1. The Petition raises an interesting issue of Plaintiff’s right to claim ownership in flats constructed on non-suit land owned by a third party by use of TDR generated from the suit land, in which Plaintiff claims ownership. The issue arises in the light of opposition by the owner of non-suit land to his impleadment to the suit. No doubt the TDR is generated from the suit land in which Plaintiff claims ownership, but is the TDR akin to immovable property and whether its utilization on another land would mean ‘transfer of right’ in suit land in favour of owner of non-suit land entitling the Plaintiff to run behind such owner and claim rights in flats constructed in that land? TDR is capable of being freely sold and monetized. Therefore, whether extraction of TDR from suit land and its utilization on another land would create in Plaintiff’s favour merely a right to claim monetary value of that TDR or can he also claim ownership rights in the flats constructed by use of such TDR? Whether owner of non-suit land would be a necessary party to the suit because TDR from suit land is utilized on his land? These are the issue that this Court is tasked upon to decide in the present Petition.

2. By this Petition filed under Article 227 of the Constitution of India, Petitioners challenge order dated 16 February 2023 passed by 7th Joint Civil Judge Senior Division, Thane, allowing the Application at Exhibit-156 filed by the Plaintiff under Order I Rule 10 read with Order VI Rule 17 and Section 151 of the Code of Civil Procedure, 1908 (the Code). By the impugned order, the Trial Court has directed impleadment of the Petitioners as Defendants to the Suit and has permitted Plaintiff to amend the Suit for incorporating inter alia pleadings and prayers relating to flats sold to them by Defendant No.9.

3. The land under dispute in the suit is inter alia the land bearing Survey No. 29/6. Plaintiff-Respondent No.1 claims right, title and interest therein on the strength of Conveyance Deed dated 20 September 1990. He has instituted Special Civil Suit No.579 of 2010 in the Court of Civil Judge Senior Division, Thane, seeking a declaration of ownership in respect of various suit properties, including land bearing Survey No. 29/6. Though the suit involves various lands, for the purpose of present Petition, the relevant land involved in the suit is the one which bears Survey No. 29/6, which is being referred in the judgment as ‘suit land’ for the sake of brevity and convenience. Defendant No. 9 claims ownership in suit land and Plaintiff has challenged ownership claim of Defendant No. 9 in that land. There is ‘adjoining land’ to suit land, which bears Survey Nos.25/1, 25/2 and 29/8 (adjoining land) of which Petitioners are the owners. Plaintiff per se does not dispute ownership of adjoining land by Petitioners and has no concern with the same.

4. The suit land totally admeasures 12538.29 square meters. As per the sanctioned Development Plan, portion admeasuring 7964.67 square meters out of the suit land was affected by reservation and accordingly, Defendant No.9 surrendered the same to Thane Municipal Corporation. The balance land admeasuring 4573.62 square meters is retained by Defendant No.9. Defendant No.9 secured Transferable Development Rights (TDR) in respect of the surrendered land admeasuring 7964.67 square meters out of Survey No.29/6 and was issued Development Rights Certificate (DRC) by the Municipal Corporation.

5. As observed above, Petitioners are the owners of adjoining land. Petitioners gave development rights to Defendant No. 9 in respect of adjoining lands and Defendant No. 9 was under contractual obligation to grant about 41 constructed units in the building to be constructed on the adjoining land by way of consideration to Petitioners. Accordingly, Allotment Letters dated 11 October 2013 were issued by Defendant No.9 to Petitioners in respect of 41 units being Commercial Shops and Residential Flats. Defendant No. 9 has utilized the TDR generated out of the suit land on the adjoining land.

6. In the meantime, Plaintiff challenged grant of TDR in respect of the suit land in favour of Defendant No. 9 by filing Writ Petition No.11401 of 2015. This Court recorded in order dated 3 May 2016 that the entire TDR out of the surrendered land was consumed by Defendant No.9 in the adjoining lands of the Petitioners. Status quo was directed to be maintained in respect of balance land admeasuring 4573.62 square meters.

7. Since TDR generated out of suit land is utilized on the adjoining land, Plaintiff filed Application at Exhibit-156 seeking impleadment of the Petitioners (in addition to few other persons) as parties to the Suit and also sought amendment of the Plaint so as to claim rights in flats constructed on adjoining land owned by the Petitioners by use of TDR arising out of suit land. By the impugned order dated 16 February 2023, the learned Trial Court has allowed the Application directing impleadment of the Petitioners to the Suit and also permitting amendments in the Plaint. Aggrieved by the order dated 16 February 2023, the present Petition is filed.

