainable Development" and as such the polluter Is liable to pay A
the cost to the individual sufferers as well as the cost of reversing the
damaged ecology."

This Court, referring to Articles 48-A and 51-A(g) of the Constitution
of India, obser¥ed that the aforementioned principles are part of the
constitutional law. B
In Intellectual Forum, Tirupathi v. State of A.P. & Ors., JT (2006) 2
SC 568, it was stated:

"In light of the above discussions, it seems fit to hold that merely
asserting an intention for development will not be enough to sanction C
the destruction of local ecological resources. What this Court should
follow is a principle of sustainable development and find a balance
between the developmental needs which the respondents assert, and
the environmental degradation, that the appellants allege."

The MRTP Act does not exclude these principles. Unless they are so D
excluded, they are to be read in the statute both in the substantive legislation
as also delegated legislation.

In A.P. Pollution Control Board v. Prof M V. Nayudu (Retd.) and Ors.,
[1999] 2 SCC 718, this Court reiterated the necessity of institutionalizing
scientific knowledge in policy-making dr using it as a basis for decision- E
making by agencies and courts.

In Narmada Bachao Andolan v. Union of India and Ors., [2000] 10
SCC 664, this Court emphasized the exercise which is required to be
undertaken by the committees before policy decisions are taken. p

In MC. Mehta v. Union of India and Ors., [1996] 4 SCC 351, this
Court directed shifting of industries which are not in conformity with the
provisions of the Master Plan.

Yet again in MC. Mehta v. Union of India and Ors., [2004] 6 sec G
588, this Court negatived the attempt on the part of the State for in situ
regularization by way of change of policy. The court emphasized that in
• , terms of Article 243-W of the Constitution of India, the Municipalities have
constitutional responsibilities of town planning stating:

"The Municipal Corporation has the responsibility in respect of matters H
1026 SUPREME COURT REPORTS (2006] 2 S.C.R.

A enumerated in the Twelfth Schedule of the Constitution of India,
regulation of land use, public health, sanitation. conservancy, solid-
waste management being some of them"

In MC. Mehta v. Union of India and Ors., [2005] 2 SCC 186, this
Court issued further directions stating that the Government must have due
B regard in letter and spirit to aspects that have been mentioned in the earlier
place including rights of individuals who are residents of the localities under
consideration for in situ regularization by amendment of the Master Plan.

In MC. Mehta v. Kamal Nath and Ors., [ 1997] I SCC 388, it was
stated:
c
"The resolution of this conflict in any given case is for the legislature
and not the courts. If there is a law made by Parliament or the State
Legislatures the courts can serve as an instrument of determining
legislative intent in the exercise of its powers ofjudicial review under
the Constitution. But in the absence of any legislation, the executive
D acting under the doctrine of public trust cannot abdicate the natural
resources and convert them into private ownership, or for commercial
use. The aesthetic use and the pristine glory of the natural resources,
the environment and the ecosystems of our country cannot be pennitted
to be eroded for private, commercial or any other use unless the
E courts find it necessary, in good faith, for the public good and in
public interest to encroach upon the said resources."

[Emphasis supplied]

In Consumer Education & Research Society v. Union of India and
F Ors., [2000] 2 sec 599, this Court issued certain directions directing the
State to constitute a committee consisting of experts for study of the relevant
environmental aspects as also for study of the effects of the present limited
mining operation pennitted by this Court. The State Government was further
directed to take steps to monitor air and water pollution in that area.

G Such a Committee having been constituted and the report having been
submitted, this Court in (2005] I0 SCC 185 issued some directions to the
State:

"Considering all these aspects, we are of the view that the
recommendation of the expert body to the effect that fhe mining
H operations should not be allowed within 2.5 km beyond the boundaries
J.
BOMBAY DYEING AND MFG. CO. LTD.'· BOMBAY ENVIRONMENT AL ACTION GROUP [SINHA.I.] J02 7
,.
A
1· -, of Narayan Sarovar Wildlife Sanctuary which obviously means the
notified boundary in force, is prima facie acceptable and could serve
as a guideline in the matter of grant or renewal of mining leases by
the State Government. Final orders in this regard will be passed after
the details mentioned in the next paragraph are furnished."

This Court, therefore, in appropriate cases may monitor implementation B
of the constitutional policy of sustainable development upon directing the
State to appoint expert committees.
_.,.
I In Sushanta Tagore and Ors. v. Union of India and Ors., [2005) 3 SCC
16, this Court was concerned with interpretation of the provisions of Visva-
Bharati Act, 1951 which was enacted to preserve and protect the uniqueness,
c
tradition and special features ofVisva-Bharati University. Therein, this Court
..... opined:

"It may be true that the development of a town is the job of the Town
Planning Authority but the same should conform to the requirements
D
of law. Development must be sustainable in nature. A land use plan
should be prepared not only having regard to the provisions contained
in the 1979 Act and the Rules and Regulations framed thereunder but
also the provisions of other statutes enacted therefor and in particular
those for protection and preservation of ecology and environment.
E
As Visva-Bharati has the unique distinction of being not only a
university of national importance but also a unitary one, SSDA should
be well advised to keep in mind the provisions of the Act, the object
and purpose for which it has been enacted as also the report of the
West Bengal Pollution Control Board. It is sui generis."
F
In that case, this Court interfered as the planning authorities were found
to have violated the provisions of a Parliament Act which had a direct
ecological impact of a special nature on the area over which the Visva Bharati
University had jurisdiction.

Mr. Chagla relied upon some decisions of this Court in this behalf G
which we may notice now.

~ ... In Indian Handicrafts Emporium and Ors. v. Union of India and Ors.,
[2003) 7 SCC 589, wherein one of us was a party, this Court opined:
A "The provisions of the said Act must be construed having regard to H
1028 SUPREME COURT REPORTS [2006) 2 S.C.R.

A the purport and object it seeks to achieve. Not only, inter alia, wild
animal is to be protected but all other steps which are necessary
therefor so as to ensure ecological and environmental security of the
country must be enforced ...."

In Virender Gaur and Ors. v. State of Haryana and Ors., ((1995) 2
B sec 577], it was stated:
"It is seen that the open lands, vested in the Municipality, were meant
for the public amenity to the residents of the locality to maintain
ecology, sanitation, recreation, playground and ventilation purposes.
The buildings directed to be constructed necessarily affect the health
c and the environment adversely, sanitation and other effects on the
residents in the locality. Therefore, the order passed by the Government
and the action taken pursuant thereto by the Municipality would clearly
defeat the purpose of the scheme"

D Lahoti, J. (as the learned Chief Justice then was) speaking for a Division
Bench of this Court in Friends Colony Development Committee v. State of
Orissa and Ors., (2004] 8 SCC 733 stated the law in the following terms:

"In all developed and developing countries there is emphasis on '
planned development of cities which is sought to be achieved by
E zoning, planning and regulating building construction activity. Such
planning, though highly complex, is a matter based on scientific
research, study and experience leading to rationalisation of laws by
way of legislative enactments and rules and regulations framed
thereunder. Zoning and planning do result in hardship to individual
property owners as their freedom to use their property in the way
F they like, is subjected to regulation and control. The private owners
are to some extent prevented from making the most profitable use of
their property. But for this reason alone the controlling regulations
cannot be termed as arbitrary or unreasonable. The private interest
stands subordinated to the public good. It can be stated in a way that
power to plan development of city and to regulate the building activity
G
therein flows from the police power of the State. The exercise of such
governmental power is justified on account of it being reasonably
necessary for the public health, safety. morals or general welfare and
ecological considerations; though an unnecessary or unreasonable ,. .
intermeddling with the private ownership of the property may not be
H justified."
BOMBAY DYEING AND MFG. CO.LTD."· BOMBAY ENVIRONMENTAL ACTION GROUP [SINHA, J.] j Q29

These decisions do not lay down any law which is different from what A
we have said herein. The development of the doctrine of sustainable
development indeed is a welcome feature but while emphasizing the need of
ecological impact, a delicate balance between it and the necessity for
development must be struck. Whereas it is not possible to ignore inter-
generational interest, it is also not possible to ignore the dire need which the
society urgently requires. B
· In a case of this nature, an endeavour should be made in giving effect
to the intention of the legislature. For the said purpose, it is necessary to
ascertain the object the legislature seeks to achieve. It may also be necessary
to address questions as regards the nature of the statute. Does the statute ex C
facie point out degradation of the environment? Would by change of user
envisaged by the legislature, the existing open space be decreased? Would it
be necessary in view of the legislative scheme to invoke the 1Jrecautionary
principles?

