Case Iii B. P. Plc. (Formerly B P Amoco PLC.) Castrol Limited V Securities and Exchange Board of India Facts
Case Iii B. P. Plc. (Formerly B P Amoco PLC.) Castrol Limited V Securities and Exchange Board of India Facts
Case Iii B. P. Plc. (Formerly B P Amoco PLC.) Castrol Limited V Securities and Exchange Board of India Facts
The court finally held that the S.11 (1) of the Act clearly provides that it is duty of the Board
to protect interest of investors in securities and they have been empowered to take such
measures and regulations as it thinks fit. There is no regulation or statutory provision which
debars SEBI from awarding such an interest. S.11 (1) of the Act r/w. regln.44 of the
Regulations made it clear that SEBI had inherent power to award interest. Further, investors
are entitled to be compensated by way of interest for delayed payment. Appellants have
accepted date to be relevant date for purpose of fixing price is date on which public
announcement was made and decision was taken to acquire. Once decision was taken to
acquire from this very date a period of four months can be given so as to complete the
formalities for the purpose of fixing the liability of interest to be calculated from that date.
SEBI Regulations clearly provide that in case of delay in refund 15 per cent. per annum
interest can be awarded. Quantum of 15 percent interest cannot be said to be unjust,
2
[1949] 2 K.B. 481
exorbitant, arbitrary and in no way the same can be construed as amounting to penalty.
Prevalent rate of interest in the United Kingdom has no relevance. Thus, there is no substance
in objection directing appellants to pay interest at the rate of 15 percent per annum. Hence the
court dismissed the appeal.
CASE IV
FACTS:
This is an appeal against the judgment of Kerala High Court dismissing the appellant's writ
petition filed against the grant of exemptions from the provisions of the Kerala Building
Rules for construction of an eight storied high rise building in the city of Cochin to the 5th
respondent. The 5th respondent herein, owns a plot of land measuring 9.5 cents in the city of
Cochin. On 1.10.1982, the 5th respondent submitted an application directly to the
Government of Kerala seeking exemptions from operation of certain provisions of the Kerala
Municipal Building Rules, 1968 for the proposed construction of a three storied go down-
cum-office on the said plot of land. The government, by a special order dated 12.10.1983,
granted exemption from the operation of the Rules. On 15.5.1984, the Kerala Building Rules,
1964 framed under Section 344 read with Section 222 of Kerala Municipalities Act, 1960 and
Section 367 read with Section 238 of Kerala Municipal Corporation Act, 1961 came into
force. After the new Rules came into force, 5th respondent submitted an another application
to the Government seeking further exemption from operation of the Rules. The State
Government by an order dated 13.3.1986 modified the earlier G.O.
After the exemption was granted, the 5th respondent started construction over the said plot of
land. It is at this stage the appellant who is residing adjacent to the said plot of land raised
objections to the Corporation as well as to the Authority, and also filed a suit for injunction. It
appears that immediately after the completion of the three storied building, the 5th respondent
on 19.3.1990 sent another application seeking exemption from operation of provisions of the
Rules to construct an eight storied building by adding five more floors to the three storied
building already constructed. This application was sent directly to the State Government and
was not processed through, as required under proviso to rule 5 of the Rules. It further appears
that after receipt of the said application the Government asked for the comments from the
Greater Cochin Development Authority, Cochin Municipal Corporation, and the Town
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Planning Board to the application of 5th respondent. The GCDA as well as the Chief Town
Planner, strongly objected to the grant of exemption from operation of the rules for
construction of an 8 storied building by the 5th respondent. On 16.8.1990, the Minister for
Local Administration held a meeting in his chamber for consideration of the application of
the 5th respondent. In the said meeting, the appellant, 5th respondent, and the Chief Town
Planner were also present. It appears that the question as to whether the 5th respondent be
granted exemption from operation of the rules for construction of an eight storied high rise
building was discussed. Subsequently, the State Government by an order dated 13.11.1990
permitted the construction of an eight storied high rise building by granting exemption
Under the aforesaid circumstances, the appellant herein, by means of a petition under Article
226 of the Constitution challenged the orders dated 13.11.1990 and 22.11.1990 passed by the
State Government. The High Court was of the view that since the Chief Town Planner who
was present in the meeting had consented to the grant of exemption from the operation of the
Rules and as such there was no infirmity in the order of the State Government in dispensing
with the Rules for construction of an eight storied building. Consequently, the writ petition
was dismissed. Again the party preferred for appeal.
