CHENNAI METROPOLITAN DEVELOPMENT AUTHORITY REPRESENTED BY ITS MEMBER SECRETARYversusD. RAJAN DEV AND OTHERS

                        [2019] 16 S.C.R. 1095                         1095


         CHENNAI METROPOLITAN DEVELOPMENT                             A
             AUTHORITY REPRESENTED BY
               ITS MEMBER SECRETARY
                                v.
                 D. RAJAN DEV AND OTHERS
                                                                      B
                  (Civil Appeal No. 9336 of 2019)
                        December 11, 2019
              [R. BANUMATHI, A. S. BOPANNA
                AND HRISHIKESH ROY, JJ.]
                                                                      C
       Housing – Residential-cum-Shopping Building – Calculation
of Premium FSI charges – First Respondent, a developer was
carrying on construction activities on basis of a planning
permission granted to him – Thereafter, the State Government
introduced a scheme called ‘Premium FSI Scheme’, wherein the
Government permitted any builder willing to pay FSI charges to        D
increase FSI above the normally permitted FSI – On 04.05.2011,
the first respondent made an application with revised proposal for
permission to have additional FSI area – The revised plan of the
first respondent was considered and forwarded to the Government
with recommendation for approval – In the meanwhile, the
                                                                      E
Registration Department revised and notified the revised guideline
value w.e.f. 01.04.2012 as per which the guideline value was
increased from Rs.1650/- per sq.ft. to Rs.5,000/- per sq.ft. – On
29.05.2012, the Government granted approval to the revised plan
of the first respondent – The premium was levied as Rs.7,61,
40,000/- – The respondent made the representation against the         F
calculation and also regarding the area, however, the same was
rejected – Writ petition – First Respondent contended that the date
of application should be considered for the purpose of calculating
Premium FSI charges and not as per the guideline value prevailing
on the date of approval of the plan – The writ petition was
                                                                      G
dismissed by the Single Judge of the High Court – However, the
Division Bench of the High Court set aside the order of the Single
Judge – On appeal, held: No right accrues to the builder by mere
submission of a plan for construction of a building which has not
been sanctioned by the Competent Authority – The rates prevailing
at the time of granting of permission are the rates which an          H
                                 1095
1096            SUPREME COURT REPORTS                      [2019] 16 S.C.R.


 A     applicant has to pay – The respondent/applicant cannot claim the
       benefit of the earlier guideline value existing prior to the date when
       approval was granted by the Government – Therefore, the
       respondent will have to pay FSI Premium charges based on the
       guideline value as existing on the date of grant of approval – When
       the Government sanctioned the approval on 29.05.2012, the
 B
       Division Bench of the High Court erred in directing the appellant
       to calculate the FSI charges as per the guideline value as on
       04.05.2011 – The impugned Judgment of the Division Bench of
       the High Court, therefore, set aside.
             Allowing the appeal, the Court
 C
             HELD: 1. In the impugned judgment, the Division Bench
       of the High Court has relied upon Union of India and Others v.
       Dev Raj Gupta and Others and Union of India and another v.
       Mahajan Industries Ltd. and another. The ratio of those decisions
       is not applicable to the case in hand as those decisions relate
 D     to application for conversion of the land and not building
       permission application. That apart, in those cases, there was a
       delay of more than three years in deciding the application. In
       the present case, there was no delay on the part of the appellant-
       CMDA or the Government to consider the first respondent’s
 E     application for approval. [Para 24] [1108-G-H]
             2. As submitted by the appellant-CMDA, the conduct of
       the first respondent is also to be taken note of. After the levy
       of Premium FSI charges calling upon the first respondent to pay
       a sum of Rs.7,61,40,000/-, the first respondent submitted a
 F     representation on 19.07.2012 requesting to revise the Premium
       FSI charges by considering the guideline value prevailing as on
       the date of the application i.e. 04.05.2011. The said
       representation was rejected by the appellant-CMDA by its letter
       dated 31.08.2012 and the first respondent was directed to make
       payment of Premium FSI Charges. The first respondent was also
 G     informed that if the payment was not made within sixty days, the
       application will be returned. The first respondent’s further
       representation dated 14.12.2012 also came to be rejected.
       Thereafter, by letters dated 23.05.2013 and 14.06.2013, the first
       respondent had prayed for thirty days’ time for remitting the
 H     Premium FSI charges as demanded by the appellant-CMDA. By
CHENNAI METROPOLITAN DEVELOPMENT AUTH. REP. BY 1097
         ITS MEMBER SEC. v. D. RAJAN DEV