8. I have heard Mr. Dewal, the learned counsel appearing for the Petitioners, Mr. Shah, the learned Senior Advocate appearing for Respondent No.1-Plaintiff and Ms. Chandnani, the learned counsel appearing for Respondent No.10/Defendant No. 9. I have gone through the reasons recorded in the impugned order and have also perused the records of the case filed alongwith the Petition.

9. Petitioners have absolutely no concern with any of the properties involved in the suit, including the suit land. Similarly the Plaintiff has no concern with the adjoining land. Petitioners are however sought to be roped in the Suit on account of the fact that TDR arising out of the suit land is loaded by Defendant No.9/Developer for carrying out construction on adjoining land belonging to the Petitioners.

10. The issue for consideration therefore is whether loading of TDR generated out of suit land on adjoining land would entail impleadment of owner of such adjoining land to the Suit? Also involved is the issue whether mere loading of TDR arising out of suit land on adjoining land would entitle Plaintiff to claim reliefs in respect of flats constructed on adjoining land on which the TDR is loaded?

11. In the present case, Plaintiff claims ownership in respect of the suit land bearing Survey No.29/6. Some part of the suit land is surrendered to Thane Municipal Corporation as the same was reserved in the Development Plan. Surrender of land admeasuring 7964.67 square meters has generated TDR in favour of Respondent No.9, who claims right, title and interest in the said suit land. Defendant No.9 coincidentally is also a Developer appointed by the Petitioners on adjoining land. Defendant No.9/Developer could have sold the TDR generated out of the suit land to an outsider and monetized the same. TDR is capable of being sold and utilised on any other land and the same is thus capable of being monetized. There are different methods of utilization of TDR. The person, in whose name DRC is issued, can hoard the same till price of TDR therein increases. He can utilize full or part of TDR in the DRC on his own land elsewhere. He can allow another developer to utilize full or part of TDR in the DRC while retaining ownership of DRC with him. This means that if the TDR of 10,000 square meters is available with the DRC holder, he can allow TDR of 5,000 square meters to be utilized by another developer and the Planning Authority accordingly deducts the utilized TDR from the DRC. The DRC holder however continues to retain ownership in respect of the DRC and balance TDR of 5000 sq. mts. The DRC holder can also sale the whole of the DRC to another person and that person then acquires ownership in respect of DRC and TDR reflected therein. That there are myriad ways of utilization of TDR in the DRC.

12. This concept of utilization of TDR in the DRC has been dealt with by me in the judgment in Green Garden Apartments Co-operative Housing Society Limited vs. Nitin Chaudhary and others(2025 SCC OnLine Bom 3623), in which it is held that TDR loses characteristic of immovable property once it is taken out from the land and sold or utilized on another land. This Court has also discussed the multiple ways in which TDR can be utilized and sold. In Green Garden Apartments CHS (supra), the issue before this Court was about requirement of registration of agreements for transfer of TDR. It was contended by Plaintiff therein that TDR is an immovable property and its sale requires compulsory registration under Section 17 of the Registration Act. On the other hand, the Defendant therein contended that TDR is a movable property and its purchase merely requires payment of stamp duty on the instrument of sale and not registration. The issue is captured in paragraph 37 of the judgment as under:

                   37. The next and the most vital ground raised by the Society for questioning the title of Defendant Nos. 5 to 18 in respect of the sold TDR is non- registration of the Agreements by which the TDR has been sold. It is Plaintiff's contention that TDR is an immovable property and its sale requires compulsory registration under Section 17 of Registration Act. On the other hand, it is the contention of the contesting Defendants that TDR essentially is a movable property and its purchase merely requires payment of Stamp Duty on the instrument of sale and not registration under Section 17 of the Registration Act. Requirement of registration of instrument of Sale of TDR is the main bone of contention between the parties in the present suit.

13. This Court in Green Garden Apartments CHS considered and distinguished the judgment of this Court in Chheda Housing Development Corporation vs. Bibijan Shaikh Farid and others((2007) 3 Mah LJ 402) by holding in paragraphs 42 to 44 as under:

                   42. By relying on judgment in Chheda Housing, Plaintiff contends that the law is well settled that FSI/TDR being a benefit arising from the land, the same must be held to be an immovable property. However, it must be noted that the observations in Chheda Housing are made in the context of issue of specific performance of Agreement for use of TDR. It is well settled position of law that judgment is an authority for what it decides and not what can be logically deduced therefrom. ...

