Writ Petition No.741 of 2013

12th March, 2015.

Petitioner Counsel: Mr. ARIF BOOKWALA, Sr. Adv. with Mr. S.G. SURANA
Respondent Counsel: Mr. D.J. KHAMBATTA, Adv. General with Mr. MILIND MORE

Cases Cited:
M/s. Sterling Buildcon Pvt. Ltd. & Anr. Vs. State of Maharashtra and Ors., W.P./1165/2012, Dt.24/9/2013 [Para 3,4,5,6,7,8,9,10,11,12]
Awdesh Tiwari Vs. Chief Executive Officer, 2006(4) ALL MR 67=2006 (4) Mah. Law Journal 282 [Para 11]
State of Maharashtra Vs. Prabhu, 1994 (2) SCC 481 [Para 12]

JUDGMENT

JUDGMENT :- This Petition under Article 226 of the Constitution of India challenges the order dated 24 April 2012 of the State Government. The impugned order cancels the Circular dated 12 November 2010 issued by the Slum Rehabilitation Authority (SRA), State Government letter dated 5 October 2010 being a direction under Section 3K(i) of the Maharashtra Slum Areas (Improvement, Clearance and Development) Act, 1971 (the Act) and Letter of Intent (LOI) dated 23 November 2010 issued by the Chief Executive Officer, Slum Rehabilitation Authority (SRA) issued in favour of the Petitioner.

2. Briefly, the facts leading to this Petition are as under:-

(a) On 23rd July, 2007, the State Government adopted a new housing policy for township development within the State Maharashtra. The objective of the housing policy was to ensure re-development of slums by adopting a cluster approach in a time bound manner with a view to improve the health standards and living conditions of the slum dwellers.

(b) In the light of the above policy, on 6th February, 2010, the Petitioner submitted a proposal to the SRA for cluster development/ special township development project under Section 3K of the Slum Act. The SRA in turn, sought necessary directions from the Government of Maharashtra under Section 3K of the Slum Act apropos the proposal submitted by the Petitioner.

(c) On 5 October 2010, the State Government accepted / approved Petitioner's proposal for cluster development and issued directives to the SRA under Section 3K of the Slum Act.

(d) On 16 October 2010, the SRA sought clarification from the State Government whether the consent of the 70% of the slum dwellers should be obtained sector-wise. The Government of Maharashtra by its communication dated 11 November 2010 inter alia directed the SRA to exercise its discretion in deciding whether to obtain consent of 70% slum dwellers either sector-wise or for the land being developed as a whole. On 12 November 2010, the SRA issued circular No.119 inter alia, providing for obtaining consent of the slum dwellers sector-wise.

(e) On 22 November 2010, the SRA informed the Petitioner to pay land premium of Rs.349.44 Crores being 25% of the land cost. Consequent to the above, on 23 November 2010, the Petitioner paid a sum of Rs.52.42 Crores by way of part payment of the land premium.

(f) Consequent to the above, the SRA issued LOI to the Petitioner on 23 November 2010 in respect of its proposal for cluster re-development on 5.13 lakh sq. mtrs of land in Village Malwani, Malad in Mumbai.

(g) On 7 May 2011, as directed by the State Government on 6 May 2011, the SRA cancelled LOI dated 23 November 2010 issued to the Petitioner without issuing any show cause notice. Being aggrieved, the Petitioner filed Writ Petition No.1230 of 2011 in this Court.

By an order dated 30 November 2011 passed in Writ Petition No.1230 of 2010, the orders of the State Government dated 6 May 2011 and of the SRA dated 7 May 2011 were set aide. However, liberty was given to the State of Maharashtra to take appropriate action if it so desires only after following the principles of natural justice i.e. issue show cause notice to the Petitioner.

