Bombay HC Full Bench: SC Judgment Capping Government Allotment In Housing Schemes At 5% Applicable Prospectively

Mumbai: A Full Bench of the Bombay High Court has ruled that the Supreme Court’s directions in the Shantistar Builders case (1990), which capped government allotment in housing schemes at 5%, apply only to future projects, not past ones.

Builder’s Plea for Relief in 1989 Scheme Dismissed

The ruling came in a plea filed by Kolhapur-based builder Dattatray Laxman Desai, who challenged a government order requiring him to give 30% of flats in his 1989 housing scheme to the government for weaker sections. He sought that this be restricted to 5%, citing the 1990 Shantistar judgment and a 1997 government resolution (GR) that implemented it.

Desai argued that since his scheme and that in Shantistar were similar, denying him the 5% benefit was discriminatory and violated his constitutional rights. He also sought quashing of penalty orders passed in 2007 for delay in completing the project.

Court Cites Previous Judgments to Uphold Government Order

However, the three-judge bench of Justices Ravindra Ghuge, Sandeep Marne, and Milind Sathaye held that the Shantistar ruling only applies to schemes sanctioned after January 31, 1990 — the date of the Supreme Court’s judgment. Desai’s scheme was approved in 1989, so he could not claim its benefits.

The court referred to earlier decisions of the Bombay High Court (Karmarahi Kanji Chandan and Sardar Dalip Singh) and the Supreme Court’s Shridhar Shetty (2020), all of which held that the 5% allotment rule is prospective.

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Penalties Stand; Case Sent for Further Hearing

The judges also noted that Desai had been granted time extensions but failed to comply with conditions, leading to a fine of ₹20.65 lakh and even criminal proceedings for not handing over the required 30% of flats.

With the legal questions now settled, the High Court directed the registry to place the case before a Division Bench for further hearing.