New Delhi: The Supreme Court on Monday ruled that banks, hospitals and other commercial activities cannot be carried out from plots in Noida developed for residential purpose. The Apex Court ordered 21 banks and nursing homes in Sector 19 to immediately close their operations.

A bench comprising Justices Swatanter Kumar and Ranjana Prakash Desai said, "That banking or nursing homes or any other commercial activity is not permitted in Sector 19 and for that matter, in any sector, in the Development Area earmarked for residential use" said.

The SC directed that the misuse of the residential plot be stopped forthwith and its order should be complied within two months. Noida is located on the outskirts of Delhi.

"That the 21 banks and the nursing homes, which are operating in Sector 19 or any other residential sector, shall close their activity forthwith, stop misuse and put the premises to residential use alone, within two months from the date of pronouncement of this judgment," the bench said.

As per the SC ruling, if the misuse is not checked within two months, Noida Authority will seal the premise and start the process of canceling of their lease. 

Further, it said the lessees of the plots shall ensure that the occupant banks, nursing homes, companies or persons carrying on any commercial activity in the residential sector should stop such activity and shift the same to the appropriate sectors i.e. commercial, commercial pockets in industrial institutional area and specified pockets for commercial use within the residential sector, strictly earmarked for that activity in the development Plan, Regulations and provisions of the Act.

The verdict upheld the decision of the Allahabad High Court which had dismissed the bunch of petitions challenging the order of the NOIDA Authority not permitting the use of residential plots for commercials purpose or mixed use.

The Apex Court, which disposed of the appeals, asked the NOIDA Authority to consider the request for providing alternative spaces to those coming under the ambit of its judgment.

"That the Development Authority shall consider the request for allotment of alternative spaces to the banks and the persons carrying on other commercial activities, with priority and expeditiousness," the bench said.

It also laid down the guidelines for using the residential plots for some specialised professionals like doctors, lawyers and architects.

"That the doctors, lawyers and architects can use 30 percent of the area on the ground floor in their premises in residential sector for running their clinics/offices," the judgment said adding that for such use "they shall be liable to pay such charges as may be determined by the Development Authority in accordance with law and after granting an opportunity of being heard".

The bench said the affected parties would be at liberty to raise objections before the Development Authority that no charges are payable for such users as per the law in force.

It is worth mentioning that Noida Authority had issued notice to shut down the banks, nursing homes or any such commercial activities in the residential sector. Authority had also issued notice to the allottees that if the misuse of residential sector is continued, the allotment will be annulled.

RK Mittal and Mangeram Sharma had challenged the Authority notice before the Allahabad High Court. Later the issue was moved to the SC which in 2002 upheld the Authority notice evacuating the banks from the residential sector.