1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.1036 OF 2007 M/s.Sigtia Constructions Pvt.Ltd. .. Petitioner V/s State of Maharashtra & Ors. .. Respondents ALONGWITH WRIT PETITION NO.1075 OF 2007 Ramchandra Mahadev Jagtap & Ors. .. Petitioners V/s The Cheif Executive Officer, Slum Rehabilitation Authority & Ors. .. Respondents WRIT PETITION NO.1589 OF 2007 Keya Developers and Construction Private Ltd. .. Petitioners V/s The Chief Executive Officer, Slum Rehabilitation Authority & Ors. .. Respondents WRIT PETITION NO.2720 OF 2008 Chandrakant Sitaram Mane .. Petitioners V/s Slum Rehabilitation Authority .. Respondent 2 Appearances: In Writ Petition No.1036 of 2007: Mr.Aspi Chinoy, Senior Advocate with Mr.Himanshu Kode i/by M/s.Shaunak Satpute & Co.for the Petitioner. Mr.Ravi Kadam, Advocate General with Mr.G.D.Utangale i/by M/s.Utangale & Co.for Respondent Nos.4 and 5. Mr.Rajeev Narulla, Advocate i/by M/s.Jhangiani Narulla & Associates for Respondent No.7. Mr.Janak Dwarkadas, Senior Advocate with Mr.J.P.Sen i/by M/s.Kanga & Co.for Respondent No.8. In Writ Petition No.1075 of 2007: Mr.F.Devitre, Senior Advocate with Mr.H.N.Thakore i/by M/s.Thakore Jariwala and Associates for the Petitioners. Mr.Ravi Kadam, Advocate General with Mr.G.D.Utangale i/by M/s.Utangale & Co.for Respondent No.1. Mr.Janak Dwarkadas, Senior Advocate with Mr.J.P.Sen i/by M/s.Kanga & Co. for Respondent No.3. Mr.C.U.Singh, Senior Advocate with Ms.Gunjan Shah i/by M/s.Shaunak Satpute & Co.for Respondent No.4. 3 In Writ Petition No.1589 of 2007: Mr.Janak Dwarkadas, Senior Advocate with Mr.J.P.Sen i/by M/s.Kanga & Co. for the Petitioners. Mr.Ravi Kadam, Advocate General with Mr.G.D.Utangale i/by M/s.Utangale & Co.for Respondent No.1. Mr.Vinod Bobde, Senior Advocate with Mr.Sunil Goel, Mr.Sachin Kadam i/by M/s.Shaunak Satpute & Co. for Respondent No.3. Mr.K.K.Singhvi, Senior Advocate for Respondent No.4. In Writ Petition No.2720 of 2008: Mr.S.U.Kamdar, Senior Advocate with Ms.Alpana Ghone and Mr.Khaitan i/by M/s.Anoop Khaitan & Co.for the Petitioners. Mr.J.G.Reddy, Advocate for Respondent No.1. Mr.Himanshu Kode, Advocate with Mr.Anant Upadhyay i/by M/s.Shaunak Satpute & Co.for the Applicants in Chamber Summons No.3 of 2008. 4 CORAM : D.K.DESHMUKH & R.G.KETKAR, JJ. DATE : 17th September, 2009. JUDGMENT: (Per R.G.Ketkar, J.) 1. All these petitions challenge the order dated February 6, 2007 passed by the Chief Executive Officer, Slum Rehabilitation Authority (for short “SRA”). The controversy in all these petitions relates to the grant of Letter of Intent (for short “LOI”) for implementation of Slum Rehabilitation Scheme (for short “Scheme”) on a plot bearing CTS Nos.439 to 442, 443, 444 (part), 447, 451, 452, 453A and 454A situate at village Vile-parle, Taluka Andheri, Mumbai Suburban District (for short the “said plot”) of the proposed Premnagar Co- operative Housing Society (for short “Society), therefore all these petitions can be conveniently disposed of by a common order. Writ petition No.1036 of 2007 is instituted by M/s.Sigtia Constructions Private Limited (for short “M/s.Sigtia”). Writ petition No.1075 of 2007 is instituted by Mr.Ramchandra Mahadev Jagtap and nine 5 Others (for short hereinafter referred to as“Jagtap & Ors.”) who are eligible slum dwellers and are residents of the said plot. Writ Petition No.1589 of 2007 is instituted by M/s.Keya Developers and Construction Private Limited (for short hereinafter referred as “M/s.Keya Developers”). Writ Petition No.2720 of 2008 is instituted by Mr.Chandrakant Sitaram Mane (hereinafter referred to as “Mane”), challenging the order dated February 6, 2007 passed by the SRA, as also for directions to the SRA to choose one of the two competing builders and developers in compliance with the directions of the Apex Court in its order dated November 7, 2006. It is interesting to note that Mr.Mane did not implead M/s.Sigtia and M/s.Keya Developers as also the Society in the petition. 2. The controvery in all these petitions arise in the following circumstances:- Under the General Body Resolution dated October 19, 2000 the proposed society appointed M/s.Sigtia as developer and Mr.Bipin Khatri as an Architect for rehabilitation of the slum known as 6 Premnagar situate at Vile Parle on the said plot. The said plot belongs to the Municipal Corporation of Greater Mumbai (MCGM). By notification dated May 24, 2001 published in the Maharashtra Government Gazette on August 2, 2001, the Additional Collector (Encroachment) and the Competent Authority, Mumbai Suburban District declared Premnagar Co-operative Housing Society (proposed), S.V.Road, Vile-parle (W), Mumbai as slum area under Section 4 of the Maharashtra Slum Areas (Improvement, Clearance and Re- development) Act, 1971 (for short hereinafter referred to as “Act”). The general body of the Society passed a resolution on September 8, 2001 noting that