SUSME BUILDERS PVT. LTD. versus CHIEF EXECUTIVE OFFICER, SLUM REHABILITATION AUTHORITY AND ORS. on 4 January 2018

[2018] 1 S.C.R. 1

SUSME BUILDERS PVT. LTD.

v.

CHIEF EXECUTIVE OFFICER, SLUM REHABILITATIONAUTHORITY AND ORS.

(Civil Appeal No. 18121 of 2017)

JANUARY 04, 2018

[MADAN B. LOKUR AND DEEPAK GUPTA, JJ.]

Slum Dwellers:

Rehabilitation of slum dwellers – 800 slum dwellers in Mumbai– Relief of rehabilitation – Slum dwellers, who are also owners ofthe land, formed a society – Agreement between the society andappellant-developer to develop the slums and rehabilitate the slumdwellers in proper accommodation in the year 1986 – Thereafter,various agreements between the Society and developer – Developerto obtain consent of 70% slum dwellers in terms of amended DCR –However, the developer not developing project as per the agreement– Society entered into an agreement with respondent no. 4, whichwas subsequently terminated and appellant again appointed as thedeveloper – Dispute between the appellant and respondent no. 4 –Matter before Supreme Court, wherein former judge of SupremeCourt appointed to verify the factum of consentum of the eligibleslum dwellers – Report to the effect that both the developers failedto show that they had obtained 70% consent – Held: It is our dutyto ensure that these owners who also happen to be slum dwellers donot live in sub-human conditions for eternity – Appellant delayedthe project, and respondent no. 4 obtained the consent of societymembers by holding out a false promise of a larger flat – Thus, boththe contesting developers not entitled to any relief – 800 slumdwellers, in addition to the flats, to be given compensation for theland owned by them – In exercise of power u/Art. 142, directionsissued to Slum Redevelopment Authority-SRA to invite letters fromrenowned builders/developers, for rehabilitation of all eligibleoccupiers/slum dwellers within the stipulated period – MaharashtraSlum Areas (Improvement, Clearance and Redevelopment) Act, 1971– Development Control Regulations for Greater Bombay, 1991 –Development Control Regulations, 1997 – Constitution of India –Art. 142.

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ARehabilitation of 800 slum dwellers – Various agreementbetween the slum dwellers and appellant-developer to develop theslums and rehabilitate the slum dwellers – In terms of amended DCR,the developer to obtain consent of 70% slum dwellers – However,project not developed as per the agreement – Dispute between theappellant and respondent no. 4-new developer – Matter beforeBSupreme Court, wherein former judge of Supreme Court appointedto verify the consent of the slum dwellers in praesenti – Scope, ambitand effect of the said order– Held: Intention of the Court, will haveto be deduced from the entire order – Phrase “there should beappropriate verification of the consent of the eligible slum dwellersCin praesenti” cannot be read in isolation – It has to be read in thecontext of the contention of the contesting parties that each one ofthem had the consent of more than 70% of the slum dwellers – ThisCourt was not oblivious of the requirements of the Slum Act thoughmay not have explicitly mentioned 70% in its order – It is clear that the judge had understood that he was to ascertain whether 70% ofDthe eligible slum dwellers are in favour of the redevelopment schemesigned with the appellant or with respondent no. 4 – Holistic readingof the order admits of no other meaning – Admittedly, neither theappellant nor respondent no. 4 received 70% support of slumdwellers, as such, the said order cannot be taken to its logicalEconclusion.Maharashtra Slum Areas (Improvement, Clearance andRedevelopment) Act, 1971:

s.13(2) – Power of Competent Authority to redevelop clearancearea – Held: Under s.13(2), the Slum Redevelopment Authority-FSRA has the authority to take action and hand over the developmentof land to some other recognized agency under three circumstances-when there is contravention of the plans duly approved; when thereis contravention of any restriction or condition imposed under sub-section 10 of s. 12; and when the development has not taken placeGwithin time, if any, specified – On facts, slum dwellers are virtuallythe owners of the land as members of the owner Society, the SRAhad the power u/s. 13(2) to issue the order of setting aside theappointment of the appellant as developer.

s.3A(3)(c) and (d) – Slum Redevelopment Authority-SRA –HPower to remove the developer – Held: Since SRA issued the letter of intent, it necessarily has the power to cancel the same – In termsof clause (c) and (d) of sub-section (3) of s.3A, SRA not only hasthe power, but it is duty bound to get the slum rehabilitation schemeimplemented and to do all such other acts and things necessary forachieving the object of rehabilitation of slums – On facts, SRA wasfaced with a situation where the slum dwellers were suffering formore than 25 years, thus, action by SRA to remove the developerfor the unjustified delay totally justified – Developer could not havecarried out the development work on the basis of its agreement withthe Society – It needed permission of SRA – Thus, SRA can revokesuch permission.

s.13(2) – Notice u/s.13(2) – Issue of 70% consent, if raised –Held: When a notice is issued to a party, it must be clear andunambiguous as to what are the allegations it must meet – Noallegation in the notice that right to develop granted in favour ofthe developer was liable to be revoked because it had not obtainedconsent of 70% of the slum dwellers but was confined to the issueof delay – Reference to Regulation 33(10) also did not specificallyraise the issue of 70% consent.

Development Control Regulations of 1991:

70% consent of the slum dwellers, if mandatory – Held:Development Control Regulations of 1991 makes it absolutely clearthat at least 70% of the slum dwellers/occupiers were to form aSociety for the purpose of slum re-development scheme – Under theamended DCR of 1997, the developer/owner was required to enterinto agreements with 70% of the slum dwellers to take up the slumrehabilitation scheme for consideration – Figure remains at 70% –Even if the remaining minority slum dwellers do not agree to be partof the scheme, the owner/developer is duty bound to make adequatearrangements for their rehabilitation and they can join the scheme,and can take benefit even at any later stage – Thus, 70% consentof the occupiers is mandatory – On facts, developer having appliedfor migration to new Scheme, had to obtain consent of 70% of theslum dwellers – Stand of the developer that it was not required tosubmit agreements with 70% slum dwellers, not legally tenable –Agreements with 70% slum dwellers should have been providedwithin a reasonable time and, though almost 20 years have elapsedsince the second letter of intent was granted in favour of developer, A

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Ait has till date failed to submit agreements – Development ControlRegulations of 1997.

Rehabilitation of slum dwellers – Whether developer delayedthe construction of the scheme – Entitlement to relief – Held:Developer never earnestly pursued the authorities for approval ofBthe plans because it did not have consent/agreements of 70% slumdwellers – It sought waiver of the requirement of obtaining 70%consent from the slum dwellers – Furthermore, only a portion ofplot was covered by the CRZ Notification and the developer notprevented from raising construction on that portion of the land whichwas not affected by the CRZ Notification – Finding given by SRACthat developer was responsible for the delay, based on appreciationof material on record and cannot said to be perverse – Thoughthere may have been a few stop orders and a few occasions whenthe developer may not have been able to raise the construction but,by and large, developer was itself guilty of delaying the constructionDfor no reason – Thus, developer rightly held responsible for thedelay in implementation of the rehabilitation scheme.

Rehabilitation of slum dwellers – Developer entered intorehabilitation scheme for slum dwellers – Inordinate delay incompletion of the project – Developer, if entitled to continue withEthe Scheme – Held: Developer not entitled to continue with therehabilitation Scheme – Developer cannot take the benefit oftechnical points to defeat the rights of the slum dwellers – On facts,both equity and law against the developer – Slum dwellers dealt ina highly inequitable manner – Law and the conditions of the letterof intent and various letters issued by SRA clearly required theFdeveloper to produce agreements with at least 70% of the slumdwellers – However, developer failed to do so – Developers as alegal entity was treating the slum dwellers only as a means of makingmoney, thus, not entitled to any relief.

Rehabilitation Scheme – Cancellation of slum rehabilitationGagreement in favour of appellant-developers – Entitlement ofrespondent no.4(new developer) to continue with the rehabilitationScheme – Held: Respondent no. 4 had misled the members of theSociety in entering into an agreement with it by holding out a falsepromise that they would be given much larger flats – RespondentHno.4 legally not entitled to make this offer – Also respondent no. 4

failed to get the consent of 70% slum dwellers and Society hadterminated its agreement with the respondent no. 4 – Thus, consenthaving been obtained by misrepresentation of facts being no consent,respondent no. 4 not entitled to continue with the project and notentitled to any relief.

Constitution of India – Arts. 142 and 136 – Order of thisCourt requesting former judge of this Court to verify the consent ofthe slum dwellers in praesenti – Held: Court was aware that theslum dwellers were suffering due to the long protracted litigationand was moved by the pathetic condition in which most of the slumdwellers continued to reside – Court felt the need to find an innovativesolution – Thus, the order fell within the ambit of Art. 142 to docomplete justice between the parties.

Judicial propriety – Requirement – Judicial propriety anddiscipline requires that a Coordinate Bench must respect the orderof an earlier Bench – Even a larger Bench should not brush asidethe order passed by an earlier Bench even if it be a smaller Benchunless the order is in issue before the larger Bench.

Judgment/Order – Interpretation – Held: Judicial order orjudgment has to be read as a whole and a single line or phrasecannot be read out of context – Judgment is not to be interpretedlike a statute.

Conclusion

Tender – Bid – Competitive bidding – Rehabilitation schemeof slum dwellers by developers – Inter se bidding between thebuilders – Held: High Court rightly held that consent once givenby the slum dwellers should not be permitted to be withdrawn andthere should be no inter se bidding between the builders –Competitive bidding can lead to a very unholy practice of developerstrying to buy out the slum dwellers, which is also not in the interestof the rehabilitation scheme.

Disposing of the appeal subject to compliance, the Court HELD: 1.1 Both the contesting developers, the appellantand respondent no. 4 are not entitled to any relief. It is the dutyto ensure that these owners who also happen to be slum dwellersdo not live in sub-human conditions for eternity. The followingconclusions are arrived at:

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A(i) That the order dated 27.03.2015 was passed in exerciseof jurisdiction vested in this Court under Article 142 ofthe Constitution of India and is an order binding on theparties;

(ii) That vide order dated 27.03.2015, this Court wantedBJustice B.N. Srikrishna to find out whether appellant orrespondent no. 4 had the consent of 70% slum dwellers;

(iii) That, as a result of the Report submitted by JusticeB.N. Srikrishna both the appellant and respondent no. 4have failed to show that they enjoyed support of the 70%of the slum dwellers;C

(iv) That, in the peculiar facts and circumstances of thiscase, where the owners and occupiers are virtually one,the SRA had the jurisdiction to invoke the provisions ofSection 13(2) of the Maharashtra Slum Areas(Improvement, Clearance and Redevelopment) Act,D1971 to revoke and set aside the right to develop andcancel the letter of intent granted in favour of theappellant. Even if it be assumed that s. 13(2) is notapplicable, then the SRA could have exercised the powerunder Section 3A (3)(c) and (d); E(v) That the notice issued by the SRA to the appellant wasonly on the ground of delay and the issue of obtaining70% consent was not specifically raised in the notice.Consequently, the order dated 24.02.2012 passed by theSRA in so far as it rejects the case of the appellant forlack of 70% consent is beyond the terms of the notice.FTherefore, this part of the judgment of the High Court,holding that the appellant was aware about thisallegation, is not accepted and is set aside;

(vi) That, the appellant was responsible for the delay inimplementation of the Scheme and construction of theGbuildings and, therefore, the SRA was justified in settingaside the appointment of the appellant as developer andimpliedly cancelling the letter of intent issued in its favourvide order dated 24.02.2012;

(vii) That, the appellant has failed to show that it has theHconsent/agreements of 70% of the slum dwellers and, therefore, is not entitled to any relief from this Court;and

(viii) That respondent no. 4 obtained the consent of themembers of the Society by holding out a false promise ofa larger flat and, therefore, the agreements entered intoby respondent no. 4 with the slum dwellers are legallyunconscionable and not enforceable and, as such,respondent no. 4 is also not entitled to continue withthe Scheme. [Paras 84, 85][57-B-H; 58-A-C]

1.2 The Court is not only disappointed with the conduct ofthe appellant, but also with the conduct of those persons whowere the office-bearers of the Society whichever faction they maybelong to. It is more than obvious that the two rival developersand the office-bearers of the Society were playing with the livesof large number of slum dwellers. On examining the variousagreements entered into by the appellant with the Society, it isfound that though the members may have been entitled to largerflat in each subsequent agreement but, in fact, it was the builder,who was the biggest gainer as the advantage of higher FSI wascornered by the builder. Only a small portion of this advantagewas being transferred to the slum dwellers and a large portionwas being retained by the builder. Furthermore, it is the occupierswho, through the Society, are also the owners of the land. Inaddition to the flats which they would be entitled to as slumdwellers or occupiers or encroachers of land, they should havebeen given some benefits as owners of the land. When a slum,owned by any authority or person, is handed over to the developer,in addition to rehabilitating the slum dwellers, the developer alsohas to compensate the owner. It is these 800 plus slum dwellers,who own this 23018.50 sq. mtrs. of land, which would be valuingthousands of crores of rupees and, therefore, there is no reasonwhy the slum dwellers, who also happen to be the owners of theland, should also not be compensated for the price of theland.[Para 86][58-D-H]

1.3 This is a case where the earlier Bench of this Courthad invoked its power under Article 142 of the Constitution ofIndia and it is a fit case for invocation of this Court’s jurisdictionunder Article 142. Hence, in exercise of this Court’s power underArticle 142, the SRA is directed to invite letters of interest from A

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Arenowned builders/developers, who have the capacity andexperience to take up such a large project by issuingadvertisements. The successful developer should undertake tocomplete the rehabilitation of part of the project to rehabilitateall eligible occupiers/slum dwellers within a period of two yearsfrom the date of sanction of the plan. The successful bidder mustBgive a bank guarantee of Rs. 200,00,00,000/- (Rupees TwoHundred crores only) to ensure that it does not violate the termsand conditions of the rehabilitation scheme. In case of violationof the terms and conditions of the rehabilitation scheme withoutreasonable cause, the SRA would be entitled to invoke the bankCguarantee, after giving notice to the developer. [Para 87][59-A,B-C; 60-A-C]

The scope, ambit and effect of the order of this Court dated27.03.2015:

2.1 Judicial propriety and discipline requires that aDCoordinate Bench must respect the order of an earlier Bench.In fact, even a larger Bench should not brush aside the orderpassed by an earlier Bench even if it be a smaller Bench unlessthe order is in issue before the larger Bench. The order inquestion holds the field. It has not been recalled and prayer forEmodification in I.A. No. 10 was rejected on 13.05.2015. Therefore,the order of this Court dated 27.03.2015 holds the field and theCourt bound by the same. At the same time, it is the duty todecipher what was the intention of the Bench while passing theorder and to find out what the Court intended to do by the saidorder. [Para 34][36-C-D]F

