# NEW DELHI ETC v. D.C.M. LIMITED AND ORS. ETC

- **Citation:** [1990] 1 S.C.R. 951
- **Court:** Supreme Court of India
- **Decided:** 1990-03-13
- **Case number:** Civil Appeal Nos. 1402 & 1401of1990
- **Bench:** Ranganath Misra, Madan Mohan Punchhi, S.C. Agrawal
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/new-delhi-etc-v-d-c-m-limited-and-ors-etc-10685
- **Pages:** 11

## Headnote

Delhi Development Authority Act-D.C. Mills Ltd.-Shifting
·Mill and redeveloping mill area for group housing and flatted factories-Resolution No. 26-Implementation of.
The respondent Delhi Cloth Mills bas a complex owr an area of 63
A
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C.
acres at Bara Hindu Rao and Kishan Gnaj, Delhi, which· is a nonconforming area and the industry of the kind in which the mill is
engaged in was required to be shilled consequent upon the enforcement
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of Master Plan prepared by Delhi Development Authority under the
Delhi Development Act, 1966, which plan amongst other things was to
assign land use. The delhi Cloth Mills in September 1982, appruached
the DDA and put forth a proposal for shifting the mill and for re-
.developing the Mill area for group housing and flatted factories. The
DDA by Resolution No. 26 agreed to the scheme to be implemented in
E
phases but it took care to examine the matter further from Delhi's
economics point of view. In September 1983, the DDA turned down the
request of the respondent for allotment of an alternate site in a conforming area for shifting the mill. Thereupon the Mill applied to the
Secretary, Labour /Labour Commissioner, Delhi Administration for
permission. to close down the Mill under Sec. 25(0) of the Industrial
F
Disputes Act, on the ground that the Mill could not be kept located in a
·non-coforming area as otherwise penal consequences would follow. On
April 15, 1985, the request of the Mill was turned down by the Secretary, Labour /Labour Commissioner. Thereupon the Delhi Mill filed a
writ petition before the High Court for direction that the DOA be
directed to implement its resolution No. 26 dated Feb. 1, 1983. It may
G
be mentioned here that during the pendency of the writ petition before
the High Court, ODA had reviewed the situation and passed a fresh
resolution No. 3 dated August 1, 1986 reviewing the earlier resolution
dated Feb. 1, 1983 recalling the grant of approval with regard to the
scheme propounded by the DCM. Thereafter DDA reiterated its Resolution of August 1, 1986 by another resolution dated November 3, _1986.
H
951
952
SUPREME COURT REPORTS
[1990] 1 S.C.R.
A
The High Court quashed the two later resolutions and restored the
·--f
resolution dated February 1, 1983. It took the view that the Mill could
not be kept working in a non-conforming area as othern'ise it would
attract penal action under the law after the lapse of three years from
Jan. 18, 1986. Both Union of India and DDA have filed appeals in this
Court by special leave against the High Court's order.
In the meantime DCM filed a writ petition in the High Court
which was allowed by a Full Bench of the High Court on March l, 1989
ordering closure of the Mill. Delhi Administration flied special leave
petition in this Court against the said order and the Mill flied another
speeial leave patition against the order of the High Court dated 3.3.1989
C extending time for grant of permission by the Lt. Governor for closure
of the factory till March 30, 1989. When these matters reached bearing
in this Court, DCM and its employees had reached an agreement in the
matter of closure of the factory. The Special Leave Petitions were therefore dismissed by thi.s Court; and on the file of this Court remained
these two appeals.
D
Dismissing the appeals with a direction, this Court,
HELD: The factory has been ordered to be closed and the employer and the employees have entered a settlement. The supposed basis
for reviewing or recalling resolution dated February l, 1983 on the
E basis of its affectation to the industry and economy of Delhi as also to
the workmen has vanished. On this footing and on the events which 1
have come by, the challenge to the judgment and order of the High
Court loses vigour. [956F-GJ
Resolution No. 26 dated February l, 1983, approving the scheme
~
F as given by the DCM provided that the scheme had taken all ncessary
safeguards and controls which would help triggering re-development
and reltabilitation in the congested

## Text

UNION OF INDIA THROUGH SECRETARY, GOVERNMENT OF INDIA, MINISTRY OF WORKS & HOUSING,
NEW DELHI ETC.
v.
