Unilateral Revocation Of Building Permission Without Proof Of Fraud Violates Article 300-A: Madhya Pradesh High Court

The Madhya Pradesh High Court has held that a municipal authority cannot arbitrarily revoke a validly granted building permission after a property owner has substantially altered their position and invested significant resources in construction, unless there is proof of fraud or misrepresentation. The ruling came in Smt. Manju Chawla and Others v. Indore Municipal Corporation, where Justice Jai Kumar Pillai quashed the revocation of building permission and subsequent demolition notices issued by the Indore Municipal Corporation.

The petitioners, lawful owners of the property, had obtained building permission after completing all statutory requirements. Acting on the approval, they constructed three storeys on the property. Nearly two years later, the Municipal Corporation issued a show-cause notice alleging that while the sanctioned map showed an 18-metre-wide road in front of the property, the proposed master plan contemplated a 30-metre road. The Corporation subsequently revoked the permission and initiated demolition proceedings.

The High Court found the Corporation’s conduct arbitrary and unreasonable. It noted that the building permission had undergone full scrutiny, including consideration of public objections, before being granted. Despite this, the authorities remained inactive while construction progressed substantially and only later sought to revoke the approval. The Court also observed that the Corporation failed to explain whether any action had been taken against officials who allegedly approved the permission improperly.

Significantly, the Court found that neighbouring properties within the same layout had received similar permissions based on an 18-metre road and no action had been initiated against them. Holding that such selective action amounted to hostile discrimination, the Court ruled that punitive powers of revocation could not be invoked merely to correct the authority’s own delayed realisation. Accordingly, it restored the building permission, quashed the demolition notices, and restrained the authorities from taking coercive action against the property on the basis of the impugned orders.