communication dated 19.06.2013, the first respondent was             A
granted time upto 15.07.2013 to pay Premium FSI charges. After
so getting extension of time, the first respondent filed writ
petition before the High Court challenging the order of CMDA
dated 31.08.2012 and prayed for quashing the demand. It is to
be pointed out that the Single Judge also commented on the
                                                                     B
conduct of first respondent in obtaining extension of time to
remit the Premium FSI charges and thereafter, filing the writ
petition before the High Court challenging the demand. [Para
25] [1109-A-E]
      3. The Division Bench did not keep in view the well
settled principle that no right accrued to the applicant-builder     C
by mere filing of application for approval and the right accrues
only after approval is granted by the Government/concerned
authorities. The impugned judgment is contrary to the well
settled principle that the applicant does not acquire any right
under law till his application is considered and sanctioned.         D
Regulation 36 clearly provides that the Premium FSI shall be
allowed in specific areas only with the approval of the
Government. Unless and until the Government grants approval,
no right accrued to the first respondent. When the Government
sanctioned the approval on 29.05.2012, the Division Bench erred
in directing the appellant to calculate the FSI charges as per the   E
guideline value as on 04.05.2011. The impugned judgment is
therefore liable to be set aside. [Para 26] [1109-E-G]
     Usman Gani J. Khatri of Bombay v. Cantonment Board
     and Others (1992) 3 SCC 455 : [1992] 3 SCR 1 ;
     Chennai Metropolitan Development Authority                      F
     represented by its Member-Secretary and another v.
     Prestige Estates Project Ltd. (2019) 10 SCALE 78 –
     relied on.
     Union of India and another v. Mahajan Industries Ltd.
     and another (2005) 10 SCC 203 ; Union of India and              G
     Others v. Dev Raj Gupta and Others (1991) 1 SCC
     63 : [1990] 2 Suppl. SCR 300 – held inapplicable.
     State of W.B. v. Terra Firma Investments & Trading Pvt.
     Ltd. (1995) 1 SCC 125 : [1994] 5 Suppl. SCR 485 –
     referred to.                                                    H
1098            SUPREME COURT REPORTS                         [2019] 16 S.C.R.


 A                             Case Law Reference
       (2005) 10 SCC 203                held inapplicable       Para 8, 9, 20
       [1992] 3 SCR 1                   relied on               Paras 9, 18
       [1994] 5 Suppl. SCR 485          referred to             Para 19
 B     (2019) 10 Scale 78               relied on               Paras 9, 22
       [1990] 2 Suppl. SCR 300          held inapplicable       Paras 9, 24
             CIVIL APPELLATE JURISDICTION : Civil Appeal No. 9336
       of 2019.
 C           From the Judgment and Order dated 03.08.2016 of the High
       Court of Judicature at Madras in W.A. No. 2376 of 2013.
             Jayanth Muthuraj, Sr. Adv., Ms. A. Jaswathi, K. V. Vijayakumar,
       Advs. for the Appellant.
            K.V. Viswanathan, Sr. Adv., Gagan Gupta, K.V. Dhanapalan,
 D
       Vinodh Kanna B., Lenin Rajasehar, Advs. for the Respondents.
             The Judgment of the Court was delivered by
             R. BANUMATHI, J.
             1. Leave granted.
 E
              2. This appeal arises out of the impugned judgment dated
       03.08.2016 passed by the Division Bench of the High Court of Madras
       in W.A. No. 2376 of 2013 filed by the first respondent in and by which
       the Division Bench set aside the order of Single Judge and allowed the
       writ appeal thereby directing the appellant Chennai Metropolitan
 F     Development Authority (CMDA) to calculate the Premium FSI charges
       at the rate prevalent as on the date of filing of application by the first
       respondent Rajan Dev.
              3. Respondent No.1 is a developer carrying on construction
       activities under the name and style of M/s. Ben Foundation. He
 G     submitted an application dated 07.05.2009 for planning permission to
       construct a residential-cum-shopping building at Survey Nos. 223, 224
       and 225, Padi Village, Padi Kuppam Road, Chennai for 196 dwelling
       units. He proposed construction of Block A – Stilt floor(part) + GF(part)
       + 6 floors + 7th floor part; Block B and C – Stilt + 6 floors and Block
 H     D – Stilt + 7 floors with floor area of 14082.26 sq.mt. and height of
CHENNAI METROPOLITAN DEVELOPMENT AUTH. REP. BY 1099
 ITS MEMBER SEC. v. D. RAJAN DEV [R. BANUMATHI, J.]

