1 IN THE HIGH COURT OF JUDICATURE AT BOMABY CIVIL APPELLATE JURISDICTION PUBLIC INTEREST LITIGATION NO. 43 OF 2005 Public Concern for Governance Trust Charitable trust registered under the Bombay Public Trusts Act, 1950, through its Chairman Shri. B.G. Deshmukh having its Office at Post Box No.9925 Worli, Mumbai-400 018. ... Petitioner Vs. 1. The State of Maharashtra through the Secretary, Urban Development Department, Mantralaya, Mumbai 400 032. 2. The City and Industrial Development Corporation of Maharashtra Limited having its office at CIDCO Bhavan, CBD, Belapur, Navi Mumbai. 3. Navi Mumbai Municipal Corporation A Statutory authority constituted as the Planning Authority for Navi Mumbai. 4. Vijay Associates (Wadhwa) Developers having its office at 425-A, Vasukamal 14th Road, Bandra (W), Mumbai 400 050. 5. Sea Queen Co-operative Housing Society Ltd. 6. Amey Co-Operative Housing Society Ltd. 7. Sagarika Co-Operative Housing Society Ltd. 8. Sea-Link Co-Operative Housing Society Ltd. 9. Sea View Co-Operative Housing Society Ltd. 2 10.Vinayak Co-Operative Housing Society Ltd. Having their addresses at Plots Nos.24 to 29, Sector-4, Nerul Node, on Palm Beach Marg, Navi Mumbai and also care/of Respondent No.5 at 425-A, Vasukamal, 14th Road, Bandra (West) Mumbai 400 050. .. Respondents ----------- Mr. C.U. Singh Senior Advocate, with Ms. Soma Singh and Mr. Mahesh Londe instructed by M/s. Sanjay Udeshi & Co. for the Petitioner. Mr. Ravi Kadam Advocate General with Mr. P.I. Khemani, A.G.P. for Respondent No.1. Mr.G.S. Hegde with Mr. Lokesh for Respondent No.2. Mr. A.A. Garge Adv. for Respondent No.3. Mr. Janak Dwarkadas, Senior Advocate, with Mr. P.K. Shroff with Mr. Subodh Joshi with Ms. Hetal Savla with Ms. Radhika A. Pinzara instructed by M/s. Parimal K. Shroff & CO. for Respondent No.4. Mr. V.A. Thorat Sr. Adv. With Ms. Preeti Shah for Respondent No.6. Other Respondents are served. CORAM: H.L.GOKHALE & SMT. ROSHAN DALVI, JJ. JUDGMENT RESERVED ON : 28TH October 2005 JUDGMENT PRONOUNCED ON: 23RD NOVEMBER 2005 3 JUDGMENT: (Per H.L.GOKHALE , J.) 1. The Petitioner is a Registered Trust which has filed this Public Interest Litigation in respect of the allotment of residential plots in Navi Mumbai Municipal Area by Respondent No.2 – City and Industrial Development Corporation. CIDCO is the Authority constituted by Respondent No.1 State of Maharashtra under the Maharashtra Regional and Town Planning Act, 1966 (MRTP Act) for development of Navi Mumbai amongst other townships. The Petitioner trust is created to promote respect for law and transparancy and accountability in governance amongst other objectives. It is founded and led by eminent citizens which include Mr. B.G. Deshmukh, former Cabinet Secretary, Mr. J.F. Rebeiro, former Director General of Police and Dr. R.K. Anand, an eminent physician with Jaslok Hospital. The principal submission of the Petitioner trust is that although the relevant scheme of CIDCO is for the benefit of genuine housing societies, the plots thereunder are grabbed by builders in the name of fictitious societies. Prayer (a) of this petition therefore seeks to quash and set aside these allotments. The 1st Respondent to the petition is State of Maharashtra through the Urban Development Department. Respondent No.3 is the Navi Mumbai Municipal Corporation (NMMC). Respondent No.4 is the concerned builder and Respondents Nos.5 to 9 are the concerned housing societies. 2. Respondent No.2 - CIDCO grants plots in Navi Mumbai for construction and development under the MRTP Act read with the prevalent Development Control Regulations for Navi Mumbai, and City and Industrial Development Corporation of Maharashtra Limited (Lease of 4 Land To Co-operative Housing Society) Regulations, 1995 (hereinafter called “the Regulations”) as amended in 1999. The applicability of the MRTP Act and the Regulations to the disputed allotments are admitted. The respective contentions of the parties are with respect to the interpretation of the Act, the Regulations, the resolutions passed by the Board of Directors of CIDCO and their application and implementation in the instant case. 3. The petition points out that the allotment of plots is done by CIDCO by either of the three methods:- (1) Public advertisements. (2) At a fixed price to Co-operative Housing Societies. (3) On individual applications. It is their case that plots which are granted by public advertisements are to be granted upon tenders being invited in which the builders apply. Since the prices of those plots are regulated and governed by Market forces, they tend to be steep. The genuine Co-operative Housing Societies which require plots for their members cannot compete with them. The Societies are therefore required to be granted plots at a fixed concessional rate. This