Gujarat HC Quashes Municipal Corporation's Cancellation of Regularisation Order, Holds Section 8(4) Confers No Power of Review
The Gujarat High Court ruled that once regularisation is granted under Section 6(3) of the Gujarat Regularisation of Unauthorised Development Act, 2011, the designated authority cannot invoke Section 8(4) to revoke it — a power the legislature never conferred.
The High Court of Gujarat at Ahmedabad has quashed an order by which the Municipal Corporation cancelled a regularisation it had itself granted for unauthorised construction at Swastik Complex, Rajpur-Hirpur, Ahmedabad. Justice Niral R. Mehta, sitting singly, held that Section 8(4) of the Gujarat Regularisation of Unauthorised Development Act, 2011 is a statutory embargo to be applied before regularisation is granted, not a source of power to revoke an order already passed under Section 6(3). The cancellation order dated 19 March 2018 and the consequential demolition notice dated 2 April 2018 were both quashed. The judgment turns on a structural reading of the 2011 Act and has direct consequences for property buyers who rely on regularisation orders when purchasing commercial premises.
The Dispute Before the High Court
Swastik Complex stands on Survey No. 7449 of Town Planning Scheme No. 4, Rajpur-Hirpur, Sub-District Ahmedabad (Maninagar), admeasuring approximately 749.21 square metres. Respondent No. 5, the original owner, applied to the Corporation under Section 5 of the 2011 Act seeking regularisation of two items of unauthorised construction: 83.16 square metres on the ground floor and 24.95 square metres in an area originally earmarked for parking.
After receiving the requisite fees, the Corporation passed an order on 12 October 2015 under Section 6(3) regularising both items. Acting on the strength of that order, the petitioners and respondent Nos. 2 to 4 purchased various units in Swastik Complex from respondent No. 5 through five registered sale deeds, all dated 14 October 2016. The transactions covered Shop Nos. 1, 2, 3 and 4 (each admeasuring approximately 37.75–38 sq. metres) and the cellar (278 sq. metres), with aggregate consideration running to over Rs. 3.21 crore across the five deeds. The buyers subsequently executed a common lease deed dated 10 February 2017 in favour of Yes Bank Ltd., which took possession of Shop Nos. 1, 2 and 3 as lessee.
Complaints about further unauthorised development on the top floor and ground floor of Swastik Complex were submitted to the municipal authorities between October 2017 and January 2018. Instead of acting against those alleged violations, the Corporation invoked Section 8(4) of the 2011 Act and, by order dated 19 March 2018, cancelled the regularisation it had granted in 2015. The cancellation order was issued in the name of respondent No. 5, the erstwhile owner, not the petitioners who had by then become registered owners. A demolition notice under Section 260(1)(a) of the Bombay Provincial Municipal Corporation Act, 1949 followed on 2 April 2018, addressed to respondent No. 5 as well as the petitioners and respondent Nos. 2 to 4.
The petitioners approached the High Court under Article 226 of the Constitution challenging both the cancellation order and the demolition notice.
The Legal Issue: Can Section 8(4) Be Used to Cancel a Section 6(3) Order?
The petitioners raised three distinct grounds. First, the cancellation order was passed without issuing any notice to the petitioners or affording them a hearing, in breach of the audi alteram partem principle. Second, the order was issued in the name of the previous owner, respondent No. 5, even though the petitioners had acquired ownership by registered sale deeds in 2016. Third, and most fundamentally, Section 8(4) does not confer any power on the designated authority to review, revise or cancel an order already passed under Section 6(3).
The Corporation, appearing through Senior Advocate Mr. Maulin Raval, did not file an affidavit-in-reply and did not dispute the factual matrix. Its sole defence was that inquiry had revealed the construction was carried out after the cut-off date of 28 March 2011, and that Section 8(4) — which bars regularisation of any unauthorised development carried out on or after that date — therefore empowered the authority to cancel the earlier regularisation order.
The court framed the question narrowly: whether the competent authority, in exercise of powers under Section 8(4), is empowered to cancel or revoke an order of regularisation already passed under Section 6(3).
How the Bench Reasoned
Justice Mehta undertook a detailed reading of Sections 5, 6 and 8 of the 2011 Act. Section 5 deals with the initiation of the regularisation process and the suspension of earlier removal notices. Section 6 governs the grant or refusal of regularisation: Section 6(1) requires the designated authority to scrutinise the application and conduct an inquiry; Section 6(3) requires it to pass a regularisation order once fees are paid; and Section 6(4) requires a reasoned refusal order where regularisation is not possible.
Section 8 enumerates categories of development that cannot be regularised — land belonging to government bodies, reserved land, water bodies, and so on. Section 8(4) specifically provides that any unauthorised development carried out, or any order or decision taken for matters specified in Section 5(2), on or after 28 March 2011 shall not be regularised.
The court held that Section 8 does not confer any independent or substantive power on the designated authority. It merely prescribes the parameters and limitations governing the exercise of powers under Section 6. The embargo in Section 8(4) is a consideration to be applied at the inquiry stage under Section 6(1), before the authority decides whether to grant or refuse regularisation. Once an order under Section 6(3) has been passed, the Act does not envisage any power of review or revision in favour of the designated authority. The only statutory remedy the Act provides is an appeal available to an applicant whose application has been rejected under Section 6(4).
Applying this reading to the facts, the court observed that the Section 6(3) order was passed on 12 October 2015, which necessarily meant the designated authority had already conducted the Section 6(1) inquiry and considered the restrictions in Section 8 before granting regularisation. The subsequent invocation of Section 8(4) to cancel that very order was, in the court's words, “wholly misconceived and dehors the powers conferred under the Act.”
The court also addressed the Corporation's factual claim that the construction post-dated 28 March 2011. Even accepting that some material existed to support that conclusion, the court found no source of power in the Act that would authorise the designated authority, after passing a Section 6(3) order, to collect fresh evidence or to reassess material already considered at the time of regularisation. Such an exercise would amount to assuming a power of review or recall which the legislature had consciously not conferred.
The court added that accepting the Corporation's interpretation would effectively confer upon the designated authority a power that finds no sanction in the statutory framework — a result that a plain and harmonious reading of the Act does not permit.
Natural Justice and the Identity of the Affected Party
Beyond the jurisdictional point, the court noted two additional infirmities in the impugned order. The cancellation was passed without issuing any notice to the petitioners and without affording them an opportunity of hearing, despite the fact that they were the registered owners of the property at the time. The order was also issued in the name of respondent No. 5, the erstwhile owner, who had transferred the property by registered sale deeds in October 2016 — nearly a year and a half before the cancellation order was passed in March 2018. The persons directly and adversely affected by the order were thus neither identified nor heard.
The petitioners had purchased the property after satisfying themselves about the Non-Agricultural permission, the sanctioned plan, and the regularisation order. The regularisation was revoked approximately three years after it was granted, without any explanation for the delay and without notice to the current owners.
Outcome
Justice Mehta allowed the petition. The impugned order dated 19 March 2018 passed under Section 8(4) of the Gujarat Regularisation of Unauthorised Development Act, 2011 was quashed and set aside. The consequential notice dated 2 April 2018 issued under Section 260(1)(a) of the Gujarat Provincial Municipal Corporation Act was also quashed and set aside.