In a judgement dated on January 12, a Division Bench comprising Justice Arun Tandon and Justice Anjani Kumar Mishra made it clear that while development authorities were "justified in insisting upon rain water system being installed by a developer in residential colonies", they "cannot ask for a bank guarantee in advance on the mere presumption that the developer otherwise would not provide" the facility.
Similarly, the court also termed as "arbitrary" bank guarantees being demanded for construction of houses for economically weaker sections or lower income groups.
"If the building plan has been sanctioned including construction of a certain number of houses for members of lower income group or economically weaker sections of the society and if such constructions are not carried out, the Development Authority can always proceed against the person in whose favour the plan was sanctioned and can even proceed to demolish the construction raised," the court said.
The court also declared as "illegal" a number of other charges levied by the authorities like city development charges, impact fee, "sub-division charges", "permit fee, supervision fee, inspection fee and labour cess", and ordered that petitioners who may have "deposited money under the aforesaid heads shall be entitled for refund".