IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.2168 OF 2007 WRIT PETITION NO.2168 OF 2007 WRIT PETITION NO.2168 OF 2007 M/s Lokhandwala Infrastructure ] Pvt. Ltd. (previous known as ] Lokhandwala Builders) a Company ] duly registered under the Companies ] Act, 1956 and having its registered ] Office at 72, Gandhi Nagar, Dainik ] Shivner Marg, Worli, ] Mumbai - 400 018. ]..Petitioners. Vs. 1. Municipal Corporation of Greater ] Mumbai, having head office at ] Mahapalika Marg, Opp. C.S.T. ] Station, Mumbai - 400 001 ] ] 2. Municipal Commissioner having ] Office at Municipal Corporation, ] Mahapalika Marg, Opp. C.S.T. ] Station, Mumbai - 400 001. ] ] 3. Asst. Municipal Commissioner, ] (Estates) having office at ] Shri Chhatrapati Shivaji Maharaj ] Market Building, 2nd Floor, ] Palton Road, Mumbai - 400 001 ] ] 4. Chairman, Improvement Committee ] Having office at Municipal ] Corporation, Mahapalika Marg, ] Opp. C.S.T. Station, ] Mumbai - 400 001. ] ] 5. S.G. Dalvi & Associates ] Architects & Engineers, having ] office At Ground Floor, ] Abhyasika Building ] c/o Snehdeep Society, ] Vitthal Chavan Marg, Parel, ] Mumbai - 400 012. ] ] 6. M/s Yash Enterprises ] Builders & Developers, having ] - = : 2 : = - Office at Ground Floor, ] Abhyasika Building, ] C/o Snehdeep Society, ] Vitthal Chavan Marg, Parel, ] Mumbai - 400 012. ] ] 7. State of Maharashtra ] Through Government Pleader, ] High Court, Original Side, ] High Court, Mumbai. ] ] 8. Ish Krupa Co-operative Housing ] Society (Proposed) having ] office at Municipal Quarters, ] Dr. E. Moses Road, Worli Naka, ] Worli, Mumbai - 400 018. ] ] 9. Rajgraha Co-operative Housing ] Society (proposed) having office ] at Municipal Quarters, ] Dr. E. Moses Road, Worli Naka, ] Worli, Mumbai - 400 018. ] ] 10.141 Municipal Tenements Tenants ] Co-operative Housing Society ] (proposed) having office at ] "141 Municipal Tenements", ] Tenants Chawl No.11/12, ] Dr.E. Moses Road, Worli Naka, ] Worli, Mumbai - 400 018. ] ]..Respondents. Mr.D.D. Madon, senior Advocate with A.N. Jakhadi for Petitioners. Mr.A.Y.Sakhare with Ms.A.K.Savla for B.M.C. Mr.C.U.Singh, senior Advocate with Soma Singh i/b. S. Udeshi & Co. for respondent No. 6. Mr.Aspi Chinoy, senior Advocate with R.M.Pethe for respondent No.10. Mr.S.K.Talsania, Senior Advocate with J.S. Saluja i/b. V.K. Tiwari for respondent Nos.8 and 9. CORAM: SWATANTER KUMAR, C.J. & J.P.DEVADHAR, CORAM: SWATANTER KUMAR, C.J. & J.P.DEVADHAR, CORAM: SWATANTER KUMAR, C.J. & J.P.DEVADHAR, J. J. J. JUDGMENT RESERVED ON : 4TH JULY, 2008 JUDGMENT RESERVED ON : 4TH JULY, 2008 JUDGMENT RESERVED ON : 4TH JULY, 2008. - = : 3 : = - JUDGMENT PRONOUNCED ON: 31ST JULY, 2008 JUDGMENT PRONOUNCED ON: 31ST JULY, 2008 JUDGMENT PRONOUNCED ON: 31ST JULY, 2008. JUDGMENT (PER J.P.DEVADHAR, J) JUDGMENT (PER J.P.DEVADHAR, J) JUDGMENT (PER J.P.DEVADHAR, J) 1. Where some of the buildings constructed prior to 1940 on a large municipal plot are occupied by the tenants, whether the Municipal Corporation would be justified in permitting the developer appointed by the tenants to redevelop the entire plot under Regulation 33(7) of the Development Regulations for Greater Mumbai, 1991 instead of permitting redevelopment either by subdividing the plot or developing the plot under Regulation 33(9) is the question raised in this petition. 2. The dispute in the present case relates to the redevelopment of a large plot belonging to the Mumbai Municipal Corporation (‘Corporation’ for short) admeasuring 12130.07 sq. mtrs. bearing C.S. No.17/47 (part) of Lower Parel Division situated at Dr. E.Moses Road, Worli Naka, G/South Ward, Mumbai - 400 018 (hereinafter referred to as the ‘plot in question’). 3. On the plot in question, the Corporation had - = : 4 : = - constructed several buildings prior to 1940, some of which are occupied by the municipal tenants and the remaining buildings are used for housing the Municipal Conservancy staff. Subsequently in the year 1959, a building for municipal school has also been constructed by the Corporation on the plot in question. Some other commercial structures have also been constructed on the said plot during the period from 1960 to 1/1/1995. 4. As the buildings constructed prior to 1940, have become dilapidated and the Corporation has not taken any steps for reconstruction of the said buildings, the municipal tenants as well as the municipal conservancy staff have formed independent co-operative societies with a view to redevelop their dilapidated buildings. Respondent No.10 society is formed by the municipal tenants and Respondent No.8 and 9 societies are formed by the municipal conservancy staff. 