2.2 The Court was aware that the slum dwellers weresuffering due to the long protracted litigation. Therefore, the Courtfelt the need to find an innovative solution. In the order, the Courtnoted the factual aspects and again emphasized the need to find asolution to resolve the various issues. The Court was obviouslyGmoved by the pathetic condition in which most of the slumdwellers continued to reside. It is thus, apparent that this is anorder falling within the ambit of Article 142 to do complete justicebetween the parties. [Para 35][36-E-G]

2.3 It is settled law that a judicial order or judgment has toHbe read as a whole and a single line or phrase cannot be read out of context. A judgment is not to be interpreted like a statute. Asfar as the order dated 27.03.2015 is concerned, the intention ofthe Court, will have to be deduced from the entire order. Thephrase “ there should be appropriate verification of the consent ofthe eligible slum dwellers in praesenti.” cannot be read in isolation.This has to be read in the context of the rival contention of thecontesting parties that each one of them had the consent of morethan 70% of the slum dwellers. This Court was not oblivious ofthe requirements of the Slum Act though it may not have explicitlyreferred to them. It is obvious from the order dated 27.03.2015that counsel for both the parties claimed that their respectiveclients had the support of 70% of the slum dwellers. Obviously,both of them could not be correct. This factual dispute could notbe decided in these proceedings. This was the dispute which wasreferred for resolution to Justice B.N. Srikrishna. It is, thus, clearthat Justice B.N. Srikrishna had understood that he was toascertain whether 70% of the eligible slum dwellers are in favourof the redevelopment scheme signed with the appellant or withrespondent no. 4. A holistic reading of the order admits of noother meaning. The only dispute raised before this Court on27.03.2015 was which of the builders had the support of the 70%of the slum dwellers. Since this factual dispute could not bedecided in Court, Justice B.N. Srikrishna was requested to dothis job. Admittedly, neither the appellant nor respondent no. 4has received 70% support. [Paras 38, 39][37-E-G; 38-C-D]

2.4 The words ‘in praesenti’ only mean that the Court wantedthe verification of the consent of the eligible slum dwellers as ondate of passing of the order. ‘In praesenti’ cannot be read to mean‘present and voting’. It only means eligible slum dwellers as on27.03.2015. Justice B.N. Srikrishna has divided the slum dwellersinto four categories; 263 were the original slum dwellers, 318were the legal heirs, 207 were those who had become membersby means of sale and transfer of shares and 79 voters weredisputed. During these entire proceedings not a single complainthas been filed that an ineligible slum dweller was permitted tovote or that an eligible slum dweller was not permitted to vote.The procedure followed by Justice B.N. Srikrishna is absolutelycorrect and no error can be found in this regard. Therefore, thereis no hesitation in accepting the report submitted by Justice B.N.

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ASrikrishna. [Para 40][38-D-G]

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ASrikrishna. [Para 40][38-D-G]

2.5 Out of 867 total eligible voters only 651 voted and theappellant secured 423 votes, which would mean 64.98% orroughly 65% of the votes polled. But, if the percentage iscalculated from the total number of slum dwellers-867 then theBpercentage is 48.78%, which is less than 50%. In case 79 votesare excluded which are doubtful, then the total eligible voterswould be 788 and the appellant secured 413 i.e. 52.41% of thetotal eligible slum dwellers, well below the magic figure of 70%.It cannot be said that to put an end to all litigation, the Court onlywanted to find out who had the majority. That, is not the essenceCof the order dated 27.03.2015. It is true that 70% is not reflectedin the direction given in the order but the directions have to beunderstood in view of the intention of the Court, which was tofind out that which of the builders had the support of 70% of theslum dwellers. Unfortunately, both the developers do not enjoyD70% support, though it is true that the appellant has the supportof more than twice the number of slum dwellers as compared torespondent no. 4. Since neither the appellant nor respondent No.4 has the support of 70% slum dwellers, the order dt 27.03.2015cannot be taken to its logical conclusion. [Para 41][38-G-H; 39-A-C]E

The scope of powers undersection 13(2) of the Slum Act:

3.1 Under Section 13(2), the SRA has the authority to takeaction and hand over the development of land to some otherrecognized agency under three circumstances: (i) When there isFcontravention of the plans duly approved; (ii) When there iscontravention of any restriction or condition imposed under sub-section 10 of Section 12 of the Slum Act; and (iii) When thedevelopment has not taken place within time, if any, specified.The requirement to complete the development within time maybe there in the letter of intent issued by the SRA or may be in theGagreement entered into between the owner/developer with theslum dwellers. Such condition, if violated, would attract theprovisions of Section 13(2) of the Slum Act. Over and above that,when a clearance order is passed, then in terms of sub-section10 of Section 12, the competent authority can include a conditionHwith regard to the time within which the development should be completed and in that case also Section 13(2) would be attracted.It cannot be said that in case of delay, the condition that is violatedmust be laid down under Section 12(10) of the Slum Act. [Paras44-45][40-D-G]

3.2 There may be cases where the slum dwellers do notoffer any resistance and willingly consent to move into transitaccommodation provided by the owner/developer. Therefore, theconditions laid down under Section 12(10) will come into playonly when there is a clearance order, but in case there is noclearance order, then under Section 13(2), the SRA would beempowered to take action when there is violation of any plan orwhen there is violation of any condition relating to developingthe project within time. The time limit can, some time, be providedin the letter of intent, in the agreement or even in the regulations.[Para 46][40-G-H; 41-A-B]

3.3 Normally under Section 13(2) of the Slum Act, action bythe SRA has to be taken against the owner. This is a unique casewhere the slum dwellers are the members of the owner-Society.The Society, in turn, has given power of attorney to the builder.The builder virtually has two roles-one as developer and the otheras power of attorney holder of the owner. Both are closelyinterlinked and inextricably mixed with each other. Therefore,though normally it would be accepted that under Section 13(2)action can only be taken against the owner, in the instant case, itcannot be accepted in its totality. Even the SRA, in its order, hasitself noted that since the Society is the owner of the plot of land,it is empowered and within its right to terminate the agreementexecuted with the said developer for breaches committed by thedeveloper. It has, however, held that a private dispute betweenthe Society and the developer cannot prevent the SRA fromdischarging its obligations. The SRA agreed that appellant hadnot completed the project within time. It took action under Section13(2) of the Slum Act. The action taken by the SRA is to removeappellant as developer which amounts to cancelling the letter ofintent issued in favour of appellant. Otherwise, there would bean anomalous situation where the Society would have terminatedits contract with appellant but the letter of intent issued by theSRA would continue to hold the field and it would be entitled to A

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Adevelop the land. The Society approached the SRA, in fact, askingit to take action against the developer. Since the SRA is theauthority which issued the letter of intent, it will definitely havethe power to cancel the letter of intent. In the peculiar facts andcircumstances of the case where the slum dwellers are virtuallythe owners of the land as members of the owner Society, the SRABhad the power under Section 13(2) to issue the order dated24.02.2012 setting aside the appointment of the appellant asdeveloper. [Paras 47-49][41-B-H]

Whether the SRA has any other power to remove the developer:4.1 Since it was the SRA which issued this letter of intent,Cit necessarily must have the power to cancel the same. A barereading of clause (c) and (d) of sub-section (3) of Section 3A ofthe Slum Act shows that in terms of the provisons, the SRA notonly has the power, but it is duty bound to get the slumrehabilitation scheme implemented and to do all such other acts Dand things as will be necessary for achieving the object ofrehabilitation of slums. In the instant case, the SRA was facedwith a situation where the slum dwellers were suffering for morethan 25 years and, therefore, the action taken by SRA to removethe appellant for the unjustified delay was totally justified. [Paras50, 51][42-B, F-G]E

4.2 A perusal of the various provisions of the Slum Act wouldshow that normally in a case falling under the Slum Act, it is theowner of the land, whether it be the Government, a statutoryauthority or a private person, who will be interested in thedevelopment work. Normally, the occupiers will be encroachersFof slum land. Therefore, there will be a conflict of interest betweenthe occupiers and the owner. The owner, in turn, will always engagea developer/builder to carry out the development work. In casethe owner gives a power of attorney to the developer, as in theinstant case, the developer now has two identities-(i) the powerof attorney holder of the owner and (ii) the developer. As far asGthe instant case is concerned, the Society is made up of themembers who are occupiers and this Society has given power ofattorney to the developer. Therefore, the developer is actuallyhaving a dual role of owner and developer. Both the letters ofintent have been issued in favour of the Society, developer andHthe architects of the developer. The developer could not have carried out the development work on the basis of its agreementwith the Society. It needed the permission of the SRA. Therefore,SRA can obviously revoke such permission.[Para 52][42-G-H;43-A-C]

Whether in the notice issued under section 13(2) the issue of70% consent was raised:

5. When a notice is issued to a party it must be clearly toldwhat are the allegations which it must meet. The notice shouldbe clear and unambiguous. There was no allegation in the notice(s)that the right to develop granted in favour of the appellant wasliable to be revoked because it had not obtained consent of 70%of the slum dwellers. The reference to Regulation 33(10) alsodid not specifically raise the issue of 70% consent. The appellantwas never put to notice by the SRA that its right to develop theland may be cancelled because of not having consent of 70%slum dwellers. It was confined to the issue of delay. However,while considering the issue of delay, the SRA was justified inmaking reference to the various communications made by thedeveloper and its architects seeking time to obtain consent of70% slum dwellers. [Paras 54-56][43-F-H; 44-A]

Whether support of 70% of the slum dwellers is mandatory andwhether slum dwellers are entitled to withdraw their consent:

6.1 A bare reading of Development Control Regulations of1991 makes it absolutely clear that under the said DCR at least70% of the slum dwellers/occupiers have to get together andform a Society for the purpose of slum re-development scheme.Therefore, unless 70% slum dwellers agree to form a Society,the provisions of the Slum Act could not be invoked to frame anSRD scheme. Under the amended DCR of 1997, there is a changethat now the developer/owner was required to enter intoagreements with 70% of the slum dwellers and unless 70% ofthe slum dwellers agree, the slum rehabilitation scheme cannotbe entertained. The magic figure remains at 70%. The idea behindit is that more than 2/3 of the occupiers must agree for therehabilitation scheme. Even if the remaining minority slumdwellers do not agree to be part of the scheme, the owner/developer is duty bound to make adequate arrangements for theirrehabilitation under the scheme and they can join the scheme,and can take benefit of the scheme even at any later stage.

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ATherefore, 70% consent of the occupiers is mandatory. [Paras61-62][46-D-F]

6.2 The circulars issued by the SRA, specially Circulardated 21.08.1997, 19.09.1998 and Circular No. 27 permitconversion of old approved SRD Scheme to new SRA SchemeBunder the provisions of Clause No.10.1 of Appendix IV of DCR.In the instant case, the scheme was initiated under the old DCRof 1991. There is no manner of doubt that the Society was formedby more than 90% of the occupiers. The migration was done tothe Scheme of 1997. Since there is no clear cut provision in the1997 DCR as to how this migration has to be done, it is presumedCthat while migrating, it was not necessary for the appellant tohave individual agreements with 70% of the slum dwellers.However, it was the appellant who applied for migration to thenew Scheme, obviously because the new Scheme gave greaterbenefits to the developer. When migration was done, it was onDthe clear cut understanding that after the migration, the provisionsof amended DCR would be applicable. When this application ofthe Society and the appellant for conversion was taken up, it wasnoticed that one of the main objections was that there were noindividual agreements with the slum dwellers. Later, the appellantsubmitted agreements of 450 of the eligible slum dwellers andEstated in writing that the remaining to make up 70% would besubmitted before start of Phase II of the construction. Fresh letterof intent dated 27.01.1998, in terms of the new DCR, was issuedin favour of the appellant and approved in accordance with ClauseNo.33(10) and Appendix IV of amended DCR subject to certainFconditions. [Paras 63-65][46-G-H; 47-A-E]

6.3 In a migration from 1991 Scheme to 1997 Scheme,obviously 70% individual agreements cannot be obtained priorto submission of the Scheme. However, while granting migration,the SRA can lay down conditions and such conditions can also beGlaid down during the course of the Scheme. From the factsnarrated, it is more than amply clear that the SRA envisaged, andappellant clearly understood, that it had to obtain consent of 70%of the slum dwellers. Even in the resolutions of the Societyauthorizing the appellant to take up the development workentered after DCRs were amended it was clearly mentioned that H

amended Regulation 33(10) would govern the agreements. Theappellant cannot now say that it is not governed by the amendedregulations. Even the letters issued by the architects of theappellant clearly indicate that they would make up the balance toachieve 70% agreements. The main dispute is by when this shouldhave been done. Initially, time was given till commencementcertificate of the sale building was issued. This was a meaninglesscondition because if this condition was to be applied after therehabilitation buildings had been built, then having the consentof the slum dwellers would be an exercise in futility because bythen they would have been thrown out of their dwellings. At best,it can be understood to mean commencement of the rehabilitationbuildings. The slum dwellers are interested with the rehabilitationbuildings and not with the free sale buildings. Later on, whenapplying for permission to trade their development rights, theappellant clearly understood and undertook that it would furnishthe consent forms of 70% of the slum dwellers. The architects ofthe appellant, in fact, deposited 580 individual agreements butout of these, only 372 were found to be correct. Thereafter, theappellant took a U-turn and, relying upon the judgment of theHigh Court took a stand that it was not required to submitagreements with 70% slum dwellers, which was not legallytenable. The appellant cannot be permitted to back out of itscommitments. The agreements with 70% slum dwellers shouldhave been provided within a reasonable time and, though almost20 years have elapsed since the second letter of intent was grantedin favour of the appellants, it has till date failed to submit theagreements. This only dealt with for showing that the appellantdelayed the project because it failed to get consent from 70% ofthe occupiers.[Para 70][49-G-H; 50-A-E]

Whether the appellant delayed the construction of the scheme,and is, therefore, not entitled to any relief:

7.1 Both SRA and the High Court came to the concurrentfinding of fact that the appellant was responsible for the delay inimplementation of the Scheme. It is more than obvious from thefacts narrated that the appellant never earnestly pursued theauthorities for approval of the plans and the reason is not far toseek-the reason being the appellant did not have consent/

