The constitutional guarantee of life and dignity under Article 21 extends fully to convicted prisoners. Continued incarceration of elderly or terminally ill prisoners without an effective, transparent and humane mechanism for compassionate or premature release is inconsistent with constitutional values. While prison administration falls within the legislative domain of the States, constitutional courts may direct States and Union Territories to establish institutional frameworks that ensure dignity, proportionality and humane treatment of such vulnerable prisoners in accordance with Articles 21, 32 and 142 of the Constitution.

 

2026 INSC 713

National Legal Services Authority v. Union of India & Ors.

HEAD NOTES 

A. Constitution of India — Articles 21, 32 & 142 — Elderly and terminally ill prisoners — Right to dignity — Compassionate release.

(Paras 25–41)

Held, incarceration does not extinguish the prisoner's fundamental right to live with dignity under Article 21. Continued imprisonment of prisoners suffering from terminal illness or advanced age, without appropriate mechanisms for compassionate or premature release, may amount to unconstitutional deprivation of dignity and humane treatment. The State is constitutionally obliged to evolve policies ensuring humane treatment of such vulnerable prisoners.

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B. Prison Administration — Constitutional obligation — State Governments — Duty to frame policy.

(Paras 37–40)

Held, since "Prisons and persons detained therein" fall within the legislative domain of the States, every State and Union Territory is obliged to formulate a comprehensive policy governing early, premature or compassionate release of elderly and terminally ill prisoners. Failure to operationalise such mechanisms undermines Article 21.

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C. Article 21 — Right to life — Prisoners — Human dignity.

(Paras 26–36)

Held, punishment cannot degenerate into cruel, inhuman or degrading treatment. Constitutional protection of dignity survives conviction and incarceration. Advanced age, terminal illness, and irreversible physical incapacity are constitutionally relevant considerations in determining continued detention.

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D. Constitutional Courts — Judicial restraint — Judicial intervention.

(Paras 37–40)

Held, although prison administration primarily lies within the legislative and executive domain, constitutional courts are duty-bound to intervene where executive inaction results in continuing violation of fundamental rights. Appropriate directions ensuring effective implementation of constitutional guarantees may therefore be issued under Articles 32 and 142.

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E. Premature release — Medical Boards — Transparent procedure.

(Para 40)

Held, every State and Union Territory shall constitute independent Medical Boards, prescribe objective criteria for determining terminal illness, establish transparent and time-bound procedures for compassionate release, integrate such process with Under Trial Review Committees, and ensure judicially reviewable decisions.

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F. Prison Reforms — Digital governance — e-Prisons Portal.

(Para 40)

Held, applications for compassionate, premature or early release shall be digitally processed through the National e-Prisons Portal with end-to-end electronic tracking, monitoring, transparency, accountability and periodic compliance reporting while preserving medical confidentiality.

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G. International Human Rights — Persuasive value.

(Paras 35–36)

Held, international standards including the Nelson Mandela Rules, UNODC Handbook on Prisoners with Special Needs and other human rights instruments provide persuasive guidance for evolving humane prison administration consistent with Article 21 and Article 51(c) of the Constitution.

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Analysis of Facts

NALSA invoked the jurisdiction of the Supreme Court under Article 32 highlighting the plight of prisoners above the age of seventy years and prisoners suffering from terminal illnesses who continued to remain incarcerated despite deteriorating health conditions and inadequate prison healthcare facilities.

Pursuant to a nationwide Special Campaign conducted between December 2024 and March 2025, NALSA identified 5,393 vulnerable prisoners, including elderly and terminally ill inmates. Among them, 95 convicted prisoners from various States and Union Territories required immediate consideration for compassionate release.

The material placed before the Court demonstrated that although Government advisories regarding terminally ill prisoners existed since 2010, implementation remained inconsistent across States. The Court treated the issue not merely as individual claims for release but as a systemic constitutional concern affecting prison administration nationwide.

