N. Paul Vasanthakumar, J.

This writ appeal is directed against the order passed by the learned single Judge in W.P.No.6006 of 1998 dated 18. 1998, allowing the writ petition filed by the respondents 1 to 3 herein.

2. The brief facts necessary for disposal of the writ appeal are as follows:

(a) The writ petitioners/Respondents 1 to 3 herein are joint owners of the land comprised in T.S.No.8/9, 10, 11, 16, 17, 20, 21 and 22 bearing Door No.12, Inner Ring Road, Arumbakkam, Chennai, measuring an extent of 4,350 Sq.Mtrs. The said land was classified as Primary Residential Use Zone. The respondents 1 to 3 applied for reclassification as Commercial Use Zone for the purpose of constructing a hotel consisting of 96 rooms with six car parking areas.

(b) The appellant herein sent a reply stating that the re-classification request will be considered subject to the respondents 1 to 3 executing an undertaking bond to meet the additional facilities required such as connection of water and sewerage as required by

the Chennai Metro Water Supply and Sewerage Board and directed the respondents 1 to 3 to execute necessary affidavit. Pursuant to the said reply, an affidavit was also executed in March, 1996.

(c) The respondents 1 to 3 also applied to the CMDA for Planning Permission by application dated 3. 1996. The re-classification of the land as Commercial Use Zone was considered by the Government and the area was re-classified as Mixed Residential Zone by Gazettee notification dated 29. 1996, Part IV, Page 1026, published on 111. 1996. Another application was submitted for granting planning permission. The said application was scrutinised by the Commissioner, Corporation of Chennai, who in turn stated that subject to handing over the open space reservation space and by collecting development charges, approval can be granted, pursuant to which the appellant directed the Commissioner to take over the open space reservation of an extent of 141 sq. ft. by way of registered Gift Deed and submit the said Gift Deed attested, for taking further action.

(d) The respondents 1 to 3 were directed to pay development charges of Rs.4,99,000/-as security deposit. The said condition was challenged in W.P.No.16078 of 1997 and this Court permitted the respondents 1 to 3 to furnish Bank Guarantee for the said sum by order dated 12. 1997. The respondents 1 to 3 herein also filed W.P.No.16954 of 1997 and prayed for a direction to the appellant to process the planning permission application considering their undertaking that all costs and expenses of the work and materials for the water and sewerage connection will be met by the respondents 1 to 3. The appellant sent a reply on 27. 1997 informing that the planning permission cannot be granted as Metro Water cannot provide both water supply and sewerage connection to multi-storied building, as no infrastructure was available. In the above referred writ petition, this court by order dated 111. 1997 directed the appellant to grant no objection certificate within a particular period.

(e) The appellant by letter dated 112. 1997 directed the respondents 1 to 3 to remit the development charges. Therefore on 112. 1997 a bank guarantee for a sum of Rs.4,99,000/- was given along with three demand drafts worth Rs.1,500/-, Rs.45,000/-and Rs.1,76,000/- respectively. The appellant refused to receive the same by stating that unless and until the open space reservation is finalised and the open space is taken over by the Chennai Corporation, request for planning permission cannot be considered.

(f) The respondents 1 to 3 in the meanwhile submitted a revised plan and stated that the open space reservation as informed earlier could not be left as the financial condition has improved and undertakes to pay market value of the land in lieu of the open space reservation, pursuant to which the appellant obtained valuation letter from the Sub-Registrar, Kodambakkam, who in turn on 4. 1998 informed the appellant that there is no