5. Since the plot in question is a large plot, the developer appointed by the municipal tenants had sought subdivision of the said plot and N.O.C. for redevelopment of the subdivided plot on which buildings occupied by the municipal tenants are existing. The petitioners representing the municipal - = : 5 : = - employees had also applied for redevelopment of the adjoining subdivided plot on which the buildings occupied by the municipal employees are existing. The municipal authorities had approved the subdivision of the plot in question and granted N.O.C. to the developer appointed by the municipal tenants to redevelop the subdivided plot. However, by the impugned decision dated 24/8/2007. the Improvement Committee of the Corporation decided to allow the Respondent No.6, developer appointed by the municipal tenants to redevelop the entire plot in question. Challenging the above order, the present petition is filed. During the pendency of the petition, the Corporation by the impugned order dated 22/1/2008 rejected the proposal submitted by the Architect of the Petitioner-developer. The writ petition has been amended to challenge the said order dated 22-1-2008. 6. Regulation 33(7) and 33(9) of the Development Control Regulations for Greater Bombay, 1991 (‘DCR 1991’ for short) published by the State Government to the extent relevant herein read thus:- 33(7) Reconstruction or redevelopment of 33(7) Reconstruction or redevelopment of 33(7) Reconstruction or redevelopment of cessed buildings in the Island City by cessed buildings in the Island City by cessed buildings in the Island City by Co-operative Housing Societies or of old Co-operative Housing Societies or of old Co-operative Housing Societies or of old buildings belonging to the Corporation buildings belonging to the Corporation buildings belonging to the Corporation. -- For reconstruction / redevelopment to be - = : 6 : = - undertaken by Co-operative Housing Societies of existing tenants or by Co-operative 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 constructed prior to 1940, the FSI 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 whichever is more. Provided, ..... " 33(9) Repairs and reconstruction of cessed 33(9) Repairs and reconstruction of cessed 33(9) Repairs and reconstruction of cessed buildings and Urban Renewal Scheme. - buildings and Urban Renewal Scheme. - 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. 7. The relevant facts are that by a letter dated 26/10/2002, the Chief Promoter of the respondent No.8 - Society formed by the Municipal employees had requested the improvement committee of the Corporation not to evict the Municipal employees from the Municipal staff quarters situated on the plot in question which are dilapidated and instead the municipal employees should be conferred with the status of tenancy, so that they can redevelop their buildings at their own costs by availing the incentive F.S.I. available under Regulation 33(7) or 33(9) of D.C.R., 1991. - = : 7 : = - 8. By a letter dated 6/4/2003, the Corporation informed the Chief Promoter of the respondent No.8 Society that the redevelopment of the plot in question would be undertaken under Regulation 33(9) of D.C.R., 1991 by inviting tenders. The Deputy Mayor of the Corporation vide his letter dated 28/5/2004 informed the Assistant Municipal Commissioner that the fresh guide-lines prepared by the Corporation for redevelopment of the Municipal staff quarters are pending approval before the State Government and as and when the said guide-lines are approved, the proposal submitted for redevelopment of the Municipal staff quarters by the municipal staff would be considered. 9. It appears that on 14/10/2004, the Architect appointed by the respondent No.10 - Society of the Municipal tenants had submitted a Plan for sub- division of the plot in question so as to redevelop the subdivided plot on which the dilapidated buildings occupied by Municipal tenants are existing by availing the incentive FSI under D.C.R. 33(7). 10. On consideration of the proposal, the Deputy Chief Engineer (P.I.Cell) submitted a report to the Assistant Municipal Commissioner on 18-1-2005 stating therein that redevelopment of the respective portion - = : 8 : = - of the plot occupied by the tenants as well as the municipal employees can be considered separately in case the layout / subdivision of the plot is approvable. Accordingly, the Assistant Commissioner (Estates) by his letter dated 27/6/2005 forwarded N.O.C. for redevelopment of the subdivided plot in the form of Annexure-II to the Architect appointed by the Municipal tenants Society and requested him to submit a scheme for redevelopment of the subdivided plot admeasuring 4905.17 sq. mt. (out of total area of 12,130.17 sq. mtrs), subject to final demarcation by the D.I.L.R. By the said letter, the Architect of the Municipal tenants was further called upon to submit the scheme of redevelopment in the form of Annexure I and III along with plans, scrutiny fee of Rs.1,000/- and also information about the developer appointed by the municipal tenants. On receipt of the Annexure I & III from the Architect of the Municipal tenants, the Assistant Municipal Commissioner (Estates) forwarded the same to the technical committee for scrutiny on 26/8/2005. 