Bombay High Court Diary
Introduction
A division bench of the Hon’ble Bombay High Court comprising of Justice A.S. Gadkari and Kamal Khata was hearing a petition filed by the developers pertaining to the matter of redevelopment of a plot of land situated at Sion, (Koliwada) particularly known as Guru Teg Bahadur Nagar (for short, “the said land”).
Facts of the case
The said land which had 25 buildings thereon was in an old, dilapidated, and precarious condition and therefore demolished by the Brihanmumbai Municipal Corporation (for short, “B.M.C.”) between 2019 – 2022. Thereafter, the said land remained vacant for over 5 years. The residents opted for redevelopment and therefore asked the Government to step in which further steered to a Cabinet decision coupled with the issuance of a Government Resolution (for short, “GR”) to effectuate the same. Maharashtra Housing and Area Development Authority (for short, “MHADA”) was appointed as the planning authority for supervising the redevelopment process of the said land. The GR explicitly contained that the MHADA will
carry out the redevelopment of the said land adhering to Regulation 33(9) of the Development Control and Promotion Regulations for Greater Mumbai, 2034 (for short, “DCPR”), by appointing a Construction and Development Agency (for short, “C & D A”) through a tender process. Subsequently and in compliance with the same, MHADA issued an e-Tender for selecting a C & D A for undertaking the redevelopment project.
The Petitioners, being the developers claimed to have vested rights in the said land and highlighted the chain of events that had taken place, viz. the passing of a Cabinet Decision, the issuance of a GR accompanied with floating of the e-Tender by the MHADA and prayed for a writ of Certiorari, to set aside the same for carrying out the redevelopment of the said land.
Contentions canvassed by the Petitioners
The counsel for the Petitioners submitted that the buildings were dilapidated and at the end of their life stage and hence were classified as C-1 category by the B.M.C and in furtherance to which demolition notices were issued under Section 353(b) and 354 of the Mumbai Municipal Corporation (for short, “M.M.C.”) Act, 1888. In the light of the above, the Petitioners approached the individual members of these buildings (as societies were not formed at that time) with proposals/offer for undertaking the redevelopment of these buildings.
It was also put forth that the Petitioners had obtained consents of 909 out of 1200 members and accordingly entered into and executed individual agreements with some of these members. Subsequently, some societies were formed and individual members had given their consents for redevelopment of their buildings. He also contended that it would be unfair to the Petitioners and their rights would be prejudiced due to the consideration of the cabinet decision and the GR. He also asserted that the cabinet decision and the GR were based on a wrong assumption that the said land belonged to the government when it actually belonged to the societies.
The counsel for the Petitioners brought to the kind attention of the bench the fact that the Petitioners had invested a huge amount in the project and had already obtained consents of various individual members and emphasizing upon the same, he maintained that the Petitioners should be allowed by the MHADA to carry out the redevelopment of the said land without undergoing a Tender process.
The counsel for the Petitioners asserted that the MHADA could not claim any right/authority on the said and and that the GR was passed negating/disregarding the fact that the said land belonged to the society. He also argued that the Government or MHADA which is a State under the purview of Article 12 of the Constitution, could not act/behave as a private developer inducing individuals/societies to contravene their individual contracts with the Petitioners by issuing such tenders as that would amount to flagrant violation of the public policy and law. He also contended that the individuals had entered into Agreements with the developers prior to the formation of the societies and such contracts were legally valid, binding and enforceable in law as both the parties had acted in furtherance to such agreements and also the Petitioners had spent huge amounts which were received by the individuals.
Contentions canvassed by the Respondents
The advocate for the Respondents stated that the Petitioners had no locus to file the petition as the Petitioners placed reliance upon the individual agreements which were entered into in a phase when the societies were not even formed.
He also mentioned that the picture was totally different at the present juncture as the societies had already been formed coupled with the fact that the agreements entered into back then were not even stamped or registered. The advocate for the Respondents also argued that the Petitioners had not obtained resolutions from the societies after their formation and compared to the estimated costs of the project, the amount invested by the Petitioners was trivial.
The advocate for the Respondents stressed upon Regulation 33(9) of the DCPR sub clause (4) and maintained that if the competitive authority could obtain the consent of 51% of each building’s residents or 60% of the overall scheme involved in the cluster development the scheme, the B.M.C or MHADA was entitled to undertake redevelopment. He also added that the developers were at liberty to participate in the tender process for redevelopment of the said land through MHADA and this process would not harm the Petitioners and as they had obtained the consent and support of the majority of society members, they would be in a better position for contending for the redevelopment. He also put forth that as MHADA was a State under the ambit of Article 12 of the Indian Constitution, it could not exclude the Petitioners by giving them the leeway to avoid the tender process and favor them.
