: 1 : wp.1522.2011 vss IN THE HIGH COURT OF JUDICATURE AT BOMBAY O.O.C.J. WRIT PETITION NO.1522 OF 2011 Lahu Shankar Patil & Ors. .. Petitioners V/s. The State of Maharashtra & Ors. .. Respondents Mr.Janak Dwarkadas, Senior Counsel with Mr.P.K. Samdhani, Senior Counsel with Mr.Chirag Balsara I/b J.R. Vyas for the Petitioner Mr.P.G. Lad, AGP, for the Respondent No.1 Mr.N.V. Walawalkar, Senior Counsel with Mr.S.P. Thorat for Resp. No.2 Mr.A.P. Sathe, Senior Counsel with Mr.P.G. Karande for Resp. No.3 Mr.Rafiq Dada, Senior Counsel with Mr.D.D. Madon, Senior Counsel i/b V.S. Kapse for Resp. No.4 Mr.D.H. Mehta with Mr.Swapnil Bangur I/b Mr.A.R. Patil for Intervenor Mr.Kalpesh Nansi for Intervenor CORAM: B.H. MARLAPALLE & SMT.NISHITA MHATRE, JJ. DATED: SEPTEMBER 19, 2011 : 2 : wp.1522.2011 P.C.: 1. This petition is filed under Article 226 of the Constitution of India were initially filed by 51 members (Petitioners Nos.52 to 79 were added as additional petitioners/interveners as per the order in Civil application) and who are the members of the Respondent No.3 Cooperative Housing Society. The petitioners have challenged the revalidation of the NOC dated 25.102.2004 by the letter of 22.3.2011 issued by respondent No.2 i.e. MHADA. 2. There is no dispute that Respondent No.3 society was registered on 11.3.1988. Ten 10 old chawls located on CTS No.580 and with the total area admeasuring about 10118.40 sq.mtrs. were occupied by about 264 occupants. On 19.9.1985 Respondent No.2 allotted about 5278.40 sq.mtrs of land from CTS No.580/TPS-IV (Mahim) which forms part of Lokmanya Nagar Hindmill Compound, Dadar (West) to Respondent No.3 society. The ownership of the tenements was transferred to the society but the land was allotted on lease basis and the premises were handed over by MHADA to Respondent No.3 on 3.12.1988. Initially the NOC for redevelopment was granted on 4.1.2000. Respondent No.3 society passed a unanimous resolution on 10.12.2000 for redevelopment and authorised the managing committee : 3 : wp.1522.2011 to select the Developer. On 7.1.2001, the general body of Respondent No.3 society passed a resolution appointing Respondent No.4 as the Developer and on 8.7.2001, a development agreement was signed between Respondent No.3 and Respondent No.4. Suit No.1315 of 2000 came to be filed before this Court by the previous developer M/s.I.S Enterprises challenging the termination of the agreement signed in its favour but without challenging the order dated 4.9.2000 passed by MHADA. On 22.12.2003, the Government of Maharashtra levied repair cess w.e.f. 31.5.1985 to all 10 chawls of Respondent No.3 society. A fresh development agreement was signed between Respondent No.3 and Respondent No.4 on 21.10.2004, after the Executive Engineer of Mumbai Building Repairs and Reconstruction Board scrutinised the proposal and verified the irrevocable consent given by about 80% members of Respondent No.3 on 15.1.2004. On 21.10.2004, Respondent No.2 executed an indenture of lease for 99 years and also sale deed in respect of the 10 chawls in favour of Respondent No.3 and on 25.10.2004, a fresh NOC was issued by the Chief Officer of MHADA thereby granting permission for redevelopment under Regulation 33(7) of the DC Regulations for Greater Mumbai, 1991. 3. In PIL Petition No.3189 of 2004, this Court had granted a : 4 : wp.1522.2011 general stay on 26.10.2004 and therefore there could be no progress till the middle of the year 2006 in the redevelopment activities. On 23.4.2006, the technical committee of structural engineers headed by the Chief Engineer of MHADA was directed to inspect various properties which were required to be taken up for redevelopment and thus the said committee also visited the subject chawls and submitted a report confirming that the redevelopment was required to be undertaken. On 15.6.2008, the Respondent No.3 society passed yet another resolution supporting a redevelopment scheme under DCR 33 (7) r/w DCR 33(9). A tripartite agreement was executed on 18.11.2008 between Respondent Nos.2 to 4 and a supplementary agreement was signed on 11.8.2009 between the very same parties. It appears that the cash amount payable to every member of Respondent No.3 society, on account of redevelopment was raised from `301,000/- to `701,000/-. As a result of this tripartite agreement, Respondent No.2 was likely to get an additional built up area of 12000 sft. over and above the area of 2500 sq.mtrs. These resolutions came to be challenged in Case No.284 of 2009 before the Cooperative Court and an application for interim relief filed in the said case was rejected on 30.7.2009. An appeal filed against the said order is pending before the cooperative Appellate court. : 5 : wp.1522.2011 4. S.C. Suit No.1857 of 2009 came to be filed before the City Civil Court for Greater Mumbai by some members of Respondent No.3 society challenging the joint agreement dated 18.11.2008 as well as the