1 917 wp 1028.94.doc K IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.1028 OF 1994 Bhagwandin Sajram & Ors. ...Petitioners Vs. The Municipal Corporation of Greater Bombay & Ors. ..Respondents. Mr. J Reis with Mr.Yadunath Chaudhary i/b Mr.S.R.Borulkar for petitioners. Ms. Priti Purandare for respondent no.1. Mr.E.P.Bharucha, Senior advocate with Mr.D.D.Madon, Senior advocate, Mr.S.Bharucha, Mr.Sandip Bhimekar and Ms.Pallavi Surati i/b Wadia Ghandy & Co. for respondent nos. 2 and 3. CORAM : D.K.DESHMUKH & K.K.TATED, JJ. DATED : 04/02/2011. PC: 1 The Petitioners by this petition challenges the commencement certificate issued by the Respondent no.1 Bombay Municipal Corporation in favour of Respondent no.3 in relation to development on City Survey No.661 of Malabar Cumballa Hill Division, Old Jaiphalwadi, Forjet Hill Road, Bombay. 2 The relevant facts are that Plot no.661 which is subject matter of this petition is owned by Respondent no.2 Parsi 2 917 wp 1028.94.doc Central Association Co-operative Housing Society Ltd. Under the Draft Development Plan prepared under the Bombay Town Planning Act in or about 1960, the plot was reserved for public Housing and for Municipal Primary School. The Draft Development Plan was approved by the Corporation and the State Government. By letter dated 19th February, 1980 the owners approached the State Government for permission to develop the property. A letter dated 25th April, 1980 was addressed by the State Government to the Corporation on the subject of grant of permission for developing the above referred plot. It was stated in that letter “In accordance with Government letter No.TPS 4379/UD/5, dated 7th January 1980, it has already been directed that the sites reserved for Public Housing in the city of Bombay District from suburbs may be allowed to be developed by Co-operative Housing Societies with the previous approval of the State Government provided the interest of the legitimate tenants or occupants of the structures on such lands are adequately protected.” The State Government informed the Corporation that the Government have no objection to allow the owner of the land to develop the land for the purpose of Co- operative Housing Society subject to the conditions which were mentioned in that letter. At the instance of the Maharashtra Housing and Area Development Authority, the Government 3 917 wp 1028.94.doc issued the notification dated 14th October, 1980 for acquisition of that land for the purpose of the Housing Board. That notification was challenged by the owner of the land by filing Writ Petition No.1917 of 1981. That Writ Petition was disposed of by a learned Single Judge of this court by order dated 10th August, 1987. In view of the no objection given by the State Government by its letter dated 25th April, 1980 referred to above for development of the land by the owner on the terms and conditions which were mentioned in that letter, this court set aside the notification for acquisition of the land. The operative part of the order passed by the court reads as under: “11 The notification dated 14th October, 1980 as also the letter dated 11th July, 1985 (being Exhibits G and L to the Petition) are quashed and set aside. I record the statement of Miss. Rahman for Respondent No.4 that the Bombay Municipal Corporation will sanction and approve for development, of the said plans as submitted by the Petitioners subject to the two conditions referred to above in the letter dated 25th April, 1980 and subject to all other rules and regulations, if any. 4 917 wp 1028.94.doc In the circumstances of the case, there will be no order as to costs.” 3 Before the court, the Corporation stated that it will approve the plan submitted by the owner for development of the land subject to two conditions mentioned in the letter dated 25th April, 1980. The two conditions to which reference has been made in the statement quoted above reads thus: “i) the interest of the existing occupants will be adequately safeguarded by providing alternative accommodation to the Occupants and by providing alternative accommodation to Dhobies somewhere in a conforming Zones. ii) the Society shall hand over an area of 2250 sq.yds. to the Municipal Corporation of Greater Bombay free from encumbrances at the prevailing market rate for developing a Municipal Primary School, and” 4 The owner thus had to agree to provide alternative accommodation to the occupants and was also to provide 5 917 wp 1028.94.doc alternative accommodation to Dhobies somewhere in the confirming Zones. The society was also to hand over to the Corporation the area of the plot which was reserved to be used as Municipal Primary School at the prevailing market rate free from all encumbrances. 