Recognising that prison administration falls within the legislative competence of the States, the Supreme Court refrained from framing substantive policy itself but exercised its constitutional jurisdiction to issue binding directions requiring every State and Union Territory to formulate comprehensive policies governing compassionate and premature release of elderly and terminally ill prisoners.

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Analysis of Law

The Supreme Court laid down the following principles:

1. Article 21 guarantees dignity even after lawful conviction and imprisonment.

2. Continued incarceration of terminally ill and elderly prisoners without humane safeguards may violate constitutional guarantees.

3. Prison administration falls within the State List, but constitutional courts may intervene where executive inaction infringes fundamental rights.

4. Every State and Union Territory must formulate comprehensive compassionate release policies within the prescribed timeframe.

5. Independent Medical Boards must objectively certify terminal illness and medical vulnerability.

6. Under Trial Review Committees should periodically review cases involving elderly, terminally ill and physically incapacitated prisoners.

7. Digital processing through the National e-Prisons Portal is essential for transparency, accountability and timely decision-making.

8. International human rights norms serve as persuasive constitutional standards for humane prison administration.

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Ratio Decidendi

The constitutional guarantee of life and dignity under Article 21 extends fully to convicted prisoners. Continued incarceration of elderly or terminally ill prisoners without an effective, transparent and humane mechanism for compassionate or premature release is inconsistent with constitutional values. While prison administration falls within the legislative domain of the States, constitutional courts may direct States and Union Territories to establish institutional frameworks that ensure dignity, proportionality and humane treatment of such vulnerable prisoners in accordance with Articles 21, 32 and 142 of the Constitution.

The determination contemplated under Section 19(1) of the Juvenile Justice (Care and Protection of Children) Act, 2015 is a mandatory jurisdictional safeguard. After receiving the Juvenile Justice Board's preliminary assessment under Section 15, the Children's Court must independently decide, by a reasoned order, whether the child should be tried as an adult or as a child. In the absence of such determination, the Court lacks jurisdiction to conduct an adult criminal trial, rendering the entire proceedings, conviction and sentence legally unsustainable.

 

2026 INSC 692

Sagar v. State of Haryana

HEAD NOTES 

A. Juvenile Justice (Care and Protection of Children) Act, 2015 — Sections 15, 18 & 19 — Heinous offence by child above 16 years — Duty of Children's Court — Mandatory determination under Section 19(1).

(Paras 8–10.8)

Held, after receiving the preliminary assessment of the Juvenile Justice Board under Section 15, the Children's Court is under a mandatory obligation to independently determine under Section 19(1) whether the child should be tried as an adult or as a child. Such determination is a jurisdictional prerequisite and cannot be dispensed with before proceeding with the trial.

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B. Interpretation of Statute — Word "may" — Construed as "shall".

(Paras 10.3–10.4)

Held, although Section 19(1) employs the expression "may", the legislative scheme, the serious consequences flowing from the decision, and Rule 13 of the Juvenile Justice Model Rules, 2016 require the expression to be construed as mandatory. The Children's Court must record a reasoned order deciding whether the child is to be tried as an adult or as a child.

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C. Juvenile Justice Act — Children's Court — Jurisdiction — Distinction between adult trial and child inquiry.

(Paras 10.3–10.5)

Held, jurisdiction of the Children's Court to conduct a Sessions trial arises only after a reasoned determination under Section 19(1)(i). Where it concludes that trial as an adult is unnecessary, it must itself function as the Juvenile Justice Board and conduct an inquiry in accordance with Sections 18 and 19(1)(ii). The two procedures are fundamentally distinct and cannot be interchanged.

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D. Non-compliance with Section 19(1) — Effect.

(Paras 11–14)

Held, failure of the Children's Court to pass an order under Section 19(1) strikes at the root of jurisdiction and vitiates the entire trial. Conviction and sentence rendered without complying with the mandatory statutory safeguard cannot be sustained.

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E. Juvenile Justice Act — Heinous offences — Protective scheme.

