Commercial Use Cannot Be Forced For Sanctioning Building Plans : Supreme Court Dismisses SDMC Appeal, Orders Residential Rebuild Approval And ₹10 Lakh Cost
Kiran Raj
The Supreme Court of India Division Bench of Justice J.B. Pardiwala and Justice K.V. Viswanathan directed the municipal body to approve fresh plans for reconstruction of an aged residential property and to do so within a fixed timeline, while also imposing a monetary liability of Rs. 10 lakh on the authority for its prolonged obstruction. The case centred on whether residents of an 85-year-old, unsafe house in a mixed-use locality could rebuild it exclusively for residential use. The municipal authority had insisted that any new structure must include compulsory commercial space on the ground floor. The Court held that mixed-use norms allow commercial activity but do not mandate it, and found the prolonged refusal to sanction residential plans unjustified.
The matter arose from appeals filed by a municipal corporation challenging concurrent decisions of the Tribunal, the Additional District Judge, and the High Court, all of which had affirmed deemed sanction of building plans submitted by the respondents. The respondents owned two old residential properties situated at Ansari Road, Darya Ganj, New Delhi. The structures, constructed around 1940, were stated to be in a dilapidated condition. In 2010, the respondents submitted plans for constructing a new residential house. No decision was taken by the corporation, prompting the respondents to approach the Appellate Authority under Section 347A of the Delhi Municipal Corporation Act, 1957. The Tribunal granted deemed sanction. The corporation appealed before the Additional District Judge, which dismissed the appeal. A writ petition before the High Court also failed.
Before the Supreme Court, the corporation argued that the respondents were not permitted to construct a new residential house and that the bylaws mandated commercial use of the ground floor under mixed-use norms. It submitted that construction must conform to the Master Plan and sub-zonal regulations. The respondents opposed the appeal, pointing to concurrent findings in their favour and contending that the notification issued by the Urban Development Department permitted optional mixed use, not compulsory commercial use. They asserted that they intended to use the property exclusively for residential purposes and were financially unable to relocate.
The Court stated that the tribunal, the Additional District Judge, and the High Court had all granted relief to the respondents and that the corporation’s appeals sought to challenge concurrent findings. It recorded the corporation’s argument that “the law does not permit the respondents to dismantle the present structure and put up a new house” and that even if new construction was undertaken, “they are obliged in law to put up a shop on the ground floor which should be commercial in nature.” The Court noted that the respondents’ counsel submitted that “there are concurrent findings of three authorities… in his favour” and that the notification dated 15.09.2006 permitted use for mixed purposes only at the option of the occupant.
The Court quoted the Single Judge’s observation that “owners of residential property on notified streets are [not] compelled to develop the property in that manner and apply for change of user.” It further recorded that the circular dated 27.05.2009 stated: “The Building Plans… can be sanctioned for commercial use/partly commercial/partly residential/fully residential as per the choice of the applicant.”
The Court cited the circular’s clarification that mixed-use activity “shall be allowed… on the ground floor only and upper floors shall be for the residential use,” and that conversion charges were payable only “for the area being sanctioned for commercial use.”
The Court referred to observations in M.C. Mehta v. Union of India explaining the Master Plans for Delhi, including that certain Local Shopping Centres allowed “commercial activity… on the ground floor and residential activity… on the upper floors.”
The Court recorded responses from an Assistant Engineer of the corporation, who stated that because the entire locality consisted of shopping centres, “each and every residential house should be a shopping complex.” The Bench stated that it was “at our wits’ end to understand how does the appellant expect the respondents to put up construction in a manner by which the ground portion would be for commercial use… when he has a vested crystalised legal right to use it for residential purpose.”
The Court observed that the corporation’s argument “defies logic,” particularly the contention that the respondents “may continue to reside in the dilapidated house, but if they want to put up new construction, then it has to be commercial on the ground floor.” The Court noted that photographs showed the house “in a dilapidated condition and any time may collapse” and stated that the corporation “should have expressed concern about the safety and lives of the occupants… rather than objecting.”
The Court stated: “we see no good ground to interfere with the impugned judgment and order passed by the High Court. The appeal fails and is hereby dismissed.” The Court directed: “We permit the respondents to put forward fresh plans for approval. The plans shall be for construction of a house. Once the plans are submitted, the authority concerned shall sanction the same within a period of four weeks from the date of presentation and grant necessary permission to put up construction meant for residential purpose.” It further ordered: “we impose costs of Rs.10,00,000… to be paid to the respondents on or before 17.12.2025 without fail. The payment towards costs shall be reported to us.” It also stated that the connected appeal “is also disposed of.”
Advocates Representing the Parties
For the Petitioners: Ms. Vandana Sehgal, Advocate
For the Respondents: Mr. Paul, Senior Advocate
Case Title: South Delhi Municipal Corporation v. Bharat Bhushan Jain (Dead) through LRs
Neutral Citation: 2025 INSC 1324
Case Number: Civil Appeal No. 6077 of 2018 (with Civil Appeal No. 6078 of 2018)
Bench: Justice J.B. Pardiwala, Justice K.V. Viswanathan