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Aagreements of 70% slum dwellers. It is more than obvious thatthe appellant was buying time on one excuse or the other. On18.01.2000, the SRA called upon the appellant to submit revisedplans in respect of rehabilitation buildings within 10 days of thereceipt of the letter. In reply thereto, the architects of theappellant sent a letter on 27.01.2000 expressing their intentionBto start Phase II of the project but, at the same time, soughtwaiver of the requirement of obtaining 70% consent from theslum dwellers. This clearly shows that the appellant was usingthis excuse to delay the construction. On 05.01.2001, the appellantaddressed a letter to the SRA praying that the plan submitted inC1997 be approved. Thereafter, the SRA did not considerappellant’s proposal since, the proposal was affected by theCoastal Regulations Zone (CRZ) Notification. [Para 71][50-G;51-G-H; 52-A-B]

7.2 On 07.07.2001, the appellant and the Society filed WritDPetition in the High Court seeking removal of the remarks whichindicated that part of the property of the Society was being affectedby the CRZ Notification. A perusal of the writ petition and theother documents clearly shows that the entire property was notaffected by the CRZ Notification, but only a part thereof. On07.08.2002, in the petition filed by the appellant and the Society,Ethe High Court passed an order. It is apparent from the said orderthat stay was granted not to raise construction in the area whichis covered by the CRZ Notification. No material has been broughton record to show that the entire plot was covered by the CRZNotification and it is amply clear that only a portion of the plotFwas covered by the CRZ Notification and nothing prevented theappellant from raising construction on that portion of the landwhich was not affected by the CRZ Notification. However, forreasons known only to the appellant, it withdrew the Writ Petitiononly on 07.04.2008. It was only thereafter that respondent no. 3-Society passed a resolution on 29.03.2009, terminating theGdevelopment agreement with the appellant. Even after that, theSRA on 15.06.2009 issued a letter that the Society’s request forchange of developer need not be considered. On 14.09.2009,the Society entered into agreement with respondent no. 4.Thereafter, civil litigation started. It has also been urged on behalfof the appellant that, in the meantime, a one man CommissionH

was constituted and due to the constitution of this Commission,work was affected. [Paras 72-73][52-B-C, F, G; 53-C-D]

7.3 The finding given by the SRA that the appellant wasresponsible for the delay, is a finding based on appreciation ofmaterial on record. It cannot be said to be a perverse finding. Itis a finding of fact and, therefore, the High Court was justified incoming to the conclusion that it could not set aside this finding offact in writ jurisdiction. Though there may have been a few stoporders and a few occasions when the appellant may not have beenable to raise the construction but, by and large, the appellant wasitself guilty of delaying the construction for no reason at all.Therefore, the appellant was rightly held responsible for the delayin implementation of the rehabilitation scheme and, as such, thereis no error in the impugned order. [Para 74][53-E-G]

Whether the appellant is entitled to continue with the scheme:

8.1 The appellant is not entitled to continue with therehabilitation Scheme on account of the fact that it has beenresponsible for the delay in completion of the project for aninordinately long time. The appellant has not been able to explainthe delay. The slum dwellers are dealt with and the appellantcannot take the benefit of technical points to defeat the rights ofthe slum dwellers. The claim of the appellant that it had the supportof 70% slum dwellers, was contested before Justice B.N.Srikrishna and his findings clearly reveal that the appellant doesnot have the support of 70% of the slum dwellers. Since the noticeby the SRA to the appellant did not make any specific allegationwith regard to the appellant not having 70% consent, that portionof the order of the SRA, setting aside the right to develop theland on the ground of lack of 70% consent, may have been beyondthe scope of the notice. However, this issue was argued beforethe HPC and the High Court and on rival claims being made, thisCourt vide order dated 27.03.2015, referred this dispute toJustice B.N. Srikrishna who submitted his report. [Para 75][54-A-C]

8.2 In writ proceedings, the petitioner must show that bothin law and in equity it is entitled to relief. In this case, both equityand law are against the appellant. It has dealt with slum dwellersin a highly inequitable manner. The law and the conditions of the A

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Aletter of intent as well as the conditions imposed in the variousletters issued by the SRA clearly required the appellant toproduce agreements with at least 70% of the slum dwellers. This,the appellant has miserably failed to do. Though the appellantmay have remained the same entity in name, there have been, atleast, three changes in the promoters of the appellant and theseBtransfers of shareholdings obviously must have been done forconsideration. It is more than obvious that the appellant as alegal entity, was treating the slum dwellers only as a means ofmaking money and, therefore, the appellant is not entitled to anyrelief. [Para 76][54-D-F]

CIn case the appellant is not entitled to continue with the schemewhether respondent no. 4 is entitled to continue with therehabilitation scheme:

9.1 Under the terms of the agreement, respondent No. 4agreed to provide permanent alternative accommodation of 344

Dsq. ft./419 sq. ft. carpet area to the slum dwellers. Obviously, theslum dwellers, who had been waiting for 23 long years for a flatadmeasuring 269 sq. ft. would happily accept the offer of a flat of344/419 sq. ft. From the communications addressed by the SRA,it is obvious that the respondent was legally not entitled to make this offer. It is submitted that respondent no. 4 was willing toEsacrifice its free sale area to give a larger flat. However, he failedto submit even one document to show that the SRA had agreedto this proposal of the respondent no. 4. In fact, the communicationsent by SRA clearly shows that the proposal was not accepted. It is, therefore, obvious that respondent no. 4 had hoodwinked theFmembers of the Society in entering into an agreement with it byholding out a false promise that they would be given much largerflats. As such, the request of respondent no. 4 to be permitted tocontinue with the project cannot accepted. The Society hasterminated its agreement with the respondent no. 4. In the votingconducted by Justice B.N. Srikrishna, the respondent no. 4 failedGto get the consent of 70% slum dwellers and, in fact, it has gotless than 1/2 of the votes, as compared to the appellant, and itssupport is even less than 30%. [Paras 78-79][55-B-F]9.3 It is accepted that agreements once entered into andthe consent once given, cannot be withdrawn. However, if the H

consent is obtained by misrepresentation of facts, then that is noconsent. The position stands clarified that the slum dwellers wouldget flats of 269 sq. ft. area only, respondent no. 4 has failed to getsupport of even 30% of the slum dwellers. In view thereof,respondent no 4 is not entitled to continue with the project andis not entitled to any relief. [Paras 80-81][55-G-H; 56-A]

Law laid down by the High Court:

10.1 The views of the High Court that consent once givenby the slum dwellers should not be permitted to be withdrawn;that voting inter se developers should not be done; that in casevoting is done, then this will lead to developers trying to buy outthe slum dwellers and then no rehabilitation scheme would attainfruition, is accepted. Slum dwellers normally belong to thepoorest section of the society. They can be tempted to changetheir mind. In the instant case itself, the slum dwellers shiftedfrom the appellant to respondent no. 4. for two reasons-(i)appellant had delayed the project and (ii) respondent no. 4 madea promise that it would give a flat of 344 sq. ft./419 sq. ft. area,which promise was obviously a false promise. The view of theHigh Court that consent once given should not be permitted tobe withdrawn, is absolutely the right view. Otherwise, a personmay give consent one day, withdraw it the second day and reviewthe consent the third day, leaving the Scheme in a perpetual stateof flux. For the said reasons, the view of the High Court thatthere should be no inter se bidding between the builders isaccepted. The proper course is that the scheme of the developerwho is the first choice, should be placed before the slum dwellersand if it gets 70% votes, then the Scheme can be considered, butif it does not get 70% consent, then obviously, the seconddeveloper can be considered. However, competitive biddingshould not be done because that can lead to a very unholy practiceof developers trying to buy out the slum dwellers, which is alsonot in the interest of the rehabilitation scheme.[Para 82][56-B-F]

10.2 As far as the instant case is concerned, this Court whilepassing the order dated 27.03.2015, made a departure becauseof the peculiar facts of this case. The instant case because of itsown unique facts cannot be treated as a precedent in other cases A

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Awith regard to action taken in this case. [Para 83][56-G]CIVIL APPELLATE JURISDICTION: Civil Appeal No. 18121of 2017.

From the Judgment and Order dated 11.06.2014 of the High Courtof Judicature at Bombay in Writ Petition No. 5 of 2013.B

F. S. Nariman, Mukul Rohatgi, Darius Khambatta, Sr. Advs.,Subhash Sharma, Kunal Vajani, Nikhil Rohatgi, Shashank Khurana, AnkurChawla, Sunil Mittal, Ms. Anu Tiwari, Suneet Tyagi, Ms. Hillaur Vaswani,Ms. Dorcas Jones, R.K. Mohit Gupta, Aman Gandhi, Ms. Pallavi Langar,Manu Sahni, Advs. for the Appellant.

CAtmaram N.S. Nadkarni, Tushar Mehta, ASGs, GopalSubramanium, Neeraj Kishan Kaul, Raju Ramchandran, Kapil Sibal, Sr.Advs., Tapesh Kumar Singh, Aditya Pratap Singh, Mohd. Waquas, KunalVerma, Ms. Yugandhara Pawar Jha, Prateek Chaddha, Pawan Bhushan,Satya Mitra, Aman Varma, Ms. Smriti Churiwal, Kush Chaturvedi, UdayB. Dube, Santosh Rebello, Ms. Nivedita Nair, Ms. Sneha PrabhuDTendulkar, Abhishek Bharadwaj, Gautam Sharma, Sanjay Kharde,Samrat Shinde, Prashant Chaudhari, Sunil Kumar Verma, Amit Sharma,Advs. for the Respondents.

The Judgment of the Court was delivered by

The Judgment of the Court was delivered by DEEPAK GUPTA, J. 1.A dream turned into a nightmare. TheEdream of over 800 slum dwellers who also happen to be owners of theland of having a permanent roof over their head has not turned intoreality for more than three decades. The slum dwellers are embroiled invarious litigations. There are many powerful persons involved, be theybuilders, promoters and even those slum dwellers who have managed toFbecome office bearers of the society of slum dwellers. Learned seniorcounsel appearing for the parties produced before us graphic photographsshowing the sordid conditions in which these slum dwellers continue toreside despite having entered into an agreement with the appellant morethan 30 years back to develop the slums and rehabilitate the slum dwellersin proper accommodation.G

THE FACTUALBACKGROUND:

2. This case has a long and chequered history and has somefeatures which are unique to it. The land in question measuring 23018.50square meters is situated in the heart of Mumbai i.e. Santacruz (East),Mumbai. This land earlier belonged to the Ardeshir Cursetji PestonjiH

Wadia Trust, hereinafter referred to as ‘the Trust’. A slum had developedover the said land. The slum dwellers formed an Association known as‘the Shivaji Nagar Residents’ Association. It appears that the Trust hadinitiated some litigation for eviction of the slum dwellers. On 19.03.1980a consent decree appears to have been passed in this litigation wherebythe Trust agreed to transfer the entire land to the slum dwellers in casethe slum dwellers formed a society. The slum dwellers thereafterconstituted a society in the name and style of Om Namo Sujlam SuflamCo-operative Housing Society, Respondent No. 3 herein (hereinafterreferred to as ‘the Society’). About 800 slum dwellers formed the Society,which was registered under the Maharashtra Co-operative SocietiesAct, 1960. In furtherance to the decree, the Trust executed a deed oftransfer in favour of the Society (Respondent No. 3 herein), transferringthe entire land to the Society on 20.02.1985. Thus, this is a unique casewhere the slum is owned by the Society of which the slum dwellersthemselves are the members. The slum dwellers are, therefore, also theowners of the land in question.

3. It would be pertinent to mention that the land in question wasdeclared to be a slum under Section 4 of the Maharashtra Slum Areas(Improvement, Clearance and Redevelopment) Act, 1971 (hereinafterreferred to as ‘the Slum Act’) firstly on 16.08.1977 and again on07.12.1983.

4. On 15.09.1985, a General Body Meeting of the Society washeld and in this meeting it was decided to appoint M/s. Susme BuildersPrivate Limited, hereinafter referred to as ‘Susme’ (the appellant herein),to develop the property. Thereafter, a development agreement wasentered into between the Society and Susme on 27.02.1986. It wasagreed that there were about 800 occupants on the land in question andeach one of the slum dwellers would be provided accommodationmeasuring 240 sq. ft. built up area with carpet area of 190 sq. ft. Theagreement also contained a condition that the slum dwellers couldpurchase additional area of 60 or 110 sq. ft. by paying for the extra areaat the rate of Rs. 350 per sq. ft.. The project was to be completed withina period of 5 years. Consequent to the agreement, the Society executeda power of attorney in favour of the nominee of Susme on 07.04.1986virtually empowering it to act on behalf of the Society.

5. Admittedly, no work was done as per the terms of the agreementand nothing was constructed during this period. The stand of Susme isthat during the period some public interest litigations were filed, hence AB

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6. Thereafter, the Development Control Regulations for GreaterBombay, 1991 under the Maharashtra Regional & Town Planning Act,1966 (for short ‘DCR’) were enforced. As per these DCRs, each oneof the slum dwellers was entitled to a tenement of 180 sq. ft. free ofBcost. Therefore, the general body of the Society met on 30.10.1994 andpassed a resolution that the earlier agreement be modified and a tenementof 225 sq. ft. carpet area be given to each slum dweller. Thereafter,letter of intent in terms of the DCR was issued in favour of the Societyand Susme on 05.04.1995. As per this letter of intent, each slum dwellerwas to be alloted 225 sq. ft. area. Susme was also to comply with theCguidelines laid down for redevelopment of notified slums. It was madeclear that first the existing slum dwellers were to be rehabilitated andonly thereafter, free sale could be done in the open market. Susme wasspecifically directed to carry out the activities as per the activity chartand in terms of Regulation No. 33(10) of the DCR within five yearsDfrom the date of issue of the commencement certificate. Thereafter,another agreement was entered between the Society and Susme on10.07.1995 and in terms of this agreement each slum dweller was entitledfor a tenement of 225 sq. ft.; 180 sq. ft. free of cost and 45 sq. ft. at thecost of Rs. 14,350/-.

7. In terms of the letter of intent dated 05.04.1995 and theEagreement, Susme was to construct 12 buildings of ground plus sevenfloors for re-housing the slum dwellers and project affected persons onabout 11,000 sq. mtrs. of land and remaining 12,497 sq. mtrs. was to bedeveloped for the purpose of free sale. During the pendency of thisagreement, Susme constructed two buildings in which 128 slum dwellersFwere rehabilitated. This was the only progress which took place.

