upa 1 wp1606-10 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.1606 OF 2010 ALONG WITH WRIT PETITION NO. 1999 OF 2010 AND WRIT PETITION (LODGING) NO. 2103 OF 2010 WRIT PETITION NO. 1606 OF 2010 Omkar Realtors and Developers Pvt. Ltd. ).. Petitioners Versus Slum Rehabilitation Authority and others ).. Respondents ALONG WITH WRIT PETITION NO. 1999 OF 2010 Khapridev Co-operative Housing Society Ltd. ).. Petitioner Versus The State of Maharashtra ).. Respondents AND WRIT PETITION (LODGING) NO. 2103 OF 2010 M/s Vilayati Ram Mittal ).. Petitioner Versus Slum Rehabilitation Authority and others ).. Respondents upa 2 wp1606-10 Mr.Janak Dwarkadas, Mr. Pravin Samdani, Senior Advocates, with Mr. Chirag Balsara, Mr. Sharan Jagtiani, Mr. Aftab Diamondwala, Mr. Jayesh Vyas and Ms. Sheetal Angre i/b M/s Divya Shah Associates for the Petitioners in W.P. No.1606/2010, for Respondent No.6 in W.P. No.1999/2010 and for Respondent No.4 in W.P. (L) No.2103/2010. Mr. D.D. Madon, Senior Advocate, with Mr. S.G. Surana for the Petitioners in W.P. No.1999/2010 and Respondent No.2 in W.P. No.1606/2010 & W.P.(L) No.2103/2010. Mr. Atul Rajyadhakshya, Senior Advocate, with Mr.S.S. Reddy for the Petitioners in W.P. (L) No.2103/2010 and for Respondent No.4 in W.P. No.1999/2010 and with Mr. D.R. Shah for Respondent No.3 in W.P. No.1606/2010. Mr. D.A. Nalawade, Government Pleader, with Mr.Milind More and Mr. B.H. Mehta, Assistant Government Pleaders, for the State in all the Writ Petitions. Mr. G.D. Uthangale for Respondent No.1 and 6 in W.P.1606/2010 and in W.P. (L) No.2103/2010 and Respondent No.2 and 7 in W.P. No.1999/2010. Mr. A.Y. Sakhare, Senior Advocate, with Mr. A.R. Shaikh for Respondent No.4 in W.P. No.1606/2010, for Respondent No.4. In W.P. No.1999/2010 and for Respondent No.3 in W.P. (L) No.2103/2010. Ms. V.S. Gharpure for Respondent No.5 in W.P. No.1606/2010 and W.P. (L) No.2103/2010 and for Respondent No.3 in W.P. No.1999/2010. CORAM : MOHIT S. SHAH, C.J. AND DR. D.Y. CHANDRACHUD, J. MONDAY, SEPTEMBER 27, 2010 P. C. : Rule in all the writ petitions, returnable forthwith. 2. With the consent of the learned counsel for the parties, we have taken up the Rule for final disposal. upa 3 wp1606-10 3, All these petitions challenge the order dated 30th June 2010 passed by the High Powered Committee in regard to the slum rehabilitation scheme in respect of the lands in question. 4. The facts leading to filing of these petitions broadly stated are as under :- i) On the lands in question in Parel, Mumbai, whose occupants have formed a co-operative housing society called “Khapridev co- operative housing society limited” (hereinafter referred to as “the co- operative society”), the Slum Rehabilitation Authority had sanctioned slum rehabilitation scheme and issued a letter of intent dated 8 November 1995 in favour of a developer called M/s Villayati Ram Mittal. The intimation of approval of the plans for one of the rehabilitation building in the same scheme was also granted in favour of the said developer on 8 November 1995. However, the said developer M/s Playacting Ram Mittal failed to show any progress in implementation of the slum rehabilitation scheme and also failed to pay any dues on account of rent for the transit accommodation. At the meeting held on 11 January 2010, the general body of the co-operative society proposed that in place of M/s Villayati Ram Mittal, a new developer called “M/s.Omkar Realtors and Developers Pvt. Ltd.” in writ petition No.1606 of 2010, be appointed for implementation of the said slum rehabilitation scheme so as to complete the scheme within two years. Accordingly, M/s.Omkar Realtors and Developers Pvt. Ltd., came to be appointed as developers for the slum redevelopment scheme. upa 4 wp1606-10 ii) The said redevelopment scheme came to be converted into slum rehabilitation scheme on 15 October 1997. A new letter of intent (LOI) dated 11 August 2003 was issued by Slum Rehabilitation Authority (SRA) in favour of M/s Omkar Realtors and Developers Pvt. Ltd., under Development Control Regulation 33(10) read with Appendix 4(2). iii) The said letter of intent had stipulated a time bound programme for slum rehabilitation of the lands in question. iv) On 14 August 2005, the co-operative society in its general body meeting passed a resolution to rescind the development agreement with M/s Omkar Realtors and Developers Pvt. Ltd. on the ground that due to improper construction of work in respect of rehabilitation building, the co-operative society had expressed concern about the quality of work carried out by M/s Villainy Ram Mittal in respect of one rehabilitation building which was the only rehabilitation building constructed by M/s Villayati Ram Mittal. v) On 17 January 2003 Annexure-II was issued by Mumbai Municipal Corporation and by conversion of the SRD to SR Scheme fresh L.O.I. Is issued by SRA on 11.08.2003 