IMPORTANT POINT
In case of ‘fee’ the principle of quid pro quo shall apply.

JUDGMENT

S.B. Sinha, J. —

1. Leave granted.

INTRODUCTION

2. Legality and/or validity of Infrastructure Development Charges (IDC) by Chennai Metropolitan Development Authority (CMDA) allegedly on behalf of Chennai Metropolitan Water Supply and Sewerage Board (the Sewerage Board) for issuing planning permission in regard to the construction of multi-storeyed building and/or special building is in question in this appeal which arises out of a judgment and order dated 20.12.2006 passed by a Division Bench of the High Court of Judicature at Madras in W.P. No.34702 of 2006.

BACKGROUND FACTS

3. Appellants herein are builders and developers and individuals who had applied for grant of permission for construction of multi-storeyed building and/or special building before the CMDA. They were asked to deposit specified sums towards IDC payable to the Sewerage Board by CMDA. Contending that CMDA had no power to collect IDC and the Sewerage Board is otherwise obligated to supply water and provide sewerage connection, they filed writ petitions before the High Court of Madras. The said writ petitions have been dismissed by reason of the impugned judgment.

SUBMISSIONS

4. Mr. L. Nageshwar Rao, learned counsel appearing on behalf of the appellants, would contend :

1) The Chennai Metropolitan Water Supply and Sewerage Act, 1978 (the 1978 Act) containing no provision for delegation of power to an outsider, the purported demand made by the CMDA must be held to be wholly illegal;

2) As no special services are to be rendered to the builders and/or developers or individuals so as to satisfy the doctrine of quid pro quo, the impugned judgment cannot be sustained.

5. Mr. Krishnamurty, learned senior counsel appearing on behalf of the respondent, on the other hand, urged :

1) The Board being bound by the directions issued by the State of Tamil Nadu, delegation to compute the IDC and collect the same by CMDA cannot be held to be ultra vires the power of the Sewerage Board.

2) CMDA being the local authority and having been in-charge of supply of water and providing sewerage, such delegation was made for convenience of the applicants.

3) As charges are being levied and collected towards provision for or improvement of water supply or sewerage service, the same meet the legal requirement of quid pro quo.

STATUTORY PROVISIONS

6. The Legislature of the State of Tamil Nadu enacted the Tamil Nadu Town and Country Planning Act, 1971 (the 1971 Act). Levy of development fees by CMDA is prescribed thereunder as a pre-condition for grant of permission to construct building.

Relevant provisions of the 1971 Act read as under:

“9-A. Establishment of the Chennai Metropolitan Development Authority.—(1) With effect from such date as the Government may, by notification in the Tamil Nadu Government Gazette appoint in this behalf, there shall be established for the Chennai Metropolitan Planning area an authority by the name of the Chennai Metropolitan Development Authority.

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9-E. Relation with the Chennai Metropolitan Water Supply and Sewerage Board.—(1) Notwithstanding anything contained in this Act, the Chennai Metropolitan Development Authority shall fully consult and collaborate the Chennai Metropolitan Water Supply and Sewerage Board constituted under the Chennai Metropolitan Water Supply and Sewerage Act, 1978 with respect to any provision regarding water supply or sewerage services and matters connected therewith that may be included in any development plan prepared or to be prepared under this Act for the Chennai Metropolitan Planning Area or any part thereof.

(2) With respect to any such development plan, the execution of or the carrying out of any work under such plan shall, in so far it relates to water supply or sewerage service or matters connected therewith, be entrusted to and be the sole responsibility of the Chennai Metropolitan Water Supply and Sewerage Board, and if any work under such plan is in the process of being executed or ca