                   43. The judgment in Chheda Housing rendered in the context of specific performance of contract for use of FSI cannot therefore be cited in support of an abstract proposition that the TDR must be held to be immovable property for the purpose of compulsory registration of an agreement for utilization of TDR. More importantly, the judgment in Chheda Housing has been explained in subsequent Division Bench judgment in B. Jeejeebhoy Vakharia (supra), in which the Division Bench has held that the judgment in Chheda Housing does not lay down a general proposition of law that FSI is immovable property. ...

                   44. Thus apart from holding that the observations in Chheda Housing about TDR/FSI being immovable property not constituting a binding precedent, the Division Bench in B. Jeejeebhoy Vakharia has made an independent analysis of the concept of TDR in the context of definition of the term ‘immovable property’ under Section 3(26) of the General Clauses Act, 1897 and has held that to form an immovable property, the benefits arising out of the land has to be necessarily attached to the land or fastened to the land and until such benefit is either attached or fastened to the land, it would continue to be an immovable property. The moment it is detached from the land to which it pertains to, it will cease to be an immovable property. Thus in B. Jeejeebhoy Vakharia, the Division Bench of this Court has emphatically ruled that since TDR is detachable from land, the same does not constitute immovable property.

                   (Emphasis added)

14. This Court thereafter dealt with the concept of TDR, how it is generated, utilized and sold in paragraphs 63 to 68 of the judgment in Green Garden Apartments CHS as under:

                   63. To appreciate the requirement of registration of instrument of transfer of DRC in DCPR and UDCPR, it would be necessary to examine the very concept of TDR, how it is generated and in what manner in can be utilized and sold. When the land is reserved in a development plan or a regional plan for public purposes, it becomes mandatory for Planning Authority or the Development Authority to acquire the same. There are three modes of acquisition under Section 126 of the MRTP Act viz., (i) by agreement of paying the amount agreed to, (ii) grant of FSI or TDR against the area of land surrendered or (iii) by making the application to the State Government for acquisition of the land.

                   64. There are twin purposes why provision is made under Section 126 of the MRTP Act to enable the Planning Authority to offer FSI or TDR to the landowner. Firstly, it expedites the process of acquisition and secondly it relieves the Planning Authority of financial burden of paying monitory compensation to the land owner. The concept of offering TDR to the land owners in lieu of compensation was introduced by amending Section 126 of the MRTP Act w.e.f. 25 March 1991. Simultaneously, with amendment of Section 126 of the MRTP Act, Development Control Regulations 1991 for Greater Mumbai came to be notified on 20 February 1991 which came into effect from 25 March 1991. Regulations 33 and 34 and Appendix VII of DCR 1991 dealt with procedure for generation of TDR and for grant of DRC. The DCR 1991 also provided for the manner of utilisation of TDR on same or another land. After introduction of DCPR 2034, Regulation 32 therein governs ‘Transfer of Development Rights’. Clause 4 of Regulation 32 deals with generation of TDR whereas clause 5 deals with utilisation of TDR. Under Clause 6.2 of DCPR 32 it is provided thus:—

                   6.2 DRC shall be issued by the Municipal Commissioner as a certificate printed on bond paper in an appropriate form prescribed by him. Such a certificate shall be a “transferable and negotiable instrument” after the authentication by the Municipal Commissioner. The Municipal Commissioner shall maintain a register in a form considered appropriate by him of all transactions, etc. relating to grant of, or utilisation of, DRC.

                   (emphasis added)

                   65. Thus, under the DCPR 2034, DRC issued by the Municipal Commissioner is a transferable negotiable instrument. The Municipal Commissioner is required to maintain a register of all transactions relating to grant or utilisation of DRC. Thus, there is a register like a passbook, which must contain entries of utilisation of TDR made from time to time.

                   66. From the provisions of Regulation 32 of DCPR 2034, it appears that there is a marked difference in the concepts of ‘utilisation of TDR’ and ‘transfer of DRC’. A holder of DRC desiring to use the FSI credit therein can attach valid DRC to the extent required with application for development purpose. Thus, the FSI standing to the credit of DRC holder can be utilised by DRC holder or he may permit such FSI credit to be used by another developer and every time utilisation of portion of FSI credit is made, entry to that effect is made by Municipal Commissioner in the register/passbook. Thus, when TDR in DRC is permitted to be utilised by DRC holder by another developer, the concept is ‘utilisation of TDR’. However, the DRC being a negotiable instrument, it can also be traded in the market. To illustrate, a DRC holder may sell the entire DRC to another person in which case there is change in the name of holder of DRC. Against this, in case of utilisation of DRC, the name of holder of DRC never changes but FSI credit in DRC can still be utilised by another developer. This is exactly what has happened in the present case where the name of DRC holder i.e. Plaintiff-Society has remained unaltered despite utilisation of FSI credit therein by as many as 13 developers. Thus, the owner of DRC remained Plaintiff-Society, but FSI credit therein has been permitted to be utilised by the Municipal Commissioner to 13 different developers. Thus, what is done in the present case is ‘utilisation of TDR’. However, Plaintiff-Society could have simply sold the DRC as well to another entity, in which case, the purchaser of DRC would have become holder thereof. This is what is contemplated by clause 6.4 of Regulation 32 of DCPR 32. In a case involving transfer of DRC, the holder changes as the DRC is traded like a negotiable instrument. The purchaser may retain the DRC without utilisation or may utilise the same himself or permit the FSI credit therein to be utilised by third party developers. The purchaser can further trade the DRC by selling the same to another entity. Thus, the DRC in such case is capable of being traded and sold as movable property like a negotiable instrument and it is permissible to earn profits by trading of DRC. However, every time the DRC is traded by way of a transfer, clause 6.4 of Regulation 32 requires a registered agreement for the purpose of changing the name of the holder.