(Paras 9–10.5)

Held, the Act creates a carefully structured mechanism balancing child rehabilitation with criminal accountability. The preliminary assessment under Section 15 and independent scrutiny under Section 19 constitute substantive safeguards ensuring that no child is subjected to an adult criminal trial without judicial determination.

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F. Remand — Refusal — Passage of time.

(Paras 12–14)

Held, where the accused has already crossed the age of 24 years and has undergone substantial incarceration, remanding the matter for fresh determination under Section 19 would serve no meaningful purpose since an effective assessment of the child's mental capacity at the time of the offence is no longer feasible.

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G. Practice Direction — Children's Courts.

(Para 15)

Held, every Children's Court, immediately upon receipt of a case transferred under Section 18(3), must first pass a reasoned order under Section 19(1) before proceeding further. Compliance with this statutory mandate is obligatory.

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Analysis of Facts

The appellant, aged about 16½ years on the date of the alleged offence, was accused of committing murder along with other assailants. The Juvenile Justice Board conducted the mandatory preliminary assessment under Section 15 of the Juvenile Justice (Care and Protection of Children) Act, 2015 and concluded that he possessed sufficient mental and physical capacity to be tried as an adult. Accordingly, the case was transferred to the Children's Court under Section 18(3).

The Children's Court, however, proceeded directly to conduct a Sessions trial, convicted the appellant under Section 302 IPC, and sentenced him to rigorous imprisonment for fourteen years with directions regarding detention in a place of safety. The High Court affirmed the conviction.

Before the Supreme Court, it was noticed that although the Juvenile Justice Board had complied with Section 15, the Children's Court had never independently passed the mandatory order contemplated by Section 19(1) determining whether the appellant should indeed be tried as an adult.

The Supreme Court held that omission to pass such an order was a jurisdictional defect which vitiated the entire trial. Since the appellant had already attained the age of twenty-four years and had undergone more than six years of incarceration, remanding the matter for a fresh assessment would be futile. Consequently, the conviction and sentence were set aside.

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Analysis of Law

The Supreme Court laid down the following principles:

1. Section 19(1) of the Juvenile Justice Act is mandatory and not merely procedural.

2. The expression "may" occurring in Section 19(1) must be interpreted as "shall" because the determination directly affects the forum of trial, procedure, punishment and rehabilitation.

3. The Children's Court must independently apply its mind even after receiving the Juvenile Justice Board's preliminary assessment under Section 15.

4. Trial as an adult and inquiry as a child involve entirely different statutory procedures and consequences.

5. The Children's Court acquires jurisdiction to conduct a Sessions trial only after recording a reasoned determination under Section 19(1)(i).

6. Failure to comply with Section 19(1) renders the entire criminal trial void and vitiates the conviction.

7. Where remand has become impracticable because of passage of time and attainment of adulthood, the conviction cannot be sustained merely by modifying the sentence.

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Ratio Decidendi

The determination contemplated under Section 19(1) of the Juvenile Justice (Care and Protection of Children) Act, 2015 is a mandatory jurisdictional safeguard. After receiving the Juvenile Justice Board's preliminary assessment under Section 15, the Children's Court must independently decide, by a reasoned order, whether the child should be tried as an adult or as a child. In the absence of such determination, the Court lacks jurisdiction to conduct an adult criminal trial, rendering the entire proceedings, conviction and sentence legally unsustainable.

A mining lease granted under the Mines and Minerals (Development and Regulation) Act, 1957 is a statutory grant governed by the Act and the Rules framed thereunder. The State's statutory power to revise royalty and dead rent under Section 15 cannot be curtailed merely because the executed lease deed does not expressly reserve such power. Statutory provisions authorising revision constitute implied terms of every mining lease. Enhancement of royalty made pursuant to statutory authority is a matter of fiscal policy subject only to limited judicial review on grounds of illegality or manifest arbitrariness. A challenge based on alleged non-compliance with the Rules of Business cannot succeed where the decision bears the approval of the Chief Minister and no substantive prejudice or constitutional infirmity is established.