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8. The DCR was amended in 1997. Under the new DCR, eachslum dweller was entitled to a flat having carpet area of 225 sq. ft..Naturally, the slum dwellers wanted, that as per the amended DCR,which was more beneficial to them, they should be granted a larger flatGhaving carpet area of 225 sq. ft.. Therefore, another meeting of generalbody was held on 10.08.1997. In this meeting it was resolved that freshnegotiations be held with Susme and that Susme should carry out furtherdevelopment under the amended Regulation 33(10) and that 70%residents should consent for the redevelopment. Thereafter, anothersupplementary agreement was entered into between the Society andH

Susme on 07.01.1998. In this agreement, it was stated that there are867 occupants, out of which 825 are occupying residential premises, 27are occupying shops and 15 are occupying industrial units. This agreementalso provided that tenements to be provided to each of the residentialoccupants would have a carpet area of 225 sq. ft.. Relevant portion ofthe agreement reads as follows:

“The parties are aware that under the Slum RedevelopmentScheme and the Development Control Regulations each slumdweller is entitled to, a tenement admeasuring 225 sq. ft. carpetarea. As regards 27 shops, the shops members shall be entitled toget such area as they are entitled under Sec. 23(10) of D.C.Regulations 1991 amended from time to time. As regards 15Industrial Units it is agreed that the Developer shall negotiatewith them directly for developing the area occupied by them andthe society agrees to sign and execute such papers and writingsrequired by the Developer for that purpose.”

Clause 26 of this agreement provided that the plans shall besubmitted by the developer to the Slum Redevelopment Authority (forshort ‘the SRA’) according to Regulation 33(10) of DCR, 1991 asamended from time to time. This agreement was treated to be asupplementary agreement to the earlier agreement.

9. Susme, on behalf of the Society, also moved the SRA forpermission to convert the old SRD Scheme into a new slum rehabilitationscheme. The SRA granted letter of intent on 27.01.1998 and approvalwas granted for conversion of the scheme. Clause 19 of the letter ofintent provided that Susme would submit the agreements with photographsof wife and husband in respect of all the eligible slum dwellers beforeissue of commencement certificate for sale building, or three months asagreed by the developer, whichever is earlier.

10. One writ petition was filed by the Shivaji Nagar Residents’Association being Writ Petition No. 1301 of 1999 challenging the sanctionby the SRA in favour of Susme on the ground that Susme had not obtainedconsent of 70% of the slum dwellers. The said writ petition was dismissedon 13.12.1999. The relevant portion of the Judgment reads as follows:- “We have heard learned counsel appearing for the parties. We donot find any substance in the contentions raised by the petitioners.

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It is required to be noted that some 109 slum dwellers filed WritPetition No. 497 of 1997 raising identical challenge to the schemeand the said petition came to be withdrawn unconditionally on10th July, 1997. Thereafter, as indicated earlier, two new buildingswere constructed and the eligible slum dwellers were put inpossession of their respective tenements. Under the 1997 schemethe builder is required to enter into agreement with individualmembers and accordingly 582 agreements have already beensigned between the parties. There is also no merit in the contentionof the petitioners that consent of 70% of the Slum dwellers wasrequired under the 1991 scheme. On perusal of the said schemeit is clearly seen that consent of 70% of the slum dwellers wasnot required and what was contemplated was that if 70% of theSlum dwellers join the society, which is interested in therehabilitation of the slum dwellers, then such society would beeligible to apply for sanction of the same under DCR 33(10). It isnot disputed before us that practically all the slum dwellers havebeen enrolled as members of the society and, therefore, it is notpossible to hold that the requirement of 1991 scheme was notcomplied with. It is also pertinent to note that the proceedings ofthe general body meeting dated 13th October, 1994 were notchallenged by the petitioners or any other slum dwellers byadopting appropriate remedy. Indeed, the general body meetinghad unanimously, resolved to modify the agreement in terms ofthe 1991 scheme and it is too late to challenge the resolution forthe first time by way of the present petition which was filed in1999. As regards the, 1997 scheme there is a Specific provisionfor conversion, of the old scheme into a new scheme andaccordingly the proposal for conversion was accepted by theauthorities and in pursuance of the acceptance, two new buildingshave been constructed at an estimated cost of Rs. 5 crores. Inour opinion, this petition suffers from gross delay and laches. It isclearly seen that the petitioners were aware of the sanction grantedto the society under the 1991 scheme as well as the 1997 scheme.The construction on the property began in 1996 and two buildingshave already been constructed. Under the circumstances, we donot find any reason to interfere in writ jurisdiction under Article226 of the Constitution.”

11. After Susme had completed 80% construction of the tworehabilitation buildings, it applied for grant of Transfer of DevelopmentRights (for short ‘TDR’) in terms of the amended DCR and sold thesame. Occupation certificate in respect of these two buildings wasissued on 03.11.1998. While granting permission it was observed on thefile as follows:-

“Further, as per policy & DCR 33(10) it is necessary thatagreements with more than 70% slum dwellers as per new schemeis required. This was pointed out to CEO (SRA) during discussion,when CEO (SRA) instructed to submit agreements with 70% slumdwellers before second phase of T.D.R. Developers have informedthat out of 869 slum dwellers, they have submitted 450 agreementsto the office of S.R.A. (52%).”

12. On 07.07.1999, the architects of Susme, on instructions ofSusme, submitted 12 files containing 580 numbers of individual agreementswith members of the Society and undertook to file the remaining individualagreements to make up 70% in due course of time. On 18.01.2000,Susme was again asked to furnish 70% individual agreements of eligibleslum dwellers. Susme replied that in terms of judgment of the BombayHigh Court dated 13.12.1999, it was not required to file 70% individualagreements. Under the 1997 amended DCR, the developer was entitledto a higher Floor Space Index (for short ‘the FSI’). Therefore, Susmesubmitted fresh plans for construction of 14 storey buildings plus groundfloor as against the earlier plan submitted for seven storey buildings plusground floor buildings. These plans were submitted sometime in theyear 1998. However, it appears that the plans were not sanctioned andSusme also did not pursue the matter earnestly with the authorities.

13. Thereafter, on 13.02.2001, SRA informed Susme that therequest of Susme for approving amended plans for slum rehabilitationscheme was not considered since the plot under reference was affectedby the Coastal Regulation Zone Notification (for short ‘the CRZNotification’). Then Susme along with the Society filed Writ PetitionNo. 2269 of 2001 in which the main prayer was for setting aside theCRZ objection and it was also prayed that the petitioner be permitted tocomplete the rehabilitation scheme. In this petition, an interim orderwas passed on 07.08.2002.

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A14. The Government of Maharashtra during this period alsoappointed a one man Commission headed by Shri Chandrashekhar Prabhuto enquire into the complaints made with regard to the Society and themanner in which the rehabilitation scheme was implemented. Susmeand the Society jointly filed Writ Petition No. 1854 of 2004 against thisCommission. It was alleged that the SRA had handed over all the filesBto Shri Chandrashekhar Prabhu. However, an order was passed on01.03.2005 in the aforesaid writ petition in which a statement was madeon behalf of the SRA that all the concerned files had been retrievedfrom Shri Prabhu and, therefore, the decision on the plans would betaken within four weeks. The Petition was accordingly disposed of.C

15. In 2005 itself it was clarified by the authorities that the propertyin question does not fall in CRZ, Part I and only a portion of the propertyfalls in the CRZ, Part II. The architects of Susme applied for approvalof construction of transit accommodation and this approval was grantedby the SRA on 18.08.2005. This was, however, subject to the conditionDthat agreements with individual slum dwellers would be executed beforedemolition of existing structure on the site. Again complaints were madeby some people that transit camps were not constructed as per theapproved plans and the SRA issued stop work notice on 14.03.2006.

16. Another supplementary agreement was entered into betweenESusme and the Society on 05.09.2006. This agreement had a clausethat the developer i.e. Susme was to deal only with the ManagingCommittee of the Society. This agreement also provided that any of theDirectors of Susme would be treated to be the attorneys of the Society.This agreement also provided that Susme had offered to pay a sum ofRs.75,000/- to each member of the Society having a structure notFexceeding 17.00 sq. mtrs. and Rs.1,00,000/- to each of those memberswhose structure is of more than 17.00 sq. mtrs.. It is, however, not clearwhether this amount was actually paid or not. An extraordinary generalbody meeting of the Society was held on 22.02.2009. In this meeting itwas pointed out that the members of the Society were not taken intoGconfidence by the Managing Committee while issuing power of attorneyin favour of the developer and changes to the detriment of the membershave been made by the Managing Committee in collusion with Susme.It was also pointed out that agreements were entered into by theManaging Committee with Susme behind the back of the members ofthe Society. The majority of the members demanded for cancellation ofH

the agreement made with Susme. It would not be out of place to mentionthat the old Managing Committee had been voted out and a new ManagingCommittee had taken over during this period. Thereafter, another generalbody meeting was held on 29.03.2009 and the minutes of the meetingdated 22.02.2009 were approved. In this meeting it was also pointed outthat now Susme had offered to make new plans giving each slum dwellera tenement of 269 sq. ft. carpet in terms of the new circular. But, thebenefit of such bigger tenements was not made available to those whowere already housed in the rehabilitation buildings. In effect, in thismeeting it was decided to terminate the agreement with Susme.

17. Susme, thereafter, invoked the arbitration clause in theagreement and filed a petition for grant of interim relief under Section 9of the Arbitration and Conciliation Act, 1996 on 29.10.2009. The saidarbitration petition was withdrawn on 26.06.2012 with liberty to Susmeto file a suit. However, the Society was restrained from implementingthe Resolution terminating the agreement till 13.07.2012. Civil suit No.1588 of 2012 was filed by Susme on 10.07.2012 in the High Court ofBombay against the Society and M/s. J.G. Developers Private Limited.

18. The Society made a complaint to the SRA on 05.04.2009 thatSusme was not developing the project as per the agreement and necessaryaction be taken by the SRA against Susme. On 15.06.2009, acommunication was sent to the Society on behalf of SRA that sinceSusme had constructed two buildings and is in the process of constructionof transit camp, the developer Susme should be allowed to continue andthe request for change of developer was virtually rejected. There issome dispute as to whether this letter was signed by the Chief ExecutiveOfficer or the Executive Engineer but that is not very material for thedecision of the case. On 24.07.2009, the Society terminated theagreement with Susme by a written notice. The Society made anothercomplaint to the SRA and on 08.09.2009, the SRA issued notice to Susmein terms of Section 13(2) of the Slum Act, but it appears, that no actionwas taken pursuant to this notice.

19. Thereafter, on 14.09.2009, the Society entered into anagreement with M/s J.G. Developers Private Limited, respondent no.4(hereinafter referred to as ‘J.G. Developers’). In this agreement J.G.Developers agreed to provide permanent alternative accommodationmeasuring 269 sq. ft. carpet area to each of the eligible members havingresidential premises. Sufficient alternative accommodation was also to A

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Abe provided to those occupying commercial/industrial premises. In Clause(4) of the agreement, it was mentioned that since the Society was theowner of the plot, the developer would also grant it 72,000/- sq. ft. carpetarea free of cost for use by the members of the Society. This wascrystallized in the supplementary agreement entered on 22.09.2009between the Society and J.G. Developers. In terms of this supplementaryBagreement, 155 members occupying double residential premises wouldbe entitled to additional area of 150 sq. ft. and 614 members havingsingle residential premises would be entitled to 75 sq. ft. additional area.This effectively meant that those having single residential area wouldget a tenement of 344 sq. ft. and those having double residential areaCwould get a tenement of 419 sq. ft.. J.G. Developers took the responsibilityof getting permission for giving this extra area. Thereafter, J.G.Developers entered into individual agreements with some of the membersof the Society in terms of the agreement and supplementary agreementas referred to above.

D20. Complaint No. 30 was filed on 21.09.2006 before the Anti-Corruption Bureau, which was referred to the High Power Committee(for short ‘the HPC’), in which it was complained that the names of theoccupants at Serial No. 774 to Serial No. 852 of the list of occupantsissued on 21.06.1993 by the Additional Collector, Encroachment, arebogus and are based on fabricated documents. Notice was issued onEthis complaint. On 04.06.2011, Susme again wrote to the SRA to processthe proposal submitted to SRA on 01.10.2008. Similar request was madeon 16.07.2011 also.

21. Thereafter, on 11.08.2011, show cause notice under Section13(2) of the Slum Act was issued by the SRA to Susme as to why theFSRA should not determine the right granted to Susme to develop theland and entrust the work of rehabilitation of the slum of the Society tosome other agency. The reasons for issuing the notice are contained inAnnexure-A, which reads as follows:

“1) The LOI for conversion of SRA scheme was issued u/No.SRA/GChE/110/HE/PL/LOI dt. 27/01/1998. It is reported by theSecretary that the developer has failed and neglected to completethe work of Rehab building within the stipulated period as perLOI condition and committed the breach of the terms andconditions of the sanctioned S.R. Scheme.

2) As per complaint of Society, the Developer have not takenH

effective steps for speedy implementation of Scheme and shownwilful negligence.”

Susme replied to the notice. Even the Society submitted its replyto the notice and stated that there was inordinate delay in completing thescheme. Written submissions were filed by all sides. Finally, by orderdated 24.02.2012, the SRA set aside the appointment of Susme asdeveloper mainly on two grounds:-

(i) that there was unexplained delay in carrying out the work underthe rehabilitation scheme and,

(ii) Susme had failed to show that it had filed individual agreementswith 70% slum dwellers.

The SRA, instead of handing over the work to another agency,held that since the Society had already entered into an agreement withJ.G. Developers, it may get the scheme implemented through it. Susmefiled an appeal being No. 39 of 2012 before the HPC. This appeal wasdismissed on 18.06.2012. This order of the HPC was challenged byfiling Writ Petition No. 1718 of 2012, on the ground that one of theMembers of the HPC was not entitled to hear the appeal. This writpetition was allowed on 14.08.2012 and the matter was remanded backto the HPC. Thereafter, the HPC again heard the appeal and dismissedthe same on 10.10.2012. Against this order of the HPC, the appellantfiled Writ Petition No. 5 of 2013, which was rejected by the BombayHigh Court by the impugned order dated 11.06.2014 and it is this orderof the High Court which is under challenge in this appeal. In themeantime, on 03.08.2012 the Bombay High Court in the suit filed bySusme, refused to grant any interim relief.

22. Letter of intent dated 29.10.2012 was issued by the SRA infavour of the Society, J.G. Developers and also its architects. In thisletter of intent approval was given for FSI of 3.78 for slum portion, 3.18for slum portion in lieu of 128 tenements with carpet area of 20.90 sq.mtrs., already constructed and 2.58 for slum portion in CRZ-II.Effectively, the FSI for the developer had increased substantially. Inthis letter of intent it was mentioned that the eligible slum dwellers wouldbe re-housed in residential tenements of carpet area of 25 sq. mtrs. (269sq.ft.) or 20.90 sq. mtrs. (225 sq.ft.). It is thus apparent that no permissionwas granted for giving larger tenements to the eligible slum dwellers.