grant of plots at a fixed rate or fixed price is therefore, meant to be given only to genuine and needy Co-operative Housing Societies and therefore, necessarily only for residential purposes. This construction is permitted at Floor Space Index 1 (FSI 1). It is the case of the Petitioners that CIDCO sought to grant the concerned 5 plots ostensibly to such needy and genuine Co-operative Housing Societies. It therefore, sought to grant them at a fixed rate calculated by itself as the base price with specified enhancement thereon. However, upon such price being computed, ascertained and fixed, instead of granting those plots to genuine and needy Co-operative Housing Societies, CIDCO allowed those plots to be frittered away to builders and developers who took them not upon any tender, but at the fixed price by floating , bogus and fake Co-operative Housing Societies consisting of their employees, nominees and friends instead. The Petitioners submit that thus on the one hand CIDCO deprived itself of the market rate of the plots which would have been determined by economies in the market, based upon the demand and supply principle, and on the other hand, the plots were cornered by builders who would make huge profits upon the development of the plots and consequently no genuine or needy Housing Society could take or develop them at the price fixed mainly and only for them. Further they contend that though those plots were to be only for residential purposes with FSI 1, the builders who captured them took those plots for both commercial and residential purposes (C + R) in the Sectors reserved for C + R though ostensibly in the names of Cooperative Societies. The Builders accordingly sought to convert those plots partly for commercial use with FSI 1.5 on the ground of they being in Sector C+R. 4. The Petitioner's case thus shows that there was a dual advantage and unjust enrichment for the builders and a corresponding disadvantage to CIDCO, the public sector undertaking and consequently to the citizens at large. Consequently the builders got a plot at the fixed 6 rate meant for societies with FSI 1 and also availed the C+R development without subjecting themselves to the requirements of a tender meant for C+R plots to be given by public advertisements to builders. 5. The Petitioners have shown this exercise by CIDCO under the aforesaid Regulations (which shall be referred to presently) based upon two resolutions of its Board of Directors Nos.8848 and 8886 passed on 23rd October 2003 and 25th November 2003 respectively based upon their respective Agenda Notes which show the exercise of computing the fixed rate upon demand stated to have been received by CIDCO from various Societies for residential purposes. The Agenda Notes and the 2 resolutions make interesting reading. The relevant resolutions of CIDCO governing the field: 6. The Agenda Note for resolution number 8848 dated 23rd October 2003 shows that as per the Land Pricing and Disposal Policy of CIDCO the plots for Co-operative Housing Societies were to be allotted by one of the 3 aforesaid modes. The Agenda Note gives the justification for grant of plots at fixed rate as “tremendous demand” from Promoters of Co- operative Housing Societies for allotment of plots to them without tender and at fixed rates in various nodes of Navi Mumbai. The Agenda Note sets out the proposal for CIDCO to offer plots for residential use at fixed rate to such societies. It further sets out that the market analysis done by CIDCO shows that those Societies found it impossible to get a plot through tender. Consequently, the Agenda Note shows that it was proposed to determine a fixed price at which the plots will be given out to 7 Co-operative Housing Societies. First, a base price is arrived at on the basis of the existing pricing policy and then there would be 40% enhancement of the base rate in the developed nodes. (similarly there was to be 30% increase in the base rate for determining the fixed price in developing and new Nodes, but with which this Petition is directly not concerned.). The Agenda therefore sets out a table showing the base price under CIDCO's existing pricing policy and the enhanced price at the above percentage. The table further shows the price concession that these plots will still get, in terms of percentage when compared to, the tender rate. This is the weighted average of such tender. Since market forces would determine the tender price, the concession received would therefore be lesser in the developed nodes and more in the developing or new nodes. 7. Though the Petitioners have made a grievance about the number of plots and claimed reliefs for all such similarly placed plots in the Petition, they have concentrated their criticism on one prime plot by way of an illustration. The plot specified by the Petitioner (the said plot) is not only in a developed node but in a prime locality of Navi Mumbai nicknamed “Marine Drive of Navi Mumbai” by CIDCO. 