supplementary agreement dated 11.8.2009 and the notice issued u/s 95A of the MHADA Act. Notice of Motion No.1371 of 2009 was filed in the said suit and it was dismissed on 13.9.2009. Appeal from Order No.85 of 2010 was filed before this Court and it was dismissed on 19.7.2010. The said order was carried before the Supreme Court by one Shivaji Patil and others in Special Leave Petition praying for being heard before the State Government approved the tripartite agreement for redevelopment under DCR 33(7) and 33(9). The said petition was rejected on 29.8.2010 holding that the petitioners had no locus standi in the matter of amalgamation. On 22.3.2011, Respondent No.2 informed the Respondent No.3 and Respondent No.4 by the impugned order that the State Government did not grant sanction for amalgamation of DCR 33(7) and 33(9) as the redevelopment scheme was to be implemented only under DCR 33(7). The NOC already issued on 25.10.2004 was continued. In the meanwhile, the members of Respondent No.3 signed the tripartite agreements for redevelopment and accepted an amount of Rs.51,000/- each from the Developer i.e. Respondent No.4. Notice of : 6 : wp.1522.2011 Motion No.949 of 2011 was taken out in the pending Suit i.e. S.C. Suit No.1857 of 2009 by Shivaji Patil and others challenging the letter dated 30.4.2011. This Notice of Motion was rejected on 5.5.2011 and the said order has received its finality. On 20.4.2011, MHADA issued notices u/s 95A and they were sought to be stayed in the Notice of Motion No.949 of 2011. As the said Motion was rejected, MHADA issued fresh notices on 23.5.2011 and on 21.7.2011, the MHADA purportedly started implementation of the eviction notices. Some of the Petitioners approached the Cooperative Court in a fresh round and prayed for status quo order. It is under these circumstances that this petition came to be filed on or about 22.7.2011. 5. The thrust of the petitioners' contention is on the basis of clause 2.6 of the tripartite agreement dated 18.11.2008. They claim that as per the said clause all earlier agreements between Respondent No.3 and Respondent No.4 were superseded and, therefore, the irrevocable consents given in the year 2000 did not remain in force and it was necessary for Respondent No.3 to call for a fresh general body meeting so as to pass a fresh resolution for redevelopment. The agreement between Respondent No.3 and Respondent No.4 signed on 21.10.2004 ceased to exist in view of the language of clause 2.6 of the : 7 : wp.1522.2011 tripartite agreement dated 18.11.2008 and, therefore, the members of Respondent No.3 society will have to pass a fresh resolution for redevelopment, and thereafter a new Developer will have to be appointed in place of Respondent No.4. If the Government of Maharashtra has rejected the proposal for the amalgamation of DCR No.33(7) and 33(9) by its order of 23.12.2010, the earlier redevelopment scheme under DCR 33(7) cannot be implemented on the basis of the consents furnished in the year 2000 as the Development agreement dated 21.10.2004 between Respondent No.3 and Respondent No.4 as well as NOC granted by the MHADA on 25.10.2004 ceased to exist. Under these circumstances, Respondent No.2 had no authority in law to revalidate the NOC granted on 25.10.2004 as has been stated in the impugned order. It was submitted by Mr.Dwarkadas, the learned Counsel appearing for the petitioners that the consents given by the members are required to be valid at all times and the validity must be continuous. On the termination of the development agreement dated 21.10.2004 between Respondent No.3 and Respondent No.4, the consents given by the members in the year 2000 could not be treated to be valid and in fact they ceased to exist. Therefore it was necessary for Respondent No.3 to call for a general body meeting, pass a fresh resolution and obtain fresh consent letters : 8 : wp.1522.2011 for redevelopment. In support of these arguments, Mr.Dwarkadas relied upon a decision of this Court in the case of Lokhandwala Infrastructure Private Limited vs. The State of Maharashtra & Ors., (2011) 3 Mh.L.J. 469 and more particularly the following observations: “17. … The Chief Executive Officer of the Slum Rehabilitation Authority ought to have been cognizant of the fact that the petitioners claimed the consents of 95% of the slum dwellers. Though these consents dated back to 2003, the question as to whether the new developer proposed by the cooperative societies has requisite consents of slum dwellers in excess of 70% needed a proper scrutiny and verification. In the absence of this process having been completed, a direction issued by the Chief Executive Officer, to process the issuance of a letter of intent to the Sixth Respondent is unsustainable and would have to be set aside.” 