in the name of the appellant M/s Villayati Ram Mittal for CTS No.1/431 only. The other plots were owned by private owners, and the Committee is not concerned with those plots for deciding the present appeal. Permission to construct Transit Camp was issued by SRA to the appellant M/s Villayati Ram Mittal vide No.SRA/Eng/676/FS/ML/LOI dated 11.07.2003. upa 5 wp1606-10 vi) The society entered into development agreement with M/s Villayati Ram Mittal on 13.5.2004 and also executed Power of Attorney in favour of appellant. In the year 2004, the developer constructed accommodation for transit camp as per the permissions granted by the SRA. Simultaneously, the developer also commenced the work of rehab building without obtaining IOD/CC from the concerned departments. On inspection by the concerned officials of the SRA, it was found that the developer had constructed rehab building up to 6th floor on the D.P. Road and outside the slum boundary, and therefore, on 11.11.2004, stop work notice was issued by SRA to the said construction of rehab building. vii) By a letter dated 19 August 2005, respondent No.2 society informed the SRA that the society had lost confidence in respondent No. 3 and forwarded copy of the said resolution dated 14 August 2005. viii) The SRA then issued a show cause notice dated 16 September 2005 (Exhibit “H”) to respondent No.3 calling upon respondent No.3 to show cause why the LOI issued in favour of respondent No.3 should not be terminated on the following grounds : (a) the part of the work of rehabilitation was carried out without obtaining commencement certificate; (b) part of the rehabilitation building was carried out on DP road without having obtained approval for rehabilitation thereof; and upa 6 wp1606-10 (c) respondent No.3 had carried out construction on rehabilitation building beyond the approved slum rehabilitation scheme/plot boundary on approved property. ix) Respondent No.3 sent reply dated 29 September 2005 (Exhibit “T”) to Slum Rehabilitation Authority admitting that the rehabilitation building was constructed outside the plot boundary, but respondent No.3 contended that SRA had given oral assurance to approve the slum rehabilitation scheme in respect of other plot of land also. x) On 1 October 2005, respondent No.2 society at special general body meeting passed a resolution removing respondent No.3 as developer and appointing M/s.Omkar Realtors and Developers Pvt. Ltd. as a developer. xi) Ultimately on the basis of the aforesaid, respondent No.2 society gave a notice dated 17 October 2005 terminating the development agreement and cancelling the power of attorney in favour of respondent No.3. Thereafter, by order dated 2 March 2006, SRA removed respondent No.3 as developer on the ground that the progress of respondent No.3 for the rehabilitation scheme was not satisfactory and that by resolutions dated 14 August 2005 and 1 October 2005, respondent No.2 society had removed respondent No.3 as their developer and also on the ground that respondent No.3 had carried out construction beyond the boundary of slum plot and in violation of the provisions of the Maharashtra Regional Town Planning Act and that M/s Omkar Realtors and Developers Pvt. Ltd. is appointed as a developer. upa 7 wp1606-10 xii) M/s.Villayati Ram Mittal challenged the aforesaid order of SRA by filing Writ Petition No.1685 of 2006. In the said writ petition, this Court passed an interim order on 2 August 2006. The operative portion of the said interim order reads as under :- “2. Amongst various questions that arise, one of the question that arises in this matter, in view of the facts on record is as to what is the remedy of a party like the petitioner who has acted on the L.O.I and spent money. It must be borne in mind that S.R.A. Scheme is for the socially and economically disadvantage group who will not be in a position to pay for any damages if the petitioner succeeds in the event a suit for specific performance lies. In these circumstances considering the Scheme of the S.R.A. and the undertaking given by the new developer to S.R.A. to reimburse any claims, the question will arise as to who is liable in the event the petitioner succeeds in the appropriate proceedings to indemnify and/or pay to the petitioner whether it be the society or S.R.A. or the new Developer. Apart from that there are other question which are required to be gone into. Hence Rule. Interim relief granted earlier to continue pending the hearing and final disposal of the petition. 