22.80 mt. The planning permission was granted by the appellant CMDA         A
on 01.07.2009. Initially, the sanction was mistakenly accorded for 14889
sq.mts. (1.84 FSI) instead of 14164 sq.mts. (1.75 FSI). The excess area
for which sanction was wrongly granted is 725 sq.mts. While the
construction was in progress, on 09.09.2009 vide G.O.Ms.No.163-
Housing and Urban Development, respondent No.2-Government of
                                                                            B
Tamil Nadu introduced a scheme called “Premium FSI Scheme”,
wherein the Government permitted any builder willing to pay FSI
charges to increase FSI above the normally permitted FSI. Additional
benefit by way of Premium FSI accrued to the developer is related to
the proportionate land extent. As per the guidelines for Premium FSI,
the amount payable by the applicant towards the Premium FSI charge          C
shall be equivalent to the cost of the proportionate land as per the
Guideline value of the Registration Department. On 04.05.2011, the first
respondent made an application along with revised proposal for
permission to have additional FSI area of 11,860 sq.ft. (= 1102 sq. mt.)
under the “Premium FSI Scheme” for extra fourteen dwelling units i.e.
                                                                            D
one floor each in two blocks. The said application was returned by the
appellant on 10.02.2012 with the direction to furnish revised plan for
rectifying sixteen defects as pointed out by the appellant. The first
respondent submitted revised plans on 24.02.2012. The appellant-CMDA
vide its letter dated 30.03.2012 forwarded the revised plan to the
Government seeking to accord approval to the recommendation of the          E
Multi-storeyed building panel and for issue of planning permission. In
the meantime, the State Government revised the guideline value of the
land w.e.f. 01.04.2012.

       4. While the application of the first respondent for revised
proposal was pending, the guideline value of the land was revised w.e.f.    F
01.04.2012 from Rs.1,650/- per sq.ft. to Rs.5,000/- per sq.ft. for the
area which the first respondent has put up construction. After inspection
of the site and recommendation of the multi-storeyed building panel,
on 29.05.2012, the Government granted approval for the Premium FSI.
Pursuant to the sanction granted by the Government, the appellant-          G
CMDA vide letter dated 02.07.2012 called upon the first respondent to
remit “Premium FSI Charges” quantified at Rs.7,96,50,000/- for 1479.81
sq.mts. of the land area based on the revised guideline value of the
property as revised w.e.f. 01.04.2012 by the Government and as
provided at the time of the approval for the proposed construction.         H
1100            SUPREME COURT REPORTS                          [2019] 16 S.C.R.


 A             5. Vide letter dated 19.07.2012, the first respondent raised
       objections to the aforesaid calculation and also as regards the area. The
       first respondent submitted that the first respondent originally proposed
       to construct 14,889 sq.mts. of built up area of an extent of land of
       8093.64 sq.mts. It was stated that the projected FSI at 1.74 by adopting
       the total built up area was calculated as 14089 sq.mts. as against 14,889
 B
       sq.mts. and the same was a human error and the same led to all the
       confusion. The first respondent has also raised objection stating that
       he made the application during May, 2011 itself and that he may be
       allowed to make payment of “Premium FSI Charges” by adopting the
       guideline value existed on both the dates of their application (04.05.2011)
 C     and the approval by the CMDA panel (30.03.2012). In the
       representation, the first respondent stated that they are ready to pay
       the “Premium FSI Charges” for both the projected built up area of 800
       sq.mt. in the already approved plan and for the proposed built up area
       of 1102 sq.mts. (proposed extra FSI of 0.24) by adopting the guideline
       value existed on the date of their application i.e. 04.05.2011. The said
 D
       representation was rejected by the CMDA vide letter dated 31.08.2012.
       The appellant by its letter dated 19.07.2012 modified the revised
       “Premium FSI Charges” for 1479.81 sq.mts. of the land area from
       Rs.7,96,50,000/- to Rs.7,61,40,000/-. By the time the plan was
       sanctioned, the guideline value had increased from Rs.1,650/- per sq.ft.
 E     to Rs.5,000/- per sq.ft. As per the revised guideline, the Premium FSI
       charges were calculated at the rate of Rs.5,000/- per sq.ft. and the
       same was quantified at Rs.7,61,05,480/-.
              6. The first respondent made further representation dated
       14.12.2012 requesting the appellant-CMDA to calculate the “Premium
 F     FSI Charges” taking into account the guideline value prevailing as on
       the date on which the application was submitted and not to levy
       “Premium FSI Charges” as per the revised guideline value. The first
       respondent also requested to deduct all balcony and duct wall area
       which is within the limit of 10% allowance. The representation made
       by the first respondent requesting for reduction of “Premium FSI
 G     Charges” was rejected by the appellant-CMDA by order dated
       19.04.2013, affirming its earlier order dated 31.08.2012. By its letters
       dated 23.05.2013 and 14.06.2013, first respondent sought for further
       thirty days’ time for remitting the Premium FSI charges as demanded
       by the appellant. By communication dated 19.06.2013, the appellant-
 H     CMDA granted time till 15.07.2013 to pay Premium FSI charges.
CHENNAI METROPOLITAN DEVELOPMENT AUTH. REP. BY 1101
 ITS MEMBER SEC. v. D. RAJAN DEV [R. BANUMATHI, J.]