5 It appears that after the petition was decided a letter dated 22.12.1987 was addressed to the Corporation on behalf of the owners of the land stating therein that “we hereby request you to inform us all the conditions and terms for development of the said plot”. The Corporation by its letter dated 28.12.1987 informed the terms and conditions on which permission for development can be granted. One of the conditions was that the society will have to offer accommodation to all the existing occupants on the plot. On 29.10.1992 the Bombay Municipal Corporation granted IOD (Intimation of Disapproval) for development of the land. Conditions (M) and (N) of that IOD are relevant for our purpose they read as under: “M) That the agreements with existing tenants will not be submitted before C.C. N) That the plot reserved for Municipal Primary School will not be handed over to M.C.G.B. 6 917 wp 1028.94.doc free of encumbrances before full occupation and registered undertaking to that effect will not be submitted before C.C.” 6 In the communication dated 5th October, 1993 on behalf of the owners in relation to condition (M) in the IOD, following is stated: “REGARDING: M) Agreement with all existing tenants: We had already submitted agreements with the 105 existing tenants in your office. Yet there are few existing tenants with whom the Agreements are yet to be executed. However, during the course of construction, we will be submitting you remaining Agreements. We therefore, request you to issue us Commencement Certificate upto stilt level without insisting for agreement with remaining tenants.” It was further stated that: “Housing area are demolished. 30% of the structures from the school and playground area are 7 917 wp 1028.94.doc also shed. The remaining 70% are being shifted by either compensation to enable them to by elsewhere in the City of their choice or we ourselves are re-accommodating them in other buildings elsewhere in the City. The negotiations are in programme and it may take minimum three to four months to get the entire plot vacated which is under reservation for the School and Play ground.” 7 Thus, it is clear that the owners were while making a request for issuance of commencement certificate made the representation to the Corporation that 30% of the structure from the school and play ground area also demolished. The remaining 70% are being shifted and that shifting will be completed within a period of three to four months and the entire plot would be got vacated. In this situation, the commencement certificate was issued and the work was started as shown in the commencement certificate. The present Petition has been filed challenging grant of commencement certificate before all the occupants of the plot are accommodated. There is a list before us which shows that atleast some of the petitioners are actual occupants of plot no.661. From the submissions made 8 917 wp 1028.94.doc before us on behalf of the owners and the developer appointed by them i.e. Respondent nos. 2 and 3 it is clear that the owners treat the plot to be in two portions, 1) portion which is reserved for public housing and 2) portion which is reserved for Municipal Primary School. The case of Respondent nos.2 and 3 is that they have already accommodated occupants of the plot which is to be used for the purpose of public housing. They also accept that it is their responsibility to provide accommodation or to enter into agreement for suitable compensation also with the occupants who are occupying the plot which is used for Municipal Primary School but according to them Respondent nos. 2 and 3 have to enter in to such arrangement with the occupants of the plot which is to be used for Municipal Primary School before they apply for occupation certificate. According to them, they can get commencement certificate from the Corporation without it being necessary for them to enter into agreement with the occupants of that part of the plot which is to be used as Municipal Primary School, hereinafter referred to as “the school plot”. 8 It is the submission of Respondent nos.2 and 3 that the condition on which Government has granted no objection permits them to develop public housing portion of the plot 9 917 wp 1028.94.doc without entering into agreement with the occupants of the school plot. They are obliged to enter into arrangement with them only before applying for occupation certificate. Whereas the Petitioner’s case is that no work of development can commence on the plot without Respondent nos. 2 and 3 either provide accommodation or suitable compensation to the occupants of the school plot. Therefore, the limited controversy that is to be decided in this petition is ‘whether the condition of entering into agreement with the occupants of the school plot is to be satisfied by Respondent nos.2 and 3 before they get commencement certificate or it is to be satisfied by them before they apply for occupation certificate?’. 