8. The said plot is in Nerul area of Navi Mumbai and is shown at serial No.5 in the table which forms a part of the Agenda Note to the Board Resolution No.8848 of CIDCO. The base price as per the existing pricing policy of CIDCO for the said plot is shown to be Rs.7188/- per square meter. The proposed increase in base price (enhanced by 40% being in the developed node) is shown to be Rs.10063/-. The weighted 8 average of Tender rate is shown to be Rs.10743/-. Since this is a prime plot in a developed area analogous to Marine Drive of Mumbai, the actual tender rate would be therefore, far higher than the average of tender rate, the average having been derived for developing as well as developed plots together. It is the case of the Petitioners in para 14 of the Petition that the base price fixed was far below the prevailing market rate and that the prevailing market rate would be about Rs.20,000/- per square meter instead. That would be near about the highest price of the plots to be developed in Navi Mumbai. Of course this rate would be when the plot is fully developed in that “developed node”, Nerul. The Agenda shows that the lower rates were justified considering the fillip it would give to speedier development in Navi Mumbai and to enable genuine Housing Societies to take them instead of resorting to the practice of allotting plots to developers only. The laudable purpose of the policy, stated in the Agenda is “in keeping with the National Policy to increase Housing Stock of Individuals”. 9. Based upon that Agenda, CIDCO passed its resolution No.8848 of 23rd October, 2003 which resolved that CIDCO approved the proposal to fix the rates for plots to be allotted to Co-operative Housing Societies with FSI 1 and purely for residential purposes without inviting tenders at a fixed rate as mentioned in column No.5 of the table to the Agenda. It further passed the resolution that this policy was to be implemented only after verifying the genuineness of the Society. 10. Thus, four characteristic facts of the grant by CIDCO emerge from that resolution: 9 (i) The grant would be only to genuine Co-operative Housing Societies. (ii)It would be only for residential purpose. (iii)It would be without inviting tenders and instead at the fixed rate. (iv) It would be for FSI 1. 11. It must be appreciated that fixed rates were therefore meant only for genuine Co-operative Housing Societies applying directly for the plots. It would be only for residential purposes and would have FSI 1. The other plots would be granted through tender. They would not be at the fixed rate since such rates would be dependent upon the market forces. Those plots would not be only for residential purposes – they would be C+R. They would therefore enjoy not 1.00 but 1.5 FSI. The advantages of constructing C+R would be that it will attract 1.5 FSI which would therefore necessarily get higher profit. It would therefore, fall within domain of the business of developers and would fetch CIDCO the gains of such development. The plots under CIDCO's new policy pursuant to resolution No.8848 would derive comparatively lesser benefit for CIDCO in as much as the plots would be granted upon the fixed rate but they will be available for residential purpose only and to genuine housing societies alone. 10 12. The case of the Petitioner is that these plots have been granted by CIDCO to Respondents 5 to 10 conferring the advantages of the policy upon those Respondents and at a disadvantage to CIDCO. However, though the price was fixed for the grant of the plots, ultimately what is seen is that they were given away not to genuine Co-operative Housing Societies and not only for residential purpose for FSI 1, but to builders for C+R attracting FSI 1.5 and without the stringency of a tender. 13. Under the further Agenda Note for a subsequent Board Resolution No.8886 of CIDCO passed on 25th November 2003, CIDCO sought to regulate the actual grants made to the Co-operative Housing Societies for whom the earlier resolution was passed on 23rd October 2003. That Agenda again shows the object of the resolution to be of “enabling and assisting the needy and genuine Co-operative Housing Societies to acquire a plot only after verifying genuineness of the Society, in Navi Mumbai”. 14. The above referred regulations specified the norms to verify the genuineness of such Societies. The Agenda provided the requirement of an affidavit (a truthful statement on oath) showing the continuous residence of 15 years of the applicant in Maharashtra State supported by documentary evidence such as ration card, passport, Domicile Certificate etc. of each member coupled with the certification in an affidavit that that member has no “other dwelling unit in Navi Mumbai”. 