       7. After so taking time, the first respondent filed the writ petition   A
in WP No.18238 of 2013 before the Madras High Court. During the
pendency of the writ petition, construction of 196 dwelling units was
completed and a partial completion certificate dated 17.06.2013 was
granted. The learned Single Judge dismissed the writ petition by holding
that the first respondent is liable to pay the “Premium FSI Charges”
as per the guideline value prevailing on the date of approval of the plan.     B
The learned Single Judge held that the builder would not acquire any
right by merely submitting application for building plan and the right to
the builder would accrue only after the approval of the plan. The
learned Single Judge also held that there was no undue delay on the
part of CMDA or the second respondent-Government in disposing of               C
the application of the first respondent.
       8. Being aggrieved by the dismissal of the writ petition, the first
respondent preferred the writ appeal before the Division Bench which
came to be allowed by the impugned judgment. Relying upon Union
of India and another v. Mahajan Industries Ltd. and another                    D
(2005) 10 SCC 203, the Division Bench held that the appellant-CMDA
is entitled to calculate levy of “Premium FSI Charges” taking into
account the guideline value prevalent as on the date of the application
for approval of the additional construction and not from the date on
which the approval is being granted. During the pendency of the writ
appeal, an amount of Rs.3,80,00,000/- was deposited by the first               E
respondent pursuant to the order dated 17.02.2014 passed by the
Division Bench. A provisional completion certificate dated 16.10.2014
was granted for a total of 210 dwelling units. Being aggrieved, the
appellant-CMDA has preferred this appeal.
      9. Mr. Jayanth Muthuraj, learned Senior counsel appearing for            F
the appellant-CMDA submitted that under the “Premium FSI Scheme”,
the application was returned for rectification of defects on 10.02.2012
and the first respondent resubmitted the application on 25.02.2012.
Placing reliance upon Chennai Metropolitan Development Authority
represented by its Member-Secretary and another v. Prestige Estates
Project Ltd. 2019 (10) SCALE 78, it was submitted that the crucial             G
date for determining the applicable rate for Premium FSI Charges is
the date on which the authority grants planning permission. It was
submitted that mere pendency of the application or any payment made
does not create any right under law in favour of the applicant till his
application is considered and sanction is granted as laid down by the          H
1102            SUPREME COURT REPORTS                          [2019] 16 S.C.R.


