AJN 00-OS-WP1810.10J 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.1810 OF 2010 Swatantravir Savarkar Mandai Punarvikas Samiti (Proposed), through its Chief Promoter Shri Sadanand Bapusheth Mandalik of Mumbai, Indian Inhabitant, residing at 6/4, 6/14, 6/15, Upendra Nagar, Senapati Bapat Marg, Dadar (West), Mumbai – 400 028 and Licensee in respect of Gala No.53 in S.V.S. Market, Dadar (West), Mumbai – 400 028. ) ) ) ) ) ) ) ) ) ) ) ... Petitioners Versus 1. Municipal Corporation of Greater Mumbai, Market Department, Crawford Market, Mumbai. ) ) ) ) 2. Swatantryavir Savarkar Mandai Utkarsha Mandal, having its office at C/o. Shop No.172/174, Dr. D'Silva Road, Dadar (West), Mumbai – 400 028. ) ) ) ) ) ) AJN 00-OS-WP1810.10J 2 3. Purabi Developers Private Limited, a Company incorporated under the Companies Act, 1956, having their office at A-402, Lotus Co- operative Housing Soceity, Hiranandani Gardens, Powai, Mumbai – 400 076. ) ) ) ) ) ) ) ) ... Respondents Mr. Shrihari Aney, senior advocate i/b Mr. Amarendra Mishra for the petitioners. Mr. Reis with Ms. Shubha Ajithkumar for respondent 1. Mr. A.A. Kumbhakoni for respondent 3. CORAM: MRS. RANJANA DESAI & R.V. MORE, JJ. DATE ON WHICH THE ORDER IS RESERVED : 5TH OCTOBER, 2010. DATE ON WHICH THE ORDER IS PRONOUNCED: 12TH OCTOBER, 2010. JUDGMENT :- (Per Smt. Ranjana Desai, J.) 1. The petitioner-society consists of license holders of Swatantravir Savarkar Mandai Punarvikas Samiti (proposed), situate at Dr. D'Silva Road, Dadar (West), Mumbai. Swantantravir Savarkar Mandai is an old market. The members of the petitioner-society claim to be licensees of their respective galas of the said market. AJN 00-OS-WP1810.10J 3 Respondent 1 is the Municipal Corporation of Greater Mumbai (for short, “the Corporation”). Respondent 2 is the rival society which claims to have consent of 70% of the license holders of the galas of the said market. Respondent 3 claims to be the developer appointed by respondent 2. 2. The case of the petitioners as stated in the petition may be shortly noted. (a) Respondent 1 as per its policy of the redevelopment of the Municipal markets proposed to redevelop the said market under Development Regulation No.33(7) read with Appendix-III which is applicable to the slum redevelopment projects. Respondent 1 addressed letter dated 25/8/2005 to respondent 2 asking it to submit proposal for the redevelopment. (b) On or about 1/9/2005, respondent 2 distributed a Marathi pamphlet in the market informing the AJN 00-OS-WP1810.10J 4 licensees about the abovestated letter and exhorting them to come together. In the letter, the licensees were warned that if they failed to respond, they would be responsible for consequences. (c) After having created fear in the minds of the licensees, respondent 2 prepared blank consent letters which did not contain any particulars and distributed them amongst the licensees. Several licensees signed them presuming that by signing the said page, they were becoming members of respondent 2. None of the members were aware that their signatures was obtained on consent letters for redevelopment of the said market. (d) In the Managing Committee meeting held on 11/12/2005, respondent 3's name was approved as the developer. In the minutes of the said meeting, it was stated that respondent 2 already had 154 consent letters from the licensees. AJN 00-OS-WP1810.10J 5 (e) After realizing that fraud was practiced by respondent 2 on the licence holders by obtaining their signatures on blank consent letters making them believe that they were signing membership forms, the licence holders formed a separate association being Swatantravir Savarkar Mandai Punarvikas Samiti (proposed). The present petition is filed by the said association through its Chief Promoter. (f) After securing consent letters, respondent 3 submitted its application for the redevelopment of the market to respondent 1 on or about 31/1/2006. After realizing the extent of fraud committed by respondent 2, the licence holders started withdrawing their consent letters. (g) The petitioners by their advocate's notice dated 17/9/2006 made a grievance about the fraudulent AJN 00-OS-WP1810.10J 6 conduct of respondent 2 and 3 and asked them to refrain from proceeding their redevelopment proposal. The petitioners made several complaints to the Corporation. The Corporation, however, issued Circular dated 13/4/2006 stating therein that the consent letters given by the licensees cannot be withdrawn in any circumstances and the same are required to be notarized and without conducting verification issued Annexure-II in favour of respondent 3. 3. The petitioner challenged the issuance of Annexure-II by filing Writ Petition No.1715 of 2006. By order dated 8/3/2007, this court directed the High Court to hold inquiry into the allegations made by the petitioners against respondents 2 and 3. Accordingly, the inquiry officer of respondent 1 considered the representation of the petitioner and respondent 2 and by order dated 31/7/2007 rejected the objections of the petitioners holding, inter alia, that the objections of the petitioner AJN 00-OS-WP1810.10J 7 were not tenable in view of guidelines given in circular issued by respondent 1 dated 13/4/2007 which states that consent letters once given by the licensees cannot be withdrawn in any circumstances. 4. Being aggrieved by the said order, the petitioners filed Writ Petition No.828 of 2009. This court by its order dated 1/2/2010 rejected the said petition, inter alia, observing that as per the guidelines issued by the Municipal Corporation, the consent once given could not be withdrawn till the proposal for redevelopment is disposed of either by acceptance or rejection and as the proposal was already submitted with consent letters by 184 licensees, the consent letters could not have been withdrawn. 