Mr.Vinodbhai Sigtia (Director of M/s.Sigtia) took efforts in declaring their area as slum area and the Resolution Nos.5 and 6 of October 19, 2000 were reaffirmed. Agreement was executed between the slum dwellers on the suit plot being the party of one part and M/s.Sigtia being the party of other part on September 15, 2001. Clause 4 of the Agreement deals with the ‘Appointment’ and reads thus: “Subject to acceptance by the SRA, the party of other part will be treated as a developer to develop the property as 7 per SRA”. Clause 5 thereof provides for ‘Consent’ and reads thus: “Slum-dwellers hereby agree and give consent to participate in SRA as per DCR (10), Appendix IV”. Clause 6(i) casts obligation on developer to appoint suitable architect. Clause 7(i) casts obligation on the slum dwellers to confirm that they have not entered into any writing or arrangement for Slum Rehabilitation Scheme of the said slum, with any other person except with the party of the other part. Clause 12 thereof states that the agreement is an irrevocable consent given by the slum dwellers in favour of the party of the other part for implementation of the SRS and an Agreement and consent to participate in SRS. 3. It is the case of M/s.Sigtia that their Architect submitted proposal alongwith Annexure I, II and III complete in all respects to the SRA on September 11, 2002. After ensuring the completeness of the proposal submitted, the computerised File Number is allotted to the Scheme. 8 The Assistant Engineer, SRA, found M/s.Sigtia’s proposal in order and accordingly gave computerised No.K-W/MCGM/0008/20021003 and directed payment of scrutiny fees for Annexures I, II and III as required by clause 11 of the Guidelines. It is the case of M/s.Sigtia that the proposal submitted by them was accepted in terms of clause 11 thereof and accordingly scrutiny fee of Rs.19,750/- was paid by them. On October 10, 2002, the draft Annexure II was forwarded by the Deputy Collector, SRA, to the Additional Collector (Encroachment), who is designated as a sole competent authority for deciding eligibility for verification and certification of Annexure II. The affidavit-cum declaration was given by individual slum dwellers with their spouse on November 26, 2002 declaring that they will give cooperation to the Architect and M/s.Sigtia. Individual tripartite agreement was entered into between the Society, M/s.Sigtia and individual slum dwellers with their spouse on November 26, 2002. Clause (xv) of the said agreement recorded that for executing the work, an irrevocable power of attorney was given to M/s.Sigtia. The Additional Collector (Encroachment), 2nd Respondent herein after 9 visiting the site and verifying the documents, certified Annexure II wherein it is noted that out of 565 protected/ eligible structures, 438 slum dwellers had given consent to M/s.Sigtia for the scheme which was more than 77% as against required 70% as per clause 2 of the Guidelines. On February 24, 2004 the Finance Controller of SRA approved M/s.Sigtia’s Annexure III and certified that they are financially sound for implementing the Scheme. On February 26, 2004 the society gave an undertaking on solemn affirmation that it is satisfied with the performance of M/s.Sigtia and they would continue with them and the Architect till the project is completed. The Society executed irrevocable power of attorney in favour of M/s.Sigtia confirming earlier irrevocable power of attorney dated April 23, 2002. It recorded that due to sustained efforts of the Directors of M/s.Sigtia, a lot of progress was achieved and the Society was awaiting issuance of LOI. While the SRA was in process of issuing the LOI to M/s.Sigtia, Mr.Jagtap & Others instituted Writ Petition No.988 of 2004 in this Court on March 29, 2004, questioning among others (i) the election of the office bearers of the Society, (ii) Annexure II issued in favour of 10 the Society, (iii) 70% consent of Slum dwellers in favour of M/s.Sigtia and (iv) Technical and financial competence of M/s.Sigtia. 4. The SRA issued supplementary Annexure II on April 16, 2004 excluding portion of land covered by the Playground Reservation and hutments situate thereon from the earlier Annexure II, in view of the orders passed by this Court in the proceedings restraining the utilisation of green spaces for SRA projects. As per this supplementary Annexure II, there are total 943 structures on the said plot of which 442 are censussed/protected. These are eligible structures for allotment under the Scheme. It is the case of M/s.Sigtia that a scrutiny report was prepared by the Executive Engineer, SRA on May 7, 2004 enclosing therewith draft LOI and was submitted to CEO, SRA for his approval. Copy of this was marked to Chief Officer, Maharashtra Housing and Area Development Authority (MHADA), among other officers. In Writ petition No.988 of 2004 by order dated