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A23. In another Special General Meeting of the Society held on13.07.2014, it was decided by majority vote to cancel the agreementwith J.G. Developers. It was also decided that in view of the cancellationof appointment of J.G. Developers, the Managing Committee shouldselect a new and capable developer and the offer made by such developershould be put up before the next general body meeting. The SocietyBterminated the appointment of J.G. Developers on 25.08.2014. J.G.Developers challenged the termination of their agreement by filing CivilSuit No. 756 of 2014 on 19.09.2014 and in this civil suit an interim orderwas passed on 24.09.2014.

24. After the termination of the agreement with J.G. DevelopersCon 25.08.2014, on 26.08.2014 the Managing Committee of the RespondentNo. 3, the Society, entered into consent terms with Susme again appointingSusme as the developer.

25. Susme filed the present petition for special leave to appealchallenging the decision of the High Court of Bombay in Writ PetitionDNo. 5 of 2013, before this Court. The respondents put in appearanceeven before the notice was issued and on 27.03.2015 this Court haspassed the following order:

“Heard Mr. Fali S. Nariman, learned senior counsel for theEpetitioner, Mr. P.C. Chidambaram, learned senior counsel and Mr.Mihir Joshi, learned counsel for respondent no.4, Mr. Kapil Sibal,learned senior counsel for respondent no.3, Mr. C.U. Singh,learned senior counsel for respondent no.1 and Mr. Raval, learnedsenior counsel for the applicant in IA No.5/14 along with theirassisting counsel.

F

2. The present case frescoes a labyrinthine chequered historythat can flummox the prudence of the wise, for the procrastinationin putting an end to a litigation. But, a pregnant one, it is a problemcreated by human beings by use of adroit proclivity at their bestand, therefore, as advised at present, this Court is obliged to takeGrecourse to an innovative method, at least to attempt at a solution.

3. We need not reflect the nature of orders passed in variouscases fought between the parties. Suffice it to mention that theyhave invoked the power of the authorities under the Maharashtra Slum Areas (Development, Clearance and Redevelopment) Act,1971, instituted civil suits on the original side of the Bombay HighCourt and sometimes the society, namely, Om Namo Sujlam SujlamCo-operative Housing Society, respondent no.3 herein, haschanged its colour as chameleon with afflux of time may be yieldingto the “hydraulic pressures of time” and thereby eventually, in allpossibilities, making the slum dwellers of the area, i.e., C.T.S.No.7627, 7627/1 to 852 admeasuring 23018.50 sq. mtrs. situatedat village Kolekalyan at Santacruz (East), Mumbai remain in thatpathetic condition as they were since 1986, as if the parties havenurtured the notion that they can arrest time. Be that as it may, asolution has to be thought of.

4. In course of hearing Mr. Chidambaram, appearing forrespondent no.4, assiduously asserted that he has got the consentfrom 70% of the eligible slum dwellers and, therefore, the societyis absolutely justified in entering into an agreement which is calleda “development agreement”. Mr. F.S. Nariman, learned seniorcounsel, determined not to lag behind, would astutely asseveratedthat he has the consentum of 70% of eligible slum dwellers andhence, his case cannot be brushed aside. We have been apprisedby Mr. Kapil Sibal, learned senior counsel appearing forrespondent no.3, that at present there are slightly more than 800eligible slum dwellers. Mr. Raval, learned senior counsel appearingfor the assumed authorised authority of the society, would presentthat it is the respondent no.3 who has been correctly granted theprivilege of development agreement inasmuch as there was averification with regard to the consent earlier.

5. In our considered opinion, regard being had to the specialfeatures of the case which includes the longevity of the case andindefatigable spirit in which the parties are determined to fight,we think there should be appropriate verification of the consentof the eligible slum dwellers in praesenti. Regard being had to thesame, we request Mr. Justice B.N. Srikrishna, formerly a Judgeof this Court, to verify the factum of consentum of the eligibleslum dwellers. The Slum Rehabilitation Authority represented bythe Chief Executive Officer either by himself or by any responsiblehigh level officer nominated by him shall assist Mr. Justice B.N.Srikrishna in this regard.

ABC

D

E

F

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A

6. As secretarial staff would be required for this purpose, thepetitioner and the respondent no.4 shall deposit a sum ofRs.5,00,000/- (Rupees five lacs only) each so that the verificationcan be expedited. In addition, learned Judge may fix his honorariumwhich shall be paid proportionately, as agreed to by the petitionerand the respondent no.4.

B

7. The parties are at liberty to file documents to facilitate theprocess of verification with regard to consentum in praesentibefore the learned Judge. We repeat at the cost of repetition thatsuch a mode has been adopted, regard being had to the specialphenomena of the case. As we have taken recourse to such aCmethod any other the litigation pending in any forum in this regardshall remain stayed.

8. Needless to say, the interim order of status quo passed in thisspecial leave petition, except the directions which have been issuedhereinabove, shall remain in force.

D

9. Let this matter be listed on 09.07.2015 awaiting the report fromMr. Justice B.N. Srikrishna.”

26. Thereafter, Justice B.N. Srikrishna, former Judge of this Courtcarried out the mandate, which he was required to do in terms of theEaforesaid order. He decided that voting should be held by secret ballot.He categorized the voters in four categories.

of the

ore the High

He found that there were 867 slum dwellers in the four categories:

A

Four separate ballot boxes were kept i.e. one for each categoryand the result of the voting is tabulated as follows:

D

E

F

Thereafter, Justice Srikrishna submitted his report setting out thevoting pattern but did not make any recommendation.

CONTENTIONS:

G

27. The main contention raised on behalf of the appellant-Susmeby Shri F.S. Nariman, learned senior counsel is that the order dated27.03.2015 is an order passed by this Court in exercise of its extraordinaryjurisdiction either under Article 136 or under Article 142 of the Constitution H

Aof India. It is submitted that this order was passed with a view to settleall disputes between the parties. It is urged that this Court cannot gobehind this order especially when there is no application filed for recallof the said order. It is also urged that I.A.No. 10 of 2015 filedby J.G.Developers for modification of the order, was rejected. It is contendedthat since Justice B.N. Srikrishna has found that the majority supportsBSusme, the appeal should be allowed and Susme be permitted to carryon with the project.

28. The other contentions raised on behalf of the appellant-Susmeby Shri Darius Khambata, learned senior counsel are:

C(a) that Section 13(2) of the Slum Act is wholly inapplicable; (b) that the notice under Section 13(2) was given only in respectof delay and not in respect of 70% consent and hence theSRA, the HPC and the High Court fell in error in insisting on70% consent; D(c) that when migration of the scheme took place fromredevelopment scheme to slum rehabilitation scheme, 70%consent was not necessary.

29. On behalf of J.G. Developers it is contended by Shri GopalSubramanium, learned senior counsel that the intention of this CourtEwas to find out whether any party had support of 70% of the slum dwellersor not. It is also contended that it was not the intention of this Court tobypass the legal provisions and this Court is not bound by the aforesaidorder. In the alternative, it is submitted that the exercise carried out byJustice B.N. Srikrishna only shows that as on date there are more peopleFwith Susme. It is contended that the Bombay High Court has consistentlyheld that there should be no competitive voting inter se developersbecause that gives rise to many malpractices with the developers tryingto outbid each other by giving sops to the voters. It is contended that theconsistent view till now has been that once the slum dwellers have givenconsent for one developer or have entered into an agreement with aGdeveloper then they cannot be permitted to withdraw the consent,otherwise, it will lead to chaos and no slum rehabilitation scheme wouldbe implemented. It is also contended that the matter should be decidedon merits and not on the basis of this order. It is also contended thatSusme does not have the support of 70% of the slum dwellers.

H

30. It is also contended on behalf of J.G. Developers that Susmeis guilty of unexplained delay and the slum dwellers are suffering and,therefore, the Society had rightly decided to enter into a fresh agreementwith J.G. Developers. It is also urged that Susme had never obtainedthe consent of 70% of the slum dwellers, which was mandatory. It isalso contended that Susme had taken advantage of trading of thedevelopment rights by assuring the SRA that it would get 70% consent.It is further urged that Susme never contested the issue of 70% consentearlier.

31. Here, it would be pertinent to mention that the Society hastwo factions. One faction supports Susme and the other faction supportsJ.G. Developers. The faction supporting Susme states that it hasterminated the agreement with J.G. Developers and cannot be forced toget the development work done through J.G. Developers. The otherfaction alleges that there is no valid existing agreement with Susme.

32. The following issues arise for decision in this case:

(i) What is the scope, ambit and effect of the order of this Courtdated 27.03.2015;

(ii) What is the scope of powers under Section 13(2) of the Slum Act;

(iii) Whether the SRA has any power to remove the developer;

(iv) Whether in the notice issued under Section 13(2) of the Slum Act the issue of 70% consent was raised;

(v) Whether support of 70% of the slum dwellers is mandatory and whether slum dwellers are entitled to withdraw their consent;

(vi) Whether Susme delayed the construction of the Scheme, and is, therefore, not entitled to any relief;

(vii) Whether Susme is entitled to continue with the Scheme;

(viii) In case Susme is not entitled to continue with the scheme whether respondent no. 4 J.G. Developers is entitled to continue with the rehabilitation scheme.

THE SCOPE,AMBITAND EFFECT OFTHE ORDER OFTHISCOURT DATED 27.03.2015:

A

B

C

D

E

F

G

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A

A33. Relevant portion of order dated 27.03.2015 has been quotedhereinabove. The main contention of Mr. Nariman, learned seniorcounsel appearing for the appellant is that this order is an order passedunder Article 142 or Article 136 of the Constitution and is binding uponthe parties. On the other hand, it was urged by M/s Gopal Subramaniumand Neeraj Kishan Kaul, learned senior counsel appearing for theBrespondents that the order in question is not a binding order. In thealternative, it was submitted that even if the order is binding, this Courtcan interpret the order and even as per the said order, the appellant isnot entitled to continue with the Scheme.

34. At the outset, we may note that judicial propriety and disciplineCrequires that a Coordinate Bench must respect the order of an earlierBench. In fact, even a larger Bench should not brush aside the orderpassed by an earlier Bench even if it be a smaller Bench unless theorder is in issue before the larger Bench. Suffice to say that the order inquestion holds the field. It has not been recalled and prayer for modificationDin I.A. No. 10 was rejected on 13.05.2015. Therefore, the order of thisCourt dated 27.03.2015 holds the field and we are bound by the same.At the same time, it is our duty to decipher what was the intention of theBench while passing the order and to find out what the Court intended todo by the said order.

E35. In Para 2 of the order, the Division Bench has noted the longand chequered history of the case and has noted that the Court had totake recourse to an innovative method to try and find a solution. It isthus apparent that this is an order falling within the ambit of Article 142to do complete justice between the parties. The Court was aware thatthe slum dwellers were suffering due to the long protracted litigation.FTherefore, the Court felt the need to find an innovative solution. In Para3 of the order, the Court has noted the factual aspects and againemphasized the need to find a solution to resolve the various issues. TheCourt was obviously moved by the pathetic condition in which most ofthe slum dwellers continued to reside.G

36. Para 4 of the order is very important because it notes thecontention of learned counsel appearing for J.G. Developers, who hademphatically stated that his client had the consent of 70% of the eligibleslum dwellers and, as such, the Society was justified in entering into adevelopment agreement with his client. On the other hand, learned seniorHcounsel appearing for the appellantequally strongly refuted this claim and claimed that his client had the consent of 70% eligible slum dwellers.It is in this context that the directions contained in Para 5 of the orderdated 27.03.2015 were passed wherein this Court directed “…….thereshould be appropriate verification of the consent of the eligibleslum dwellers in praesenti.” Justice B.N. Srikrishna was requested toverify the factum of the consent of the eligible slum dwellers.

37. The contention raised on behalf of Susme is that there is nomention of “70%” in the direction given in Para 5 of the order and,therefore, all that Justice B.N. Srikrishna was required to do was toascertain consent of the slum dwellers in praesenti. It is contendedthat almost 70%, and at least much more than the majority, have exercisedtheir choice in favour of Susme and, thus, there is no reason why theappealshould not be allowed. Susme should be permitted to carry on thedevelopment work in terms of the agreement entered into with therespondent no. 3-Society. It is also urged that as far as respondent no.4 is concerned, it has got hardly 30% of the votes and, therefore, there isno question of awarding the contract to respondent no. 4.

38. We are not in agreement with this submission. It is settledlaw that a judicial order or judgment has to be read as a whole and asingle line or phrase cannot be read out of context. A judgment is not tobe interpreted like a statute. As far as the order dated 27.03.2015 isconcerned, the intention of the Court, will have to be deduced from theentire order. We cannot read the phrase “…….there should beappropriate verification of the consent of the eligible slum dwellersin praesenti.” in isolation. This has to be read in the context of the rivalcontention of the contesting parties that each one of them had the consentof more than 70% of the slum dwellers. According to us, this Court wasnot oblivious of the requirements of the Slum Act though it may not haveexplicitly referred to them. It is obvious from Para 4 of the order dated27.03.2015 that learned counsel for both the parties claimed that theirrespective clients had the support of 70% of the slum dwellers. Obviously,both of them could not be correct. This factual dispute could not bedecided in these proceedings. This was the dispute which was referredfor resolution to Justice B.N. Srikrishna. We may observe that JusticeB.N. Srikrishna in the first effective procedural order dated 27.04.2015,rightly understood the order to mean as follows:

“After carefully perusing the Order dated 27[th] March, 2015 madeby the Hon’ble Supreme Court and the submissions made in writing A

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Aand through Counsel and representatives on behalf of thePetitioners as well as the Respondents, I am of the view that thebest way of verifying the factum of consentum of the eligibleslum dwellers in praesenti would be to hold a secret ballot undermy aegis and after counting the votes, make a report to the Courtas to whether more than 70% of the eligible slum dwellers are inBfavour of the redevelopment agreement being signed with thePetitioner or Respondent No.4.”

39. It is, thus, clear that Justice B.N. Srikrishna had understoodthat he was to ascertain whether 70% of the eligible slum dwellers arein favour of the redevelopment scheme signed with the appellant-SusmeCor with respondent no. 4. We are clearly of the view that a holisticreading of the order admits of no other meaning. The only dispute raisedbefore this Court on 27.03.2015 was which of the builders had the supportof the 70% of the slum dwellers. Since this factual dispute could not bedecided in Court, Justice B.N. Srikrishna was requested to do this job.DIt is not necessary for us to go into the other arguments raised withregard to the effect of the order because, according to us, this orderadmits of no other interpretation. Admittedly, neither the appellant norrespondent no. 4 has received 70% support.