 

2026 INSC 690

State of Haryana & Ors. v. M/s Faridabad Gurgaon Minerals & Anr.

(Connected with State of Haryana & Ors. v. M/s Ganpati Enterprises Slate Mines)

HEAD NOTES 

A. Mines and Minerals (Development and Regulation) Act, 1957 — Section 15(3) — Minor Minerals — Royalty and Dead Rent — Statutory power of revision — Effect of lease deed.

(Paras 21 to 37)

Held, a mining lease granted under the MMDR Act and the Rules framed thereunder is a statutory grant. Mere absence of an express clause in the lease deed providing for future enhancement of royalty or dead rent does not denude the State of its statutory power under Section 15(3) and the applicable Rules to revise such rates. The statutory power of revision forms an implied condition of every mining lease.

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B. Mining Lease — Statutory Contract — Contract vis-à-vis Statutory Power.

(Paras 21 to 35)

Held, Government cannot, by entering into a statutory contract, surrender or fetter a statutory power conferred upon it for public purposes unless the statute itself expressly permits such exclusion. A contractual stipulation cannot override or extinguish the statutory authority of the State to regulate mineral development and revise royalty in public interest.

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C. MMDR Act, 1957 — Section 15 — Punjab Minor Mineral Concession Rules, 1964 — Rules 10 & 21 — Implied incorporation into mining lease.

(Paras 26 to 31)

Held, where the auction notice and letter of acceptance expressly provide that the mining lease shall be governed by the statutory Rules, omission to reproduce those provisions in the executed lease deed does not exclude their operation. Rules 10 and 21 become implied conditions of the lease and bind the lessee throughout the subsistence of the lease.

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D. Royalty and Dead Rent — Enhancement — Judicial Review of Policy Decisions.

(Paras 38 to 44)

Held, fixation or enhancement of royalty and dead rent constitutes an economic and fiscal policy decision. Judicial review is confined to examining legality, arbitrariness or Wednesbury unreasonableness. Courts cannot substitute their own assessment regarding the quantum of enhancement merely because another rate may also appear reasonable.

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E. Constitution of India — Article 166 — Rules of Business — Financial Decisions — Chief Minister's approval.

(Paras 45 to 65)

Held, although compliance with Rules of Business is essential in matters involving public finance, where the impugned decision has been approved by the Chief Minister himself and there is nothing to indicate disagreement by the Finance Minister, absence of express concurrence by the Council of Ministers or Finance Department does not, in the peculiar facts of the case, invalidate the decision.

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F. Constitutional Governance — Mineral Resources — Public Trust Doctrine.

(Paras 32 & 33)

Held, mineral resources are public assets held by the State in trust for the people. The State is constitutionally obliged to ensure that exploitation of such resources secures an appropriate return to the public exchequer. Mining leases must therefore be interpreted consistently with the State's continuing statutory authority to regulate and revise royalty and dead rent.

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G. Relief — Recovery of arrears — Interest.

(Paras 69 & 70)

Held, while upholding enhancement of royalty and dead rent, equitable considerations arising from prolonged interim protection and expiry of the mining lease justified limiting interest on arrears to 12% per annum instead of permitting recovery at higher statutory rates.

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Analysis of Facts

The respondents were granted mining leases for extraction of minor minerals under the Punjab Minor Mineral Concession Rules, 1964, as adopted by the State of Haryana. The auction notice and letters of acceptance specifically stated that the leases would remain governed by Rules 10 and 21 of the 1964 Rules.

Subsequently, the State amended the Rules by notification dated 3 June 2005, enhancing royalty and dead rent by 50%. The lessees challenged the notification before the High Court on the grounds that the executed lease deeds did not contain any clause permitting enhancement during the lease period, that the enhancement lacked any rational basis, and that the notification had been issued without complying with the Rules of Business framed under Article 166 of the Constitution.

The High Court accepted these contentions and quashed the notification.

