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

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, 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 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

' 1 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.

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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 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 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.

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 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 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

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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 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 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 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 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 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

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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 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 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 : H

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 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 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 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 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 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 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 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

-' 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

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"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 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 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 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 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 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 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 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 justified."

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These decisions do not lay down any law which is different from what 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 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 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 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 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 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 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

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 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 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 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 ecological balance. It is also contended that the land area available towards

--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 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%

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.

1Copy pinpoint1. Matulya Mill 5641.40 4616.46 Nil

2Copy pinpoint2. Swadeshi Mill 24482.00 12612.13 12612. 13 B

3Copy pinpoint3. 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

4Copy pinpoint4. Morarjee Goculdas Unit No. 24479.37 1276.96 Located at Kandivli Unit

5Copy pinpoint5. Piramal Mill · 1533.46 1254.65

6Copy pinpoint6. Mafatlal Mill Unit No. 3 588.41 481.43

7Copy pinpoint7. Matulya Mill 474.68 388.37

8Copy pinpoint8. Modern Mill 1163.31 Nil F

9Copy pinpoint9. Shreeram Mill 1848.25 1572.20

10Copy pinpoint10. Victoria Mill 545.34 4537.10

11Copy pinpoint11. Hindustan Spg. & Wvg. Mill Unit No. 1 & 2 662.61 542.12

12Copy pinpoint12. Hindustan Spg. & Wvg. G Mill (Crown Mill Division) 1134.81 928.67

13Copy pinpoint13. Simplex Mill 1363.54 1115.63 ·~.

14Copy pinpoint14. New Great Eastern Spg. & Wvg. Mills 1533.30 1254.52

15Copy pinpoint15. Swan Mill (Kurla) H 4663.70 3815.76

1036 SUPREME COURT REPORTS (2006) 2 S.C.R.

16Copy pinpoint16. Kohinoor Mills No. 3 2628.00** 2946.54***

17Copy pinpoint17. India United Mill No. 2 & 3 7873.63** 8828.01***

18Copy pinpoint18. Elhpinstone Mills 2796.40** 3135.35**

19Copy pinpoint19. Jupiter Mills 1484.75** 1664.72***

20Copy pinpoint20. New Hind Textile Mills 2034.88** 2281.54***

21Copy pinpoint21. Mumbai Mills (Sakseria Mills) 10631.02** 11919.63***

22Copy pinpoint22. Apollo Mills & its property i.e. Morarka Bungalow 4714.81** 5286.33***

23Copy pinpoint23. Swan Mill (Seweree) 4059.00 3321.00 c 24. Western India Spg. & Wvg. Mill 1436.00 1175:00

25Copy pinpoint25. Bombay Dyeing (Spring Mill Wadala) 25775.24 26556.30 '

26Copy pinpoint26. 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:

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 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 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 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 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 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 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 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

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 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 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 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, 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 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 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 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 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 determination by the High Court.

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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 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 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 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 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 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.

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) ' 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 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 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 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 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 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 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 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 passed by this Court dated I Ith May, 2005, the sale of NTC mills is seriously not in question.