40. Further, the words ‘in praesenti’ only mean that the Courtwanted the verification of the consent of the eligible slum dwellers as onEdate of passing of the order. ‘In praesenti’ cannot be read to mean‘present and voting’. It only means eligible slum dwellers as on27.03.2015. Justice B.N. Srikrishna has divided the slum dwellers intofour categories; 263 were the original slum dwellers, 318 were the legalheirs, 207 were those who had become members by means of sale andFtransfer of shares and 79 voters were disputed. We may note thatduring these entire proceedings not a single complaint has been filed thatan ineligible slum dweller was permitted to vote or that an eligible slumdweller was not permitted to vote. The procedure followed by JusticeB.N. Srikrishna is absolutely correct and no error can be found in thisregard. Therefore, we have no hesitation in accepting the reportGsubmitted by Justice B.N. Srikrishna.

41. Out of 867 total eligible voters only 651 voted and the appellantsecured 423 votes, which would mean 64.98% or roughly 65% of thevotes polled. But, if we were to calculate this percentage from the totalnumber of slum dwellers i.e. 867 then the percentage is 48.78%, whichH

is less than 50%. In case we exclude 79 votes which are doubtful, thenthe total eligible voters would be 788 and the appellant secured 413 i.e.52.41% of the total eligible slum dwellers, well below the magic figureof 70%. We are unable to accept the contention of Mr. Nariman that toput an end to all litigation, the Court only wanted to find out who had themajority. That, according to us, is not the essence of the order dated27.03.2015. It is true that 70% is not reflected in the direction given inPara 5 of the order but as earlier noted by us, the directions have to beunderstood in view of the intention of the Court, which was to find outthat which of the builders had the support of 70% of the slum dwellers.Unfortunately, both the developers do not enjoy 70% support, though itis true that the appellant has the support of more than twice the numberof slum dwellers as compared to respondent no. 4. Since neither Susmenor J.G. Developers has the support of 70% slum dwellers, the orderdated 27.03.2015 cannot be taken to its logical conclusion and we haveto decide the appeal on merits.

THE SCOPE OF POWERS UNDER SECTION 13(2) OF THESLUM ACT:

42. Relevant portion of Section 13 of the Slum Act which is thebone of contention between the parties reads as follows; “13. (1) Notwithstanding anything contained in sub-section (10)of section 12, the Slum Rehabilitation Authority may, after anyarea is declared as the Slum Rehabilitation Area, if the landholdersor occupants of such area do not come forward within areasonable time, with a scheme for re-development of such land,by order, determine to redevelop such land by entrusting it to anyagency for the purpose.

(2) Where on declaration of any area as a Slum RehabilitationArea the Slum Rehabilitation Authority, is satisfied that the land inthe Slum Rehabilitation Area has been or is being developed bythe owner in contravention of the plans duly approved, or anyrestrictions or conditions imposed under sub-section (10) of section12, or has not been developed within the time, if any, specifiedunder such conditions, it may, by order, determine to develop theland by entrusting it to any agency recognised by it for the purpose:Provided that, before passing such order, the owner shall be givena reasonable opportunity of showing cause why such order shouldnot be passed.”

AB

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AB

C

D

E

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A43. Shri Darius Khambata, learned senior counsel appearing forSusme urged that under Section 13(2) of the Slum Act, the SRA is entitledto take action only against the owner. He also submits that Section13(2) will apply only when there is violation of the conditions imposedunder sub-section 10 of Section 12 of the Slum Act and the conditionwith regard to the time should also be a condition contained in sub-Bsection 10 of Section 12. He submits that there is no power to takeaction under this section against the developer. According to him, actioncould have been taken by the SRA against the Society but not againstSusme.

44. We cannot accept such a wide submission. According to us,Cunder Section 13(2) of the Slum Act, the SRA has the authority to takeaction and hand over the development of land to some other recognizedagency under three circumstances:

i. When there is contravention of the plans duly approved; Dii.When there is contravention of any restriction or conditionimposed under sub-section 10 of Section 12 of the Slum Act;and iii. When the development has not taken place within time, if any,specified.E

45. The requirement to complete the development within timemay be there in the letter of intent issued by the SRA or may be in theagreement entered into between the owner/developer with the slumdwellers. Such condition, if violated, would attract the provisions of Section13(2) of the Slum Act. Over and above that, when a clearance order isFpassed, then in terms of sub-section 10 of Section 12, the competentauthority can include a condition with regard to the time within whichthe development should be completed and in that case also Section 13(2)would be attracted. We are not, however, able to accept the very wideargument that in case of delay, the condition that is violated must be laidGdown under Section 12(10) of the Slum Act.

46. There may be cases where the slum dwellers do not offer anyresistance and willingly consent to move into transit accommodationprovided by the owner/developer. Therefore, the conditions laid downunder Section 12(10) will come into play only when there is a clearance H

order, but in case there is no clearance order, then under Section 13(2),the SRA would be empowered to take action when there is violation ofany plan or when there is violation of any condition relating to developingthe project within time. The time limit can, some time, be provided in theletter of intent, in the agreement or even in the regulations.

47. Having held so, we are of the view that Shri Darius Khambata,learned senior counsel, is right in his submission that normally underSection 13(2) of the Slum Act, action by the SRA has to be taken againstthe owner. Here, we may repeat that this is a unique case where theslum dwellers are the members of the owner-Society. The Society, inturn, has given power of attorney to the builder. The builder virtually hastwo roles – one as developer and the other as power of attorney holderof the owner. Both are closely interlinked and inextricably mixed witheach other. Therefore, though normally we would have accepted thecontention that under Section 13(2) action can only be taken against theowner, in the present case, we are unable to accept this contention in itstotality. We may point out that even the SRA, in its order, has itselfnoted that since the Society is the owner of the plot of land, it is empoweredand within its right to terminate the agreement executed with the saiddeveloper for breaches committed by the developer. It has, however,held that a private dispute between the Society and the developer cannotprevent the SRA from discharging its obligations. The SRA agreed withthe submission made by the Society that Susme had not completed theproject within time. It has taken action under Section 13(2) of the SlumAct. The action taken by the SRA is to remove Susme as developerwhich amounts to cancelling the letter of intent issued in favour of Susme.

48. Otherwise, there would be an anomalous situation where theSociety would have terminated its contract with Susme but the letter ofintent issued by the SRA would continue to hold the field and it would beentitled to develop the land. The Society approached the SRA, in fact,asking it to take action against Susme. Since the SRA is the authoritywhich issued the letter of intent, it will definitely have the power to cancelthe letter of intent.

49. We are of the considered view that in the peculiar facts andcircumstances of the case where the slum dwellers are virtually theowners of the land as members of the owner Society, the SRA had thepower under Section 13(2) of the Slum Act to issue the order dated24.02.2012.

A

BCDE

F

G

H

AWHETHER THE SRAHAS ANY OTHER POWER TOREMOVE THE DEVELOPER:

50. Even if we were to assume that the SRA did not enjoy thispower under Section 13(2) of the Slum Act, we are of the consideredview that since it was the SRA which issued this letter of intent, itnecessarily must have the power to cancel the same. The SRA can alsoderive this power under clauses (c) and (d) of sub-section (3) of Section3A of the Slum Act, which read as under:

B

“3A. (1) Notwithstanding anything contained in the foregoingprovision, the State Government may, by notification in the OfficialGazette, appoint an authority to be called the Slum RehabilitationAuthority for such area or areas as may be specified in thenotification; and different authorities may be appointed for differentareas.

C

xxx xxx xxx

D(3) The powers, duties and functions of the Slum RehabilitationAuthority shall be,- xxx xxx xxx

(c) to get the Slum Rehabilitation Scheme implemented; (d) to do all such other acts and things as may be necessary E

for achieving the objects of rehabilitation of slums.”

51. A bare reading of these provisions shows that in terms ofclause (c) and (d) of sub-section (3) of Section 3A of the Slum Act, theSRA not only has the power, but it is duty bound to get the slumrehabilitation scheme implemented and to do all such other acts andthings as will be necessary for achieving the object of rehabilitation ofslums. In this case, the SRA was faced with a situation where the slumdwellers were suffering for more than 25 years and, therefore the actiontaken by SRA to remove Susme for the unjustified delay was totallyjustified.

F

G

52. A perusal of the various provisions of the Slum Act wouldshow that normally in a case falling under the Slum Act, it is the ownerof the land, whether it be the Government, a statutory authority or aprivate person, who will be interested in the development work. Normally,the occupiers will be encroachers of slum land. Therefore, there will be H

a conflict of interest between the occupiers and the owner. The owner,in turn, will always engage a developer/builder to carry out thedevelopment work. In case the owner gives a power of attorney to thedeveloper, as in the present case, the developer now has two identities –(i) the power of attorney holder of the owner and (ii) the developer. Asfar as the present case is concerned, the Society is made up of themembers who are occupiers and this Society has given power of attorneyto the developer-Susme. Therefore, the developer Susme is actuallyhaving a dual role of owner and developer. Both the letters of intenthave been issued in favour of the Society, Susme and the architects ofSusme. Susme could not have carried out the development work on thebasis of its agreement with the Society. It needed the permission of theSRA. Therefore, SRA can obviously revoke such permission.

WHETHER IN THE NOTICE ISSUED UNDER SECTION 13(2)THE ISSUE OF 70% CONSENTWAS RAISED:

53. Shri Darius Khambata, learned senior counsel, has raisedanother contention that there is no allegation in the notice under Section13(2) of the Slum Act that Susme has violated any provisions of the Act,Regulations or Scheme in not getting consent of 70% of the slum dwellers.We have gone through all the three notices and find that, in fact, in thenotices there is no specific allegation in this behalf. On the other hand,Shri Gopal Subramanium, learned senior counsel appearing for J.G.Developers, urges that in the last notice reference has been made toviolation of DCR and this will obviously include violation of requirementof consent of 70% slum dwellers.

54. We are unable to accept the contention of Shri GopalSubramanium, learned senior counsel. When a notice is issued to aparty it must be clearly told what are the allegations which it must meet.The notice should be clear and unambiguous.

55. There was no allegation in the notice(s) that the right to developgranted in favour of Susme was liable to be revoked because it had notobtained consent of 70% of the slum dwellers. The reference toRegulation 33(10) also did not specifically raise the issue of 70% consent.Susme was never put to notice by the SRA that its right to develop theland may be cancelled because of not having consent of 70% slumdwellers. It was confined to the issue of delay. We answer this issueaccordingly.

A

BC

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E

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A56. However, we are of the view that while considering the issueof delay, the SRA was justified in making reference to the variouscommunications made by Susme and its architects seeking time to obtainconsent of 70% slum dwellers and, therefore, while dealing with theissue of delay, we shall take into consideration all these matters.

BWHETHER SUPPORT OF70% OFTHE SLUM DWELLERSIS MANDATORYAND WHETHER SLUM DWELLERS AREENTITLED TO WITHDRAWTHEIR CONSENT:

57. It would be important to note that under DCR of 1991, whichwere initially applicable to this project, a Scheme for rehabilitation couldCbe initiated where more than 70% of the eligible hutment dwellers on theland agreed to the redevelopment scheme by becoming members of acooperative society. Thereafter, the Scheme was to be considered bythe authorities for implementation. Relevant portion of the DCR readsas follows:

D

“INITIATION OF THE SCHEME:- Where more than 70% ofthe eligible hutment dwellers on the land agree to join theredevelopment scheme and become members of the co-operativesociety, the scheme should be considered for implementation.”

58. Under Development Control Regulations 33(10) of 1991, theEessential requirement was that at least 70% of the slum dwellers had toform a society with a view to redevelop the slum area. In case 70%slum dwellers did not join, there could be no rehabilitation scheme. Asfar as the present case is concerned, it is not disputed that more than70% slum dwellers had formed the respondent no. 3-Society. It is theFadmitted case of the parties that 800 out of 867 slum dwellers formedrespondent no. 3-Society, which is 92.27%.

59. DCRs of 1991 were amended in 1997. Clause 1.15 of Appendix(IV) of the amended DCR provided that 70% or more of eligible hutmentdwellers in a slum must agree to join a rehabilitation scheme before itGcan be considered for approval. This clause reads as follows:

“Where 70 per cent of more of the eligible hutment-dwellers in aslum or pavement in a viable stretch at one place agree to join arehabilitation scheme, it may be considered for approval:

Provided that nothing contained herein shall apply to SlumRehabilitation Projects undertaken by the State Government orPublic authority or as the case may be a Government Companyas defined in section 617 of the Companies Act, 1956 and beingowned and controlled by the State Government.”

Clause 1.16 of Appendix (IV) of this DCR reads as follows:

“In respect of those [eligible] hutment-dwellers on site who donot join the Project willingly the following steps shall be taken:-

(i) Provisions for all of them shall be made in the rehabilitationcomponent of the scheme.

(ii) The details of the actual tenement that would be given to themby way of allotment by drawing lots for them on the same basisas for those who have joined the Project will be communicated tothem in writing by the Managing Committee of the Co-operativeHousing Society. [If it is registered or the developer and in caseof dispute decision of the CEO/SRA shall be final and binding onall the parties concerned.

(iii) The transit tenement that would be allotted to them wouldalso be indicated alongwith those who have joined the Project.

(iv) If they do not join the scheme within 15 days after the approvalhas been given to the Slum Rehabilitation Project on that site,then action under the relevant provisions including sections 33and 38 of the Maharashtra Slum Areas (Improvement, Clearanceand Redevelopment) Act, 1971 as amended from time to time,shall be taken and their hutments will be removed, and it shall beensured that no obstruction is caused to the scheme of the majorityof persons who have joined the scheme willingly.”

60. It is thus obvious that under the amended DCR, not only 70%or more of the eligible hutment dwellers must first agree to join arehabilitation scheme before it is taken up for consideration, but the owner/developer or cooperative society must also enter into individualagreements with each of these eligible hutment dwellers. We may alsopoint out that the amended DCR in clause 1.16 of Appendix IV providesthat even in respect of those eligible hutment dwellers who do not jointhe project willingly, the developer/builder has to make provision for A

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Aaccommodation of these hutment dwellers in the scheme. They areentitled to the same benefits as the hutment dwellers who actually jointhe scheme. They are also entitled to similar transit accommodation asis allotted to those who willingly join the scheme. Further, the regulationsalso provided that if such hutment dwellers do not join the scheme anddo not accept the transit accommodation or the completed premises,Bthen they can be removed from their hutments and it will be ensured thatthese hutment dwellers do not cause any hindrance to the project.