 A     Supreme Court in Usman Gani J. Khatri of Bombay v. Cantonment
       Board and others (1992) 3 SCC 455. The learned Senior counsel
       submitted that the judgments relied upon by the Division Bench viz.
       Union of India and others v. Dev Raj Gupta and others (1991) 1
       SCC 63 and Union of India and another v. Mahajan Industries
       Ltd. and another (2005) 10 SCC 203 are not applicable to the case
 B
       in hand as both the judgments deal with the application for conversion
       and not application for building permission. The learned Senior counsel
       further submitted that the first respondent being an experienced builder
       with for more than three decades experience, is well aware of the
       procedure to be followed in making an application seeking planning
 C     permission, but had deliberately filed a defective application and
       therefore, the first respondent is not right in contending that there was
       delay on the part of the appellant-CMDA in processing the application.
               10. Per contra, reiterating the findings of the Division Bench, Mr.
       K.V. Vishwanathan, learned Senior counsel appearing for the first
 D     respondent submitted that as rightly held by the Division Bench that
       the crucial date for determining Premium FSI has to be the date of
       receipt of the application by the first respondent. It was submitted that
       the first respondent has submitted the application for permission to have
       additional FSI under the “Premium FSI Scheme” way back on
 E     04.05.2011 and the same was returned on 10.02.2012 by the appellant
       for rectifying the defects nearly after a delay of nine months. It was
       further submitted that the application of the first respondent was pending
       consideration for quite some time with the appellant-CMDA and the
       Multi-Storeyed Building Panel discussed the application of the first
       respondent and forwarded the proposal to the Government with
 F     recommendation for approval even on 30.03.2012. The learned Senior
       counsel further submitted that the Division Bench of the High Court
       rightly held that the FSI charges is payable on the date of filing of the
       application for conversion and not on the date of the approval and the
       impugned judgment warrants no interference.
 G           11. We have considered the submissions and carefully perused
       the impugned judgment and other materials on record. The point falling
       for consideration is whether the High Court was right in holding that
       the Premium FSI charges are payable only as per the pre-revised
       guideline value as on 04.05.2011 i.e. the date of filing of application
 H     with revised plan, by the first respondent?
CHENNAI METROPOLITAN DEVELOPMENT AUTH. REP. BY 1103
 ITS MEMBER SEC. v. D. RAJAN DEV [R. BANUMATHI, J.]

      12. On 07.05.2009, the first respondent submitted an application       A
for construction of residential-cum-shopping complex at Padi Village,
Padi Kuppam Road, Chennai. The planning permission was granted for
the original plan by the appellant-CMDA on 01.07.2009. When the
construction was in progress, the Government of Tamil Nadu introduced
the “Premium FSI (Floor space Index) Scheme” vide G.O.Ms.No.163,
                                                                             B
Housing and Urban Development (UD-I) dated 09.09.2009 as per
which the Government permitted willing builders to increase FSI above
the normally permitted FSI subject to a maximum of one relating the
same to the road width parameters by paying premium FSI charges.
      13. Regulation 36 deals with “Premium FSI”, which reads as
under:-                                                                      C

      “36. Premium FSI:- The Authority may allow Premium FSI over
      and above the normally allowable FSI subject to a maximum of
      1 (one) relating the same to the road width parameters as
      follows:-
                                                                             D
         Serial           Road width                   Premium FSI
         Number                                        (% of normally
                                                       allowable FSI)
         (i)          18 meters and above                    40%
                      (60’ and above)                                        E
        (ii)          12 meters – below                      30%
                      18 meters(40’ – below 60’)
        (iii)         9 meters – below 12 meters
                      (30’ – below 40’)                      20%
                                                                             F
       The premium FSI shall be allowed in specific areas as may be
notified, subject to Guidelines and on collection of charge at the rates
as may be prescribed by the Authority with the approval of the
Government. The amount so collected towards the award of Premium
FSI shall be remitted into the Government account to be allotted
separately for the purpose for utilizing it for infrastructure development   G
in that area as may be directed by the Government.”
       14. The first respondent sought to avail the benefits of Premium
FSI and submitted an application on 04.05.2011 seeking approval of
additional FSI under the Premium FSI Scheme. The said application
was returned by the appellant-CMDA on 10.02.2012 for rectification           H
1104            SUPREME COURT REPORTS                         [2019] 16 S.C.R.