15. The Agenda further sets out the maximum extent of the area of the flat, the number of members of the society, the area of the plot and 11 the conditions to regulate the change of members. Initially the number of members not allowed a change was 1/3 of the total members and the period of such restriction was 5 years as shown in the Agenda Note for the Board Resolution. In the resolution, 1/3 has plummeted to ¼ of the total number of members and the 5 year period in the Note has been decreased to 3 years from the date of allotment. 16. The two resolutions read together show the Board of CIDCO having decided to allot residential plots with 1 FSI at fixed rate to genuine Societies whose members would be verified by a statement on oath supported by documentary evidence to substantiate those statements, part of whom shall not transfer their memberships for a specified period. 17. It may be mentioned that though the suit plot at Nerul found its ultimate place as a plot with a fixed price, about a year prior thereto, it was sought to be allotted by public advertisements which implied the allotment by tender. Such public advertisements were given in August- September, 2002 in 2 English and 2 Marathi News-papers. The advertisements of CIDCO show Navi Mumbai's Marine Drive with a base price of Rs.10,000/- per sq. mtr. The advertisements gave a “life time opportunity to top most builders of India”. They published the names of authorities and the contact number and address of CIDCO. We are told that no offers were received by CIDCO consequent upon the said advertisements. The base price shows the minimum price below which CIDCO would not and could not have allotted the plot to any of the top- most builders of India. That same plot (the suit plot) has however been subsequently offered under the Board Resolution No.8848 at the flat fixed 12 rate of Rs.10063/- not to any of “the top most builders of India” but to “genuine Co-operative Housing Societies”. 18. The petition contends that although ostensibly CIDCO sought to target a separate market for allotment of interalia the suit plot, instead of the ultimate allotment to genuine societies, there has been a volteface as the suit plot came to be taken for development by one of the top most builders of India, Respondent No.4 instead of any genuine Co-operative Housing Societies. 19. The Petitioners have drawn our attention to the website print out of Respondent No.4 showing interalia that the suit plot is its premier residential construction annexed at Exhibit-F to the Petition. 20. On paper however 6 Societies being Respondent Nos.5 to 10 have applied for and been allotted one plot each at the fixed price from CIDCO. According to the Petitioners, these societies are not genuine housing societies. The applications of the disputed societies for allotment of land: 21. To appreciate this submission, one will have to examine the documentary evidence of the offer by Respondents 5 to 10 and the acceptance by CIDCO constituting the contract of allotment between them. The documents containing the particulars of the members of these societies will also have to be seen to examine whether they fulfill the criteria laid down. This will enable us to examine the genuineness of 13 these societies. 22. These documents have come to be referred and relied upon by the Petitioners in a further Affidavit filed by the Petitioner's Trustees, consequent upon inspection of the documents taken by the Petitioners from CIDCO. CIDCO has produced the files containing the applications, affidavits and documents furnished by the members of these societies. 23. When we look into these documents, what we find is that the letters of application titled “Request for Allotment” by Respondents Nos.5 to 9 Societies are computer print-outs. All the letters are undated. All of them are addressed to the then Chief Minister of Maharashtra Shri Sushilkumar Shinde and not to CIDCO which as a statutory Corporation, is a separate competent legal entity. Each of them bears the endorsement of the Chief Minister “Please put up” dated 21st February 2004. Each of them has been received by the Registered Office of CIDCO at Nirmal Building, Nariman Point, Mumbai on 24th February 2004 and in the Commercial Section of CIDCO at Navi Mumbai on 25th February 2004. The 2 stamps of these Offices bear 5 different running inward numbers. The inward numbers of the stamp of the CIDCO Office at Nirmal are 15 onwards marked “C.M.”