6. Mr.Walawalkar, the learned Senior Counsel appearing for Respondent No.2 submitted that the redevelopment agreement dated 18.11.2008 was on the basis of the proposal submitted by MHADA on 25.1.2008 and the subsequent advice of the State Government in its letter dated 8.2.2008. As per Mr.Walawalkar, the tripartite agreement dated 18.11.2008 as well as the supplementary agreement dated 11.8.2009 were contingent on the approval to be granted by the State Government and the State Government rejected the proposal submitted by MHADA for the amalgamation of DCR 33(7) and 33(9). It is under these circumstances that the NOC granted earlier continued to operate. : 9 : wp.1522.2011 It was also submitted that the land admeasuring 5278.40 sq.mtrs was allotted on lease and it was not the ownership land of the Respondent No.3 society. The ownership of the land would always remain with MHADA. MHADA would otherwise also be entitled for a built up area of 2500 sq.mtrs as per the NOC granted under DCR 33(7) and, therefore, it is one of the major stakeholders. The validity of the continuation of the agreement dated 18.11.2008 or the supplementary agreement dated 11.8.2009 cannot be read in isolation and if the Government of Maharashtra has rejected the proposal for amalgamation by its order dated 23.12.2010, both these agreements ceased to exist and they were never brought into force at any time when they were signed. Hence, the petitioners cannot rely upon clause 2.6 of the tripartite agreement dated 18.11.2008. In support of these arguments, Mr.Walawalkar relied upon the following observations made by the Supreme Court in the case of Bank of India & anr. V/s. K. Mohandas & Ors., (2009) 5 SCC 313: “28. The true construction of a contract must depend upon the import of the words used and not upon what the parties choose to say afterwards. Nor does subsequent conduct of the parties in the performance of the contract affect the true effect of the clear and unambiguous words used in the contract. The intention of the parties must be ascertained from the language they have used, considered in the light of the surrounding circumstances and the object of the contract. The nature and purpose of the : 10 : wp.1522.2011 contract is an important guide in ascertaining the intention of the parties.” 31. It is also a well-recognised principle of construction of a contract that it must be read as a whole in order to ascertain the true meaning of its several clauses and the words of each clause should be interpreted so as to bring them into harmony with the other provisions if that interpretation does no violence to the meaning of which they are naturally susceptible (North Eastern Railway Co. v. Lord Hastings)” 7. Mr.Sathe, learned Counsel appearing for the Respondent No.3 society submitted that the redevelopment has been delayed for no reasons attributable to the society and it has been dragged in litigation from time to time during the last about 10 years. Out of 262 members of the society, 212 members have furnished their irrevocable written consent, including 51 petitioners. Thus, more than 80% of the members had furnished their irrevocable written consent. He also submitted that after the supplementary agreement was signed on 11.8.2009, 50 of the original petitioners have signed the tripartite agreement to which the Respondent No.3 and Respondent No.4 are the parties. 32 of the original petitioners after signing the said tripartite agreement have received an amount of `51000 individually from Respondent No.4. It is further pointed out that 59 of the 262 occupants have moved out of the present premises by way of a transit arrangement and 30 other members have shifted to the transit building : 11 : wp.1522.2011 constructed by Respondent No.4 at the site. It was also stated that 136 tenaments are vacant in the transit building constructed by Respondent No.4. He also submitted that all the 10 buildings of Respondent No.3 society and which are proposed for redevelopment are of category `A' and `cessed' and they were constructed before the year 1940. He submitted that there was no necessity to obtain a fresh NOC and the written consents remained intact for the redevelopment to be undertaken by Respondent No.4. Mr.Sathe also relied upon a decision of this Court in the case of Awdesh Vasistha Tiwari v. Chief Executive Officer, 2006(5) Bom.C.R. 772 in support of his contentions that the written consents once given are irrevocable. 