61. Very lengthy arguments were addressed by learned counselon the issue whether 70% support of the slum dwellers is mandatory. Alarge number of authorities have also been cited but, in our view, it is notCnecessary to refer to the various authorities because the bare provisionsof law are sufficient to decide this issue. A bare reading of DCR of1991 makes it absolutely clear that under the said DCR at least 70% ofthe slum dwellers/occupiers have to get together and form a Society forthe purpose of slum re-development scheme. Therefore, unless 70%Dslum dwellers agree to form a Society, the provisions of the Slum Actcould not be invoked to frame an SRD scheme. Under the amendedDCR of 1997, there is a change and the change is that now the developer/owner was required to enter into agreements with 70% of the slumdwellers and unless 70% of the slum dwellers agree, the slum rehabilitationscheme cannot be entertained. The magic figure remains at 70%. TheEidea behind it is that more than 2/3 of the occupiers must agree for therehabilitation scheme.

62. As pointed out above, even if the remaining minority slumdwellers do not agree to be part of the scheme, the owner/developer isduty bound to make adequate arrangements for their rehabilitation underFthe scheme and they can join the scheme, and can take benefit of thescheme even at any later stage. We are, therefore, of the consideredview that 70% consent of the occupiers is mandatory. As clarified above,we are not dealing with this aspect in relation to the order of the SRAbecause the notice under Section 13(2) did not raise this issue. However,Gwe are clearly of the view that under the 1997 DCR the owner is requiredto produce individual agreements with 70% slum dwellers before thescheme can be taken up for consideration.

63. The circulars issued by the SRA, specially Circular dated21.08.1997, 19.09.1998 and Circular No. 27 permit conversion of old H

approved SRD Scheme to new SRA Scheme under the provisions ofClause No.10.1 of Appendix IV of DCR. In the present case, the schemewas initiated under the old DCR of 1991. There is no manner of doubtthat the Society was formed by more than 90% of the occupiers.

64. The migration was done to the Scheme of 1997. There is noclear cut provision in the 1997 DCR as to how this migration has to bedone. Since there is no clear cut provision, we may presume that whilemigrating, it was not necessary for Susme to have individual agreementswith 70% of the slum dwellers. We may, however, point out that it wasSusme who applied for migration to the new Scheme, obviously becausethe new Scheme gave greater benefits to the developer. When migrationwas done, it was on the clear cut understanding that after the migration,the provisions of amended DCR would be applicable. When thisapplication of the Society and Susme for conversion was taken up, itwas noticed that one of the main objections was that there were noindividual agreements with the slum dwellers.

65. Later, Susme submitted agreements of 450 of the eligible slumdwellers and stated in writing that the remaining to make up 70% wouldbe submitted before start of Phase II of the construction. Fresh letter ofintent dated 27.01.1998, in terms of the new DCR, was issued in favourof Susme and approved in accordance with Clause No.33(10) andAppendix IV of amended DCR subject to certain conditions.

Clause 19 of the letter reads as follows:

“That you shall submit the Agreements with the photographs ofwife and husband on the agreements with all the eligible slumdwellers before issue of CC for sale bldg., or 3 months as agreedby developer whichever is earlier. And the name of the wife ofthe eligible occupier of hut shall be incorporated with joint holderof the tenements to be allotted in rehabilitation building.”

66. A bare perusal of this condition makes it clear that Susme wasdirected to submit agreements with all the eligible slum dwellers beforecommencement certificate for sale building was issued or within threemonths, as agreed by it. It has been urged by Shri Darius Khambata,learned senior counsel that, as per this condition, the agreements have tobe submitted only at the stage when the commencement certificate is tobe issued. It would also be important to note that even before the A

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Arehabilitation building numbers 5 and 6 were completed, Susme wasgranted TDR to the extent of 40% of the construction of building nos. 5and 6, which they sold in the open market. The relevant portion of thenote dated 16.02.1998 is extracted hereinbelow:

“Further as per policy & DCR 33(10) it is necessary thatBagreements with more than 70% slum dwellers as per new schemeis required. This was pointed out to CEO (SRA) during discussion,when CEO (SRA) instructed to submit agreements with 70% slumdwellers before second phase of T.D.R. Developers have informedthat out of 869 slum dwellers, they have submitted 450 agreementsto the office of S.R.A. (52%).”

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When Susme applied for permission to sell the TDR, the SRAordered that 70% agreements should be submitted before Phase II TDRand, further, Susme was informed by the SRA that it has only submittedthe agreements with 450 slum dwellers which comes to barely 52%.The Bombay High Court, therefore, rightly recorded that Susme acceptedDthe condition of 70% consent requirement when it accepted theseconditions and sold the TDR. Thereafter, on 03.11.1998, occupationcertificate was issued in favour of Susme with regard to two rehabilitationbuildings. Relevant portion of communication dated 03.11.1998 readsas under:

E“That the 70 percentage individual agreements with slum dwellersshall be submitted before further approval/CC.”

67. On 24.12.1998, the SRA permitted Susme to take 90% benefitof the TDR equivalent. Relevant portion of this note reads as follows:

F “As per policy it is necessary that agreements with minimum70% slum dwellers for new scheme is required. It is alsomentioned in the previous report sidelined ‘x’ at page 35. Architecthas to submit 70% agreements before granting Phase-II TDR.At present 52 (sic520) agreements (60%) out of 869 are submittedin this office as mentioned in the letter of Architect as atGpage…….However, these two Rehab Bldgs are physicallyoccupied and list of documents rehoused is submitted at P-164 to171 Phase II T.D.R. can be recommended if agreed.

In view of above pending requirement if CEO (SRA) agreed TDRequivalent to 0.90 x 3720.90 = 3348.81 (1295 SQ.MT. released in H

Phase I + 2051.81 sq.mt. to be released & Phase II) sq. mt.Phase II TDR will be recommended to M.C.G.M. “

68. It was noted that Susme was required to submit agreementswith 70% of the slum dwellers. On 07.07.1999 Susme, through itsarchitects, sent a letter to respondent no. 1 forwarding 580 individualagreements of the members of the Society and also undertook to submitthe remaining, to make 70% in due course. SRA pointed out in its letterdated 25.07.2001 addressed to Susme that out of the agreementssubmitted, only 372 were correct.

69. Here, it will be pertinent to note some other relevant facts.On 11.05.1999, some slum dwellers filed Writ Petition No. 1301 of 1999,challenging the letter of intent dated 27.01.1998 in favour of Susme onvarious counts including the ground that Susme had failed to obtainconsent of 70% or more of the eligible slum dwellers. This petition wasdismissed on 13.12.1999 and we have quoted the relevant portion of theBombay High Court in the earlier part of the judgment. According toSusme, in view of this judgment, it was not required to obtain 70% consentof the slum dwellers. We do not think this is what was said by the HighCourt. We may note that the main contention by the appellant beforethe High Court was that the consent of 70% of the slum dwellers wasnot required under the 1991 Scheme. The High Court held, and rightlyso, that under the 1991 DCR what was required was that 70% of theslum dwellers joined the Society, which was interested in the rehabilitationof slum dwellers and there was no requirement that there should beconsent from 70% slum dwellers. The High Court did not discuss at all,the issue whether 70% consent was required under the 1997 Scheme.This judgment will have no bearing on the present case.

70. As we have already indicated above, in a migration from 1991Scheme to 1997 Scheme, obviously 70% individual agreements cannotbe obtained prior to submission of the Scheme. However, while grantingmigration, the SRA can lay down conditions and such conditions canalso be laid down during the course of the Scheme. From the factsnarrated above it is more than amply clear that the SRA envisaged, andSusme clearly understood, that it had to obtain consent of 70% of theslum dwellers. Even in the resolutions of the Society authorizing Susmeto take up the development work entered after DCRs were amended itwas clearly mentioned that amended Regulation 33(10) would govern AB

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Athe agreements. Susme cannot now say that it is not governed by theamended regulations. Even the letters issued by the architects of Susmeclearly indicate that they would make up the balance to achieve 70%agreements. The main dispute is by when this should have been done.Initially, time was given till commencement certificate of the sale buildingwas issued. This was a meaningless condition because if this conditionBwas to be applied after the rehabilitation buildings had been built, thenhaving the consent of the slum dwellers would be an exercise in futilitybecause by then they would have been thrown out of their dwellings.We can, at best, understand this to mean commencement of therehabilitation buildings. The slum dwellers are interested with theCrehabilitation buildings and not with the free sale buildings. Later on,when applying for permission to trade their development rights, Susmeclearly understood and undertook that it would furnish the consent formsof 70% of the slum dwellers. The architects of Susme, in fact, deposited580 individual agreements but out of these, only 372 were found to becorrect. Thereafter, Susme took a U-turn and, relying upon the judgmentDof the Bombay High Court in CWP No.1301 of 1999, took a stand that itwas not required to submit agreements with 70% slum dwellers. Thisstand was not legally tenable. Susme cannot be permitted to back out ofits commitments. The agreements with 70% slum dwellers should havebeen provided within a reasonable time and, though almost 20 yearsEhave elapsed since the second letter of intent was granted in favour ofSusme, it has till date failed to submit such agreements. We may againreiterate that we are not dealing with this issue for the purpose of removingSusme but only for the purpose of showing that Susme delayed the projectbecause it failed to get consent from 70% of the occupiers.

FWHETHER SUSME DELAYED THE CONSTRUCTION OFTHE SCHEME, AND IS, THEREFORE, NOT ENTITLED TOANY RELIEF:

71. With regard to the issue whether the appellant is responsiblefor the delay in implementation of the Scheme, at the outset, we mayGnote, that both the SRA and the High Court have dealt with this issue indetail and come to a concurrent finding of fact that Susme was responsiblefor the delay in implementation of the Scheme. Since this is a finding offact and dealt with in detail by the High Court, we are not required toexamine this contention in detail. However, at the insistence of thelearned senior counsel for Susme we have gone through the voluminousH

record. From the facts which are set out in this regard it is apparent thatSusme first entered into an agreement with the Society on 27.02.1986committing to complete the project in 5 years. Unfortunately, from 1986to 1991, nothing was done and the only excuse is that some public interestlitigation was pending. On 25.03.1991, the DCRs were brought intoforce. On 09.10.1992, the appellant obtained permission for developmentof the property on certain conditions. It would be important to note thatin the letter of 09.10.1992, while granting permission, it was stated thatthe developer should produce agreement of all the existing occupierswithin six months and the development work is to be completed withintwo years, though the time could be extended for genuine reasons.Admittedly, no work was done during this period also. On 05.04.1995,letter of intent was issued in favour of Susme. In this letter also, therewas a stipulation that Susme should produce the agreement with all theslum dwellers. Thereafter, Susme entered into a fresh agreement withthe Society. During this period of 9 long years, not an inch of constructionwas raised nor any portion of the property developed. Thereafter, in ameeting of General Body of the Society held on 12.11.1995, a resolutionwas passed that each slum dweller be provided 225 sq. ft. carpet area.This was accepted by Susme and crystallized in the agreement dated07.01.1998. Between 15.01.1996 to 01.02.1996 Susme obtained‘intimations of disapproval’ which, in fact, are sanctions for constructionfor 15 rehabilitation buildings and started construction of two rehabilitationbuildings nos. 5 and 6. Susme’s proposal for conversion of SRD Schemeto SRA Scheme was approved in January, 1998 and fresh letter of intentwas issued in favour of Susme on 27.01.1998. During this period, tworehabilitation buildings were constructed but nothing further was done.There is virtually no explanation as to why the remaining rehabilitationbuildings were not constructed during this period except to state thatfresh plans were never approved. It is more than obvious from the factsnarrated above that Susme never earnestly pursued the authorities forapproval of the plans and the reason is not far to seek – the reason beingSusme did not have consent/agreements of 70% slum dwellers. It ismore than obvious that Susme was buying time on one excuse or theother. On 18.01.2000, the SRA called upon the appellant to submit revisedplans in respect of rehabilitation buildings within 10 days of the receiptof the letter. In reply thereto, the architects of Susme sent a letter on27.01.2000 expressing their intention to start Phase II of the project but,at the same time, sought waiver of the requirement of obtaining 70%

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Aconsent from the slum dwellers. This clearly shows that Susme wasusing this excuse to delay the construction. On 05.01.2001, Susmeaddressed a letter to the SRA praying that the plan submitted in 1997 beapproved. Thereafter, the SRA did not consider Susme’s proposal since,according to the SRA, the proposal was affected by the CoastalRegulations Zone (CRZ) Notification.B

72. On 07.07.2001, Susme and the Society filed Writ Petition No.2269 of 2001, in the Bombay High Court seeking removal of the remarkswhich indicated that part of the property of the Society was being affectedby the CRZ Notification. A perusal of the writ petition and the otherdocuments clearly shows that the entire property was not affected byCthe CRZ Notification, but only a part thereof. On 07.08.2002, in thepetition filed by Susme and the Society, the Bombay High Court passedan order, relevant portion of which reads as follows:

“Prima facie, having perused the affidavit of Dr. Munshil Gautamfiled before this Court on 24[th] June, 2002 and the documentsDannexed thereto it does appear that the property in question isaffected by CRZ regulations. Respondent No. 2 and 3 havealready placed Coastal Zone remark which is of course impugnedin the present petition but until the petitioners are granted relief asprayed, the petitioners cannot raise any construction in the areaEwhich is covered by CRZ regulation. We accordingly observethat during the pendency of petition the petitioners shall not raiseany construction in the property in question which is affected byCRZ regulation.”

73. It is apparent from the aforesaid order that stay was grantedFnot to raise construction in the area which is covered by the CRZNotification. No material has been brought on record to show that theentire plot was covered by the CRZ Notification and it is amply clearthat only a portion of the plot was covered by the CRZ Notification andnothing prevented Susme from raising construction on that portion of theland which was not affected by the CRZ Notification. On 09.05.2005,GSusme’s architects sought approval of plans for transit accommodation.This permission was granted on 18.08.2005, but a condition was laiddown that 70% agreements must be submitted before the existingstructures are demolished. On 14.03.2006, the SRA issued notice toSusme to stop work on various grounds including non-submission ofHdemarcation from the competent authority permitting the transit camp to be set up. Thereafter, on 05.09.2006, Susme and the Society enteredinto another agreement and on 03.04.2008, respondent no. 1 revokedthe order dated 29.05.2006, after Susme obtained permission from theState Government allowing the transit camps to remain. It is apparentthat sometime in the year 2005, it was clarified by the concerned authoritiesthat Susme’s construction was not affected by the CRZ Notification. Itis obvious that only a portion of the land was affected by the CRZNotification and nothing prevented Susme from constructing the buildingswhich were to be constructed on land not falling within the CRZNotification. However for reasons known only to Susme, it withdrewthe Writ Petition No.2269 of 2001 only on 07.04.2008. It was onlythereafter that respondent no. 3-Society passed a resolution on29.03.2009, terminating the development agreement with Susme. Evenafter that, the SRA on 15.06.2009 issued a letter that the Society’s requestfor change of developer need not be considered. On 14.09.2009, theSociety entered into agreement with respondent no. 4 - J.G. DevelopersPvt. Ltd.. Thereafter, civil litigation started. It has also been urged onbehalf of Susme that, in the meantime, a one man Commission wasconstituted and due to the constitution of this Commission, work wasaffected.