D.C.M. LIMITED AND ORS. ETC.
MARCH 13, 1990
,;..
[RANGANATH MISRA, MADAN MOHAN PUNCHHI AND
S.C. AGRAWAL, JJ.]
Delhi Development Authority Act-D.C. Mills Ltd.-Shifting
·Mill and redeveloping mill area for group housing and flatted factories-Resolution No. 26-Implementation of.
The respondent Delhi Cloth Mills bas a complex owr an area of 63
A
B
C.
acres at Bara Hindu Rao and Kishan Gnaj, Delhi, which· is a nonconforming area and the industry of the kind in which the mill is
engaged in was required to be shilled consequent upon the enforcement
D ·
of Master Plan prepared by Delhi Development Authority under the
Delhi Development Act, 1966, which plan amongst other things was to
assign land use. The delhi Cloth Mills in September 1982, appruached
the DDA and put forth a proposal for shifting the mill and for re-
.developing the Mill area for group housing and flatted factories. The
DDA by Resolution No. 26 agreed to the scheme to be implemented in
E
phases but it took care to examine the matter further from Delhi's
economics point of view. In September 1983, the DDA turned down the
request of the respondent for allotment of an alternate site in a conforming area for shifting the mill. Thereupon the Mill applied to the
Secretary, Labour /Labour Commissioner, Delhi Administration for
permission. to close down the Mill under Sec. 25(0) of the Industrial
F
Disputes Act, on the ground that the Mill could not be kept located in a
·non-coforming area as otherwise penal consequences would follow. On
April 15, 1985, the request of the Mill was turned down by the Secretary, Labour /Labour Commissioner. Thereupon the Delhi Mill filed a
writ petition before the High Court for direction that the DOA be
directed to implement its resolution No. 26 dated Feb. 1, 1983. It may
G
be mentioned here that during the pendency of the writ petition before
the High Court, ODA had reviewed the situation and passed a fresh
resolution No. 3 dated August 1, 1986 reviewing the earlier resolution
dated Feb. 1, 1983 recalling the grant of approval with regard to the
scheme propounded by the DCM. Thereafter DDA reiterated its Resolution of August 1, 1986 by another resolution dated November 3, _1986.
H
951
952
SUPREME COURT REPORTS
[1990] 1 S.C.R.
A
The High Court quashed the two later resolutions and restored the
·--f
resolution dated February 1, 1983. It took the view that the Mill could
not be kept working in a non-conforming area as othern'ise it would
attract penal action under the law after the lapse of three years from
Jan. 18, 1986. Both Union of India and DDA have filed appeals in this
Court by special leave against the High Court's order.
In the meantime DCM filed a writ petition in the High Court
which was allowed by a Full Bench of the High Court on March l, 1989
ordering closure of the Mill. Delhi Administration flied special leave
petition in this Court against the said order and the Mill flied another
speeial leave patition against the order of the High Court dated 3.3.1989
C extending time for grant of permission by the Lt. Governor for closure
of the factory till March 30, 1989. When these matters reached bearing
in this Court, DCM and its employees had reached an agreement in the
matter of closure of the factory. The Special Leave Petitions were therefore dismissed by thi.s Court; and on the file of this Court remained
these two appeals.
D
Dismissing the appeals with a direction, this Court,
HELD: The factory has been ordered to be closed and the employer and the employees have entered a settlement. The supposed basis
for reviewing or recalling resolution dated February l, 1983 on the
E basis of its affectation to the industry and economy of Delhi as also to
the workmen has vanished. On this footing and on the events which 1
have come by, the challenge to the judgment and order of the High
Court loses vigour. [956F-GJ
Resolution No. 26 dated February l, 1983, approving the scheme
~
F as given by the DCM provided that the scheme had taken all ncessary
safeguards and controls which would help triggering re-development
and reltabilitation in the congested areas of the central core of the
capital. [956G J
Appeals dismissed conveying a direction that the DDA shall grant
G to the DCM conditional approval subject to removal of the enumerated
otijections raised or such oft,!J,em as are valid and tenable in law after
)--
DCM is heard by the Municipal Corporation of Delhi. The matter be
formalised forthwith by the DDA and other authorities connected therewith within eight weeks so that the settlement between the workers and
the DCM ·and other matters connected do not stagnate and moye to the
f':I
benefit of all concerned. [960G-HI
U .0.1. v. D.C.M. IPUNCHHI, J.)