11. In the meantime, the Architect of the petitioners representing the Municipal employees (respondent Nos. 8 and 9) submitted a proposal on 26/9/2005 seeking permission to redevelop a portion of the plot in question admeasuring 5761.23 sq. mtrs. - = : 9 : = - area (out of the total area of 12,130.07 sq. mtrs.) so as to reconstruct the buildings occupied by municipal employees on the terms more particularly set out therein. Thereupon, the Deputy Chief Engineer (B.P.) City I/c in his report dated 21/10/2005 remarked that the sub-division of the plot in question into three plots is acceptable and though from the planning point of view it was always better to develop the entire plot at a time, in view of the delay in finalisation of the policy guide-lines in respect of municipal staff quarters, the proposal submitted by the Municipal employees would have to be delayed till the policy guide-lines are finalised by the State Government. The Dy. Chief Engineer further remarked that since the plot falls in the height restriction zone covered under D.C.R. 31(4)(a), relaxation provided under D.C.R. 33(10) would have to be sought for. 12. While the proposal for redevelopment of the subdivided plot submitted by the Architect of the municipal tenants under D.C.R. 33(7) was pending final approval by the technical committee of the Corporation, suddenly on 16/11/2006 the Architect of the Municipal tenants gave up the proposal for redevelopment of the subdivided plot admeasuring 4905.17 sq. mtrs. and submitted modified Annexure I - = : 10 : = - and III for redevelopment of the entire plot in question admeasuring 12,130.07 sq. mtrs. by availing 2.5 F.S.I. under D.C.R. 33(7). The Architect of the municipal tenants further offered to pay to the Corporation premium on the surplus area of 17,193.49 sq. mtrs. remaining after rehabilitating the municipal tenants, municipal employees, municipal school and other structures set out therein, at a capitalised value of Rs.31,22,33,780/- calculated on the basis of the market value set out in the Stamp Duty Ready Reckoner ("SDRR" for short). 13. In the meantime, the Chief Promoter of the Municipal employees Society as well as their Architect wrote letters on 17/1/2007 and 22/1/2007 objecting to the Architect of the municipal tenants submitting modified Annexure I and III for redevelopment of the entire plot in question. In the meantime the Architect of the municipal employees submitted modified Annexure I and III on 16/7/2007 seeking approval for redevelopment of the subdivided plot admeasuring 5761.23 sq. mtrs. with 2.5 F.S.I. and offered to pay to the Corporation a premium of Rs.14,33,59,040/- on the surplus area of 6445.31 sq. mtrs. calculated at the rate prescribed under S.D.R.R, 2007. - = : 11 : = - 14. The technical Committee which met on 15-5-2007 approved redevelopment of the entire plot under D.C.R. 33(7) by the respondent No.6 - developer appointed by the Municipal tenants. 15. The Improvements Committee by the impugned order dated 24/8/2007, approved the recommendations of the technical committee dated 15/5/2007 and permitted the respondent No.6 representing the municipal tenants to redevelop the entire plot in question subject to the conditions set out therein and subject to payment of premium on the surplus area calculated on the basis of the price set out in S.D.R.R. at Rs.99,76,85,205/- less Rs.3,16,50,660/- towards the cost of reconstruction of the municipal school building and reconstruction of the structures built after 1960 but prior to 1/1/1995. Challenging the aforesaid decision, the present Writ Petition was filed on 10/9/2007. 16. On 17/9/2007, this Court while issuing Court notice to all the respondents directed that any steps taken for redevelopment of the plot in question thereafter shall be subject to further orders of the Court. On 19th October, 2007, this Court recorded the statement of the Counsel for respondent No.5 and 6 that they would not take any action in furtherance to - = : 12 : = - the impugned decision of the Corporation till the next date of hearing. By order dated 19th December, 2007, the statement made by the counsel for the respondent Nos.5 and 6 on 19th October,2007 was continued till the next date of hearing. 