 A     of defects. Thereafter, on 24.02.2012, first respondent submitted the
       revised plan after rectification of the defects.
              15. The Multi-Storeyed Building Panel considered the revised
       plan of the first respondent and the appellant-CMDA by its letter dated
       30.03.2012 forwarded the proposal to the Government with
 B     recommendation for approval subject to the conditions indicated thereon.
       In the meanwhile, the Registration Department revised and notified the
       revised guideline value w.e.f. 01.04.2012 as per which the guideline value
       of Padi Kuppam Road was increased from Rs.1,650/- per sq.ft. to
       Rs.5,000/- per sq.ft. On 29.05.2012, the Government granted approval
       to the revised plan of the first respondent. Based upon the revised
 C     guideline value, the appellant-CMDA by its letter dated 02.07.2012
       informed the first respondent that the Premium FSI has been levied at
       Rs.7,96,50,000/-. The same was later modified as Rs.7,61,40,000/-.
              16. Learned Senior counsel for the respondent contended that
       only the date of application for revised building plan has to be taken
 D     into consideration and the first respondent cannot be levied with the
       revised FSI Premium charges because of the time taken by CMDA in
       processing the application. The learned Senior counsel mainly relied upon
       the recommendation made by the appellant-CMDA to content that pre-
       revised guideline would only be applicable for calculation of the Premium
 E     FSI charges. The forwarding of the revised proposal by the appellant-
       CMDA to the Government reads as under:-
             “AGENDA ITEM NO:2/203 FILE NO: C3(N)/6476/2011
             Sub: CMDA – APU – MSB (North) Division – Planning
             Permission Application for the revised approval for the
 F           construction of Block A: Stilt/GF (Shop cum Parking) + 7 Floors;
             Block-B, C and D: Stilt + 7 Floors Commercial cum Residential
             building with 210 dwelling units at T.S.No.113/2, Block No.65,
             Ward I, Old S.No.224/1 (part) of Padi Village, Padikuppam
             Road, Mogappair, Chennai – Applied by Thiru. D. Rajan Dev
 G           – Recommended for Approval – Reg
             The MSB Panel discussed the subject in detail and recommended
             to forward the proposal to the Government recommending for
             approval subject to the following conditions:
                    i) undertaking accepting conditions of NOCs to be obtained
 H                     before issue of Planning Permission; and
CHENNAI METROPOLITAN DEVELOPMENT AUTH. REP. BY 1105
 ITS MEMBER SEC. v. D. RAJAN DEV [R. BANUMATHI, J.]

            ii) undertaking to furnish IAF NOC before issue of               A
                completion certificate to be obtained before issue of
                Planning Permission.
                                                     Sd.XXXX
                                                     30.3.2012
                                          MEMBER SECRETARY”                  B
       By reading of the above, it is seen that it is only forwarding of
the proposal to the Government with recommendation for approval of
the revised plan which is as per the procedure involved. Such forwarding
of the proposal to the Government with recommendation for approval,
does not create any right in favour of the respondent. In terms of           C
Regulation 36, Premium FSI shall be allowed in specific areas as notified
subject to guidelines with the approval of the Government and on
collection of charges at the rates as may be prescribed by the authority.
Thus, for the award of Premium FSI, inter-alia the conditions “collection
of charges at the rates as may be prescribed by the authority” and
“approval of the Government”, are mandatory. The collection of FSI           D
Premium charges is subject to the guidelines. The revised guideline
came into force w.e.f. 01.04.2012. Be it noted that the first respondent’s
application was considered and finally approval was granted by the
Government on 29.05.2012 only after revised guideline came into force.
At the time of granting approval by the Government on 29.05.2012,            E
when the revised guideline was in force, the High Court ought not to
have held that the guideline value as on 04.05.2011, that is, the date of
application of the first respondent, should be considered for the purpose
of calculating Premium FSI charges. The right would accrue to the first
respondent only after the Government grants approval to the revised
plan sanctioning the Premium FSI. Thus, the date on which the approval       F
was granted by the Government i.e. 29.05.2012 ought to have been
taken into consideration for calculating the Premium FSI charges.
       17. It is well settled that no right accrues to an applicant until
the application for approval is considered and sanctioned. The first
respondent has given the proposal for revised building plan under            G
Regulation 36 with a view to avail the benefit of Premium FSI. As
pointed out earlier, the process of grant of Premium FSI is completed
only after the grant of approval by the Government. Regulation 36
clearly provides that the Premium FSI shall be allowed in specific areas
with the approval of the Government and the approval of the                  H
1106            SUPREME COURT REPORTS                         [2019] 16 S.C.R.