Answers to the said questions in this case are to be rendered in the D
negative. The main purpose of the legislation is revival of industry inter a/ia
by modernisation and shifting of industry. Article 21 guarantees a right to a
decent environment and, thus, what should be the parameters therefor would
essentially be a legislative policy. Undoubtedly, different criteria may be laid
down to achieve different purposes. When the discretionary power under a
statute is arbitrarily exercised, evidently the court will not tolerate the same E
and strike it down. DCR 58, however, ex facie does not impair sustainable
development of the town of Bombay.

Mr. Salve has placed before us several decisions of American Courts
to suggest that environmental considerations into town planning laws have
got the upper hand in the matter of interpretation of the town planning
F
provisions in a broad manner. The said discussions are not relevant for our
purpose. He further relied upon a decision of House of Lords in South Bucks
District Council v. Porter Chichester District Council v. Searle and Ors.,
[2003] 3 All ER I wherein it was held:
G
"Over the past 60 years there has been ever-increasing recognition of
the need to control the use and development of land so as tJ prevent
inappropriate development and protect the environment. This is,
inevitably, a sensitive process, since it constrains the freedom of
private owners to use their own land as they wish. But, it is a very
important process, since control, appropriately and firmly exercised, H
1030 SUPREME COURT REPORTS (2006] 2 S.C.R.

A enures to the benefit of the whole community."

The statement of law propounded by us do not lay anything contrary
( ..
to the said dicta. Herein, an attempt has been made to interpret OCR 58 in
such a manner so that it not only enures to the benefit of the whole community
but also give effect to the purport and object thereof.
B
REDUCTION IN GREEN AREAS /S-rdj-VIS ENVIRONMENTAL IMPACT
ASSESSMENT

While considering the environmental aspect. we must not forget that
before constructions are allowed to be commenced and completed, the exercise
C for environmental impact assessment is mandatorily required to be done by
the competent authority. An expert body albeit within the fourcorners of the
regulatory provisions would be entitled to consider the entire question from
the environmental aspect of the matter which would undoubtedly take into •
consideration all relevant factors including the question as to whether the
D same is likely to have adverse effects on ecology or not. Consideration of
ecological aspects from the coun •s point of view cannot be one sided. It
depends on the fact situation in each case. Whereas the court would take a ~-
very strict view as regard setting up of an industry which is of a harazardous
nature but such a strict construction may not be resorted to in the case of

-
town planning. The counsel before us referred to the decision in Padma v.
E Hirata! Motilal Desarda and Ors.. (2002] 7 SCC 564, wherein it was stated:
'The significance of a development planning cannot therefore be
denied. Planned development is the crucial zone that strikes a balance
between the needs of large-scale urbanization and individual building.
It is the science and aesthetics of urbanization as it saves the
F development from chaos and uglification. A departure from planning
may result in disfiguration of the beauty of an upcoming city and
may pose a threat for the ecological balance and environmental
safeguards."

G This, however. has no relevance in the present case. Whereas even in
a case of town planning, the court may consider the action on the part of the
State while exercising its discretionary jurisdiction in changing the user with
all seriousness; it deserves particularly when it is contrary to the development
plan, it may not do so where it is within the contours thereof.

H The question has to be considered having regard to the fact that in stead

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BOMBAY DYEING AND MFG. CO.LTD.'· BOMBAY ENVIRONMENT AL ACTION GROUP [SINHA,!.) } Q) }

and place of industries which would have otherwise a far larger environmental A
._ 1 impact vis-a-vis the buildings which would be constructed would be used for .
residential or commercial purposes. The problem will have to be addressed
from the point of view that as a part of the scheme framed by the State in
making DCR 58, the money would be invested not only for the purpose of
revival and I or rehabilitation of the sick or closed mills, the same would also
give a boost to modernization and/ or shifting of mills and/ or parts thereof
B
from residential area to outside the town of Bombay. It is not disputed that
modernization and shifting of the mills from Bombay to the suburbs would
_,.
go a long way in solving ecological problems of the town. If some mills opt
for modernization, the ecological impact would be lesser than the mills which
are existing for a very long time. While setting up modern mills in place of c
old ones, evidently approval of the Commissioner and sanction of the State
in relation to the scheme would be imperative and while doing the exercise
of scrutiny as regard environmental impact assessment would be required to
be gone into.

Furthermore, such a step would also be in consonance with the present D
economic policy of the State viz. the policy of disinvestment and privatization.
~
Such a policy is not alien to the scheme of MRTP Act.

We, however, fail to understand that if raising of construction by the
mill owners had been questioned on ec9logical considerations why the
~
E
\ Appellants failed and/ or neglected to raise such a contention as regard the
constructions to be raised by MHADA. Construction of buildings, if results
in an impact on ecology; it was expected that the writ petitioners Respondents
would question the validity thereof. They might have not done so having
• regard to the fact that the same would invite adverse comments from the
workers. Even the mill owners did not question the constitutionality of such F
).. a provision presumably because they considered the provisions of OCR 58
as part of a package deal. Presumably, they also thought that if change of
user is granted, even sale of a portion of land would compensate them for the·
portion they are required to surrender to MCGM by way of public greens
and/ or housing schemes to be undertaken by MHADA. G
The notification of 7th July, 1994 under the Environment Protection
Act, 1986 sought to amend the notification dated 27th January, 1994. The
r ,I primary purpose for issuing such notification was to state in detail the nature
of the project, the extent of work carried on in respect thereof which would
require environmental impact assessment clearance from the committee. H
1032 SUPREME COURT REPORTS [2006] 2 S.C.R.

A Before us, the findings of the High Court as regard requirement to
comply with the statutory directions issued by the Central Government for
the purpose of getting the environmental impact assessment in respect of
each and every project is not in question. Parties before us have raised rival
contentions. It was contended by some of the Appellants that the said
B notification will have no application in the matters they represent; contentions
have also been raised that despite the said notification having come into
force, the building plans are being sanctioned and constructions to a large
extent are being carried out without obtaining clearance from the E.I.A.
Committee. We do not intend to determine the factual dispute keeping in
view the fact that in cases in which the said notification would apply, the
C committee required to assess the environmental impact as regard each project
shall go into the individual cases and pass appropriate orders.

The apprehension that by reason of the 200 I Regulations, the existing
green area would be reduced, does not appear to be based on any factual
data. According to the Respondent Nos. 1 and 2, in terms of 1991 Regulations,
D the residents would have got 165 acres for greens whereas under the new
Regulations, they would get approximately 32 acres of greens.

'Reduction in green areas' envisages reduction of an area which was
existing.
E The said submission does not have any factual foundation. No actual
greens existed by way of designation under Section 22(c) of the MRTP Act
or otherwise under any other legislation. In any event, OCR 58 of 1991 did
not work. Increase in FSI by reason of 200 l Regulations even according to
Mr. Salve would have added many more floors which thus became otherwise •
F permissible in law. It ensures giving of some areas voluntarily by the mill
owners. It is, however, one thing to say as to what actual area would be
available for public greens but it is another thing to say that by reason thereof
a change in the character of plan itself has taken place as a result whereof
the green areas would be reduced. The Appellants have contended that in
G terms of the 200 l Scheme, the extent of actual surrender has substantially
gone up in comparison to the offer of surrender made during the period
1991-200 I. They have contended that the lands available to MCGM and
MHADA would also be higher. It is also the contention of the Appellants that
larger volumes of private greens which would be available although the same
may not be a substitute for public greens, but would certainly enhance the
H ecological balance. It is also contended that the land area available towards
I

--1
BOMBAY DYEING AND MFG. CO.LTD.'· BOMBAY ENVIRONMENTAL ACTION GROUP [SINHA, J] ) Q))

the owner's component would be higher and the private green areas emerging A
therefrom would also be correspondingly higher. Dr. Singhvi has further
submitted that by reason of implementation of the Zonal Regulations, three
more Shivaji Parks would be added.

The contentions raised by the Appellants may or may not be correct.
However, only because the ideal situation could not be brought about by the B
State while inserting 200 I Regulations, the same, in our opinion, would not
lead to a conclusion that the same would be ultra vires Section 37(1AA) of
the MRTP Act.