. The endorsement of the then Managing Director of CIDCO Shri V.M. Lal “Please process early” is made on 24th February 2004 itself, before the letters are moved to the Commercial Section at Navi Mumbai. A further endorcement also dated 24th February 2004 on the top of these letters shows them serially numbered from No.30 onwards and bearing the endorcement “VVIP”. After these, three identical endorcements have been made by the Commercial Section of 14 CIDCO at Navi Mumbai under separate inward numbers commencing from No.3768 on 25th February 2004. 24. Surprisingly, the copies of letters produced by Respondent No.6 (the lead society) on behalf of Respondent Nos.5 to 10 in Court show that they were received by CIDCO on 26th February 2004 after all such action was already taken. 25. Though the names of the Societies and their addresses are different, none of the letters bear any telephone number of the Society as also the date. The font of the letter-head in the printout are similar for 4 Societies. The subject of the letter is identical except for the Sub-Division of the plot mentioned therein. All the letters show Plot No.24 in the print out. (Indeed the Development Plan of CIDCO dated 9th January 2004 which is C+R shows the said plot bearing No.24!). They further show handwritten subplots A to E. Hence at the time of the application itself the specific sub-plot to be allotted is specified by the author of the letter who is the Chief Promoter of that Society. The contents of each of these letters is identical. Their addresses are from different parts of the city. Thus, “Sealink's” address is Matunga, Mumbai-19, Sagarika's - Ambedkar Road, Mumbai-14; Amey's – Manektala Estate, Mumbai-86 and others from Vashi. It is seen that Co-operative Housing Societies stated to be having different names and different addresses in far off areas have all sought to apply for allotment by writing identical letters on the same day not to CIDCO but to the then Chief Minister of Maharashtra. For some unknown reason all these letters are directed to be put up and processed early on the date they were received and marked “VVIP”. 15 26. The applications show no annexures. In fact the contents of the letters show that the annexures had been earlier or separately submitted. Copies of any such annexures, not being with the letters, they were not even offered for inspection by CIDCO to the Petitioner's representatives. 27. The application of Respondent No.10 has been made separately. It is also undated. It is received initially on 5th April 2004 and bears endorcement of the Chief Minister dated 5th April 2004 “Please Process and Pass by 12 th April 2004” . It is received by the Nirmal Building of CIDCO on 6th April 2004 under No.42 CM. It bears the further stamp of VVIP, No.75 against the date 8th April 2004. The endorcement of then Managing Director of CIDCO was made on 12th April 2004. 28. The note of the Marketing Manager dated 16th March 2004 with regard to each of these letters is identically made for each of these applications showing that the applications were received along with enclosures which were duly certified and that the Societies have fulfilled all the terms and conditions with regard to the number of members and the extent of the area of the plot and the flats. Neither the then Chief Minister nor the Marketing Manager nor the Managing Director of CIDCO are seen to have made any query in spite of this astonishing similarity of approach of these six societies coming from different parts of the city. Strangely enough, their response to these identical applications is also astonishingly identical. 16 Documents in support tendered by members and total absence of scrutiny: 29. CIDCO claims to have scrutinised and verified the applications of these Respondents. Upon our query CIDCO has produced 6 files containing the documents of all the members of the 6 Societies. A cursory look at these files has revealed not only that CIDCO has not scrutinised or verified the documents, but that when seen, those documents go against the basic elementary requirements for application by members as per the Regulations and shown in the Agenda to the Board Resolution in terms of which resolution No.8886 came to be passed by the CIDCO on 25th November 2003. 30. It would be essential to enumerate some of the salient features of those documents. It may be remembered that these documents were required as per the Agenda to the aforesaid Board Resolution in support of the affidavits to be made by the members that they lived in Maharashtra for 15 years and that they do not have another dwelling unit in Navi Mumbai. In support of that statement on oath the documents of the members are produced by them, supposedly scrutinised by CIDCO and have been appreciated by us. 31. Most of the members have annexed photocopies of their Ration-cards, many of which are unreadable. The ration-cards are issued in many of the cases after the year 2000. They