3. Considering the nature of the controversy and as the S.R.A. scheme is being stayed in our opinion it will be appropriate that the petition itself is heard and finally disposed of. In the light of that place the matter on Board for final hearing on 20th September, 2006 at 3.00 p.m.” xiii) Ultimately, when the said writ petition came up for hearing before the Division Bench, by order dated 12 December 2007, the petitioner was relegated to the alternative remedy of approaching High Powered Committee which was established by the State Government pursuant to the judgment dated 1 November 2007 of the Full Bench of upa 8 wp1606-10 this Court in the case of Tulsiwadi Navnirman Co-op. Hsg. Society Ltd. and another vs State of Maharashtra (Writ Petition No.1326 of 2007 and others). Immediately thereafter, on 17 December 2007, the petitioner moved Notice of Motion No.620 of 2007 for recalling the said order dated 12 December 2007 on the ground that in the facts of that case the issues which arose for consideration were as mentioned in the order dated 2 August 2006 of the Division Bench of this Court. However, on 22 December 2008, the Notice of Motion came to be disposed of in terms of the following order :- “ The learned counsel appearing for the applicant wishes to withdraw this notice of motion with liberty to raise all the issues raised in this petition before the High Powered Committee. Notice of motion is allowed to be withdrawn with liberty as prayed.” xiv) In the meantime, respondent No.3 filed Suit No.719 of 2008 against Slum Rehabilitation Authority and the Government of Maharashtra claiming damages and loss of profit for Rs.66.85 crores. xv) In the meantime, M/s Omkar Realtors and Developers Pvt. Ltd., who were appointed as developer as per the order dated 2 March 2006 obtained IOA dated 8 June 2006 and commencement certificate dated 21 April 2008 and provided transit accommodation to 407 slum dwellers by paying compensation/rent for temporary transit accommodation. upa 9 wp1606-10 xvi) Ultimately, the appeal filed by M/s Villayati Ram Mittal came to be heard by the High Powered Committee and by the impugned order dated 30 June 2010 the High Powered Committee remanded the matter to SRA after making observations in respect of the following issues :- (a) The High Powered Committee observed that the regularisation order was passed after considering the two irregularities being : (b) construction work was carried out without IOA and commencement certificate; and (c) construction made on the alignment of the D.P. road. The High Powered Committee, however, noticed that respondent No.3 had also done construction of rehabilitation building outside the boundary of the development plot and the High Powered Committee, therefore, had grave doubts about validity of the regularisation order which was passed without considering this encroachment on the land outside the development plot. Hence, the regularisation order stood vitiated and was required to be re-visited. The High Powered Committee also observed that the SRA had passed the impugned order dated 2 March 2006 without making any reference to the regularisation order and, therefore, the said order removing respondent No.3 as developer was also required to be set aside. upa 10 wp1606-10 5. It is against the aforesaid order that respondent No.3 has filed Writ Petition (Lodging) No. 2103 of 2010 challenging that part of the order in which the High Powered Committee has made observations about regularisation order being required to be re-visited. 6. Respondent No.2 society has also challenged the order dated 30 June 2006 vide Writ Petition No. 1999 of 2010 in so far as the order dated 2 March 2006 has been set aside and the matter is remanded to SRA which is also challenged by M/s Omkar Realtors and Developers Pvt Ltd. in Writ Petition No.1606 of 2010. 7. The learned counsel for the petitioner in Writ Petition No. 1606 of 2010 -M/s Omkar Realtors and Developers Pvt. Ltd. has assailed the order dated 30 June 2006 on the ground that when the High Powered Committee itself has given a finding that regularisation order passed by SRA in respect of one rehabilitation building required reconsideration and the High Powered Committee noticed various irregularities committed by M/s Villayati Ram Mittal, there was no justification for setting aside the order removing respondent No.3 as developer and appointing M/s Omkar Realtors and Developers Pvt Ltd as a developer. It is submitted that both the learned counsel for respondent No.3 and learned counsel for respondent No.2 society have submitted that the scheme for redevelopment of slum was sanctioned way back in the year 1995 and thereafter it was sanctioned in favour of respondent No.3; that the first developer M/s Priyanka Developer had not done anything for four years from 1995 to 1999 and thereafter respondent No.3 had not made sufficient progress for seven years. It is, therefore, submitted that upa 11 wp1606-10 there was full justification for respondent No.2 society to remove respondent No.3 as a developer and to appoint M/s Omkar Realtors and Developers Pvt Ltd. as the developer. It is also submitted that the resolutions passed by respondent No.2 society on 14 August 2005 and 1 October 2005 