The advocate for the Respondents also submitted that the Petitioners strong reliance upon the various documents like agreement cum undertaking, indemnity etc. could not be taken into account as they were not registered. It was also placed on record that the Petitioners had not commenced redevelopment of the societies even for those who had given their consent to the Petitioners and had also not provided transit accommodation to those who had vacated their Old premises due to demolition. He also clarified that the signatures of 716 residents out of total 1200 residents had signed declarations to allow MHADA to carry out redevelopment through the tender process along with giving a reference of some judgments to support his arguments. The advocate for the Respondents also mentioned that the proposed layout plan submitted by the Petitioners Architect to the B.M.C was rejected.
Observation of the Hon’ble Bombay High Court
The bench remarked that the petition was not maintainable and the Petitioners could resort to the individuals for support but not MHADA who was just issuing an e-Tender for redevelopment of the said land. The bench also observed that 716 out of 1200 residents had given a go-ahead for the redevelopment of the said land through MHADA and to materialize the same, a Cabinet decision and a GR was passed. The bench opined that the Regulation 33 (9) (b) of the DCPR read with sub clause (4), gives rights to the State to develop lands as provided therein. DCR 33 (9)(b) states that the MHADA, MCGM, jointly with the landowners and/or co-operative housing societies independently or by means of a Promoter/Developer could undertake the reconstruction or redevelopment of cluster (s) of buildings under the cluster development scheme.
The implementation of the Cabinet decision, GR and the e-tender was stayed pending the filing of the Affidavit in Reply by State and MHADA by an order dated 17 th April, 2024. According to the Affidavit in Reply, 692 residents were dishoused since the year 2019 and the Petitioners had neglected to take necessary steps since 2013. The bench clearly communicated that the tender process for appointing a developer could not be stalled simply because of the fact that the Petitioner had obtained consents from the individual members for commencing, carrying out and completing the redevelopment. The bench stated that the consents were old and were obtained prior to the formation of the societies and the Petitioners had not disclosed the correct facts to the Court and the Petitioners were very well aware that
they were under an obligation to obtain the development rights from the newly formed societies which they had not discharged.
The bench averred that they were unable to identify any valid grounds that could support the Petitioners to restrain the MHADA from issuing a tender for the redevelopment of the said land and the Petitioners had not produced any documents to corroborate their claims and contentions.
The bench expressed its view that the Petitioner’s rights, if any, would only lie in respect of the individuals who had signed the contracts and received compensation and therefore the Petitioners informing about their claim to the State does not prohibit/restrain the State from acting for the public welfare by making a Cabinet decision and appointing MHADA to carry out the redevelopment. The provisions under the scope of DCR 33(9) (b) read in consonance with sub clause (4) would make the Petitioners case baseless.
The bench concluded that the Petitioners would retain their right to participate in the tender process and having attained consents from individuals, would place them in a beneficial situation along with shedding light upon the fact that the Petitioners had not taken into consideration the signed representations submitted by the individuals to the Government requesting the MHADA for undertaking the redevelopment of the said land.
The bench derived that the buildings were demolished between 2019 – 2022 and around 692 members were dishoused for a period of 5 years with the remaining members being deprived of their homes for 2 years along with stating that out of 25 societies, 14 were against the Petitioners and 5 were not functioning. The bench noted that the Petitioners claimed to have obtained 909 consents, however in the petition it was showcased that only 798 individuals had executed documents and also the contention that the Petitioners had paid corpus to all the individuals who had given their consents for redevelopment was a clear misrepresentation.
Judgment of the Hon’ble Bombay High Court
The division bench of the Hon’ble Bombay High Court in its judgment dated 19 th November, 2024 pronounced that the Petitioners, if at all had any right to seek remedy, then they could pursue those rights against the individual members in accordance with law. Writ would not lie against the MHADA for floating the e –Tender and therefore the bench dismissed the petition and cleared the way for MHADA to oversee the redevelopment of the said land.
Analysis of the ruling
The judgment passed by the Hon’ble Bombay High Court exhibits the importance of maintaining transparency at the time of making any submissions before the court of law along with full, fair, true and complete disclosure of all the relevant facts. It portrays the significance of appropriate documentation and evidence to substantiate the claims, as the absence of the above mentioned paved the way for dismissal of the petition.
It also clarifies the fact that once the societies have been formed, the individual agreements with the developer do not hold any substance and value. The judgment passed depicts and communicates the prioritization of the better interest and welfare of the distressed residents/families and their legitimate rights to be rehoused at the earliest, in the looming uncertainty of the redevelopment process, over the claims/grievances of the developers who had knocked the doors of the court with unclean hands.
Nirali Yash Desai authors the article, she is a real estate lawyer working with Damji Shamji Shah Group, Mumbai (in house legal department).
1. Lakhani Housing Corporation v/s State of Maharashtra & Ors – Writ Petition No.2167 of 2024 with
Interim Application (L) No. 25969 of 2024