 A     Government therefore is mandatory. Only when the Government grants
       approval, the right would accrue to the builder and not before that.
       Therefore, the date of approval is the crucial date.
              18. Learned Senior counsel for the appellant has submitted that
       the builder would not acquire any legal right by merely submitting an
 B     application for approval of the building plan and the right would accrue
       only after sanction of the revised plan by the Government. In this regard,
       we may usefully refer to Usman Gani J. Khatri of Bombay v.
       Cantonment Board and Others (1992) 3 SCC 455 which has been
       referred to by the learned Single Judge in the order passed in the writ
       petition wherein, the Supreme Court held as under:-
 C
             “24. …….The petitioners did not acquire any legal right in
             respect of building plans until the same were sanctioned in their
             favour after having paid the total amount of conversion charges
             in lump sum or in terms of sanctioned instalments and getting
             conversion of their land in freehold tenure…….”.
 D
             19. As pointed out by the learned Single Judge, in Usman Gani,
       the Supreme Court in order to explain the unsustainability of the claim
       made by the builders has also explained a reverse case as under:-
             “24. ……..If we consider a reverse case where building
 E           regulations are amended more favourably to the builders before
             sanctioning of building plans already submitted, the builders would
             certainly claim and get the advantage of the regulations amended
             to their benefit.”
             Learned Single Judge has also referred to State of W.B. v. Terra
 F     Firma Investments & Trading Pvt. Ltd. (1995) 1 SCC 125 and other
       judgments wherein, the Supreme Court held that no right accrues to
       the builder by mere submission of a plan for construction of a building
       which has not been sanctioned by the competent authority.
              20. In the impugned judgment, the High Court relied upon the
       decision in Union of India and Another v. Mahajan Industries Ltd.
 G
       And Another (2005) 10 SCC 203 wherein, the Supreme Court had
       followed the decision of the Delhi High Court in the case of Ansal &
       Saigal Properties (P) Lts. bs. L & DO, holding that the crucial date
       for calculating the conversion charges has to be the date of receipt of
       application for conversion of land use. It is the submission of the
 H     appellant that the decision in the said case is not applicable to the case
CHENNAI METROPOLITAN DEVELOPMENT AUTH. REP. BY 1107
 ITS MEMBER SEC. v. D. RAJAN DEV [R. BANUMATHI, J.]

in hand as the said judgment deals with application for conversion of           A
land and not the application for building permission. Apart from that,
there was delay of more than three years in deciding the said application.
We find merit in the submission of the appellant that the decision in
Mahajan Industries is not applicable to the facts of the present case.
Though the application was filed on 04.05.2011 and resubmitted after
                                                                                B
rectification of defects on 24.02.2012, the Government approved the
revised proposal only on 29.05.2012. In the meanwhile, the revised
guideline value was introduced for implementation w.e.f. 01.04.2012.
As rightly held by the learned Single Judge that the first respondent/
builder does not acquire any legal right until the plan is sanctioned.
                                                                                C
       21. Mere pendency of the application for planning permission does
not create a vested right in an applicant. Right accrues only when the
permission/sanction is granted by the Government/concerned authorities.
This is because planning permission is accorded on the basis of scrutiny
of application form and the concerned documents. There is always
possibility of an application not meeting the requisite criteria for carrying   D
out the proposed development and being rejected. Until and unless an
application complete in all respect is approved, it remains a mere
application and no right can be claimed on the basis of such an
application. A proposal cannot be equated with an approval, otherwise
the later will lose all significance. The obvious logical conclusion is that
the right to an applicant accrues when the permission has been granted.         E
Further, as a corollary, it can be said that the rates prevailing at the
time of granting of permission are the rates which an applicant has to
pay. The respondent/applicant cannot claim the benefit of the earlier
guideline value existing prior to the date when approval was granted
by the government. In our considered view, the respondent will have             F
to pay FSI Premium charges based on the guideline value as existing
on the date of grant of approval.
       22. Learned Senior counsel for the appellant has placed reliance
upon Chennai Municipal Development Authority v. Prestige Estates
Projects Limited 2019 (10) Scale 78. In Prestige Estates, despite the           G
payment having been made by the builder on 28.03.2012, the Supreme
Court held that the developer is liable to pay Premium FSI charges
based on the revised guideline value which are applicable post
01.04.2012. In Prestige Estates, after referring to Usman Gani and
other judgments, the Supreme Court held that the demand on account
of Premium FSI charges arises only upon the grant of approval by the            H
1108            SUPREME COURT REPORTS                         [2019] 16 S.C.R.


