An embargo on the sanction of plans for the construction of buildings exceeding a certain height is arbitrary, unreasonable, and violative of Articles 14 and 19 of the Constitution of India if it is not based on any discernible principle, creates an impermissible classification between sanction-holders and non-sanction-holders, and is not a reasonable restriction on the right to carry on trade or business.

Ajit K. Sengupta, J.: These two appeals have been preferred from a common judgment and order dated 21st December, 1990 whereby the learned trial Judge has in effect dismissed the writ petitions filed by the appellants on the finding that they had become infructuous. In both the writ petitions the appellants/writ petitioners challenged the Constitutional validity of the Calcutta Municipal Corporation (Amendment) Ordinance, 1989 and the Calcutta Municipal (Amendment) Act, 1990 (hereinafter referred to as "the 1990 Amendment Act") which replaced that Ordinance.

2. The 1990 Amendment Act inserted a new Section in the Calcutta Municipal Corporation Act, 1980, namely s. 398A, as a result of which, for a period of one year from 18th December, 1989 (i.e. the date on which the 1990 Amendment Act came into force), there was a total embargo on any person applying for sanction of any plan to erect a building exceeding 13½ metres in height. The constitutional challenge is basically directed against this embargo.

3. The learned trial Judge heard the writ petitions at length. Since the embargo was for a period of one year from 18th December, 1989, the learned trial Judge in his judgment and order dated 21st December, 1990 held that the writ petitions had become infructuous. The learned Judge observed:

"As the said amendment has ceased to have any effect then the constitutional validity of an Act which is no longer in force cannot be entertainable."

There were certain other observations made by the learned Judge to which reference would be made later as and when necessary.

4. After the commencement of the hearing of this appeal, and having regard to the submissions made on behalf of the appellants on the short questions' as to whether the learned Judge was right in arriving at the conclusion that the writ petitions had become infructuous, the Court enquired as to whether it would be advisable to hear the parties on the merits as well, since, if the Court found that the learned Judge had erred in his conclusion that the writ petitions had become infructuous that would necessarily involve an examination on merits and such examination would normally be done on remand by the learned trial Judge. All the parties, however, agreed that they would prefer the question on merits to be decided by the Appeal Court so that the entire controversy should be laid at rest at least as far as the High Court stage is concerned. Since the Court was prima facie of the view that the submissions made on behalf of the appellants that the writ petitions could not have become infructuous, as held by the learned Judge, could not be brushed aside, it was decided to hear the parties on merits as well and to decide the issues comprehensively. Since the parties agreed to this course, we proceeded to adopt this course to shorten the litigation process.

5. Although the facts leading to the filing of the two writ petitions are not much in dispute it is necessary to refer to them to the extent required.

6. In Matter No. 1149 of 1990 (which has given rise to Appeal No. 21 of 1991), the writ petitioner no. 1 is a Private Ltd. Company known as Terra Firma Investment and Trading Private Ltd. (hereinafter referred as "Terra Firma") and the writ petitioner No 2 to 7 are the Shareholders of Terra Firma. Terra Firma is engaged in the business, inter alia, of developing real property, including promoting and constructing buildings. On 8th December, 1988 Terra Firma purchased a plot of land at premises No. 104, Ultadanga Main Road, which is now known as Bidhan Nagar Road. According to Terra Firma, it decided to buy the Ultadanga property on the basis that it would be able to construct a building having a covered area of at least 5,66,836.8 Sq ft. This again was based on the then available Floor Area Ratio (FAR) calculated at the statutory rates then prevailing under the relevant Building Rules Terra Firma submitted an application for sanction of a building plan which was accepted by the