If the government intends to create more green areas in mill lands it has C
to avail of one of three alternatives, namely:

(a) designation/reservation in terms of Section 22(c);
(b) acquisition of land; or

(c) voluntary surrender of land. D
It was contended by the NTC that DCR 58 of 2001 is an attempt to
induce higher voluntary surrender of land by the mill owners. The first two
alternatives would only put additional time and costs for the government in
terms of procedures for acquisition and payment of compensation.
E
It was also contended that through the Integrated Development Scheme,
NTC have made themselves liable to surrender 26 acres of land to MHADA
and 23 acres to MCGM. It is estimated that for all the mills more than 70.00
acres of land would be available for public greens and value thereof would
approximately be 750 crores (calculated on the basis of auction price).
F
'r It is not at all in dispute that all the 58 cotton textile mills are spread
over seven wards of MCGM, namely, A, E, F (South), F (North), G (South),
G(North) and L. They are not spread over the entire town of Bombay. The
mill lands occupy only 3.07% of the wards and 0.65% of the entire town of
Bombay as is evident from the following chart: G.
1034 SUPREME COURT REPORTS [2006] 2 S.C.R.

A S.No. Name of Ward No. of mills % of area occupied
by mills

I. A I 0.31%

2. E 12 6.61%
B
3. F(South) 13 5%

4. F(North) I 0.67%
..
c 5. G(South) 25 9.95%

6. G(North) 3 1.43%

7. L 3 0.88%
D
From the affidavit affirmed by Shri Raoul S. Thackersey, it appears
that the mill lands available for development, both open and built-up area,
aggregate 400 acres approx. and not 600 acres of land as contended by the
writ petitioners. Approximately, 200 acres of mill lands comprising running
E textile mills are not available for development.

Out of the total lands, 87% of thy lands occupied by the mill owners
are freehold lands and 13% of the lands are lease-hold either from the State
or private parties. All the textile mills are not within I-2 Zones. 13 cotton
textile mills are situated within the residential zone.
F As per the provisions of OCR 58 of 1991, it was in the discretion of
the owner whether to come forward for total redevelopment of the mill and/
or to utilize the existing built up area for commercial purposes, etc. However,
out of the area which would have been available for sharing lands with
M.C.G.M./ MHAOA under OCR 58 of 1991 in the cases of the proposals
G which were approved for total/ partial redevelopment would have been as
under:
BOMBAY DYEING AND MFG. CO.LTD.'· BOMBAY ENVIRONMENT AL ACTION GROUP (SINHA, J.) 1QJ5

s. Name of the Mill Land for Land for Others (for
A
No. MCGM in MHAOA in public
sq. m. sq. m. housing) in
sq. m.
1. Matulya Mill 5641.40 4616.46 Nil
2. Swadeshi Mill 24482.00 12612.13 12612. 13 B
3. Moder Mill 8626.56 7058.12 Nil

) However, the area available for M.C.G.M. & MHAOA for the proposals
approved under modified OCR 58 of 200 I for total/ partial redevelopment
are as under:
c
s. Name of the Mill Proposed as per the provisions
, No. of modified OCR 58(J)(b)
MCGM in MHAOA in
sq. m. sq. m
1. Standard Mill (China Mill) 1525.14 1247.84 D
2. Standard Mill Prabhadevi 1247.80 .1020.93
3. Morarjee Goculdas Unit No. I
4. Morarjee Goculdas Unit No. 24479.37 1276.96
Located at
Kandivli Unit
5. Piramal Mill · 1533.46 1254.65
6. Mafatlal Mill Unit No. 3 588.41 481.43
7. Matulya Mill 474.68 388.37
8. Modern Mill 1163.31 Nil F
9. Shreeram Mill 1848.25 1572.20
10. Victoria Mill 545.34 4537.10
11. Hindustan Spg. & Wvg.
Mill Unit No. 1 & 2 662.61 542.12
12. Hindustan Spg. & Wvg. G
Mill (Crown Mill Division) 1134.81 928.67
13. Simplex Mill 1363.54 1115.63
·~.
14. New Great Eastern Spg. &
Wvg. Mills 1533.30 1254.52
15. Swan Mill (Kurla)
H
4663.70 3815.76
1036 SUPREME COURT REPORTS (2006) 2 S.C.R.

A 16. Kohinoor Mills No. 3 2628.00** 2946.54***
17. India United Mill No. 2 & 3 7873.63** 8828.01***
18. Elhpinstone Mills 2796.40** 3135.35**
19. Jupiter Mills 1484.75** 1664.72***

B 20. New Hind Textile Mills 2034.88** 2281.54***
21. Mumbai Mills (Sakseria Mills) 10631.02** 11919.63***
22. Apollo Mills & its property i.e.
Morarka Bungalow 4714.81** 5286.33***
23. Swan Mill (Seweree) 4059.00 3321.00
c 24. Western India Spg. & Wvg. Mill 1436.00 1175:00
25. Bombay Dyeing (Spring
Mill Wadala) 25775.24 26556.30 '
26. Bombay Dyeing Textile Mill
(Lower Pare!) 7052.86 5770.52
D
•• Proposed to be earmarked and handed over at India United Mill No. 2 &
3.

*** Proposed to be earmarked at New Hind Textile Mill and India United
E Mill No. 2 & 3"
The difference can, thus, at once be felt.
-
The main features of the new OCR 58 will have to be construed having
regard to the changes brought about thereby. For the aforementioned purpose,
F we may notice the following chart showing the purported reduction of space:
)

-4
)

BOMBAY DYEING AND MFG. CO.LTD."· BOMBAY ENVIRONMENT AL ACTION GROUP [SINHA,!.] ) Q3 7

Ward A E F(South) F(North) G(South) G(North) L A
% of total 5.79% 9.29% 4.47% 6.12% 12.43% 4.40% 19.30%
Open Space
in each ward
as per old
OCR 58 B
% of total 5.73% 7.84% 3.37% 5.97% 10.29% 4.08% 19.11%
Open Space
) in each ward
as per new
OCR 58
Ward wise
c
reduction in
open space 0.06% 1.45% 1.1% 0.15% 2.14% 0.32% 0.19%

If Regulation prior to 1991 was implemented, the average of the Green
Areas would have come to 8.33% whereas after 1991, it comes to 8.16%. D
_, From what has, thus, been noticed hereinbefore, it is difficult to agree with
the contentions of the writ petitioners that there had been substantial reduction
in green area. It must also be placed on record that civic load in respect of
residential construction so far as land occupied by the mills owners was more
than the present ratio of FSI at 1.33%. FSI given for construction of buildings
to MHADA itself would be 1.596 i.e. almost 1.6%. E
It is contended on behalf of the Appellants that out of the total area of
2,430,000 sq. m., the lands which would be available to MCGM as public
green is 11.53% and the private greens works out to be 20.87%, thus, totalling
32.43%. It is also contended that the purported reduction ward-wise will vary
~ from 0.06% to 2.14% and in most cases it would be 1.1% or less. From what
F
has been noticed hereinbefore, it is evident that the purported reduction in
green area compared to pre-1991 situation, would not create much difference
so far as maintenance of the ecological balance is concerned by giving effect
to 2001 Regulations vis-a-vis the 1991 Regulations.
G
SALE OF LANDS OF NTC MILLS
t· ....
A large number of cotton and other textile mills were situate in the
town of Bombay. The workmen of the said cotton textile mills resorted to a
strike as a result whereof a large number of textile mills were closed. The
mills occupied lands measuring about 600 acres. H
1038 SUPREME COURT REPORTS [2006] 2 S.C.R.