5. The petitioners have, therefore, challenged Circular dated 13/4/2006 in this petition. Mr. Aney learned senior counsel submitted that the impugned Circular dated 13/4/2006 is constitutionally invalid and is violative of AJN 00-OS-WP1810.10J 8 Article 14 and 21 of the Constitution of India. He submitted that the circular blindly bars the withdrawal of consent letters given by licensees in redevelopment of a retail market in any circumstances and leaves no scope for withdrawal of consent even in situations where the consent was taken by fraud and misrepresentation as in this case and, therefore, the circular be declared constitutionally invalid and be struck down. 6. Mr. Reis, learned counsel for the Corporation drew our attention to the affidavit of Mr. Dange Rajesh Masaji, Asstt. Engineer (Market) of respondent 1 and submitted that the impugned circular reflects the policy of the Corporation which cannot be made subject matter of challenge. Mr. Reis submitted that the development project is under D.C. Regulations 33(7) which has to be read along with Appendix III. Counsel submitted that validity of Regulation 33(7) of the D.C. Regulation 1991 has been upheld by the Supreme Court in Jayant Achyut Sathe v. Joseph Bain D'Souza & Ors., 2008 (12) AJN 00-OS-WP1810.10J 9 SCALE 194. Counsel submitted that if the consent is permitted to be withdrawn projects initiated under D.C. Regulation 33(7) would never be completed. There has to be some finality. Counsel submitted that in the circumstances, the petition be rejected. 7. We find substance in Mr. Reis' submissions. Under D.C. Regulation 33(7) read with Appendix III, a development project can be undertaken if 70% or more of the occupants give an irrevocable consent in favour of the project. This provision offers an opportunity to the occupants of the old buildings to redevelop their old building which over the years becomes dilapidated. Regulation 33(7) is part of D.C. Regulations, 1991. D.C. Regulations, 1991 have been framed after following the procedure laid down in the Maharashtra Regional Town Planning Act, 1966. They contain the policy of the Corporation. The constitutional validity of Regulation 33(7) AJN 00-OS-WP1810.10J 10 has been upheld. Against this background, the contents of the impugned circular need to be seen. 8. Upon reading the impugned circular, it is clear that it only reinforces the policy of the Corporation. It states that after acceptance by the Government of the policy of the Corporation regarding the redevelopment of the Municipal market, several proposals pertaining to the redevelopment of the market have been received. Out of these proposals, some are given Annexure-II and further processing of these proposals is going on, while other proposals are being scrutinized and according to their merits further steps will be taken. The impugned circular further states that while scrutinizing the proposals, it has been noticed that the licensees in some of the markets give their irrevocable consent letters to more than one developer due to which confusion is created in several cases and disputes may arise. The impugned circular further states that those associations/developers who first submit in the office of the Market Department, the AJN 00-OS-WP1810.10J 11 redevelopment proposal along with the duly notarized consent letters from at least 70% or more licensees together with the resolution passed in the Special General Body meeting pertaining to the redevelopment of the market, their proposal will be considered for issuing Annexure-II. The impugned circular further goes on to say that those licensees who once issue their consent letters to the developers approved by the Association their consent letters will not be revoked for any reason and the redevelopment of the market will be processed further in accordance with them. It is further stated that once the redevelopment proposal is received in the office of the Market Department through the Association then no proposal for transfer of the licence in the same market will be considered. The impugned circular informs all the licensees that the consent letters issued by them to the Association or to the concerned developer appointed for the redevelopment of the market are irrevocable and if they give new consent letters to some other developer except for some compelling reasons they will be liable for AJN 00-OS-WP1810.10J 12 action and their such new consent letters will not be considered and no letter or request in respect thereof will be considered. The licensees are further informed that the consent letters for the redevelopment once given but later on withdrawn will not be taken into account for revocation of Annexure-II. 9. The impugned circular, therefore, appears to have been issued to ensure that the policy of the Corporation for redevelopment of Municipal market is not hampered by licensees giving consent to more than one developer or withdrawing consent letters for no compelling reasons. 10. In this connection, we may reproduce the relevant paragraph of affidavit of Mr. Dange. After emphasizing that the impugned circular enunciates the policy of the Corporation which cannot be challenged, Mr. Dange has stated as follows : “d) Without prejudice to the aforesaid contention which are without prejudice to AJN 00-OS-WP1810.10J 13 one another. I say that even otherwise admittedly the development project is under D.C. Regulation 33(7), which has to be read along with Appendix-III. A perusal of clause 1 of the Appendix-III makes it more clear that a project under D.C. Regulation 33(7) can originate only if 70% or more of the occupants gives an irrevocable consent in favour of the project. The said irrevocable consent is given in the form of notarized writing. If the consent is revocable, the entire purpose of considering the proposal would be defeated because if parties who give consent or permit to reconsider the opposition, entire epitome of 70% or more irrevocable consent, being a seed of initiation of a project under D.C. Regulation 33(7) would be lost. It is in the light of the aforesaid facts that an irrevocable consent is absolutely necessary and hence consent is given, because from its very nature is irrevocable, it cannot be withdrawn. It is submitted that if any party who has given irrevocable consent is permitted to withdraw the consent, it would create complete chaos inasmuch as it would lead to horse trading and would defeat the entire purpose of either considering and or sanctioning a project under D.C. Regulation 33(7).” 11. Having considered the impugned circular in its proper perceptive, we are of the opinion that it reflects the policy decision of the Corporation. The policy decision of the Corporation cannot be interfered with unless it is AJN 00-OS-WP1810.10J 14 arbitrary, capricious or unreasonable. In the facts of this case, we are not in a position to come to the conclusion that the petitioners have made out such a case. This petition, therefore, cannot be entertained and, hence, is dismissed. [MRS. RANJANA DESAI, J.] [R.V. MORE, J.]