953
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1402
& 1401of1990.
From the Judgment and Order dated 22.5.1987 of Delhi High
Conrt in C.W.P. No. 2687of1986.
A
N.S. Hegde, Additional Solicitor General, K. Swamy and Ms.
B
A. Subhashini for the Appellants.
G. Ramaswamy, Rajiv Sawnney, A.K. Verma, Sukumaran,
V.B. Saharya and S.D. Sharma for the Respondents.
T.C. Bhatia (In pers?n) for the Intervener.
PUNCHHI, J. Special leave granted.
These two appeals respectively are directed by the Union of
India and the Delhi Development Authority (hereinafter referred to
as the DDA) against the full bench decision and order of t\J.e Delhi
High Court dated May 22, 1987 declaring and by necessary implication
directing that the DDA carry out and implement its resolution numbr
26 dated February 1, 1983, which resolution was said to have been
substituted by it by a later resolution number 3 dated August 1, 1986
reiterated by another resolution dated November 3, 1986. These resolutions related to some affairs of the Delhi Cloth Mills Limited
(hereinafter referred to as the DCM), the writ petitioiner before the
High Court, and the official reaction thereon.
Some of the essential facts as culled out from the judgment of the
High Court, and others which have come by in the meantime, would
be necessary to be noticed. The Mill has a complex over an area of
about 63 acres at sites at Bara Hindu Rao and Kishan Ganj at Delhi.
The Delhi Development Act, 1956 envisages preparation by the DDA
of a Master Plan for Delhi, which it did, and was enforced and one of
its attributes is to assign land use. Bara Hindu Rao is a non-conforming area and the industry of the kind in which the Mill is engaged in has
to be shifted out to a conforming area. 612 acres of land near about
N arela was said to have been ear-marked for conformed use of
factories. The DCM in September 1982 approached the DDA and
putforth its proposal for shifting the Mill and for re-developing the
Mill area for group housing and flatted factories. On February 1, 1983
the DDA by resolution number 26 agreed to the scheme as propounded by DCM as feasible for implementation in phases. But in passing it
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11990] 1 S.C.R.
recorded a fact that the shifting of the Mill would involve a lot of
working population and consequently income and products manufactured by the DCM would carefully need to be looked into by the Delhi
Administration and Ministry of Industries in terms of its affectation to
the economy of Delhi. On the other hand in September 1983 the DDA
turned down the request of the DCM for allotment of an alternate site
measuring 150 to 200 acres of land in a conforming area for shifting
having regard to the kind of industry the DCM was engaged in. The
DCM then applied to the Secretary, Labour/Labour Commissioner,
Delhi Administration for permission to close down the Mill under the
provisions of Section 25(0) of the Industrial Disputes Act. The
reasons advanced by the DCM inter a/ia were that the Mill could not
be kept located in a non-conforming area as otherwise penal consequences would follow as also that it had run into tremendous losses,
the industry being unprofitable. On April 15, 1985, the request of the
DCM was turned down by the Secretary, Labour/Labour Commissioner. In this state of affairs when the DCM had been given no place
to shift to and the closure of the Mill had been declined, the ODA
II> reviewed the situation and passed a fresh resolution No. J dated
August 1, 1986 reviewing its earlier resolution dated February 1, 1983
recalling the grant of approval with regard to the scheme propounded
by the DCM. Further it felt justified in taking such step as the Master
Plan was under process of review keeping the perspective of the year
2001 AD in view. The DOA even reiterated its resolution of August 1,
1986, by another resolution dated November 3, 1986 during the
pendency of the writ petition in the High Court when asked to have a
fresh look into the matter. These two later resolutions, as said before,
were quashed by the High Court restoring the earlier resolutions dated
February 1, 1983 taking a broader view that the mill could not be kept
F
working in a non-conforming area as otherwise it would attract penal
action under the law after the lapse of three years from January 18,
1986, and that.the DOA could not justify its action as even the proposals to modify the Master Plan with the perspective of year 2001 AD in
view did not contain any proposal for change of land use of the site
under the DCM, and as of original, it was a site marked for group
housing and flatted factories.