A The Parliament of India enacted the Sick Textile Undertakings
(Nationalisation) Act, 1974 (for short "the 1974 Act") for acquisition and
transfer of the sick textile undertakings, and the right, title and interest of the
owners thereof specified in the First Schedule appended thereto. The said Act
received the assent of the President oflndia on 21st December, 1974. It came
into force from 1st day of April, 1974. In terms of Section 3 of the said Act,
B every sick textile undertaking and the right, title and interest of the owners
thereto stood transferred to and vested absolutely in the Central Government
with effect from the appointed day. The sick textile undertakings which stood
vested in the Central Government by virtue of sub-section (I) of Section 3
of the said Act had been transferred to and vested in the National Textile
C Corporation.
The Parliament of India again enacted the Textile Undertakings
(Nationalisation) Act, 1995 (for short "the 1995 Act") for acquisition and
transfer of textile undertakings specified in the First Schedule appended thereto
with a view to augmenting the production and distribution of different varieties
D of cloth and yarn so as to subserve the interests of the general public for
matters connected therewith or incidental thereto. In terms of the provisions
of the said Act, 25 mills notified thereunder vested in NTC. It, inter alia, has
two subsidiaries, viz., National Textile Corporation (South Maharashtra) and
National Textile Corporation (North Maharashtra). By reason of the 1974
E Act and the 1995 Act, about 119 textile mills situate throughout the country
were nationalized. Out of the 25 mills of National Textile Corporation which
are in the town of Bombay, 18 mills were lying closed. 14,800 employees
were retrenched. National Textile Corporation together with its six other
subsidiary corporations were referred to BIFR under SICA sometime between
1992-1993. The said proceedings remained pending for nearly ten years.
F BIFR formulated eight schemes. The schemes were approved by all concerned
as well as the operating agencies. The matter came up before this Court and
by an order dated 27.9.2002 the scheme as sanctioned by BIFR was directed
to be implemented.

The said order was passed in a special leave petition filed by NTC
G (IDA) Employees Association v. Union of India & Ors., [SLP No. 16732 of
1997 dated 7.5.1999) which is in the following terms :

" ... We have been informed that BIFR has already formulated right
schemes which stand approved by all concerned and agencies. Let
the schemes as sanctioned by BIFR be implemented. The Special
H Leave Petition and the Transfer Petition stand disposed of accordingly."
BOMBAY DYEING AND MFG. CO.LTD. v. BOMBAY ENVIRONMENTAL ACTION GROUP (SINHA,!.) 1QJ9

The salient features of the said schemes are as under: A
(a) One time settlement qua banking institutions;
(b) Identification of closed unviable mills;
(c) Sale of surplus assets including land;
(d) Rehabilitation/revival of unviable mills;
B
(e) An Asset Sale Committee (ASC) under Section 32(1) of the SICA
Act for the sale of the assets was to be constituted. A nominee of
;
BIFR was one of the members thereof. It was constituted to ensure
transparency in the sale of assets of the mills.
c
Guidelines for the said ASC had also been set out. Pursuant to or in
furtherance of the said schemes, National Textile Corporation closed down
unviable mills and mobilized a large sum towards implementation thereof.
Some of the steps taken in this behalf are as under:

(a) An amount of Rs. 643.94 crores were spent by the National Textile D
Corporation for payment of Modified Voluntary Retirement
Scheme to workers. The said amount was disbursed before April,
2003.
(b) National Textile Corporation issued bonds (series No. IX) whereby
a sum of Rs. 2028 crores was raised. The said bonds carried E
interest ranging from 6.10% to I0% per annum.
(c) Expenses have been incurred towards wage bills amounting to
Rs. 1839 crores. The accumulated total loss of National Textile
Corporation was about Rs. 4055.35 crores including the amounts
payable to the banks/ financial institutions. F
( d) An amount of Rs. 84 crores had been paid to the workers on
account of Provident Fund and ES! dues.
(e) Having regard to the one time settlement arrived at with banks
and financial institutions, a sum of Rs. 72 crores had been paid.
G
Pursuant to the said Scheme dated 25.7.2002, National Textile
Corporation submitted an Integrated Development Plan on 3.5.2005 for all
the 25 mills situate in the town of Bombay. The said scheme was prepared
'keeping in view DCR 58 as modified in 2001.

On or about 27. I0.2004, Municipal Corporation of Greater Mumbai H
1040 SUPREME COURT REPORTS [2006] 2 S.C.R.

jA (MCGM), however, approved the scheme only for seven mills. permitting
sale of five mills and surrender of India United Mills 2 and 3 as well as New
Hind Textile Mill as share of Maharashtra Housing and Area Development
Authority (MHADA) and MCGM.

An integrated plan was set out for sale of lands in terms whereof lands
B situate in other mills were kept aside to provide open lands which may be
required in the event the writ petition filed by the Writ Petitioners -
Respondents was allowed. Negotiations were held between the purchasers
and NTC as regards sale of the said land. Several queries were made by the
intending purchasers which were duly answered. Specific assurances were
C given to the bidders by NTC that deficiencies in open space shall be made
good by making available equivalent open space from its other mills in the
vicinity, in the event the writ petition was allowed. Clarifications were also
issued to the effect that NTC WdS committed to sell lands specified in respect
of each mill as well as specified in FSI as approved by the Bombay Municipal
Corporation and, thus, any extra surrendering of land, if any occasion arises
D therefore, would be borne by it. It was furthermore clarified that "assuming
that the court decides otherwise, then NTC has other mills to offer as far as
the share of MHADA and MCGM is concerned and NTC will take care of
the interest of the purchasers". An undertaking had also been given by it in
the High Court which was duly recorded in its interim order dated 1.4.2005
E which reads as under :

"On behalf ofNTC the learned counsel submits that they should be
allowed to proceed with the sale of Jupiter Mills. The matter is pending
before this Court. However, considering the urgency which counsel
make out any further as NTC has 25 mills the request for confirming
F the sale can be agreed to, subject to the following conditions:

(i) NTC will file an undertaking in this Court, that on the Court
passing an order on interim relief they will comply with the order of
the Court including if a situation arises of reserving the land in the
other mills for which development is sought in terms of the order that
G may be passed by the Court. On such undertaking being filed, it is
open to NTC to confirm the sale of Jupiter Mills."

It was further directed:

"(ii) Considering that the matter has now been adjourned to 20-4-
H 2005 Respondent 2 Municipal Corporation directed not to approve
_...
I

BOMBAY DYEING AND MFG. CO. LTD.''· BOMBAY ENVIRONMENT AL ACTION GROUP [SINHA,!.] j Q4 J

any further layouts, issue !OD, or CC without the permission of this A
••
' Court or till further orders."

As regard, sale of lands from NTC Mills, the High Court in its judgment
opined that the sale of its mills by NTC was contrary to this Court's orders
dated I 1.05.2005 and 27.09.2002 as also contrary to the BIFR scheme in the
following terms : B
"273. It is very clear from the order of the Supreme Court dated I i th
....,, May, 2005, that every sale after the said order by either NTC-MN or
! NTC-SM will be only in terms of the scheme framed by the BIFR.
Only sale of land from Jupiter Mills had taken place earlier.
c
274. But even the sale of land from Jupiter Mills will have to be in
accordance with the BIFR scheme, as per earlier order of the Supreme
Court dated 27th September, 2002.

275. The sanctioned scheme of BIFR, clearly provides that the
surrender of land to MCGM and MHADA in respect of each mill D
shall be out of the land of such mill itself and not out of the land of

'
-· some other mill. Hence, the integrated scheme in respect of 7 mills
approved by MCGM on 27th October, 2004 (which provides for
aggregation of land to be surrendered to MCGM and MHADA in
respect of the five mills sold, on two other mills) is contrary to the
sanctioned scheme, which clearly does not contemplate any such E
integration, (emphasis supplied).

276. In paragraph 5 of the affidavit dated 12th September, 2005 filed
by NTC, it is expressly admitted that the integrated development
scheme submitted to MCGM is a modification of the sanctioned
scheme of BIFR. It is stated that a proposal for modification of the
F
~
sanctioned scheme has been made to BIFR about a year ago. It is
submitted by the Petitioners that this application for sanction of the
BIFR to such modifications was made in view of the direction of the
Supreme Court dated 27th September 2002 "Let the scheme as
sanctioned by BIFR be implemented". It is stated in the said affidavit G
of NTC that "The sanction of BJFR is awaited and Respondent Nos.
)
3 and 4 will implement the same after approval of BIFR''. However,
f -\ contrary to the aforesaid statement and in breach of the orders of the
Hon'ble Supreme Court, NTC has sold five mills under the integrated
development scheme approved by MCGM without the approval of
the BIFR to the modifications in the sanctioned scheme. H
1042 SUPREME COURT REPORTS (2006) 2 S.C.R.