8. Mr.Dada, the learned Senior Counsel appearing for Respondent No.4 submitted that Respondent No.4 has by now invested more than `10 crores in the subject project for redevelopment under DCR 33(7). If the Government of Maharashtra rejected the proposal for redevelopment as a tripartite arrangement with the involvement of MHADA, the redevelopment agreement signed on 21.10.2004 remained intact and the tripartite agreements dated 18.11.2008 and 11.8.2009 had never taken effect as they were subject to approval by the State Government. Clause 2.6 of the tripartite agreement dated : 12 : wp.1522.2011 18.11.2006 therefore cannot be relied upon so as to claim that the bipartite agreement dated 21.10.2004 was superseded and the NOC granted on 25.10.2004 could not be acted upon. It has also been pointed out that after the expert committee constituted in PIL Petition No. 3189 of 2004 submitted its report, the Government of Maharashtra acting on a private complaint had stayed the redevelopment to be undertaken by Respondent No.4 and the stay order was vacated only on 22.2.2008. Respondent No.4 is thus not responsible for the delay caused in the redevelopment and in any case there is no change/amendment in DCR 33(7) during the last about 10 years or so. As per Mr.Dada, the petitioners or some of them have dragged the society as well as the Developer into litigation from one Court to another and despite the fact that about 80% of the members of Respondent No.3 society have furnished written consent for redevelopment to be undertaken by Respondent No.4. Notices u/s 95A of the MHADA Act have been issued as a last resort and Respondent No.4 undertakes to provide the transit accommodation for the remaining members i.e. 173 as soon as they vacated the present tenaments under the redevelopment. 9. Clause 2.6 of the agreement dated 18.11.2008 reads as under: : 13 : wp.1522.2011 “2.6 Entire Agreement This Agreement contains the entire arrangement between the Parties on the subject matter hereof and supersedes all prior discussions, information, writings, memorandums and documents exchanges and agreements with respect to the subject matter of this Agreement. It is expressly agreed between the parties that this Agreement supersedes all arrangements and all previous agreements and/or arrangement between them as regards the rights hereby ascertained.” 10. The letter submitted by the CEO of MHADA to the Principal Secretary of the Housing Department, Government of Maharashtra referred to the Government letter dated 19.10.2007 and further stated about the imperative need to reexamine the redevelopment project situated at Dadar/Mahim division in the following circumstances: “The plot is situated at Dadar (West) and in this case, the MBR and RB has granted NOC for redevelopment of the existing buildings in October 2004 under the provisions of DC Regulation No.33(7) with permissible FSI of 2.5. It is felt that MHADA should revise the scheme from DCR 33(7) to 33(7) read with 33(9) so that the NOC granted in the next plan be retained and the Joint Venture (JV) project can get FSI of 4.00 thereby substantial built up area can be made available by the Developer to MHADA in this project. It is proposed to utilise about 2560 sq.mtrs. Of built up area for MHADA for rehabilitation of tenants as it is under NOC as per DCR 33(7) and is to be received under MHADA Act for rehabilitation purpose. This 2560 m2 area is to be received at an amount as may be decided by MHADA. The surplus FSI of 23.106 is proposed to be shared : 14 : wp.1522.2011 between Developer and MHADA so that about 15.434 sq.mtrs. of the built up area can be received by MHADA from Developer free of cost. Developer will receive 50% incentive as per minimum incentive granted in the DCR 33(7). The additional BUA of 15,404 sq.mtrs is proposed to be sold in the open market by undertaking construction of about 70.00 sq.mtrs. carpet area of flats. It may be mentioned that the incentive of FSI under DCR 33(7) is given at the rate of minimum 50% and maximum 70% over rehab component. The incentive FSI under Draft D.C. Regulation 33(9) which is under consideration of Govt. in Urban Development Department is minimum 50% and maximum 80% over rehab component. In the slum rehabilitation scheme the incentive FSI under D.C. Regulation 33(10) in the Island City is 75% over rehab component. In SRA scheme, FSI on plot is 2.5 whereas in this scheme the FSI proposed to be utilized is 4.0 resulting in construction of high rise buildings. In view of the above, 50% incentive FSI proposal is reasonable.” 11. On 22.2.2008, the Housing Department of the Government of Maharashtra informed the CEO of MHADA that the stay granted earlier for the redevelopment under 33(7) was vacated and the proposal submitted on 25.1.2008 was scrutinised by the State Government. 12. The Housing Department of Government of Maharashtra by its letter dated 23.12.2010 rejected the proposal for redevelopment of the : 15 : wp.1522.2011 subject chawls by amalgamation of DCR 33(7) and 33(9) as they operated in different redevelopments. The proposal submitted by MHADA for tripartite redevelopment was, therefore, turned down. MHADA was also advised to examine if it was willing to undertake the redevelopment under DCR 33(9) and submit a proposal to that effect. 