The reasons advanced by the Secretary, Labour/Labour Commissioner declining request of the DCM for closure of the Mill under
section 25(0) of the Industrial Disputes Act as recorded were as
follows:
"The closure of the unit is not in public interest as this
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U .0.1. v. D.C.M. [PUNCHHI, J.]
955
would render almost 6000 workers jobless and adversely
affect thousands of their families members. Besides, trade
and commercial activity associated with this Mill would be
adversely affected on account of the closure. It is in public
interest that the management makes all out efforts towards
the efficient functioning of this Mill. Finally, the operations
of this unit are not dangerous to the lives of the Industrial
workers and the people living around the factory. The location of the Unit in a thickly populated locality therefore
does not involve any community risk."
The DCM filed Civil Writ No. 1281 of 1985 in the High Court which
was allowed by a Full Bench of the High Court on March 1, 1989
ordering closure of the Mill, though much after the decision instantly
appealed against. The Lt. Governor, Delhi Administration sought
special leave vide SLP (C) No. 3630 of 1989. Another sequential petition SLP (C) No. 3369 of 1989 was preferred.by the DCM against the
order of the Full Bench of the High Court passed two days later on
March 3, 1989 extending time for grant of permission by the Lt.
Governor for closure of the factory till March 30, 1989. When these
matters were called in this Court along with the SLPs, now appeals, it
transpired that the DCM and its employees, ranging about 6,000 in
number, had fortunately teached an agreement in the matter of closure of the factory. The High Court also had come to the conclusion
that indisputably the location of the factory in Bara Hindu Rao, within
the municipal limits of New Delhi was not congenial from the point of
view of sanitation and was otherwise hazardous. Keeping such finding
and the settlement between the DCM and its employees in view, the
Full Bench judgment of the High Court dated March, 1, 1989 was left
uninterfered with dismissing the special leave petition no. 3630 of 1989
on March 27, 1989, with a consequential direction:
"So far as the payment of statutory compensation which
forms part of the agreement, we direct that DCM shall
credit the amounts payable to the individual employees by
opening an account with a nationalised bank as per the time
schedule indicated in the agreement by making fixed
deposits for an initial period of 91 days. Payment into the
account and making over the fixed deposit receipt, so far as
the disbursement of the statutory compensation is concerned, shall be taken to have been satisfied when such fixed
deposit receipt is made over to the respective employees."
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SU~REME COURT REPORTS
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A Sequelly SLP No. 3369 of 1989 preferred by the DCM was also dismissed on the same date.
What survived on March 27, 1989, were the instant two special
leave petitions, now appeals, and during the course of their hearing
Mr. Nariman appearing for DCM on his own indicated that DCM was
B prepared to locate a community centre and a hospital to serve the
requirements of the employees as also the residents of the locality. He
further.submitted that notwithstanding the pendency of those two petitions, the Delhi Administration, should proceed to process the application of DCM for requisite permission for locating the proposed flatted factories and residential accommodation for officers and workmen
in accordance with the Master Plan, subject to the result of these
C petitions. In these circumstances, the Municipal Corporation of Delhi,
which was not a party to these proceedings (though later represented
by counsel), as welt as the two petitioners, Union of India and the
DOA were given directions to process the applications for permission
and proceed with the same in accordance with law pending disposal of
D the special leave petitions. This order was later clarified on April 10,
1989 to say that processing of the applications by the three aforementioned functionaries did not include making of a final order and no
final order disposing of the applications be made until the special leave
petitions are finally disposed of. It was further directed that in the
matter of processing, the Master Plan and the relevant law be kept in
E view.
The scope of these matters is now considerably reduced and
easily discernible. The factory has been ordered to be closed and the
employer and the employees have entered a settlement. The supposed
basis for reviewing or recalling resolution dated February 1, 1983 on
F the basis of its affectation to the industry and economy of Delhi as also
to the workmen has vanished. On this footing and on the events which
have come by, the challenge to the judgment and order of the High
Court loses vigour and this does not now at least remain a case calling
for interference under Article 136 of the Constitution except what we
intend adding thereto to further the cause of justice.