Allowing the State's appeals, the Supreme Court held that mining leases are statutory grants governed by the MMDR Act and the statutory Rules. The statutory power to revise royalty and dead rent remained available notwithstanding the silence of the lease deed. The Court further found that the enhancement was based upon relevant considerations, fell within statutory limits, and did not suffer from arbitrariness. It also rejected the challenge based on the Rules of Business, holding that approval by the Chief Minister and the surrounding circumstances sufficiently satisfied the constitutional requirements in the facts of the case.

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Analysis of Law

The Court laid down the following principles:

1. A statutory mining lease cannot curtail the State's statutory power to revise royalty and dead rent under Section 15 of the MMDR Act.

2. Statutory Rules governing mining leases become implied conditions of every lease, even if not expressly reproduced in the lease deed.

3. Royalty is a statutory levy, and the liability to pay revised royalty flows from the statute rather than from contractual stipulations.

4. Fiscal and economic policy decisions relating to royalty are subject only to limited judicial review on grounds such as arbitrariness, irrationality or illegality.

5. Mineral resources are held by the State in public trust, requiring periodic revision of royalty to secure an appropriate public return.

6. Rules of Business under Article 166 cannot invalidate a financial policy decision where the Chief Minister himself approved the proposal and no material establishes dissent by the Finance Department.

7. Even while upholding statutory recovery, equitable circumstances may justify moderation of interest on outstanding dues.

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Ratio Decidendi

A mining lease granted under the Mines and Minerals (Development and Regulation) Act, 1957 is a statutory grant governed by the Act and the Rules framed thereunder. The State's statutory power to revise royalty and dead rent under Section 15 cannot be curtailed merely because the executed lease deed does not expressly reserve such power. Statutory provisions authorising revision constitute implied terms of every mining lease. Enhancement of royalty made pursuant to statutory authority is a matter of fiscal policy subject only to limited judicial review on grounds of illegality or manifest arbitrariness. A challenge based on alleged non-compliance with the Rules of Business cannot succeed where the decision bears the approval of the Chief Minister and no substantive prejudice or constitutional infirmity is established.

Where goods are booked at the owner's risk rate and the railway receipt records that the quantity was not verified by Railway staff, the proviso to Section 65(2) of the Railways Act casts the burden upon the consignor to establish the quantity actually entrusted for carriage. Unless such burden is discharged and negligence or misconduct of the Railway Administration is affirmatively proved as required under Section 97, the Railway cannot be held liable for shortage merely because a shortage certificate has been issued at destination.

 

2026 INSC 711

M/s Bajaj Trading Company v. Union of India

HEAD NOTES 

A. Railways Act, 1989 — Sections 65(2), 93 & 97 — Goods booked at owner's risk rate — Burden of proof — Railway liability.

(Paras 9 to 15)

Held, where goods are booked at the owner's risk rate, the general responsibility of the Railway Administration under Section 93 stands displaced by Section 97. The Railway is liable only upon proof that loss, shortage or non-delivery resulted from negligence or misconduct of the Railway Administration or its servants.

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B. Railways Act, 1989 — Section 65(2) Proviso — Railway receipt — "Said to contain" endorsement — Effect.

(Paras 10, 14 & 15)

Held, where the Railway does not verify the quantity or weight of goods at the time of booking and the railway receipt carries the appropriate endorsement, the burden of proving the quantity actually entrusted to the Railway rests upon the consignor, consignee or endorsee. Failure to discharge such burden disentitles the claimant from seeking compensation for alleged shortage.

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C. Railways Act, 1989 — Section 97 — Owner's risk booking — Negligence — Proof required.

(Paras 11 to 15)

Held, mere proof of shortage at destination does not establish negligence on the part of the Railway Administration. Before liability can be fastened under Section 97, the claimant must first establish the quantity entrusted to the Railway and thereafter prove negligence or misconduct attributable to the Railway or its employees.

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D. Railway Claims — Shortage Certificate — Evidentiary value.