July 1, 2004 this Court directed the SRA to submit the report regarding financial and technical capability of M/s.Sigtia for 11 implementing the Scheme. On July 28, 2004 the CEO of SRA, after hearing all the parties in the said petition, submitted a report to this Court. In the said report it was concluded that M/s.Sigtia has financial and technical expertise and has complied with both conditions of Annexure III. Report also recorded submissions made by the Advocate on behalf of the Society before the SRA that the Society was satisfied with the progress of the project undertaken by M/s.Sigtia. On August 21, 2004, the Executive Enginer III of SRA resubmitted the draft LOI to the CEO of the SRA for his approval after the Chief Minister’s stay order was vacated. On September 15, 2004 the CEO made endorsement to the following effect: “The High Court had asked CEO SRA for certain opinion. We are aware that the Scheme is subjudice. It will be better if we await the judgment of the Hon’ble High Court”. 5. By judgment and order dated March 11, 2005 this Court finally disposed of Writ Petition No.988 of 2004. This Court recorded submissions made on behalf of the petitioners therein to the effect that the Committee Members of the Society in collusion with 12 M/s.Sigtia defrauded the residents of the Society; that the office bearers of the Society were not elected by the General Body; that no General Body meetings were held by the Society, nor the election of the Managing Committee was held. The Court also noted the submissions made on behalf of the petitioners therein that 70% of the eligible slum dwellers have not supported the Scheme. On the other hand, on behalf of the Society it was submitted that it had taken all the necessary precaution and after considerable efforts ultimately approached the SRA and are now waiting anxiously for allotment of tenements. This Court recorded that the SRA was satisfied that the requisite 70% occupiers of the slum area have come forward and reposed confidence in M/s.Sigtia. Even the apprehension raised by the petitioners therein about the capacity and capability of M/s.Sigtia was taken care of by calling upon the CEO of SRA to once again verify and submit report. The Court also directed M/s.Sigtia to deposit an amount of Rs.2.50 crores as Interest Free Security Deposit so as to ensure the implementation of the Scheme. Thus all the requisite measures for protecting the interest of the eligible slum dwellers were 13 taken and ultimately this Court dismissed the writ petition. 6. As noted earlier, on September 15, 2004 the CEO of SRA made an endorsement that since the matter is subjudice before this Court they would await the judgment. Even after the disposal of the writ petition No.988 of 2004 on March 11, 2005, the SRA did not issue the LOI though all the requisite formalities were completed. Out of nine petitioners in Writ Petition No.988 of 2004, Nazir Khan filed Special Leave Petition, being SLP(C) No.11318 of 2005 before the Apex Court on May 13, 2005 against the decision of this Court dated March 11, 2005 in Writ Petition No.988 of 2004. On July 18, 2005 the Apex Court issued notice and granted stay to this Court’s order dated March 11, 2005. The said SLP was withdrawn on September 26, 2005. Four other petitioners out of the petitioners in Writ Petition No.988 of 2004 filed SLP No.19848 of 2005 and obtained interim stay on September 19, 2005 from the Apex Court. In view of this stay order, M/s.Sigtia could not take any further steps towards the implementation of the Scheme. It appears that in that SLP the Society filed an application 14 being I.A.No.5 praying for issuance of direction to the SRA to consider and sanction the Scheme prepared by the Society alongwith M/s.Keya Developers. It further appears that the said I.A.was dismissed. The SRA had filed affidavit in SLP No.19848 of 2005 on January 4, 2006 interalia contending that it had not taken cognizance of letter dated June 6, 2005 of the Society alleging that the development agreement in favour of M/s.Sigtia was terminated. Eventually, SLP No.19848 of 2005 was dismissed as withdrawn on April 13, 2006. 7. During pendency of SLP 19848 of 2005, on behalf of the Society notices dated April 26, 2005 and June 6, 2005 purporting to revoke the development agreement and the power of attorney executed in favour of M/s.Sigtia were given. This was replied by M/s.Sigtia on June 15, 2005 questioning the authority of the persons purporting to terminate and revoke the said development agreement and power of attorney. Since the SRA was not taking further steps of issuance of the LOI M/s.Sigtia made a representation to the State Government on June 10, 2005. Before the Principal Secretary of the Housing 15 Department, Government of Maharashtra, the Chief Executive Officer of the SRA, representatives of the Society and the representatives of