9 We have heard learned counsel for both the sides. We have also perused the record. In our opinion, for deciding this controversy the most important document is the letter dated 25th April, 1980 and the two conditions mentioned therein. The operative part of the order of the High Court which we have quoted above shows that the Corporation had also stated before the High Court that the plan for development of the plot submitted by the owners will be considered by the Corporation subject to the two conditions which are mentioned in the letter dated 25th April, 1980. Perusal of the two conditions shows 10 917 wp 1028.94.doc that it impose the responsibility on the owner of the land to hand over the school plot to the Corporation free from all encumbrances. It is clear from paragraph no.3 of the letter dated 25th April, 1980 that these two conditions have to be satisfied by the owners before they get permission to develop the land. It means that the owner is under a duty to make the school plot free from encumbrance before he gets the permission to develop the land. It means that before he can start the work of development, he must enter into arrangement with the tenants from the school plot also. This gets reinforced, if one looks at condition (M) in the IOD dated 29.10.1992. Condition (M) specifically states that the agreement with the existing tenants will have to be entered into before commencement certificate is granted. Perusal of the communication dated 5th October, 1993 from Respondent nos. 2 and 3 also shows that the respondent nos. 2 and 3 also understood condition (M) quoted above accordingly. It is, therefore, they stated that they are in the process of entering into arrangement with all the occupants, that work is likely to take three to four months and therefore, in view of their promise that they will enter in to arrangement with all the occupants, they should be given commencement certificate. Perusal of the communication dated 5th October, 1993 shows that it was not the stand of Respondent no.2 and 3 11 917 wp 1028.94.doc that they will enter into arrangement before they apply for occupation certificate. That stand is for the first time being taken in this petition. It is clear from the communication dated 5th October, 1993 that Respondent nos. 2 and 3 had clearly understood that they are under an obligation to enter into arrangement with the occupants of the school plot before they could get commencement certificate. It is therefore, clear that they have stated in that letter that they have already entered into negotiation with all the occupants and that they will enter into arrangement with them in three to four months. Had it been the stand of Respondent no.2 and 3 that they have to enter into arrangement with the occupants before they apply for occupation certificate, it was not necessary for them to say that they will complete the negotiation and enter into an agreement in three to four months. 10 The learned counsel appearing for Respondent nos. 2 and 3 relied on the affidavit filed on behalf of the Corporation dated 20th December, 2010 in support of his submission. We have read that affidavit. But we find that affidavit is at variance with the stand taken by the Corporation earlier including the affidavit filed by the Corporation. The stand of the Corporation taken earlier even at the time of granting IOD was that the tenants on 12 917 wp 1028.94.doc the entire plot are to be accommodated or agreement is to be entered with them before commencement of the work. In our opinion, insisting on the arrangement with the occupants of the entire plot being entered into is also in public interest because the Respondent no.2 is already granted commencement certificate to develop the plot and if the builder is allowed to commence construction on the plot without entering into arrangement with the occupants, he will create third party rights in favour of unsuspecting third party and that will create further complications and allowing him to adopt such course of action will cause prejudice to the interest of unsuspecting third parties. Therefore, in our opinion, public interest demands that before the builder can start any construction on the plot, the plot should be made free of encumbrances so that clear title can be given to the persons who purchase flats in the construction that comes up on the land. 11 It was contended on behalf of Respondent nos. 2 and 3 that the school plot is to be handed over to the Corporation on paying market price to the owner. If the plot is free from encumbrances and is offered by the owner to the Corporation, Corporation cannot decline to take the plot and pay the market price because that condition was incorporated by the 13 917 wp 1028.94.doc Corporation itself in its proposal and it is at the instance of the Corporation that the Government has incorporated that condition. Once the plot is offered by the owner the Corporation has to pay the market price for getting possession of the school plot and Respondent nos. 2 and 3 cannot say that unless the Corporation offers market price they are not obliged to remove the occupants from that plot. 12 Taking over all view of the matter, therefore, in our opinion following order will meet the ends of justice: i) Commencement certificate granted in favour of Respondent nos.2 and 3 is set aside. It is held that the commencement certificate may be granted in favour of Respondent nos. 2 and 3 by the Corporation on their satisfying the Corporation that they have entered into arrangement with all the occupants of plot no.661. ii) Rule made absolute accordingly. iii) Writ Petition is disposed of accordingly. No order as to costs. (D.K.Deshmukh, J.) (K.K.Tated, J.)