(Paras 3 & 5)

Held, issuance of a shortage certificate by the Railway Administration is not, by itself, an admission of liability or proof that the shortage occurred due to negligence of the Railway. Such certificate merely records the shortage noticed at destination and does not dispense with the claimant's burden of proof under the Act.

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E. Railways Act, 1989 — Sections 65(2) & 97 — Duty of care — Scope.

(Paras 13 to 15)

Held, a duty of care on the part of the Railway Administration regarding the quantity of goods entrusted arises only where Railway personnel have actually verified, counted or weighed the goods at the time of booking. In the absence of such verification, negligence cannot be inferred merely because shortage is reported at destination.

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F. Negligence — Essential ingredients — Railway claims.

(Paras 12 to 15)

Held, negligence signifies breach of a legal duty of care. In claims arising from owner's risk consignments, negligence cannot be presumed from loss or shortage alone but must be affirmatively established by proving breach of a duty owed by the Railway Administration to the consignor.

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Analysis of Facts

The appellant consigned over forty thousand bags of salt through the Railways from Gujarat to Assam under an owner's risk booking. On arrival, the consignee reported shortage of 1,742 bags, whereupon the Railway Administration issued a shortage certificate.

The appellant sought compensation before the Railway Claims Tribunal. The Tribunal found that the goods had been loaded by the consignor without verification by Railway staff and that the railway receipt carried the necessary endorsement indicating that the contents had not been checked. The Tribunal further noticed discrepancies in the transshipment tallies and concluded that the appellant had failed to establish the actual quantity entrusted to the Railway.

The High Court affirmed the Tribunal's decision. Before the Supreme Court, the appellant contended that the Railways remained liable under Sections 93 and 97 of the Railways Act and had failed to supervise loading as required under the Railway Manual.

The Supreme Court held that the consignment having been booked at the owner's risk rate, Section 97 governed the liability. Since the appellant failed to prove the actual quantity loaded and entrusted to the Railway, the statutory burden under the proviso to Section 65(2) remained undischarged. Consequently, no case of negligence or misconduct against the Railway Administration was established.

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Analysis of Law

The Court reaffirmed the following principles:

1. Section 97 of the Railways Act overrides the general liability under Section 93 in cases of owner's risk consignments.

2. The proviso to Section 65(2) places the burden of proving the quantity entrusted upon the consignor where Railway staff have not verified the goods.

3. A "said to contain" endorsement in the railway receipt shifts the evidentiary burden to the consignor regarding the quantity of goods loaded.

4. A shortage certificate merely records shortage and does not amount to admission of negligence by the Railway Administration.

5. Negligence under Section 97 must be affirmatively proved and cannot be presumed solely from shortage or non-delivery.

6. The Railway Administration owes a duty regarding the quantity entrusted only where its officials have actually verified, counted or weighed the goods at the time of booking.

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Ratio Decidendi

Where goods are booked at the owner's risk rate and the railway receipt records that the quantity was not verified by Railway staff, the proviso to Section 65(2) of the Railways Act casts the burden upon the consignor to establish the quantity actually entrusted for carriage. Unless such burden is discharged and negligence or misconduct of the Railway Administration is affirmatively proved as required under Section 97, the Railway cannot be held liable for shortage merely because a shortage certificate has been issued at destination.

Premium collected by the State for grant of additional Floor Space Index (FSI) cannot be retained where the additional FSI was never utilised and no corresponding benefit accrued to the landowner. A policy permitting refund of such premium for certain categories of constructions while denying identical relief for residential projects, without any rational basis, is arbitrary, discriminatory and violative of Article 14 of the Constitution. The affected party is consequently entitled to refund of the premium, subject to reasonable administrative deductions, together with appropriate interest for the period of wrongful retention.

 

2026 INSC 683

Prasad Pandurang Tapkir & Anr. v. Assistant Director of Town Planning, Pune District & Ors.