were not challenged by respondent No.3 and, therefore, the High Powered Committee could not have set aside the subsequent order of SRA removing respondent No.3 as developer and appointing M/s Omkar Realtors and Developers Pvt Ltd as the developer. It was further submitted that the petitioner has already taken number of steps in implementation of the slum rehabilitation scheme as indicated in paragraph 31 of writ petition No.1606 of 2010. It is submitted that the petitioner had already constructed temporary building camp for 432 families including 359 eligible slum dwellers and 73 project affected persons who are going to be given rehabilitation tenements admeasuring 269.10 sq.ft.. The Petitioner has also provided transit accommodation to 408 slum dwellers by paying them compensation/rent or transit accommodation. The petitioner has also started construction and has furnished bank guarantee to the tune of Rs.2.72 crores and has also furnished further performance security in the form of revised bank guarantee of Rs.3.70 crores to the Slum Rehabilitation Authority. The petitioner has also obtained environment clearance. The Petitioner has also executed deed of indemnity in favour of the Slum Rehabilitation Authority in respect of any claims made by respondent No.3. The petitioner also started excavation for laying pile foundations and the construction work is under progress. It is submitted that it is only on account of the ad-interim stay granted on 11 August 2010 that the petitioner is not able to carry on the construction. It is submitted that on account of the said indulgence and pendency of the present proceedings, 359 families of slum dwellers and 73 families of projected affected upa 12 wp1606-10 persons, in all 432 families are being denied their right to get permanent alternative accommodation in the form of rehabilitation buildings for which the petitioner has made all the arrangements and had also started construction work. 8. The learned counsel for respondent No.3 M/s.Villayati Ram Mittal has opposed the petition filed by M/s.Omkar Realtors and Developers Pvt Ltd and has also challenged that part of the order by which the Slum Rehabilitation Authority has set aside the order of regularisation which was made in favour of respondent No.3 as far back as on 23 June 2005. It is further submitted that when the matter is at large before the Slum Rehabilitation Authority, as per the impugned order dated 30 June 2010 of the High Powered Committee, this Court may not entertain the challenge levelled by M/s.Omkar Realtors and Developers Pvt Ltd and respondent No.2 society. It is submitted that if the Slum Rehabilitation Authority upholds the decision to regularise the rehabilitation building, the entire basis of removal of respondent No.3 as a developer will disappear and respondent No.3 will be entitled to get back the rights to develop the property under the slum rehabilitation scheme. 9. As regards the petitioner’s contention that respondent No.3 has already filed Suit No.719 of 2008 on 21 January 2008, respondent No.3 had elected to claim damages and given up the right to develop the property, the learned counsel for respondent No.3 submitted that the suit was filed only in order to save limitation, but once the High Powered Committee has set aside the impugned order dated 2 March 2006 of Slum Rehabilitation Authority, there is no question of respondent No.3 now being required to prosecute the suit. It is submitted that nothing upa 13 wp1606-10 further is required to be done except to restore the regularisation decision of the Slum Rehabilitation Authority in favour of respondent No.3. 10. In response to a specific query from the Court about the cost of construction incurred by respondent No.3 till respondent No.3 was removed as developer by the order dated 2 March 2006 of the Slum Rehabilitation Authority, the learned counsel for respondent No.3 stated that he was not in a position to give a specific reply, but in any case respondent No.3 was only interested in getting the right as a developer under the scheme or to get damages and that respondent No.3 was not as such interested merely in recovering cost of construction incurred on the rehabilitation building. 