G
Resolution No. 26 dated February 1, 1983 approving the scheme
as given by the DCM provided that the scheme had taken all necessary
safeguards and controls which would help triggering re-development
and rehabilitation in the congested areas of the central core of the
capital. The Technical Committee of the DDA assisting in the matter
H was even of the opinion that when permitting flatted factories, it could
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U .0.1. v. D.C.M. [PUNCHHI, J.] '
957
be ensured that a reasonable percentage in the scheme is reserved for
rehabilitating small industrial units presently functioning in the State
in non-conforming areas and that the scheme could only be implemented if it had the approval of the Delhi Administration and the
Government of India. To further that object, during the course of
these proceedings upto date plans as prepared and submitted by the
DCM to Municipal Corporation of Delhi, together with the sanction
accorded thereon by the Standing Committee of the Municipal Corporation of Delhi vide resolution No. 1136 and 1137 dated November 24,
1989, were sent to the DDA for approval on December 6, 1989. These
had to be examined by the DDA in accordance with the assurance
given to this Court by Shri G. Ramaswamy, its learned counsel and
keeping in view the Master Plan. These plans were examined vis-a-vis
the plans earlier submitted by the DCM in 1982-83. We have been
conveyed that the objections as raised by the Municipal Corporation
of Delhi within their own domain have been adopted by the DDA as
their own objections, which are extracted below:
1. FLATTED FACTORIES:
The scheme has been formulated on a piece of land
measuring 24.55 acres. This land is earmarked for flatted
factories in Delhi Master Plan and partly for widening of
road. The Master Plan provides on page 18 about the DCM
site as follows:
'The Delhi Cloth Mills have to move out of this congested area to the extensive industrial districts according to
the time schedules given for non-conforming uses. The present site should be developed for flatted factories in
gradual stages io relocate the industries now located in
Ahata Kidara and other areas.'
2. _Therefore, this site after development in stages for flatA
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ted factories is to be utilised only for providing accommodation to the existing units in the .above referred areas. The
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number of flatted factory units will depend upon/be related
to the units located/functioning in these areas. Therefore,
in the proposed scheme of flatted factory, all these aspects
have to be provided for and it should fulfil these requirements. The Scheme has to be modified accordingly as no
such details provision are indicated in the Scheme.
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SUPREME COURT REPORTS
[199{)j 1 S.C.R.
3. Regarding the No Objection Certificate from the land
use point of view, as required under bye-law No. 6.2.2
which has come into force w.e.f. 2.6.83, DCM is required
to obtain the NOC from the land use point of view from the
DOA before the plans can be approved by MCD. In the
present case, no such NOC under bye-law No. 6.2.2 has
been applied for by the DCM.
4. The right of way of National Highway No. 10 as per
Master Plan for Delhi is 200 ft. whereas in the Scheme, it is
shown as 150 ft., the Scheme accordingly needs suitable
modification.
-,
5. In the proposed scheme an entry/exit is provided from
the proposed National Highway No. 10 which would not be
technically feasible because of the proposed road underbridge at this point.
6. In the proposed scheme 2, basements have been provided equivalent to 40% of the ground coverage whereas
the basement should be equivalent to the ground coverage,
provided in the scheme and should be used for essential
services and for parking. This condition has also been
imposed in the NOC issued by Commissioner (Slum) under
the Slum Improvement and Clearance Act, 1956.
II. GROUP HOUSING RESIDENTIAL COMPLEX AT
KISHANGANJ
1. The scheme on an area measuring 39.73 acres has been
formulated by the DCM in Kishan Ganj area comprising of
(i) free hold land of DCM, (ii) lease hold land with DCM
where Lessor is DDA, measuring 11.98 acres and (iii) the
DDA land encroached by the DCM, measuring 5091 sq.
mtrs. As per the terms of lease, the lessee cannot use,
without permission, in writing, of the Lessor, land for any
purpose other than that for which it has been given by the
Lessor. The Scheme, therefore, needs modification to
exclude the lease hold land which has been included in this
Scheme.
2. Land, measuring 5091 sq. mtrs. has been illegally
encroached.by DCM. This land belongs to DDA which has
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U.0.1. v. D.C.M. [PUNCHHI, J.]
