M/S. SHABI CONSTRUCTION COMPANY versus CITY AND INDUSTRIAL DEVELOPMENT CORPORATION AND ANR.

Citation: [1995] 3 S.C.R. 534 · Decided: 19-04-1995 · Supreme Court of India · Bench: J.S. VERMA · Disposal: Dismissed

Judgment (excerpt)

A 
B 
MIS. SHABI CONSTRUCTION COMPANY 
v. 
CITY AND INDUSTRIAL DEVELOPMENT 
CORPORATION AND ANR. 
APRIL 19, 1995 
[J.S. VERMA, N.P. SINGH AND M.K. MUKHERJEE, JJ.] 
Maharashtra Regional and Town Planning Ac4 1966/General Develop-
ment Control Regulations for New Bombay, 1975: ss. 21,22(m), 31, 37 and 
C 159/Regulations 3.11 and 16.3.1-Township of New Bombay-Town Develop-
ment Authority-f'ower to prescribe Floor Space 1nd~eld, fixation of FSI 
is an in-house exercise of Development Authority, but it gets legal sanctity only 
when State Government grants approval theret&-lncrease in FSI without ob-
taining prior· approval of State Government would amount to breach of 
D ss.31(6) and 37(2) of the Act. 
Doctrine of Promissory estoppeHfeld, cannot be invoked to compel 
public bodies or Government to cany out representation or promise made 
contrary to law. 
E 
The Government of Maharashtra, by Notification dated 23.3.1971 
issued under s.113(1) of Maharashtra Regional and Town Planning Act, 
1966, delineated and designated certain area for development as a site for 
a new town to be known as New Bombay, and also declared respondent No. 
1, a Government Company, to be the new Town Development Authority for 
the township. Respondent No. 1, with the approval of the State Govern-
F ment, framed the General Development Control Regnlations for New 
Bombay, 1975, Regnlation 16.3.1 whereof provided that the Floor Space 
Index (FSI) for diverse land use should not exceed 1. (Regulation 3.11 
defined FSI to mean the ratio of the gross Door area of all the storeys of 
a building on a plot to the total area of the plot). Lftter, the Board of 
G Directors of respondent No. 1 passed a resolution to amend Regnlation 
16.3.1 by fixing different FSls for diverse land uses and for land use for 
business and commercial purposes maximum permissible FSI was fixed 
at 2. The said resolution was sent on 21.10.1981 for approval of the State 
Government. 
H 
While the matter was awaiting approval and final decision of the 
534 
i 
SHABI CONSTRUCTION CO. v. CITY AND INDL. DEV. CORPN. 
535 
Government, respondent No. 1 issued a public notice in Angnst 1985 invit- A 
ing offers for lease of a commercial plot. The maximum permissible limit of 
FSI was shown as 2. The olTe.r of the appellant was accepted and It was 
allotted the said plot. The agi-eement entered into between the parties on 
21.1.1987 provided that the maximum permissible FSI would be 2. 
Meanwhile, on 10.10.1986 the State Government issued a notification B 
in the official gazette sanctioning increase in FSI in res,.ct of use for 
business purpose to 1.50. The allottee wrote to respondent No. 1 stating 
that the Notification had no hearing upon its construction plan as in its 
case FSI was to be as per the plan. Respondent No. 1 communicated to the 
allottee that the plan could not be approved as there was discrepancy in C 
the FSI mentioned in the agreement and the FSI actually approved by the 
Government. The allottee filed a writ petition challenging the Notification 
dated 10.10.1986. The High Court dismissed the writ petition holding that 
the agreement between the parties was contrary to the Regnlatlons and the 
law. Aggrieved, the allottee filed the appeal by special leave. 
D 
It was contended for the appellant that the prescription of FSI was 
not a statutory prescription but .an administrative decision required to be 
taken by respondent No. 1 from plan to plan under the provisions of 
s.22(m) of the Act and since respondent No. 1, as the Planning Authority, 
took a decision to increase the FSI to 2 and entered into an agreement with E 
the appellant on that basis, it was estopped from repudiating the co~iract. 
Dismissing the appeal, this Court 
HELD : 1.1. Though fll<ation of FSI is an in-house exercise of 
respbndent No. 1, it gets legal sanctity only when the State G~"rnment p 
grants its approval thereto under section 159 of the Maharashtra Regional 
and Town Planning Act, 1966. After the FSI is so fixed to comply with the 
requirements of section 22(m), it becomes a part and parcel of the Develop-
ment plan which is to be submitted by the Planning Authority to the State 
Government under section 21. Once the State Government grants approval° 
to the Development plan it becomes the final Development Phm and binds G 
the Planning Authority under section 31(6) of the Act. Therefore, any 
breach or violation of any of the terms or contents of the final Development 
plan or 

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