13. DCR 33(7) and 33(9) read as under: 33(7) Reconstruction or redevelopment of cessed buildings in the Island City by Co-operative Housing Societies or of old buildings belonging to the Corporation or of old buildings belonging to the Police Department,- For reconstruction / redevelopment to be under taken by Co- operative Housing Societies of existing tenants or by Co-op. Housing Societies of landlords and/or occupiers of a cessed buildings of `A' category in Island City, which attracts the provisions of MHADA Act, 1976 and for reconstruction/redevelopment of the buildings of Corporation and Department of Police, Police Housing Corporation, Jail and Home Guard of Government of Maharashtra, constructed prior to 1904, the Floor Space Index shall be 2.5 on the gross plot area or the FSI required for rehabilitation of existing tenants plus incentive FSI as specified in Appendix-III whiever is more. Note.-The development of land for Department of Police, Police Housing Corporation, Jail and Home Guard of Government of Maharashtra shall be permitted by the Commissioner after due approval of the Committee mentioned in Note-3 below regulation 33(3)(A): Provided, however, that with the previous approval of the Government, MHADA/Corporation shall be eligible to get additional incentive FSI over otherwise permissible FSI as specified in Annexure III of these Regulations: Provided further that in cases of composite redevelopment scheme for plot having `A' category as also `B' category cessed building the above FSI shall be available: Provided further that in cases of reconstruction/ : 16 : wp.1522.2011 redevelopment of buildings which have been declared as unsafe by the BHAD Board prior to monsoon of 1997, the above FSI will be available irrespective of category of cessed building: Provided further, that reconstruction/redevelopment undertaken by proposed Co-operative Housing Societies of Landlords and/or Occupiers of cessed building of `B' category, and where composite development is undertaken by different owners of 5 or more plots the FSI required for Rehabilitation of existing tenants plus incentive FSI as specified in Appendix III will be available.” 33(9) Repairs and reconstruction of cessed buildings and Urban Renewal Scheme. - For repairs and reconstruction of cessed buildings and Urban Renewal Scheme undertaken by the Maharashtra Housing and Area Development Authority or the Mumbai Housing and Area Development board or Corporation in the Island City, the FSI shall be 4.00 or the FSI required for rehabilitation of existing tenants/occupiers, whichever is more.” 14. We have no doubt in our mind that the Government of Maharashtra was justified in holding that there could be no amalgamation of DCR 33(7) and DCR 33(9) in the instant case, though MHADA was likely to gain additional free built up area i.e. over and above 2500 sq.mtrs. When the amalgamation proposal itself was not permissible, the tripartite development agreement dated 18.11.2008 and the subsequent supplementary agreement dated 11.8.2009 could not be approved by the State Government. These agreements were thus contingent and they could not be brought into force. Mr.Dwarkadas, the learned Senior Counsel referred to sections 10, 31, 32, 37 and 62 of the Indian Contract Act 1872. He submitted that if the : 17 : wp.1522.2011 parties had agreed to substitute a new contract for the earlier development agreement signed between Respondent No.3 and Respondent No.4, the said bipartite agreement dated 21.10.2004 could not be performed on account of the effect of novatio. Section 31 of the Contract Act defines contingent contract and section 32 of the said Act provides for enforcement of contracts contingent on an event happening. There can be no doubt that the tripartite agreements between Respondent No.2 to 4 referred to hereinabove were contingent contracts and they were to be brought into force subject to the proposal of the amalgamation of DCR 33(7) and 33(9) being approved by the Government of Maharashtra. The Government rejected the said proposal. Consequently, these tripartite agreements were never brought into force and, therefore, the petitioners cannot rely upon clause 2.6 of the tripartite agreement dated 18.11.2008. 15. Clause 1 of appendix III (Regulation 33(7) of the DCR) states that new building may be permitted to be constructed in pursuance of an irrevocable written consent by not less than 70 percent of the occupiers of the old building and all the occupants of the old building shall be reaccommodated in the redeveloped building. The consents given by 212 out of 262 members of Respondent No.3 society, in the year 2000 : 18 : wp.1522.2011 are thus irrevocable and bipartite agreement between Respondent No.3 and Respondent No.4 signed on 21.10.2004 has not been superseded and it is very much enforceable. The NOC granted by MHADA on 25.10.2004 has also the same effect and it remains valid and operative. There is therefore no substance in the arguments that Respondent No.3 society is required to call for a fresh general body meeting so as to pass a resolution for obtaining fresh written consents for redevelopment from the members