 A     Government to avail Premium FSI. The ratio of the decision in Prestige
       Estates is squarely applicable to the present case. In the present case,
       since the sanction for revised plan was granted by the Government on
       29.05.2012, the first respondent in the present case is liable to pay the
       Premium FSI charges based on the revised guideline value which came
       into force w.e.f. 01.04.2012.
 B
               23. Learned Senior counsel for the first respondent inter-alia
       contended that there was inordinate delay on the part of appellant-
       CMDA in processing the application and the first respondent cannot
       be burdened with extra charges on account of delay caused by the
       appellant. Learned Senior counsel further submitted that the application
 C     of the first respondent dated 04.05.2011 for revised proposal was
       returned after nine months on 10.02.2012 and the respondent cannot
       be blamed for the delay caused by the appellant in processing the
       application of the first respondent. This contention does not merit
       acceptance. The appellant-CMDA is a body entrusted with the task of
       examination and approval of multitude of building applications throughout
 D     the planning area. That apart, the appellant-CMDA is a single window
       system and it has to verify various documents with the connected
       Departments at various levels. The application was processed at various
       levels and it was sent to the departments like police, Fire, etc. for
       clearance. Considering the fact that different departments and agencies
 E     are involved with the process of approval, we feel that, there was no
       undue delay on the part of the appellant-CMDA or the State
       Government. As rightly pointed out by the learned Single Judge, the
       first respondent submitted the application after rectification of defects
       only on 24.02.2012 and within a period of one month, the application
       was placed before the meeting. Therefore, it cannot be said that there
 F     was undue delay on the part of the appellant-CMDA or Government
       to consider the first respondent’s application for approval of the revised
       plan.
              24. In the impugned judgment, the Division Bench has relied upon
       Union of India and Others v. Dev Raj Gupta and Others (1991) 1
 G     SCC 63 and Mahajan Industries Limited. The ratio of those decisions
       is not applicable to the case in hand as those decisions relate to
       application for conversion of the land and not building permission
       application. That apart, in those cases, there was a delay of more than
       three years in deciding the application. In the present case, as discussed
       above, there was no delay on the part of the appellant-CMDA or the
 H     Government to consider the first respondent’s application for approval.
CHENNAI METROPOLITAN DEVELOPMENT AUTH. REP. BY 1109
 ITS MEMBER SEC. v. D. RAJAN DEV [R. BANUMATHI, J.]

       25.As submitted by the learned Senior counsel for the appellant-      A
CMDA, the conduct of the first respondent is also to be taken note of.
After the levy of Premium FSI charges calling upon the first respondent
to pay a sum of Rs.7,61,40,000/-, the first respondent submitted a
representation on 19.07.2012 requesting to revise the Premium FSI
charges by considering the guideline value prevailing as on the date of
                                                                             B
the application i.e. 04.05.2011. The said representation was rejected
by the appellant-CMDA by its letter dated 31.08.2012 and the first
respondent was directed to make payment of Premium FSI Charges.
The first respondent was also informed that if the payment was not
made within sixty days, the application will be returned. The first
respondent’s further representation dated 14.12.2012 also came to be         C
rejected. Thereafter, by letters dated 23.05.2013 and 14.06.2013, the
first respondent had prayed for thirty days’ time for remitting the
Premium FSI charges as demanded by the appellant-CMDA. By
communication dated 19.06.2013, the first respondent was granted time
upto 15.07.2013 to pay Premium FSI charges. After so getting extension
of time, the first respondent filed writ petition before the High Court      D
challenging the order of CMDA dated 31.08.2012 and prayed for
quashing the demand. It is to be pointed out that the learned Single Judge
also commented on the conduct of first respondent in obtaining
extension of time to remit the Premium FSI charges and thereafter, filing
the writ petition before the High Court challenging the demand.              E
       26. The Division Bench did not keep in view the well settled
principle that no right accrued to the applicant-builder by mere filing of
application for approval and the right accrues only after approval is
granted by the Government/concerned authorities. The impugned
judgment is contrary to the well settled principle that the applicant does   F
not acquire any right under law till his application is considered and
sanctioned. Regulation 36 clearly provides that the Premium FSI shall
be allowed in specific areas only with the approval of the Government.
Unless and until the Government grants approval, no right accrued to
the first respondent. When the Government sanctioned the approval on
29.05.2012, the Division Bench erred in directing the appellant to           G
calculate the FSI charges as per the guideline value as on 04.05.2011.
The impugned judgment is therefore liable to be set aside.
      27. In the result, the impugned judgment dated 03.08.2016 passed
by the High Court of Madras in W.A. No.2376 of 2013 is set aside
and this appeal is allowed. The appellant-CMDA is at liberty to recover      H
1110                SUPREME COURT REPORTS           [2019] 16 S.C.R.


 A     the balance Premium FSI charges from the first respondent in
       accordance with its regulations and rules. No costs.


       Ankit Gyan                                       Appeal allowed.

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