A 277. Hence we are clearly of the view that the sale of lands by NTC
from 5 mills viz. (a) Apollo Textile Mills (SM), (b) Mumbai Textile
Mills (SM), (c) Elphinstone Mills (SM), (d) Kohinoor Mill No. 3
(MN) and (e) Jupiter Mills are clearly contrary to the sanctioned
BIFR Scheme and both the orders of Supreme Court dated 11th May,
2005 and 27th September, 2002."
B
We for the reasons stated hereinafter are not in agreement with the
conclusion of the High Court in this behalf.
...
It is not in dispute that in the special leave petition wherein the said
order dated 27.09.2002 was passed, the parties therein were not concerned
C with the sale of any mill lands or for enforcement and/or interpretation of any
regulation framed under the MRTP Act. The said observations were made
while entertaining an application filed on behalf of the workmen and not for
any other purpose. The observations were not made for the purpose of
determination of any of the issues involved in the matter. It could not, thus,
D be treated to be a direction on the part of this Court. The question of the sale
of mill lands by NTC could be held to be invalid if the same had been
effected contrary to the direction of this Court and not otherwise.

ORDER OF THIS COURT DATED 11.5.2005
••
E The order of this Court dated I Ith May, 2005 reads as under:

"So far as transactions relating to seven mills belonging to the National
Textile Corporation are concerned, including sale of Jupiter Mills, it
is not in dispute that transactions have reached a final stage. The
purchasers of Jupiter Mills have already paid Rs. 16 crores and a sum
F of Rs 376 crores would pass hands if the transaction is completed. If
the transactions in respect of the mills are not allowed to be completed,
the scheme framed by BIFR would come to a standstill resulting in
accrual of interest payable by the National Textile Corporation to the
financial institutions besides other hardships which may be caused to
various other persons including the workers.
G
We, therefore, having regard to the facts and circumstances of this
case as also the law operating in the field, are of the opinion that
interest of justice would be subserved if the National Textile
Corporation is permitted to complete the transactions in terms of the
scheme framed by BIFR but the same shall be subject to the condition
H
·~
BOMBAY DYEING ANO MFG CO. LTO.'· BOMBAY ENVIRONMENTAL ACTION GROUP [SINHA, I.] J043

that in the event, the writ petition ultimately succeeds, the vacant A

'
I ... land available from other mills, if necessary, shall be offered by way
of adjustment."

In the said order, it was recorded:

"Mr Parasaran and Mr Rohatgi, learned Senior Counsel appearing on B
behalf of the National Textile Corporation would contend that keeping
in view the fact that in respect of seven mills, negotiations have been
entered into, they should be allowed to be sold off and in the event,
~
} the writ petition succeeds, the order of the Court can be complied
with by adjusting vacant land belonging to the other mills.
:-::
c
Mr Iqbal Chagla, learned Senior Counsel appearing on behalf of the
writ petitioner respondents, on the other hand, would urge that the
undertaking directed to be given by the National Textile Corporation
is commensurate with the suggestion given by Mr Parasaran before
this Court."
D
So far as order of this Court dated I I .05.2005 is concerned, again the
... validity or otherwise of the BIFR scheme and/or implementation thereof was
not in question. An order of this Court, it is well-known, must be construed
having regard to the text and context in which the same was passed. For the
said purpose, the orders of this Court were required to be read in their
entirety. A judgment, it is well settled, cannot be read as a statute. [See Saraf
E
Chandra Mishra and Ors. v. State of Orissa and Ors., [2006] I SCC 638 and
State of Karnataka and Ors. v. C Lalitha, (2006) I SCALE 73]. Construction
of a judgment. it is well settled, should be made in the light of the factual
matrix involved therein. What is more important is to see the issues involved
therein and the context wherein the observations were made. Any observation F
~· made in a judgment, it is trite, should not be read in isolation and out of
context.

While passing the order dated 11.05.2005, this Court merely noted the
terms of the BIFR scheme. It did not issue any direction to the effect that the
sale of the mill land should be effected strictly in terms thereof or in a G
particular manner. The BIFR scheme evidently was referred to as this Court
noticed that even statutory authorities constituted under a Parliamentary Act
}
~
found it necessary to direct sale of the mill lands in public interest. While
considering a writ petition on an environmental issue, the focus of the court
should have been confined thereto. It was in our considered opinion
H
1044 SUPREME COURT REPORTS [2006] 2 S.C.R.

A impermissible for the High Court to examine the BIFR scheme as if the
environmental issues were considered therein. .
The BIFR exercises its jurisdiction under a statute; the objects whereof
are distinct and different from a town planning scheme. The BIFR is not a
town planner. It is not a development authority. It has nothing to do with the
B town planning or development scheme or maintenance of ecological balance.
The BIFR was concerned only with the manner in which sick industrial
undertaking should be made to revive. Before passing the said order, it was
required to hear all concerned, namely, the management, the workmen, the
financial institutions, banks etc. as also the operating agencies. It did so.
c BIFR appointed IDBI as an operating agency. The authorities were
concerned with obtaining maximum amount by way of sale of mill lands. It
was in any event not concerned with the interpretation and/or applicability of
the provisions of the MRTP Act or the Regulation framed thereunder. BIFR
was not concerned with the interpretation of DCR 58 and, thus, only because
D this Court in its aforementioned orders dated 27.09.2002 and 11.05.2005 had
referred thereto, the same would not mean that thereby any direction was
issued either directly or indirectly that the sale of the lands pertaining to
•
cotton textile mills must strictly be conducted in accordance with the said
scheme. This Court merely asked the authorities to effect sale of mill land
upon following the scheme framed by BIFR and in accordance with the
E procedure laid down therefor. This Court in its order dated 11.5.2005
categorically observed that if the transactions in respect of mills are not
allowed to be completed, the scheme framed by the BIFR would come to a
standstill resulting in accrual of liability of a huge amount by way of interest
payable by NTC to the financial institutions besides other hardships which
F may be caused to various other persons including the workers. The scheme
framed by the BIFR, therefore, was taken to be a relevant factor only for the
purpose of determining the issues involved in the appeal which arose out of
an interim order. It was only in that situation mention was made to the
scheme framed by the BIFR and not for any other purpose. This Court, as
would appear from the submissions made by the counsel for the parties
G therein merely intended to give effect to the consensus arrived at the bar that
an undertaking by the NTC to the effect that the order of this High Court
would be complied with by way of adjustment of lands from other mills
would subserve the interest of justice. The validity or otherwise of the ··
transaction of sales of seven mills of NTC were, thus, not open to a further
H determination by the High Court.
BOMBAY DYEING AND MFG. CO.LTD.'· BOMBAY ENVIRONMENTAL ACTION GROUP [SINHA,!.] j 045

The High Court furthermore appeared to have committed a manifest A
, ' error in reading down para 5 of the affidavit of Shri Deodutt B. Pandit. It has
been contended before us that the proposed modification by IDBI as has been
referred to therein was not in respect of the five NTC mills, including Jupter
Textile Mill proposed to be sold but was as regards shifting of the activities
of Finally Mills to Digvijay Textile Mills and that of Gold Mohur Mills to B
Sitaram Mills. The proposed modification by the IDBI had nothing to do
with sale of five mill lands and, thus, no attempt was made by NTC to get
the order of the BIFR modified in regard thereto as opined by the High
Y Court. In any view of the matter, the BIFR scheme did not postulate that the
surrender of lands to MCGM and MHADA should be out of the lands of each
individual mill itself and not out of the lands of some other mills. The BIFR C
had no occasion to say so nor could it do so having regard to the provisions
contained in DCR 58. The writ petitioner-respondents have nowhere denied
or disputed that the seven mills which were put up for sale were unviable
ones. The lands pertaining to the mills were found to be surplus. For the
purpose of giving effect to the scheme framed by the BIFR, indisputably an
Asset Sale Committee was constituted to discharge the functions of overseeing D
the sale of surplus assets of the said mills. It is furthermore not in dispute that
an Integrated Development Scheme was framed by NTC with the assistance
of the architects which was submitted to MCGM and the same was duly
approved. Sanction of sale of two mills out of seven mills was not granted
evidently in view of the pendency of the writ petition. The BIFR scheme or E
the said Integrated Development Scheme framed by NTC was not in question
in the writ petition. Even when the interlocutory application was being heard,
no submission was made as regard violation of the BIFR scheme or the
aforementioned order dated 27.09.2002. Before this Court as also the High
Court the question which arose was as to whether sufficient lands were
available in the event the writ petition was to be allowed. F

BIFR SCHEME

The order of the Bl FR dated 25.07.2002 passed in Case No.536 of
1992 clearly shows that after hearing the concerned parties it has been noticed
that the Government of Maharashtra although had not given clearance to sell G
the surplus lands of all the 13 mills in Mumbai and 5 mills outside Mumbai,
as has been done in other states, agreed that with a view to compensate
therefor MCGM would give additional Floor Space Index (FSI) and MHADA
would give Transfer Development Rights which would not enable the
NTCMNL to earn full consideration for the land. It further appears that the H
'