"5. Power of Government to exempt building: The Government may in consultation with the
Chief Town Planner exempt (any building) from the operation of all or any of the provisions
of these rules subject to conditions if may, to be stipulated in the order, granting such
exemptions;
Provided that such exemption shall be considered on individual application forwarded to the
government through the authority and the Chief Town Planner with their specific
recommendations;
Provided further that such exemption shall be considered only if the individual application for
exemption from building Rules is forwarded to Government along with a challan receipt
remitting the application fee in the Government Treasury as detailed below ....."
ISSUSE:
The question, therefore, that arises for consideration is whether in absence of any
recommendation by the GCDA and the Chief Town Planner the State Government was
competent to grant exemption from the operation of the Rules for construction of a high rise
building.
REASONING:
The Rules with which we are concerned here provide for regulation and construction of
building in an urban area. The object behind the Rule is maintenance of public safety and
convenience. The Municipal Corporation, GCDA, and the Chief Town Planner are entrusted
with the functions and duties for carrying out development and regulation of building in the
urban area. These are the authorities on the spot who have special and technical knowledge to
advise the Government whether public safety and convenience requires dispensing with the
provisions of Rules while permitting construction of an eight storied building. Thus, the
meaning of the word recommend, when read in the context of Rules show that it means
giving of a favourable report, opposed to an unfavourable one. Therefore the
recommendations by the GCDA and the Chief Town Planner are sine qua non for granting
exemption from operation of the Rules by the State Government. In the absence of such
recommendations, the State Government was not legally justified in granting exemption from
operation of the Rules for construction of high rise building. However, the position would be
different where the GCDA and the Chief Town Planner give an unfavourable report on
irrelevant or extraneous ground and in that case, the Government can call for a fresh report
for meeting the viewpoint of the GCDA and the Chief Town Planner. Here, what we find is
that there were neither recommendations by the GCDA and the Chief Town Planner, nor the
State Government obtained any fresh report to contradict the view point of the GCDA and the
Chief town Planner while granting exemption from operation of the Rules for constructing
high rise building. We are, therefore, of the view that the impugned orders suffer from serious
legal infirmity. Moreover recommendation having made by the Chief Town Planner
recommending the State Government to grant exemption from operation of the Rules for
construction of an eight storied building. Where the Rules require specific recommendation
of the Chief Town Planner in writing, his mere presence in the meeting would not constitute
recommendation for grant of exemption from the Rules. Therefore, in the absence of any
such recommendation, we find that the order passed by the State Government permitting the
5th respondent to construct an eight storied building after granting exemption from operation
of the Rules was erroneous.
CONCLUSION:
This shows that the Rules, which are mandatory in nature and are required to be complied
with for construction of a high rise building, were allowed to be dispensed with. Observance
and compliance of Rules is for public safety and convenience. There cannot be relaxation or
Rules, which are mandatory in nature and cannot be dispensed with especially in the case of
high rise building. The position may be different in the case of one or two storied building
where there are minor deviations from the Rules, which do not effect the public safety and
convenience. In the present case, we find that the deviations are of high magnitude, which are
contrary to the public safety and convenience. We are, therefore, of the view that the order
passed by the State Government exempting the provisions of the Rules for constructing an
eight storied building was contrary to the mandatory provisions of the Rules and therefore, is
not sustainable in law.