HEAD NOTES 

A. Constitution of India — Article 14 — State action — Arbitrariness — Refund of premium for unutilised additional FSI.

(Paras 11 to 18)

Held, where the State permits refund of premium paid for unutilised additional Floor Space Index (FSI) in respect of certain categories of buildings while denying the same benefit for residential projects without any rational basis, such distinction is arbitrary, discriminatory and violative of Article 14. Fairness and non-arbitrariness are inseparable facets of State action.

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B. Maharashtra Regional and Town Planning Act, 1966 — Additional FSI — Premium — Refund — Absence of express statutory provision.

(Paras 11 to 18)

Held, mere absence of an express statutory provision providing for refund cannot justify retention of premium paid towards additional FSI where the additional FSI was never utilised and no corresponding benefit accrued to the landowner. The State cannot unjustly enrich itself by retaining consideration for a privilege that remained wholly unexercised.

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C. Development Control Regulations — Additional FSI — Differential treatment — Residential projects vis-à-vis institutional buildings.

(Paras 12, 13 & 17)

Held, distinction between refund of premium for unutilised additional FSI relating to educational, medical and institutional buildings on the one hand and residential/group housing projects on the other is irrational and unsupported by any intelligible differentia. Such classification bears no reasonable nexus with the object sought to be achieved.

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D. Writ Jurisdiction — Delay and laches — Refund claim.

(Paras 6 & 10)

Held, where the claimant sought refund within the prescribed period and continuously pursued the claim before the authorities and the High Court, delay on the part of the authorities cannot be attributed to the claimant so as to defeat the claim on the ground of laches.

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E. State Action — Fairness — Public law obligations.

(Paras 13 to 18)

Held, every action of the State must conform to the constitutional mandate of fairness, reasonableness and equality. Even in matters arising out of statutory permissions and financial levies, the State cannot act arbitrarily or retain amounts without lawful justification.

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F. Refund — Interest — Unjust retention of money by State.

(Paras 19 & 20)

Held, where the State wrongfully retains money paid by a citizen for a considerable period, refund must ordinarily carry reasonable interest so as to compensate for the unjust deprivation of the money, even where the statute does not specifically prescribe such interest for the particular transaction.

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Analysis of Facts

The appellants obtained permission to undertake a group housing project and paid premium for grant of additional Floor Space Index (FSI). Subsequently, they abandoned the proposed construction and instead obtained permission to develop the property by plotting. Since the additional FSI was never utilised, they sought refund of the premium paid.

The planning authorities rejected the request on the ground that the Development Control Regulations contained no provision for refund of premium relating to residential construction, although refund was permissible in certain cases involving educational, medical and institutional buildings.

The High Court dismissed the writ petition, holding that once the privilege of additional FSI had been granted upon payment of premium, the appellants could not seek refund merely because they chose not to utilise it.

The Supreme Court found that the appellants had never derived any benefit from the additional FSI and that the authorities had permitted refund in comparable situations without any rational basis for excluding residential projects. The refusal to refund the premium was therefore held to be arbitrary and unconstitutional.

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Analysis of Law

The Court laid down the following principles:

1. Article 14 prohibits arbitrary State action in every sphere of governmental activity.

2. The State cannot retain premium collected for an additional development benefit which was never utilised.

3. Absence of an express statutory provision for refund cannot legitimise unjust enrichment by the State.

4. Classification permitting refund for certain categories of buildings while denying the same benefit for residential developments must satisfy the test of reasonable classification under Article 14.

5. Administrative decisions must be guided by fairness, reasonableness and constitutional equality.

6. Where public authorities unjustifiably retain money belonging to citizens for prolonged periods, refund should ordinarily carry reasonable interest.

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Ratio Decidendi

Premium collected by the State for grant of additional Floor Space Index (FSI) cannot be retained where the additional FSI was never utilised and no corresponding benefit accrued to the landowner. A policy permitting refund of such premium for certain categories of constructions while denying identical relief for residential projects, without any rational basis, is arbitrary, discriminatory and violative of Article 14 of the Constitution. The affected party is consequently entitled to refund of the premium, subject to reasonable administrative deductions, together with appropriate interest for the period of wrongful retention.