1046 SUPREME COURT REPORTS (2006] 2 S.C.R.

A Government of Maharashtra had not been asked to make assessment regarding
sacrifice, if any, made by them in this behalf or any benefit which would
accrue to them with the sale so that the Board could consider such a sacrifice/ '
benefit in line with the sacrifices made with others and if the final stand is
not conveyed by the Government, the Board would decide to confirm winding
up of the company which would be detrimental to all who made sacrifices,
B wherefor some power was granted. It had further been noticed therein that
the Government of Maharashtra by a letter dated 30.03.2002 i.e. after the
200 I Regulation came into force, although expressed its inability to give
exemption from payment of stamp duty, categorically stated that necessary
permission would be given by the competent authority strictly as per DCR 58 t----

C which also shows that DCR 58of1991 was not directed to be taken recourse
to. The Board had further noticed the submissions of the GOI-MOT
(promoters) as contained in their letter dated 08.05.2002, inter alia, to the
following effect :

"(iii) Appointment of Monitoring Committee to oversee
D implementation of the package would not only run contrary to the
provisions of SICA but would also result in duplication of authority
and control. BIFR may direct State Government to exclude NTC
package from the purview of such a committee."

It directed constitution of another committee, namely, Assets Sale
E Committee (ASC) for bringing in transparency in the sale of assets. Para 21
of the said order runs thus : -
"21. Since the GOM had indicated in regard to sale of land that
the necessary permission in this regard would be given by competent
authority strictly as per the provisions of Regulation 58 of the
F Development Control Regulation (OCR) the promoters (GOI-MOT)
should ensure that in the event of any shortfall of funds, which would
be utilized for rehabilitation of other NTC units, would be brought in
by them for rehabilitation of NTCMNL."

G It is, therefore, evident that the Board had all along in its mind the
modified regulations only. Yet again it is evident that for the purpose of
valuation only they had referred to DCR 58 which also goes to show that
they had only in mind the 2001 Regulations and not the 1991 Regulations.

From what we have notieed hereinbefore, it is evident that the High
H Court was not correct in holding that the sale of mill lands was contrary to
BOMBAY DYEING AND MFG. CO. LTD."· BOMBAY ENVIRONMENTAL ACTION GROUP [SINHA. l.) JQ4 7
the scheme framed by the BIFR. Even otherwise it is preposterous to suggest A
\ that having regard to its statutory function. BIFR would issue any direction
which would be to a great extent defeasive of the purpose for which the
schemes were made. We have noticed hereinbefore the anxiety expressed by
the BIFR to have/ save more funds for NTC.

Our attention has also been drawn to the fact that there is nothing to B
show that the BIFR scheme provided that the lands were to be surrendered
to MCGM and MHADA from each of the mills and not out of the land of
y
~ some other mill. The High Court, therefore, committed an error of records.
Even otherwise, the scheme should have been read in the light of the factual
matrix obtaining therein as also the extant regulation . c
. It is furthermore not in dispute that sale of the lands was approved by
ASC. One of the directors of the BIFR, again indisputably, was a member of
the said Committee. Once approval of ASC was obtained, the sales were to
be treated as confirmed. The order of this Court dated 11.05.2005 had, thus,
been given effect to. D
-l
It is furthermore not in dispute that conveyance deeds ha~ duly been
executed and registered between the parties. It is also not in dispute that
additional lands for open space were available from the two mills which had
not been the subject-matter of sale. The purchasers yet again indisputably E
• had created third party interest. They had also created financial liabilities by
taking loans from banks/financial institutions.

The writ petitioners in the writ proceedings, we have noticed
hereinbefore, at no point of time questioned the sale of surplus land by NTC.
In fact, challenge to such sale even could not be permitted by the High Court. F
i Even assuming that the NTC failed and/ or neglected to comply with the
directions contained in the scheme framed by the BIFR and, consequently,
the orders of this Court, the persons aggrieved thereby could have gone back
. to BIFR.

It is not in dispute that NTC was a sick company. As a sick company,
G
it might not have in a position to reopen any close mill at all. Reference to
BJFR in terms of Section 16 of the Act evidently was made for the
f. -I aforementioned purpose. If the schemes sanctioned by BIFR are given effect
to, at least some of the NTC mills indisputably would be revived. SICA, we
have noticed hereinbefore, is a special statute. It was enacted by the Parliament H
1048 SUPREME COURT REPORTS (2006] 2 S.C.R.

A only with a view to meet the contingencies contemplated therein. The validity
or otherwise of the reference made by NTC to BIFR is not in question. The
writ petitioners did not question the validity of the statutory schemes. No
material has been brought before us to show even the workmen were in any
way aggrieved thereby. Had they been so, they could have preferred an
B appeal before the BJFR. Even there does not exist any material to show that
at any point of time they had approached the High Court in judicial review.
The workmen were parties in the proceedings before BJFR. Presumably BIFR
made the said schemes after hearing of parties concerned including the
workmen.

C It is not in dispute that the writ petitioners merely filed an affidavit on
12th July, 2005 before the High Court alleging that the sale of surplus land
by NTC was in violation of this Court's order and/ or the scheme framed by
the BIFR. If the prayer in the writ petition had not been amended, we fail to
understand as to on what premise the High Court proceeded to consider the
D question as regards the alleged violation of the order of this Court, as also the
BIFR Scheme by NTC for the purpose of setting aside the sale. In a collateral
proceeding, the High Court, in our opinion. could not issue· any direction
which would not only be contrary to a statutory scheme but defeasive of the ~
purport and object for which SICA was enacted. Furthermore, it was none of
the concern of the writ petitioners Respondents as to how BIFR calculated
E the financial viability by way of sale of surplus land by NTC. It was equally
impermissible for the High Court to consider as to whether despite their .,.
being a provision for multi-mill aggregation in terms of OCR 200 I, the same
had been taken into consideration under BJFR Scheme or not. We have
noticed hereinbefore that for the purpose of considering the validity or
F otherwise of the sale in terms of BIFR Scheme itself, ASC was appointed
wherein a member of the BIFR was also represented. We are, therefore, of
the firm opinion that the judgment of the High Court in this behalf is not
correct.

G EFFECT OF SUCH SALES ON AUCTION PURCHASERS
NTC issued advertisements in several newspapers for sale of five mills,
viz., Jupiter Textile Mill, Mumbai Textile Mill, Apollo Textile Mill, Kohinoor
Mill No. 3 and Elphinstone Spinning and Weaving Mills. Some of the
Appellants herein pursuant to or in furtherance of the said advertisements
H submitted their tenders.
BOMBAY DYEING AND MFG CO. LTD.>'. BOMBAY ENVIRONMENT AL ACTION GROUP [SINHA, J.) J049

) ' It is, furthermore, not in dispute that out of the five mills sold full
payments have been received by National Textile Corporation from the
purchasers of four mills, viz., Jupiter Textile Mill, Mumbai Textile Mill,
Apollo Textile Mill and Kohinoor Mill No. 3. As regards the fifth mill, viz.,
A

Elphinstone Spinning and Weaving Mills, full payment is yet to be received.

It is, however, not in dispute that the processes of auction sales are B
complete and the applicants are bonafide purchasers in duly concluded sales.
Bona fide purchasers in an auction sale for certain purposes are treated
'¥ differently. A distinction has all along been made between a decree holder
~
who came in to purchase under his own decree and a bona fide purchaser
who came in and got at the sale in execution of a decree to which he was not
a party. In a case where the third party is a bona fide auction purchaser, even
c
if decree is set aside, his interest in an auction sale is saved (See Zain-ul-
Abdin Khan v. Muhammad Asghar Ali Khan, - 15 IA 12). The said decision
has been affirmed by this Court in Gurjoginder Singh v. Jaswant Kaur (Smt.)
and Anr., (1994) 2 SCC 368).
D
In Janak Raj v. Gurdia/ Singh and Anr., (1967) 2 SCR 77, this Court
-+ confirmed a sale in favour of the Appellant therein who was a stranger to the
suit being the auction purchaser of the judgment-debtor's immovable property
in execution of an ex parte money decree in terms of Order XX! Rule 92 of
the Code of Civil Procedure. Despite the fact that ordinarily a sale can be set
aside only in terms of Rules 89, 90 and 91 of Order XX! of Code of Civil E
Procedure, it was opined that the court is bound to confirm the sale and direct
grant of a certificate vesting the title in the purchaser as from the date of sale
when no application in term of Rule 92 was made or when such application
was made and disallowed.
F
+ In Padanathil Ruqmini Amma v. P.K. Abdulla, (1996) 7 SCC 668, this
Court upon making a distinction between the decree-holder auction purchaser
himself and a third party bona fide purchaser in an auction sale, observed :

" ... The ratio behind this distinction between a sale to a decree-holder
and a sale to a stranger is that the court, as a matter of policy, will G
protect honest outsider purchasers at sales held in the execution of its
decrees, although the sales may be subsequently set aside, when such
I- \ purchasers are not parties to the suit. But for such protection, the
properties which are sold in court auctions would not fetch a proper
price and the decree-holder himself would suffer. The same
consideration does not apply when the d.ecree-holder is himself the H
1050 SUPREME COURT REPORTS [2006] 2 S.C.R.