                   67. Thus, there is a fine but a very important distinction between the concepts of ‘utilization of TDR’ and ‘transfer of DRC’. The DRC contains FSI credit and it is not mandatory that the whole of the FSI must be sold to one entity for being utilized on one land alone. It is permissible to sell the quantum of FSI reflected in the DRC to multiple developers at different points of time. Thus, a DRC holder having FSI credit of 10,000 sq. mtrs can sell only FSI of 1000 in 2025 to one developer and retain the balance 9000 sq mtrs of FSI on his DRC. When he sells that 1000 sq. mtrs FSI for being utilized by a developer, the Municipal Commissioner deducts the sold quantity from the register/passbook maintained in respect of that DRC. Despite sale of 1000 sq. mtrs FSI, the name of DRC holder remains unaltered, and he continues to own the DRC qua balance FSI credit. The DRC holder can then sell the balance 9000 sq. mtrs FSI in the DRC to multiple developers at different times and every time the sold FSI is utilized by a developer, a debit entry is made in the DRC register. This is the concept of sell of FSI/TDR reflected in the DRC for its utilization by other developers. The other option available to the DRC holder is to ‘transfer the DRC’, where he needs to sell the whole of DRC to another entity. In this case, the name of the DRC holder changes and the purchaser becomes the DRC holder. The new DRC holder can further sell the DRC to another entity or exercise the right of selling of FSI credit for utilization in phased/staggered manner as demonstrated above.

                   68. Thus, the concept of sale of TDR for utilization does not permit the purchaser of TDR to further trade the purchased FSI and profiteer therefrom. However, in the concept of transfer of DRC, the purchaser of DRC can trade the DRC and profiteer therefrom. Where the TDR is sold for being utilized, the DCPR 2034 or UDCPR do not require the agreements to be registered, whereas the registration is mandated when the whole of DRC is traded by sale thereof.

15. This Court concluded in paragraph 71 that an instrument of sale of TDR is not required to be registered by observing as under:

                   71. It is sought to be contended by Plaintiff-Society that the stand of contesting Defendants that each of the Agreements executed in favour of Defendant Nos. 5 to 18 are for ‘sale’ and not merely for ‘utilisation’ of TDR. In my view nomenclature of transaction is irrelevant. Even if TDR is sold, the same is for the purpose of utilisation. It is not that Defendant Nos. 5 to 18, who have purchased the TDR from Plaintiff-Society could further sell it to third parties. Sale for the purpose of utilisation of TDR can only be done by holder of DRC. By reason of sale of TDR, Defendant Nos. 5 to 18 have not become holders of DRC. The Agreements would have required registration only if Plaintiff-Society was to trade and sell the entire DRC in favour of one of the Defendants. In that case, the purchaser of DRC could have not only been entitled to utilise the FSI credit in the DRC but further sell the same to third party.

16. Thus, when TDR is detached from a piece of land and utilized on another piece of land, it loses characteristic of immovable property and also loses connection with the land in respect of which the same is generated.

17. Following the above principle, mere utilization of TDR generated out of part of suit property cannot be a reason for impleadment of owner of the land on which such TDR is loaded as party Defendant to the Suit. Defendant No.9 could have simply sold the TDR in the DRC to a third party, who could have held such TDR and then allowed it to be utilized to number of persons. Mere existence of title disputes relating to suit land cannot be a ground for presuming that Plaintiff would have a semblance of right in the land on which the TDR is utilized. If Plaintiff claims title in the suit land from which TDR is generated and is aggrieved by transfer/utilization of such TDR on another land, Plaintiff can sue Defendant for recovery of monetary value of such TDR. Mere purchase of TDR or utilization thereof on another land would not necessarily mean that the purchaser of TDR or owner of land, on which it is utilized, needs to be impleaded as party Defendant to the Suit. This is because mere loading of TDR on another land does not mean that landowner from which the TDR is generated becomes entitled to any rights in the land on which TDR is loaded.