17. To complete the narration of facts, it may be noted that pursuant to the direction given by this Court, the Corporation considered the proposal for redevelopment of the subdivided plot submitted by the Architect of the petitioners and by the impugned order dated 22/1/2008 rejected the proposal submitted by the petitioners for redevelopment of the subdivided plot and also rejected the petitioners’ objection to the Corporation granting permission to the developer appointed by the municipal tenants to redevelop the entire plot in question. The Writ Petition has been amended to challenge that order as well. 18. At the outset, Mr.Singh, learned senior Advocate appearing on behalf of respondent Nos.5 and 6, raised preliminary objection regarding the maintainability of the present Writ Petition mainly on two grounds. Firstly, he submitted that the petitioners claim right to redevelop the property in question on the basis of the consent given by the municipal employees who have formed respondent Nos. 8 - = : 13 : = - and 9 society. Since the members of respondent Nos.8 and 9 society have resolved on 6/11/2007 and 3/11/2007 respectively to withdraw the consent, the petitioners have no locus standi to pursue the present Writ Petition. Secondly, he submitted that the right to redevelop the plot under D.C.R. 33(7) is available only to the Municipal tenants and not to the municipal employees. Since the municipal employees do not have the status of tenants, they have no right to redevelop the plot in question under D.C.R. 33(7) and consequently the petitioners who claim to represent the municipal employees do not have any right to redevelop the plot in question. 19. Dealing with the first preliminary objection, Mr.Madon, learned senior Advocate appearing on behalf of the petitioners submitted that the Affidavits filed by the Chief Promoters of respondent Nos.8 and 9 society to the effect that the members of the society have resolved to withdraw their consent is totally false. Mr.Madon referred to various Affidavits filed by the individual members of the respondent Nos.8 and 9 society wherein they have denied the allegation that the individual members of the society have resolved to cancel and/or withdraw the consent and/or development rights given to the petitioners. He submitted that the Chief Promoters of respondent Nos.8 and 9 society - = : 14 : = - have filed the false Affidavits at the instance of respondent Nos.5 and 6 because, this Court on 19-10-2007 had ordered that the respondent Nos.5 and 6 shall not implement the decision of the Corporation. Accordingly, Mr.Madon submitted that in view of the irrevocable consent given by more than 70% of the members of the respondent Nos.8 & 9 society to the petitioners for redevelopment of the plot in question is still valid and subsisting, the petitioners would have locus standi to pursue the present Writ Petition. 20. With reference to the second preliminary objection relating to the maintainability of the Writ Petition, Mr.Madon submitted that admittedly the guide-lines framed by the Corporation regarding the redevelopment rights of the municipal employees occupying municipal staff quarters are pending for approval before the State Government and during the pendency of the said approval, if the respondent No.6 developer appointed by the municipal tenants is permitted to redevelop the entire plot in question, then grave prejudice will be caused to the petitioners as well as the members of the respondent Nos. 8 and 9 society. Mr.Madon further submitted that in any event, where the action of the Corporation is vitiated by malafides and the same is not in public interest, the petitioners can invoke writ jurisdiction to - = : 15 : = - enforce the fundamental rights guaranteed under the Constitution. 21. As to the merits of the case, Mr.Madon submitted that once the Corporation took decision to subdivide the plot and permit redevelopment of the subdivided plot the Corporation could not have arbitrarily decided to permit the developer appointed by the municipal tenants to redevelop the entire plot in question under D.C.R. 33(7). By permitting the developer appointed by the municipal tenants to redevelop the entire plot under D.C.R. 33(7), instead of a portion of the plot, the Corporation purported to distribute the State largesse upon the respondent No.6 -developer which is totally unfair, unreasonable and unsustainable. In this connection he relied upon the decisions of the Apex Court in Ramana Shetty V/s. Ramana Shetty V/s. Ramana Shetty V/s. I.A. Authority of India reported in A.I.R. 1979 S.C. I.A. Authority of India reported in A.I.R. 1979 S.C. I.A. Authority of India reported in A.I.R. 1979 S.C. 1628 (para 11), Haji T.M. Hassan V/s. Kerala Finance 1628 (para 11), Haji T.M. Hassan V/s. Kerala Finance 1628 (para 11), Haji T.M. Hassan V/s. Kerala Finance Corporation reported in A.I.R. 1988 S.C. 157 (para Corporation reported in A.I.R. 1988 S.C. 157 (para Corporation reported in A.I.R. 1988 S.C. 157 (para 14) 14) 14). 