A purchaser and the decree in his favour is set aside. He is a party to
the litigation and is very much aware of the vicissitudes of litigation
and needs no protection.

We are not oblivious of the fact that the decisions referred to hereinbefore
have no direct application in the instant case as the sale of NTC mill lands
B were not effected in execution of decrees passed by a competent court of law,
but, we have referred thereto only to highlight that having regard to the
principles analogous to the ratio laid down in the aforementioned decisions
the court should make an endeavour to safeguard the interest of the bona fide
purchasers unless and until there exists any statutory interdict.
c It is, thus, absolutely clear that the purchasers of the cotton textile mills
of the NTC cannot be made to suffer for no fault on their part and, thus, the
High Court committed a manifest error in that behalf.

DELAY AND LACHES
D Each one of the learned counsel appearing on behalf of the Appellants
had advanced lengthy submissions in regard to the irretrievable injuries caused
to their respective clients by reason of delay and !aches on the part of the writ
petitioners in filing the writ petition.

E We may notice that the writ petitioners although raised objections when
DCR 58 was proposed to be made in the year 1990 but no such objection was
raised when the State proposed to amend the same in 2000.

The writ petitioners filed a writ petition before the Bombay High Court
questioning the validity of DCR 58 which was dismissed. They did not prefer
F any appeal thereagainst. Some of the mill owners, as noticed hereinbefore,
submitted their scheme as also applications for grant of sanction of their
layout plans much before the clarificatory order dated 28.3 .2003 was issued
by the State. Requisite statutory sanctions had been obtained in most of the
cases.

G Plans were also sanctioned pursuant whereto and in furtherance whereof
some of the Appellants had not only entered into development agreements
with third parties; in some cases they demolished the structures, carried on
excavations, raised constructions; in some cases construction activities are
complete and flats had been sold, the purchasers whereof in turn incurred
H huge financial liabilities. In almost all the cases, the workers had been paid
-
!
~

BOMBAY DYEING AND MFG. CO. LTD.'· BOMBAY ENVIRONMENT AL ACTION GROUP (SINHA, l.) J05 J

· a large sum of money which may not be possible to be recovered. Loans and A

'
other financial assistances had been obtained from banks and other financial
institutions by the auction purchasers - appellants for the said purpose. In
some cases, the development agreements have been fully acted upon.

Some of the mills, as noticed hereinbefore, were closed but not referred
to BIFR. One mill, viz., Bombay Dyeing and Manufacturing Company Limited B
wanted to modernize its plants and machines. Ruby Mills Limited had a
scheme of shifting-cum-modernization. Schemes were submitted by them in

• ••
terms of the extant regulations. The same had been approved by the State .
' Although the State issued the clarificatory notification as far back on
28.3.2003, no step had been taken by the writ petitioners to question the c
validity thereof within the reasonable time. The writ petition was filed on
18.2.2005. Even on 21.3.2005, the writ petitioners filed an affidavit and in
paragraph 27 thereof it was categorically averred that the BlFR Scheme had
no bearing on the validity of the rule. Although, permission for multi-mill
aggregation was granted on 27. 10.2004, the validity or legality thereof had D
not been questioned in the writ petition. Yet again on 19.4.2005, another
affidavit was affirmed on behalf of the writ petitioners wherein it was averred
that the scheme framed by the BIFR was irrelevant for the purpose of its
decision. An application for amending the writ petition was filed only on
7. 7.2005 wherein a contention as regard the interpretative effect of the
clarification was raised. Only in the third affidavit dated 12.7.2005, the writ E
petitioners raised the question in regard to the correctness or otherwise of
BIFR Scheme· for the first time only whereupon an interim order was passed
on 1.4.2005 by the High Court.

On I Ith May, 2005, this Court set aside the interim order passed by the
F
High Court whereafter an advertisement was issued by NTC. Tender
+
documents were published in newspapers and put on website on 21.6.2005
The last date for submission of the bid was 27.7.2005. On 12.7.2005, the writ
petitioners had put an affidavit that such sale was permissible. The bid was
accepted on 13 .8.2005 whereafter ASC approved the sale. After the writ
petition was heard and t'ie judgment was reserved on 14.9.2005, the writ G
petitioners only in their written submissions filed on 15.9.2005, raised a
contention that the sales were contrary to BIFR Scheme as also orders of this
~ Court. The purchasers on different dates in October/ November purchased
lands of the textile mills and took possession after the deeds of conveyances
were executed in their favour. The purchasers indisputably borrowed a huge
~
amount from banks/ financial institutions and they are required to pay interest
H
\
)...

1052 SUPREME COURT REPORTS [2006) 2 S.C.R.

A on the said borrowed sums.
Delay and !aches on the part of the writ petitioners indisputably has a
role to play in the matter of grant of reliefs in a writ petitior.. This Court in
a large number of decisions has categorically laid down that where by reason
of delay and/ or !aches on the part of the writ petitioners the parties altered
B their positions and/ or third parties interests have been created, public interest
litigations may be summarily dismissed. Delay although may not be the sole
ground for dismissing a public interest litigation in some cases and, thus,
each case must be considered having regard to the facts and circumstances •
obtaining therein, the underlying equitable principles cannot be ignored. As
C regards applicability of the said principles, public interest litigations are no
exceptions. We have heretobefore noticed the scope and object of public
interest litigation. Delay of such a nature in some cases is considered to be
of vital importance. [See Chairman & MD, BPL Ltd v. S.P. Gururaja and
Ors., [2003] 8 SCC 567].

D In Narmada Bachao Ando/an v. Union of India, [2000] 10 SCC 664,
this Court held:

" ... Any delay in the execution of the project means overrun in costs
and the decision to undertake a project, if challenged after its execution
has commenced should be thrown out at the very threshold on the
E ground of !aches if the petitioner had the knowledge of such a decision
and could have approached the court at that time. Just because a
petition is termed as a PIL does not mean that ordinary principles
applicable to litigation will not apply. Laches is one of them."

In R. & M. Trust v. Koramangala Residents Vigilance Group, [2005]
F 3 sec 91, this Court laid down the law in the following terms:
" ...sacrosanct jurisdiction of public interest litigation should be invoked
very sparingly and in favour of the vigilant litigant and not for the
persons who invoke this jurisdiction for the sake of publicity or for
the purposes of serving their private ends."
G
It was further stated:

"There is no doubt that delay is a very important factor while exercising
extraordinary jurisdiction under Article 226 of the Constitution. We
cannot disturb a third party interest created on account of delay. Even
H otherwise also why should the Court come to the rescue of a person
BOMBAY DYEING AND MFG. CO. Lm. •.BOMBAY ENVIRONMENTAL ACTION GROUP [SINHA. J.] j 05 3

who is not vigilant in his rights." A
In State of Maharashtra v. Digambar, [1995] 4 SCC 683, this Court
held:

" ... where the High Court grants relief to a citizen or to any person
under Article 226 of the Constitution against any person including B
the State without considering his blameworthy conduct, such as (aches,
or undue delay, acquiescence or waiver, the relief so granted becomes
unsustainable even if the relief was granted in respect of alleged
deprivation of his legal right by the state."

However, we do not intend to lay down a law that delay or laches alone C
should be the sole ground for throwing out a public interest litigation
irrespective of the merit of the matter or the stage thereof. Keeping in view
the magnitude of public interest, the court may consider the desirability to
relax the rigours of the accepted norms. We do not accept the explanation in
this regard sought to be offered by the writ petitioners. We have no doubt in
our mind that the writ petitioners are guilty of serious delay and laches on D
their part.