74. After going through all the material placed on record, we areclearly of the view that the finding given by the SRA that the appellantwas responsible for the delay, is a finding based on appreciation of materialon record. It cannot be said to be a perverse finding. It is a finding offact and, therefore, the Bombay High Court was justified in coming tothe conclusion that it could not set aside this finding of fact in writjurisdiction. We may, however, add that since lengthy arguments wereaddressed, we have ourselves gone through the various documents andthough there may have been a few stop orders and a few occasionswhen Susme may not have been able to raise the construction but, byand large, Susme was itself guilty of delaying the construction for noreason at all. We, therefore, hold that Susme was rightly held responsiblefor the delay in implementation of the rehabilitation scheme and, as such,we find no error in the impugned order.

WHETHER SUSME IS ENTITLED TO CONTINUE WITHTHE SCHEME:

WHETHER SUSME IS ENTITLED TO CONTINUE WITHTHE SCHEME:

75. With regard to the issue whether the appellant is entitled tocontinue with the Scheme; in view of the findings given above, we are AB

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Aclearly of the view that Susme is not entitled to continue with therehabilitation Scheme on account of the fact that it has been responsiblefor the delay in completion of the project for an inordinately long time.Susme has not been able to explain the delay. We are dealing with slumdwellers and Susme cannot take the benefit of technical points to defeatthe rights of the slum dwellers. The claim of Susme that it had theBsupport of 70% slum dwellers, was contested before Justice Srikrishnaand his findings clearly reveal that Susme does not have the support of70% of the slum dwellers. We are of the view, that since the notice bythe SRA to Susme did not make any specific allegation with regard toSusme not having 70% consent, that portion of the order of the SRA,Csetting aside the right to develop the land on the ground of lack of 70%consent, may have been beyond the scope of the notice. However, thisissue was argued before the HPC and the High Court and on rival claimsbeing made, this Court vide order dated 27.03.2015, referred this disputeto Justice Srikrishna, who has submitted his report.

D76. In writ proceedings, the petitioner must show that both in lawand in equity it is entitled to relief. In this case, both equity and law areagainst Susme. It has dealt with slum dwellers in a highly inequitablemanner. The law and the conditions of the letter of intent as well as theconditions imposed in the various letters issued by the SRA clearly requiredSusme to produce agreements with at least 70% of the slum dwellers.EThis, Susme has miserably failed to do. We may also add that thoughSusme may have remained the same entity in name, there have been, atleast, three changes in the promoters of Susme and these transfers ofshareholdings obviously must have been done for consideration. It ismore than obvious that Susme, as a legal entity, was treating the slumFdwellers only as a means of making money and, therefore, we are clearlyof the view that Susme is not entitled to any relief.

IN CASE SUSME IS NOT ENTITLED TO CONTINUE WITHTHE SCHEME WHETHER RESPONDENTNO. 4 J.G.DEVELOPERS IS ENTITLED TO CONTINUE WITH THEGREHABILITATION SCHEME:

77. The next issue is whether J.G. Developers is entitled to anyrelief and can be permitted to continue with the rehabilitation scheme.In this behalf, we may note that the conduct of J.G. Developers is notabove board. It is more than obvious that when respondent no. 3-Society H

entered into a development agreement with respondent no. 4, themembers were given a false hope and dream that the size of their flatswould go up.

78. Under the terms of this agreement, J.G. Developers agreed toprovide permanent alternative accommodation of 344 sq. ft./419 sq. ft.carpet area to the slum dwellers. J.G. Developers also entered intoindividual agreements and under these agreements, it agreed to provide344 sq. ft./419 sq. ft. carpet area to some residents. It is obvious that afalse promise was held out by J.G. Developers that the carpet area ofthe flat would be increased from 269 sq. ft. to 344 sq. ft./419 sq. ft..Obviously, the slum dwellers, who had been waiting for 23 long yearsfor a flat admeasuring 269 sq. ft. would happily accept the offer of a flatof 344/419 sq. ft..

79. From the communications addressed by the SRA, it is obviousthat J.G. Developers was legally not entitled to make this offer. It issubmitted by Shri Gopal Subramanium, learned senior counsel that J.G.Developers was willing to sacrifice its free sale area to give a largerflat. However, he has failed to submit even one document to show thatthe SRA had agreed to this proposal of the J.G. Developers. In fact, thecommunication sent by SRA clearly shows that the proposal was notaccepted. It is, therefore, obvious that J.G. Developers had hoodwinkedthe members of the Society in entering into an agreement with it byholding out a false promise that they would be given much larger flats.As such, we are unable to accept the request of respondent no. 4- M/s.J.G. Developers, to be permitted to continue with the project. We mayalso note that the Society has terminated its agreement with the J.G.Developers. We are not going into the question whether this has beendone rightly or wrongly, but the fact is that the agreement standsterminated. We may also note that in the voting conducted by JusticeSrikrishna, J.G. Developers failed to get the consent of 70% slum dwellersand, in fact, it has got less than 1/2 of the votes, as compared to Susme,and its support is even less than 30%.

80. It was urged before us that agreements once entered into andthe consent once given, cannot be withdrawn. We are totally in agreementwith the same. However, if the consent is obtained by misrepresentationof facts, then that is no consent. Now, when the position stands clarifiedthat the slum dwellers would get flats of 269 sq. ft. area only, J.G.Developers has failed to get support of even 30% of the slum dwellers.

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A81. In view of the above discussion, we are clearly of the viewthat J.G. Developers is not entitled to continue with the project and is notentitled to any relief.

LAWLAID DOWN BYTHE BOMBAYHIGH COURT:

82. Our attention was drawn to various judgments of the BombayBHigh Court that consent once given by the slum dwellers should not bepermitted to be withdrawn. It was also brought to our notice that theBombay High Court has consistently held that voting inter se developersshould not be done. It has been the consistent view of the Bombay HighCourt that in case voting is done, then this will lead to developers tryingCto buy out the slum dwellers and then no rehabilitation scheme wouldattain fruition. We totally agree with the aforesaid views of the BombayHigh Court. We must remember that slum dwellers normally belong tothe poorest section of the society. They can be tempted to change theirmind. In the present case itself, the slum dwellers shifted from Susmeto J.G. Developers for two reasons – (i) Susme had delayed the projectDand (ii) J.G. Developers made a promise that it would give a flat of 344sq. ft./419 sq. ft. area, which promise was obviously a false promise.The view of the Bombay High Court that consent once given should notbe permitted to be withdrawn, is absolutely the right view. Otherwise, aperson may give consent one day, withdraw it the second day and reviewEthe consent the third day, leaving the Scheme in a perpetual state of flux.For the aforesaid reasons, we agree with the Bombay High Court thatthere should be no inter se bidding between the builders. The propercourse is that the scheme of the developer who is the first choice, shouldbe placed before the slum dwellers and if it gets 70% votes, then theScheme can be considered, but if it does not get 70% consent, thenFobviously, the second developer can be considered. However, competitivebidding should not be done because that can lead to a very unholy practiceof developers trying to buy out the slum dwellers, which is also not in theinterest of the rehabilitation scheme.

83. As far as the present case is concerned, this Court whileGpassing the order dated 27.03.2015, made a departure because of thepeculiar facts of this case. The present case because of its own uniquefacts cannot be treated as a precedent in other cases with regard toaction taken in this case.

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CONCLUSION:

84. In view of the above discussion, we arrive at the followingconclusions:

1. That the order dated 27.03.2015 was passed in exercise ofjurisdiction vested in this Court under Article 142 of theConstitution of India and is an order binding on the parties;

2. That vide order dated 27.03.2015, this Court wanted JusticeB.N.Srikrishna to find out whether Susme or J.G. Developershad the consent of 70% slum dwellers;

3. That, as a result of the Report submitted by Justice B.N.Srikrishna, both Susme and J.G. Developers have failed to showthat they enjoyed support of the 70% of the slum dwellers;

4. That, in the peculiar facts and circumstances of this case, wherethe owners and occupiers are virtually one, the SRA had thejurisdiction to invoke the provisions of Section 13(2) of theSlum Act to revoke and set aside the right to develop and cancelthe letter of intent granted in favour of Susme. Even if it beassumed that Section 13(2) is not applicable, then the SRAcould have exercised this power under Section 3A (3)(c) and(d) of Slum Act.

5. That the notice issued by the SRA to Susme was only on theground of delay and the issue of obtaining 70% consent wasnot specifically raised in the notice. Consequently, the orderdated 24.02.2012 passed by the SRA in so far as it rejects thecase of Susme for lack of 70% consent is beyond the terms ofthe notice. Therefore, this part of the judgment of the BombayHigh Court, holding that Susme was aware about this allegation,is not accepted and is set aside;

6. That, Susme was responsible for the delay in implementationof the Scheme and construction of the buildings and, therefore,the SRA was justified in setting aside the appointment of Susmeas developer and impliedly cancelling the letter of intent issuedin its favour vide order dated 24.02.2012;

7. That, Susme has failed to show that it has the consent/agreementsof 70% of the slum dwellers even today and, therefore, is notentitled to any relief from this Court; and A

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A8. That J.G. Developers obtained the consent of the members ofthe Society by holding out a false promise of a larger flat and,therefore, the agreements entered into by J.G. Developers withthe slum dwellers are legally unconscionable and notenforceable and, as such, J.G. Developers is also not entitledto continue with the Scheme.

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RELIEF:

85. This, as pointed out earlier, is a very unusual case. We haveheld that both the contesting developers are not entitled to any relief. Itis our duty to ensure that these owners who also happen to be slumCdwellers do not live in sub-human conditions for eternity.

86. We are not only disappointed with the conduct of Susme, butalso with the conduct of those persons who were the office-bearers ofthe Society whichever faction they may belong to. It is more than obviousthat the two rival developers and the office-bearers of the Society wereDplaying with the lives of large number of slum dwellers. We are notgoing into this issue in detail but, if we were to carefully examine thevarious agreements entered into by Susme with the Society, we find thatthough the members may have been entitled to larger flat in eachsubsequent agreement but, in fact, it was the builder, who was the biggestgainer as the advantage of higher FSI was cornered by the builder. OnlyEa small portion of this advantage was being transferred to the slumdwellers and a large portion was being retained by the builder. Anotherimportant aspect is that, in this case, it is the occupiers who, through theSociety, are also the owners of the land. In our view, in addition to theflats which they would be entitled to as slum dwellers or occupiers orFencroachers of land, they should have been given some benefits asowners of the land. When a slum, owned by any authority or person, ishanded over to the developer, in addition to rehabilitating the slum dwellers,the developer also has to compensate the owner. We see no reasonwhy, in the present case, the slum dwellers, who are the owners, shouldalso not be given some adequate compensation for the land which theyGown. It is these 800 plus slum dwellers, who own this 23018.50 sq.mtrs. of land, which would be valuing thousands of crores of rupees and,therefore, we see no reason why the slum dwellers, who also happen tobe the owners of the land, should also not be compensated for the priceof the land.

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87. This is a case where the earlier Bench of this Court had invokedits power under Article 142 of the Constitution of India and we also feelthat it is a fit case for invocation of this Court’s jurisdiction under Article142 of the Constitution of India. Hence, in exercise of this Court’spower under Article 142 of the Constitution of India, we issue the followingdirections/orders for doing complete justice:

1. That the SRA shall within three weeks of the receipt of thisorder, invite letters of interest from renowned builders/developers, who have the capacity and experience to take upsuch a large project by issuing advertisements in not less thanthree newspapers having wide circulation in Mumbai, one eachin English, Hindi and Marathi;

2. The advertisement may be brief but all necessary details mustbe incorporated in the advertisement. The details of the projectincluding a copy of this judgment should be made available onthe website of the SRA;

3. After the letters of interest are submitted, the SRA shall considerwhich is the best offer and while considering the best offer, itshall ensure that the terms offered to the occupiers are in nomanner disadvantageous to them when compared to the lastoffer made by Susme in regard to the area of flat offered, thenature of construction and other facilities available on the site.The SRA must, while evaluating the proposals, take intoconsideration the past record of the party/person expressinginterest: it shall also take into consideration the financial viabilityof such party/person and, therefore, it may ask such party/person to submit all the documents to support their financialviability. In case of any doubt, the SRA can move appropriateapplication before this Court;

4. The persons who express interest must be willing to give anassurance that they will submit plans within one month of theapproval of their proposal and all the concerned authoritiesmust, within 15 days thereafter, raise objections, if any, givingthe successful bidder a chance to remove the objections, ifany, within one month thereafter;

5. Thereafter, the concerned authorities should ensure that theplans are approved and sanctions granted latest within two A

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Amonths of the submission of the original plans. The successfuldeveloper should undertake to complete the rehabilitation ofpart of the project to rehabilitate all eligible occupiers/slumdwellers within a period of two years from the date of sanctionof the plan. The successful bidder must give a bank guaranteeof Rs. 200,00,00,000/- (Rupees Two Hundred crores only) toBensure that it does not violate the terms and conditions of therehabilitation scheme. In case of violation of the terms andconditions of the rehabilitation scheme without reasonablecause, the SRA will be entitled to invoke the bank guarantee,after giving notice to the developer; C

6. Keeping in view the fact that the slum dwellers are also theowners, the developers may also indicate what benefit theywill give to the members of the Society either in cash or in kindby means of giving additional built up area out of their ownfree sale area to such members of the Society; D

7. The SRA shall monitor the progress of the Scheme to ensurethat it is completed within the time granted by this Court;

8. No Court or authority shall pass any order which will in anymanner affect the implementation of the directions/ordersissued by us; E

9. The Society, its members, the SRA and all concerned will rendercomplete assistance to the builder/developer, who is awardedthe project by the SRA; and

10. That all pending litigation shall be disposed of in view of theFaforesaid orders passed by us and shall be disposed of by theCourt(s) accordingly.

88. We may also point out that vide order dated 12.10.2017 thisCourt directed that elections to respondent no. 3-Society be conductedon or before 31.12.2017. These elections were held on 17.12.2017 and anew Managing Committee was constituted. This Managing CommitteeGheld its first meeting on 31.12.2017 and has filed an affidavit on 03.01.2018praying that the mandate recorded in the Report of Justice B.N. Srikrishnabe implemented. It has also referred to the proposed amendment to theDCR whereby the requirement for consent is being reduced from 70%to 50%. We have taken this affidavit on record. It does not in anyHmanner affect the view which we have taken.

89. Pending application(s), if any, stand(s) disposed of.90. The SRA to file status report by 31.03.2018. List on 09.04.2018.

Nidhi Jain Directions issued.

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