The Supreme Court of India ruled in favor of the appellants, holding that the authorities’ refusal to refund the premium paid for unutilized additional Floor Space Index (FSI) was arbitrary, discriminatory, and violative of Article 14 of the Constitution. The Court ordered the refund of the premium amount, along with simple interest at 7% per annum, noting that the state cannot justify withholding funds paid for a benefit that was never utilized.
- The Dispute: The appellants sought a refund of ₹30,46,290 paid as a premium for additional FSI for a proposed group housing project in Pune.
- Abandonment of Project: The appellants subsequently abandoned the group housing plan and received permission to plot the land instead.
- Denial of Refund: The authorities rejected the refund request, arguing that the Development Control Regulations did not contain a provision for such refunds and that existing government resolutions (GRs) permitting refunds were limited to specific types of constructions (e.g., educational, medical, star hotels) or geographical areas (Mumbai).
- Procedural History: The Bombay High Court dismissed the appellants’ writ petition on the grounds that there was no statutory provision for the requested refund.
Key Findings of the Supreme Court
- Arbitrariness and Discrimination: The Court found it “patently arbitrary and discriminatory” for the authorities to differentiate between Mumbai and the rest of the state, or between specific building types and residential construction, regarding the refund of premiums for unutilized additional FSI.
- Constitutional Violation: The refusal to refund the money was deemed contrary to the principles of fairness and non-arbitrariness intrinsic to Article 14 of the Constitution.
- State Responsibility: Relying on precedents such as P. Royappa v. State of Tamil Nadu and Kumari Shrilekha Vidyarthi v. State of U.P., the Court emphasized that all state actions must be fair, just, and reasonable, even in contractual or fiscal matters. The Court held that equality and arbitrariness are “sworn enemies”.
Final Order
- The Supreme Court set aside the High Court’s judgment and the orders passed by the authorities.
- The respondents are directed to refund the sum of ₹27,41,661 (reflecting the adjusted amount) to the appellants.
- The refund must be paid with simple interest at 7% per annum from the date of deposit until the date of actual payment, within two months of the judgment.
2026 INSC 683
Prasad Pandurang Tapkir and another vs. The Assistant Director of Town Planning, Pune District, Pune and others (D.O.J. 13.07.2026)