Mis. Lohia Machines (supra), whereupon the High Court placed strong
reliance, was not a case where a third party interest was created. Therein, the
validity of Rule 19-A of the Income Tax Rules, 1962 was in question. It may E
be true that therein the validity of the rule was challenged after 19 years but
the plea of dismissing the writ petition on the ground of delay was negatived
holding that the challenge in regard to the constitutionality of the said rule
was otherwise well-founded. It was not a case where during the interregnum,
the parties altered their position and third party interest was created. It is. in
. that situation this Court observed that if a rule made by a rule making authority F
+ is found to be outside the scope of its power, it is void and it is not at all
relevant that its validity has not been questioned for a long period of time;
if a rule is void it remains void whether it has been acquiesced in or not.

The High Court in this case did not declare DCR 58 to be ultra vires
the Constitution or the provisions of the MRTP Act. G
In Proprietary Articles Trade Association v. AG of Canada, (1931) AC
I 4
310, the validity of the rule was in question. The decision of the Privy
Council in Attorney General of the Commonwealth of Australia v. Queen [95
CLR 529] is to the same effect. In this case, the delay is enormous. Most of H
1054 SUPREME COURT REPORTS [2006) 2 S.C.R.

A the Appellants and, particularly, those who are purchasers have been suffered
considerable financial loss and embarrassment. It had calamitous consequence
to the entrepreneurs who are required to pay lakhs and lakhs of rupees by
way of interest to the banks and other financial institutions per day. The bona
fide of the purchasers of NTC Mill lands had never been in question in the
B sense that as the writ petitioners at no point of time questioned the validity
or otherwise of the sale of the lands by filing any application for amendment
of the writ petition, and as noticed hereinbefore, only during arguments such
a contention was raised. The High Court, in our considered opinion, thus,
committed a manifest error in acting thereupon. Before us, we may notice,
a statement has been made across the bar that keeping in view the orders
C passed by this Court dated I Ith May, 2005, the sale of NTC mills is seriously
not in question.

As we have considered the matter on merits, evidently, we are not
dismissing the writ petition on the ground of delay and !aches alone but we
have taken the same as one of the factors in determining the questions raised
D before us.

CONFLICTING ST AND OF WORKMEN

The workers are vertically divided. Whereas Rashtriya Mill Mazdoor
Sangh (RMMS) sides with the mill owners, Girni Kamgar Sangharsh
E Committee (GKSS) sides with the writ petitioners. They contradict each other
not only from their own stand point vis-a-vis the point of view of the workers,
but also as regards the interpretation and constitutionality of OCR 58. RMMS
complains that the High Court did not consider its principal submissions at
all which were placed before it by way of written submissions, but merely
F considered only those which were raised by way of further written submissions.
According to them, RMMS is the only representative and approved trade +
union under the Bombay Industrial Relations Act for Greater Bombay.
According to them, closure of the cotton mills affected 2,00,000 workers and
because of the strike the mills defaulted in making payment of wages, provident
funds dues, gratuity, etc. to the workers causing great hardship to them. It
G played an active role in the revival I rehabilitation of the NTC mills and other
sick mills by representing the workers' cause before BIFR. It also agrees with
the reasons put forward by the appellants as regards the validity of OCR 58
of 200 I. It highlights the policy/ objectives thereof in great details. It also
states:
H (i) RMMS has entered into YRS Agreement with the management of
~

BOMBAY DYEING AND MFG. CO. LTD. v. BOMBAY ENVIRONMENTAL ACTION GROUP (SINHA, I.] 1055
several mills. A

' (ii) Nearly 10,000 workers of the NTC mills and more than 25,000
workers of private mills, aggregating in all more than 35,000
workers stand to benefit by the VRS Schemes.
(iii) As on date, the NTC mills have discharged their entire liabilities
under the VRS Schemes by making payment to the extent of B
398. 76 crores payable to these workers.
(iv) The Maharashtra State Textile Corporation has also cleared the
r
outstanding dues of its workers to the extent of Rs. 22 crores. As
, regards the private mills, out of the total amount due to the workers
.under VRS Schemes amounting to 808.75 crores, approximately c
a sum of 631.05 crores has been paid.
(v) However, approximately Rs. 373 crores remain outstanding to be
paid to approximately 20,000 workers which payments are directly
linked to the development of the lands by the mill owners.
D
It further argues that if the judgment of the High Court is implemented,
it would cause irretrievable injury and extreme prejudice to the workers.

Mr. Colin Gonsalves, learned counsel appearing on behalf of GKSS, on
the other hand, not only laid emphasis on the so-called defaults of the mill
owners but had gone to the extent of urging that the workers' dues have not E
been paid substantively. He further contended that revival scheme has not
been given effect to and the amount required to be spent therefor had in fact
not been spent. It has further been contended that no guidelines had at all
been framed for the Monitoring Committee by the State for overseeing the
disbursement of funds. According to it, in the case of Mafatlal Centre although
the scheme was sanctioned in 200 I, no payment has been made despite the
F
~
fact that the company received a sum of Rs. 16 crores from the sale of the
built up areas of Mafatlal Centre at Pare I. The workers' dues being to the
extent of 93 crores, the same are in excess of the legal dues of the workers
and only a paltry sum had been paid to them whereas the dues of the banks
had been cleared. G
In these appeals, we are not concerned with the said issues. We may,
>· however, place on record that according to Mr. Sorabjee the statement of Mr.
" Colin Gonsalves that nothing had been paid to the workers is baseless and
irresponsible. It was contended that the Union represented by Mr. Gonsalves
impleaded itself in the writ petition filed by it before the High Court against H
)..

1056 SUPREME COURT REPORTS (2006] 2 S.C.R.

A the MCGM as regard non-disposal of layout plan, etc. wherein they
categorically stated that it would have no objection to the development of
their property subject to realization of the cheques given in favour of the
workers. It is stated that the cheques had been fully realized and the workers
have enjoyed the benefit of payment.

B We have pointed out these factors only for the purpose of showing that
this litigation was treated to be a platform for even championing the cause
of the workers although neither the High Court nor this Court is concerned
therewith. •
•
In terms of the Regulations, the entire amount is to be deposited in the
C funds specially created therfor. It is the Committee appointed by the State
alone which can spend the amount. The priority as regard disbursal of such
amount has categorically been laid down in the regulation itself. If the fund
created is not being expended for the purposes mentioned therein, a separate
cause of action will arise therefor. It is, thus, not necessary for us to delve•
D deep into the said contentions. Guidelines for the Committee are also not
necessary to be laid down. In any event, we are not called upon nor is it
necessary to make any attempt in that regard. However, if any occasion arises
for any of the parties in this behalf, the aggrieved party indisputably would
be at Iiberty to agitate the same before appropriate forums

E CONCLUSION
The upshot of our aforementioned discussions is:

(i) The Public Interest Litigation was maintainable.
(ii} OCR 58 is valid in law. OCR 58( I) applies also to closed mills
F
but sub-regulation (6) of OCR 58 does not apply to sick industries +
which have not been referred to BIFR.
(iii) The clarification made by the State is neither ultra vires Section
37 of the MRTP Act nor is violative of the constitutional
provisions.
G
(iv) OCR 58, as inserted in 200 I and as clarified in 2003, is not
contrary to the principles governing environmental aspects
including the principles of sustainable and planned development '
vis-a-vis Article 2 I of the Constitution of India.

H (v) Judicial review of OCR 58 was permissible in law.
-4
)

BOMBAY DYEING AND MFG. CO.LTD.'· BOMBAY ENVIRONMENTAL ACTION GROUP (SINHA,!.) ) QS 7

(vi) Sale of NTC mills was not contrary to the BIFR Scheme as also A
\ the orders passed by this Court.
(vii) Although, delay and !aches play an important role, as we have
considered the merit of the matter, the writ petition filed by the
Respondent Nos. I and 2 is not being dismissed on that ground
alone. B
(viii)It is not necessary for us to go into the question as to whether
worker's dues have been paid and also as to whether the committee
had been applying the fund in terms of DCR 58 or not. However,
all such contentions shall remain open.

For the reasons aforementioned, these appeals are allowed, the impugned c
judgment of the High Court is set aside. However, in the facts and
circumstances of the cases, there shall be no order as to costs.

G.N. Appeals allowed.

i _,