M/s.Sigtia among others were present. After carefully considering the documents presented before him and after hearing all the parties, the Principal Secretary passed an order on June 20, 2005 directing the SRA to issue LOI with further directions to the CEO of SRA as also M/s.Sigtia to ensure compliance of the order of this Court dated March 11, 2005 passed in Writ Petition No.988 of 2004. This order is not questioned by anybody till date. 8. As noted earlier, the second SLP was dismissed as withdrawn on April 13, 2006. After dismissal of the SLP and vacation of the stay, M/s.Sigtia wrote to the SRA on April 25, 2006 offering to deposit Rs. 2.5 crores as Interest Free Security Deposit as directed by this Court on March 11, 2005. M/s.Sigtia requested the SRA to issue LOI. It is at this stage the Writ Petition No.1277 of 2006 was filed in this Court by Jagtap and nine others against the CEO of SRA being the Respondent No.1, and the Society being the Respondent No.2, M/s.Keya 16 Developers being the Respondent No.3 and the MCGM being the Respondent NO.4. M/s.Sigtia were not made party in this proceeding. One of the prayers in that petition was to the following effect:- “(a) to issue writ of certiorari or any other writ, order/direction in the nature of certiorari against the Respondent No.1 (CEO of SRA) to consider the proposal submitted by Respondent No.3 (M/s.Keya Developers) and to issue letter of intent (LOI) for redevelopment of the said property in favour of Respondent No.3. 9. It is relevant to note here that before the Apex Court the SRA had made an affidavit on January 4, 2006 in SLP No.19848 of 2005 solemnly affirming that it had not taken cognizance of letter dated June 6, 2005 issued by the Society purporting to terminate the development agreement in favour of M/s.Sigtia. The SRA however did not point out before this Court that M/s.Sigtia were necessary party. It further appears that the SRA also did not file any affidavit in that petition. On May 4, 2006 this Court (F.I.Rebello and Anoop V. Mohta, JJ.) disposed of the said writ petition by passing order to the following effect:- 17 “In the ordinary course we would not have entertained this petition when there is a society who is responsible for the development. However, on behalf of Respondent No.2 the learned counsel makes a statement that they had already communicated to Respondent No.1 to appoint Respondent No.3 as developer. The Respondent No.1 to call the parties in terms of the judgment of this court and after hearing the parties dispose of the application of Respondent No.2 according to law, within a period of six weeks from today.” 10.We must record the consensus among all the learned counsel appearing for the parties that the judgment referred in the above order, is the judgment dated March 11, 2005 passed by this Court in Writ Petition No.988 of 2004. Even otherwise, this fact becomes abundantly clear from the perusal of the order of the Hon’ble Apex Court dated November 7, 2006. 11.Jagtap & others preferred SLP No.10281 of 2006 before the Apex Court against the order dated May 4, 2006 passed by this Court in Writ Petition No.1277 of 2006. Even before the Apex Court M/s.Sigtia were not made party and once again it appears that the SRA did not point out before the Apex Court that M/s.Sigtia were necessary party 18 particularly when the order dated May 4, 2006 passed by this Court in Writ Petition No.1277 of 2006 required SRA to call the parties in terms of the judgment of this Court and after hearing the parties to dispose of the application of M/s.Keya Developers. Even the SRA did not point out to the Apex Court that there was no proposal of M/s.Keya Developers complete in all respects pending with the SRA. On June 27, 2006 the Apex Court directed the SRA to issue LOI in favour of M/s.Keya Developers. In the order the Apex Court recorded grievance of the petitioner before it that despite no legal impediment, SRA was not issuing the LOI in favour of M/s.Keya Developers despite the request made by the Society. According to the petitioners, before the Apex Court, it was merely giving replacement of previous developers M/s.Sigtia who had not even started the project even after almost eight years and whose agreement with the Society had come to an end by efflux of time. 12.When M/s.Sigtia acquired knowledge of the Apex Court order dated June 27, 2006 it made an application on June 30, 2006 for recalling 19 of the said order and also an application for impleadment in the SLP No.10281 of 2006. In this application the SRA made an affidavit on July 7, 2006 reiterating that it had not taken cognizance of the letters dated April 27, 2005 and June 6, 2005 purporting to terminate M/s.Sigtia’s appointment as developers. By judgment and order dated November 7, 2006 the Apex Court recalled its earlier order dated June 27, 2006. It was held that M/s.Sigtia was