11. Having heard the learned counsel for the parties, we cannot help notice that the slum redevelopment scheme was sanctioned and M/s.Priyanka Developer was appointed as the developer as far back as in the year 1995. Nothing was done by the said developer and, therefore, respondent No.3 herein was appointed as a developer under the slum redevelopment scheme. It appears that no progress was made till the slum redevelopment scheme was substituted by the slum rehabilitation scheme and the letter of intent in favour of respondent No.3 under the slum rehabilitation scheme came to be issued in favour of respondent No.3 on 11 August 2003. From 11 August 2003 till 2 March 2006, when respondent No.3 came to be removed as developer, all that respondent No.3 had done was constructing the RCC structure of ground floor plus six stories of one wing of one of the two rehabilitation buildings that respondent No.3 was required to put up. Having regard to the stand of Slum Rehabilitation Authority that one wing of the rehabilitation building could provide only about 64 tenements, it would mean that upa 14 wp1606-10 construction put up by respondent No.3 would be sufficient for hardly about 64 slum dwelling families out of total 432 families who are to be accommodated. In other words, respondent No.3 has hardly completed only 1/7th of the work required to be done by respondent No.3. The photographs of the construction site have been shown to us and we find that it is only the RCC structure without any walls or partitions. 12. In the above background, we are here to examine the illegality or otherwise of the order dated 30 June 2010 of the High Powered Committee and the order dated 2 March 2006 of the slum rehabilitation authority. 13. Having considered the matter in the background of the above facts and particularly the fact that the slum dwellers have remained without any permanent alternative accommodation for the last many years and also having regard to the fact that the order of the HIgh Powered Committee itself has created serious doubt about the regularisation decision of the Slum Rehabilitation Authority on 23 June 2005, we are of the view that if no regularisation is granted in respect of the rehabilitation building constructed by respondent No.3, the entire structure put up by respondent No.3 will have to be demolished. 14. On the other hand, even if the structure put up by respondent No.3 is regularised, it could mean that the structure would be allowed to stand but that does not necessarily mean that the decision to remove respondent No.3 and to appoint the petitioner as a developer would be vitiated on account of regularisation. The fact that respondent No.3 had constructed a part of the rehabilitation building on D.P. road without having obtained approval for realignment and that respondent upa 15 wp1606-10 No.3 had carried out construction of rehabilitation building beyond the approved slum rehabilitation scheme plot boundary, are prima facie serious allegations. The High Powered Committee has already expressed its views on the subject and remanded the matter back to the Slum Rehabilitation Authority for reconsidering the decision to regularise. In this set of circumstances, we are of the view that the decision of the Slum Rehabilitation Authority to remove respondent No. 3 as developer and having regard to the fact that respondent No.2 society had already passed resolutions on 14 August 2005 and 1 October 2005 expressing its loss of confidence in respondent No.3, cannot be ignored. 15. The learned counsel for respondent No.3 has relied on the decision of this Court in Awdesh Vasistha Tiwari and others vs Chief Executive Officer, Slum Rehabilitation Authority and others, 2006 (4) Mh. L.J. 282, wherein this Court has made the following observations :- “13. ...... Thus, the right of a hutment dweller who is in possession of a hutment on an area to which the Scheme is made applicable is for a tenement admeasuring 225 sq. ft. in exchange of the hut irrespective of the area of the hut. Thus, an individual hutment dweller gets this limited right apart from right to seek protection from eviction under section 3Z(1) of the Slum Act. However, there is nothing in the scheme of D.C. Regulation 33(10) that an individual slum dweller gets a right to decide which Society or which developer should implement the scheme.” 16. It is true that as per the aforesaid judgment of this Court, the individual slum dweller may not have a right to decide which society or developer should implement under the scheme, but when the society itself has lost confidence in the developer whose acts of omission and upa 16 wp1606-10 commission have already been taken into consideration by the Slum Rehabilitation Authority and the Slum Rehabilitation Authority found substance in the grievances of the society, it is not possible to say that the views of the entire co-operative society become irrelevant. The very fact that the scheme of the Slum Rehabilitation Authority provides that the developer should obtain consent of 70% of the members of the society goes to show that the developer should have confidence of the society. May be after the LOI is issued in favour of the developer if for some extraneous reasons the society passes a resolution for removing the developer without any justification, the views of the society may not be acted upon by Slum Rehabilitation Authority. 17. Our attention is invited by the learned counsel for Slum Rehabilitation Authority to the provisions of section 13(2) of