959
not been given on leasehold basis to the DCM. This land
has been included in the re-development Scheme. Since the
ownership of the land is with the DDA, the Scheme will
have to be modified to exclude this land also. Therefore,
lands leased out and unauthorisedly occupied should be
deleted and the scheme should confine to the free hold
land. The scheme needs modification.
3. The scheme formulated is without any distinction of the
freehold, leasehold, and the unauthorisedly occupied land.
Therefore, the plan has to be modified to ensure that the
scheme on the lease hold land is a separate entity because
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in the eventuality of permission being granted by the
Lessor to allow use of the land for group housing purpose~,
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it would be necessary as there may be occasion for
determining the lease for violation of the lease terms and
this will be possible only if the lease hold land has a separate identity on the ground.
4. As per June, 1983, Municipal Building Bye laws, under
the byelaws 6.2.2 a 'no objection certificate from land use
point of view from DDA is required to develop this land for
residential use. Therefore, the DCM had have to obtain
'No objection Certificate' from land use point of view from
DDA for the development of this land under the provisions
of this bye-law before their scheme could be considered
and sanctioned by the Municipal Corporation of Delhi.
5. In the Scheme formulated, it is observed that some of
the areas for facilities such as nursery school, shopping etc.
have been included for coverage and FAR calculations as
part of the group housing area; while as per Master Plan
stipulations, the area for community facilities within group.
housing scheme cannot be included for the purpose of
calculations of coverages and I:AR. These should be left as
independent plots for providing such facilities.
6. The present Master Plan Zoning regulations prescribe a
height of 80 ft. for residential group housing whereas the
height provided is more than that.
7. The present scheme has been formulated having some
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of the blocks of 12 floors (ground plus 11 storeyes). The .ll-
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SUPREME COURT REPORTS
[ 1990] I S.C.R.
Master Plan Zoning regulations provide a maximum height
of 80 ft. i.e. ground plus 7 storeyes. Therefore, the scheme y
needs notifications accordingly .
•
8. In the proposed scheme 2 b!lsements have been provided for parking, servicing and storage whereas the basement should be provided equivalent to the ground coverage
for essential services and for parking which is also one of
the conditions imposed by the Commissioner (Slum) while
granting NOC under the Slum Improvement and Clearance
Act, 1956.
III. GOVT. OF INDIA MIN. OF URBAN DEVELOPMENT COMMUNICATION THIS REGARD.
Director (DD), Min of U.D. vide his letter No.
16021/3/87-DD IIN A date 11.12.89 has stated that the
land use and the proportion in which the land has to be
developed for various uses, the provisions of the Master
Plan of 1962 and the proposals made in PDP 2001 will have
to he borne in mind. Further, it is mentioned that a view is
to be taken for the use for which the Nazul Land given on
lease is to be put. Thus, keeping in view the above communication from the Ministry, the Scheme will require modifications in the light of the proposals made in PDP 2001."
The DDA thus requires the aforesaid objections to be first met before
it could give its final approval. It is worthy of record that under interim
directions of this Court, afore referred to, its approval shall proceed
after the disposal of these appeals. And we feel that time for that
purpose has arrived.
Having heard learned counsel for the parties and having taken
note of the objections above referred to, we take the view that the
appeals be dismissed conveying a direction that the DOA shall grant to
the DCM conditional approval subject to removal of the above
enumerated objections raised or such of them as are valid and tenable
in law after DCM is heard by the Municipal Corporation of Delhi
which the DOA has adopted and the matter be formalised forthwith by
the DDA and other authorities connected therewith within eight
weeks from today so that the settlement between the workers and the
DCM and other matters connected do not stagnate and rather move
further to the benefit of all concerned. It appears that to the 6,000
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U.0.1. v. D.C.M. {PUNCHHI, J.]
961
workmen the grant of such approval even though conditional, would
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he beneficial; so are the terms of the settlement. .
Saddling the order appealed against with the above direction we
dismiss these appeals. No Costs.
·
I.A. No. 1 of 1989 for intervention by a co-sharer named Tara
Chand Bhatia voicing grievance that the DCM has under-valued its
property at Bara Hindu Rao etc. and that it should be ordered to be
revalued, is also dismissed as it has no connection with the main issue.
Y.Lal
Appeals dismissed.
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