necessary party to Writ Petition No.1277 of 2006 as well as SLP No.10281 of 2006. The Apex Court recorded that the order dated June 20, 2005 passed by the Principal Secretary, Home Department, was not challenged by anyone before any forum. The order dated March 11, 2005 passed by this Court in Writ Petition No.988 of 2004 had attained finality and that as on April 13, 2006 there was no proposal of M/s.Keya Developers before the SRA. The Apex Court further recorded the submission that the development agreement in favour of M/s.Sigtia came to an end on April 25, 2005 by efflux of time. In this context, it was observed that clause 2.2 of the development agreement must be read as a whole and when so read, it would be clear that the developer (M/s.Sigtia) was to 20 start the actual construction after issuance of the commencement certificate by the authority. Therefore, the period of three years must be construed to begin from the date when the commencement certificate is issued and not from the date of the execution of the agreement. The Apex Court also noted that even the SRA to whom letter dated June 6, 2005 was addressed, in its counter affidavit filed before the Apex Court in the said proceeding stated that they did not take notice of the said letter of termination as the letter was not supported by the relevant resolution of the Society. Eventually, the Apex Court passed order directing the SRA to call two developers viz.M/s.Keya and M/s.Sigtia, as directed by the order in Writ Petition 988 of 2004 dated March 11, 2005 and the order dated May 4, 2006 in Writ Petition No.1277 of 2006, and disposed off their applications for issuing the LOI and to pass appropriate orders in accordance with the Act and also strictly following the procedure for submission, processing and approval of the Scheme and to award LOI to the developer who satisfies the required qualifications, conditions, regulations and the provisions of the Act. The SRA was also directed 21 to consider as to whether the guidelines and other conditions were fulfilled by the slum dwellers/the society/as well as by the developers and issue notice to the society also and hear them and pass appropriate speaking order within three months from the date of passing of that order. 13.Pursunt to these directions the SRA heard all the concerned parties and passed the impugned order on February 6, 2007. In the order the SRA recorded findings to the following effect: (i) By resolution dated May 29, 2005 passed by the General Body of the Society, M/s.Keya Developers were proposed as the new developers for implementation of the Scheme. However, records of the SRA indicate that M/s.Keya Developers had submitted their proposal with the certified Annexure II which had also been submitted earlier by M/s.Sigtia Developers. In the absence of certification of M/s.Keya Developers Annexure II by the Competent Authority which was required to be submitted by M/s.Keya Developers to the SRA 22 alongwith their proposal, it would not be possible to conclusively establish that M/s.Keya Developers indeed enjoyed support of more than 70% of the eligible slum dwellers of the Society. (ii)The validity of the General Body Resolution dated May 29, 2005 of the Society remains to be finally decided since the proceedings are pending before this Court, (iii)In view of the termination of development agreement by the Society on account of efflux of time, both the contending developers vis.M/s.Sigtia Developers and M/s.Keya Developers had not fulfilled necessary and sufficient conditions to be declared as competent developer since as of date they had not enjoyed undisputed support of more than 70% of eligible slum dwellers by way of both (a) General Body Resolution of the Society which is formed for identification of the competent developer, (b) Annexure II independently certified by the Competent Authority after observations of due procedure and on verification of individual consent cum agreement signed by the 23 eligible slum dwellers. 14.On these among other grounds, SRA ultimately held that in the given circumstances identification of the competent developer can be done diligently only through verification of the individual consent cum agreement signed by the eligible slum dwellers followed by fresh certification of Annexure II by the Competent Authority so as to conclusively establish which developer enjoys the actual support of more than 70% of the eligible slum dwellers of the Society. 15.We have heard Mr.Aspi Chinoy, learned Senior Counsel appearing on behalf of the Petitioners in Writ Petition No.1036 of 2007 filed by M/s.Sigtia. We have also heard Mr.Vinod Bobde, learned Senior Counsel appearing on behalf of M/s.Sigtia Developers being the Respondent No.3 in Writ Petition No.1589 of 2007 filed by M/s.Keya Developers, and Respondent No.4 in Writ Petition No.1075 of 2007 filed by Jagtap and