18. TDR ultimately represents compensation in kind in the form of FSI on account of Planning Authorities’ financial constraints to pay monetary compensation. Otherwise, upon acquisition of land, Planning Authority is required to pay monetary compensation to the owner. In a case where Planning Authority pays compensation in respect of acquired land, any party claiming right, title or interest in the acquired land can sue the Defendant who has received the compensation and seek recovery of amount of compensation. In such a case, person claiming right, title or interest in the acquired land is not supposed to implead the Planning Authority to the suit or seek return of land claiming that it was acquired from non-owner. Once the land is acquired, the interest therein gets transformed into compensation, to which a claim can be staked by the Plaintiff. Plaintiff cannot implead Planning Authority on the ground that the land acquired belongs to him and that therefore the same must be returned to him upon success in the suit. Plaintiff can only claim compensation payable for that land. Acquisition of land is compulsory and who can receive compensation can only be the subject matter of debate. Therefore merely because the Planning Authority grants TDR/FSI due to its financial constraints instead of paying monetary compensation, the same does not mean that Plaintiff claiming title in the acquired land can sue the owner of the land on which TDR is actually utilized. Permitting impleadment of owner of land on whose land TDR is utilized would mean permitting Plaintiff to run after the acquired land, which concept is unknown to law. Once land is acquired, the right therein takes the form and shape of compensation, which may be in money or in kind. Though the compensation is in kind in the form of TDR, the same is still capable of being monetized. Therefore, the appropriate remedy for the Plaintiff in such a case is to seek recovery of value of TDR granted in favour of the Defendant by the acquiring body. In the present case therefore, Plaintiff needs to sue Defendant No.9 for recovery of value of the TDR utilized on the land of Petitioners. It appears that such a prayer is already included in the Plaint, which Plaintiff needs to pursue against Defendant No.9.

19. In my view, the Trial Court has egregiously erred in not appreciating this fundamental position of law and has erroneously directed impleadment of Petitioners as Defendants to the Suit merely because TDR arising out of part of suit property is loaded by Defendant No.9 on their land.

20. Mr. Shah has made an attempt to impress upon the Court that Defendant No.9 has sold 41 flats/units in the building to the Petitioners after loading of TDR and that those 41 flats/units have a direct connection with the loaded TDR, making Plaintiffs entitled to ownership of the said 41 flats/units. I am unable to agree. The 41 flats/units are allotted/sold to the Petitioners as a consideration for the development rights granted in the land owned by them. The building constructed on land owned by the Petitioners has approximately 496 units, some of which may have been a result of loading of TDR on the land. However, it cannot be contended that the said 41 flats/units allotted/sold to Petitioners are in lieu of TDR loaded by Defendant No.9 on the adjoining land. Therefore, Plaintiff/Respondent No.1’s proposed prayer for seeking title in respect of the said 41 flats/units is clearly misplaced.

21. In my view therefore, neither Petitioners could be impleaded in the Suit nor the flats allotted/sold to them can form subject matter of the Suit. While claiming title in respect of the suit properties, Plaintiff cannot seek to embroil an unconnected property in the controversy merely because TDR arising out of suit property is loaded on that property. Thus, the impleadment application as well as amendment Application qua Petitioners/Defendant No.10 and 11 were clearly not maintainable and deserved outright rejection. By the impugned order dated 16 February 2023, Defendant Nos.12 to 15 are also impleaded in the Suit, who have not challenged their impleadment. Accordingly, the order dated 16 February 2023 is required to be modified only to the extent of its application to Petitioners/Defendant Nos.10 and 11.

22. The Petition accordingly succeeds, and I proceed to pass the following order:

                   i) Order dated 16 February 2023 passed by the Trial Court on Application at Exhibit-156 is partly set aside qua impleadment of Petitioners/Defendant Nos.10 and 11.

                   ii) All the amendments allowed by the Trial Court vide impugned order dated 16 February 2023 qua Defendant Nos.10 and 11 as well as any property belonging to them are set aside.

                   iii) The Trial Court accordingly shall not permit any amendment in the Plaint concerning Defendant Nos.10 and 11 or any properties concerning them and the Plaintiff shall carry out only rest of the amendments in the Plaint.

23. With the above directions, the Writ Petition is allowed and disposed of.