The High Court of Judicature at Allahabad has delivered a landmark ruling prohibiting the practice of repeated compounding of building plans under the Uttar Pradesh Urban Planning and Development Act, 1973. In a significant judgment impacting the real estate landscape, the Court declared that a developer cannot circumvent building regulations by repeatedly seeking regularization for identical deviations, effectively ruling that such offences can only be compounded once.

The bench comprising Justice Saral Srivastava and Justice Sudhanshu Chauhan ordered the immediate demolition of unauthorized 9th and 10th floors in four residential towers and the entirety of two additional towers—Tower 27 and Tower 28—within the Gulmohar Greens project in Ghaziabad. The Court further imposed a cost of ₹25 lakh on the developer, M/s S.V.P. Builders India Limited, to be deposited into the accounts of the Gulmohar Greens Residents Welfare Association, alongside a fine of ₹50,000 to be paid to each petitioner in the case.

A Pattern of Repeated Illegality The legal dispute originated from a petition filed by apartment owners who alleged that the developer had repeatedly deviated from sanctioned layout plans without obtaining the mandatory consent of residents. The Ghaziabad Development Authority (GDA) had sanctioned a Group Housing Scheme in 2006, which subsequently underwent three separate rounds of compounding—in 2011, 2015, and 2024—despite the developer failing to secure a completion certificate or resolve critical title disputes over the land.

The Court observed that the developer’s actions constituted a direct violation of the Uttar Pradesh Apartment (Promotion of Construction, Ownership and Maintenance) Act, 2010. By failing to disclose accurate plans and specifications, and by unilaterally changing common areas without resident consent, the developer had bypassed statutory safeguards intended to protect homeowners.

“It is trite law that the compounding only waives or satisfies criminal liability/fines. It cannot be used as a tool to regularize architectural changes that runs counter to the layout plan,” the Court observed. The bench emphasized that the compounding mechanism exists to address minor, permissible deviations, not to serve as a blanket permit for structural overhaul through repetitive applications.

Collusion and Regulatory Failure The judgment highlights a systemic failure within the GDA, with the Court finding compelling evidence that authority officials colluded with the developer to perpetuate illegal constructions. The Court noted that the developer had improperly included land belonging to the Indian Air Force (Hindon Air Base) when calculating the permissible Floor Area Ratio (FAR) for the project. Despite repeated warnings from the defense authorities regarding the title dispute, the GDA proceeded to approve compounding requests based on these tainted calculations.

The bench was particularly critical of the police investigation into the matter. An FIR had been lodged in 2018 regarding the sale of common areas and the failure to obtain completion certificates; however, the police submitted a final report characterizing the issue as a "civil matter." The Court described this as an attempt to protect the builder, ordering a fresh investigation to be conducted by an officer not below the rank of Additional Commissioner of Police.

“The facts delineated above also establishes that the Development Authority has been in collusion with the respondent no.3-Promoter in committing the aforesaid illegalities with impunity by the Promoter inasmuch as despite the fact that Development Authority did know about the violation committed by the Promoter, allowed him to transfer the apartments and deliver the possession to the apartment owners,” the Court stated.

Consequences for Future Development The Court’s ruling establishes that in a Group Housing Scheme, obtaining a completion certificate is a non-negotiable statutory requirement under Section 15A of the 1973 Act and Section 4(5) of the 2010 Act. The Court rebuked the builder for prioritizing financial gains over the safety and structural integrity of thousands of residents. By selling flats without these certificates, the builder left owners vulnerable and denied them the protection of legally verified fire safety, electrical, and structural systems.

To rectify the situation, the Court has directed the GDA to constitute a three-member committee to identify common areas sold illegally to 85 individuals. The developer is mandated to return the sale price of these common areas to the purchasers, inclusive of construction costs and 10% interest. Furthermore, the Court has directed the state government to initiate disciplinary inquiries against the GDA officials responsible for approving the illegal third compounding map.

The Court’s firm stand serves as a warning against the "regularization culture" in urban planning, asserting that the sanctity of approved master plans cannot be compromised by financial settlements. The demolition process is expected to commence immediately, with the District Administration and local police ordered to provide comprehensive security to GDA demolition teams. The litigation, which has spanned nearly a decade, concludes with these stringent directions, ensuring that the burden of regulatory non-compliance falls solely upon the developer and the oversight authority, rather than the residents.