22. Mr.Madon further submitted that when admittedly the guide-lines framed by the Corporation in respect of the municipal staff quarters was pending for approval before the State Government, the Corporation ought not to have hastily taken a decision - = : 16 : = - so as to deprive the municipal employees of their right to redevelop the subdivided plot in question by availing the benefits under D.C.R. 33(7). 23. Mr.Madon submitted that D.C.R. 33(7) applies to reconstruction or redevelopment of the cessed buildings or old buildings belonging to the Corporation which were constructed prior to 1940. The municipal school on the plot in question was constructed in the year 1959 for which D.C.R. 33(7) was not applicable and, therefore, permitting the developer appointed by the municipal tenants to redevelop the entire plot under D.C.R. 33(7) is totally illegal and contrary to law. 24. Assuming that the redevelopment of the entire plot as a whole was essential from the planning point of view, then, it is submitted by Mr.Madon that the proper course was to invite tenders and award the work to the highest tenderer, instead of arbitrarily and illegally awarding the redevelopment work to the respondent No.6 developer without inviting tenders. He submitted that by determining the capitalized value of the surplus FSI based on SDRR the Corporation is made to suffer huge losses. He submitted that as against the capitalized value of Rs.99,76,85,205/- determined by the Corporation, the petitioners were - = : 17 : = - willing to redevelop the said plot on the same terms and conditions by offering capitalised value on the surplus area at Rs.130 crores and to prove the bonafides, Mr.Madon produced before us a bank draft in the sum of Rs.15 crores drawn in favour of the Corporation. Accordingly, it is contended that the impugned decision of the Corporation is neither bonafide nor in public interest. He placed reliance on the Division Bench decision of this Court in the case of Municipal Corporation of Greater Mumbai V/s. State of Maharashtra (Original Side Writ Petition No.2687 of 1999) decided on 19/9/2005. 25. Mr.Madon further submitted that the decision of the Corporation in computing the cost of construction of the municipal school and other structures at Rs.3,16,50,660/- is not only unreasonable but excessively high. He submitted that if the redevelopment of the plot in question is entrusted to the petitioners, they are willing to construct the municipal school and other structures free of cost and offer higher premium on the surplus area as stated hereinabove. Accordingly, Mr.Madon submitted that by the impugned decision the Corporation has purported to favour the developer appointed by the municipal tenants at the cost of the Corporation which is wholly unsustainable in law. - = : 18 : = - 26. With reference to the order passed by the Corporation on 22/1/2008 whereby the proposal for redevelopment given by the petitioners is rejected, Mr.Madon submitted that the said order has been passed without application of mind. The proposal given by the petitioners has been rejected firstly on the ground that the petitioners have not submitted a comprehensive plan for the entire plot. When the Corporation had already granted N.O.C. to the developer appointed by the municipal tenants to redevelop the plot by notionally subdividing the plot, there is no question of the petitioners submitting a composite plan for the entire plot. In any event, if the Corporation had called upon the petitioners or its Architect to submit a comprehensive plan, the petitioners would have gladly submitted comprehensive plan and in such a case the Corporation would have been immensely benefited. Secondly, the proposal submitted by the petitioners has been rejected on the ground that the petitioners have not obtained the consent of the tenants / occupants of the entire plot. When the petitioners were seeking to redevelop the subdivided plot there was no question of obtaining consent of the tenants / occupants of the entire plot. Thirdly, during the pendency of the approval of the guide-lines framed by the Corporation in respect of - = : 19 : = - the municipal employees, the Corporation ought not to have favoured the respondent No.6 by conferring the benefits of D.C.R. 33(7) available on the entire plot to defeat the rights of the petitioners. Accordingly Mr.Madon submitted that the approval granted by the Corporation to the respondent No.6 for redevelopment of the plot in question which is vitiated by malafides, favouritism and entails huge loss to the public exchequer be quashed and set aside and the Corporation be directed to approve the plans submitted by the petitioners on such terms and conditions as this