(h) Consequent to the above, on 10 February 2012 a show cause notice was issued to the Petitioner, seeking to cancel the LOI dated 23 November 2010 and the circular No.119 dated 12 November 2011 issued by the SRA. The Petitioners' responded to the notice. However, by the impugned order dated 24 April 2012, show cause notice was confirmed, resulting in cancellation of the LOI dated 23 November 2010 and circular No.119 dated 12 November 2010 issued by the SRA, as a consequence of directions dated 5 October 2010 issued by the State Government, was also cancelled.

3. It is the Petitioner's contention that the issues arising in this Petition are no longer res integra in view of the judgment of this Court in Writ Petition No.1165 of 2012 (M/s. Sterling Buildcon Pvt. Ltd. & another V/s. State of Maharashtra and Others) rendered on 24 September 2013. It is submitted that this Court in M/s. Sterling Buildcon (supra) had set aside an order dated 24 April 2012 passed by the State Government. This resulted in Government directives dated 8 October 2010, Circular dated 12 November 2010 of SRA and provisional LOI dated 7 December, 2010 issued in favour of M/s. Sterling Buildcon (supra) being upheld. It is submitted that on the above ground alone, the Petition be allowed.

4. This is not a case where a common impugned order had been issued in case of M/s. Sterling Buildcon (supra) and the Petitioner. Although, the impugned orders are both dated 24 April 2012, they are in fact two different orders - one in case of the Petitioner and the other in case of M/s. Sterling Buildcon. In these circumstances, it may not be appropriate to apply the decision of this Court in M/s. Sterling Buildcon (supra) without comparing the facts in both the cases.

5. In support of its submission that the facts in its case are identical to the facts of M/s. Sterling Buildcon (supra), the Petitioner highlighted the following facts:-

(a) Both the Petitioner and M/s. Sterling Buildcon had submitted similar proposal to the State Government and SRA for cluster development;

(b) The directives given by the State Government to the SRA under Section 3K(i) of the Slum Act dated 5 October 2010 in respect of the Petitioner and dated 8 October 2010 in respect of M/s. Sterling Buildcon are similar;

(c) The circular No.119 dated 12 November 2010 issued by the SRA was a general circular applicable to both i.e. M/s. Steling Buildcon and the Petitioner;

(d) On the basis of the above, an LOI was issued by the SRA to the Petitioner on 23 November 2010 and on 7 December 2010 to M/s. Sterling Buildcon;

(e) Thereafter, show cause notices were issued by the State Government dated 10 February 2012 to the Petitioner and dated 2 March 2012 to M/s. Sterling Buildcon. Both the notices were identical, calling upon the parties to show cause as to why LOI issued should not be cancelled and also why the Circular No.119 issued by the SRA should not be cancelled. This was essentially on the ground that the SRA Circular was contrary to the State Government directions dated 5 October 2010 in case of the Petitioner and dated 8 October 2010 in case of M/s. Sterling Buildcon ; and

(f) The impugned order dated 24 April 2012 by the State Government on the show cause notice issued to the Petitioner was on the same date i.e. 24 April 2012 when the order was passed in case of M/s. Sterling Buildcon. The impugned order canceling the LOI dated 23 November, 2010 issued by the SRA, the Circular No.119 dated 12 November 2010 issued by the SRA as well as the State Government letter dated 5 October 2010 in the case of Petitioner. This impugned order is submitted, is identical to the order passed in the case of M/s. Sterling Buildcon.

In the above facts, it is contended that the order of this Court rendered on 24 September 2013 in case of M/s. Sterling Buildcon (supra) applies to the facts of the present case and the Petition be allowed.

6. The aforesaid submission is opposed by the State Government on the ground that there are fundamental differences in the facts in this Petition from that existing in M/s. Sterling Buildcon. The State Government pointed out the following distinguishing features in the present case which would warrant the Petition not being entertained:-

(a) In M/s. Sterling Buildcon, the Petitioner had obtained written consent of 3839 slum dwellers out of 7000 slum dwellers covering in area of 1,89,470.50 sq. mtrs. Further, 1470 slum dwellers had shown their willingness to appoint M/s. Sterling Buildcon (supra) for re-development.Thus, 71% of the 7000 slum dwellers had given their consent for redevelopment.As against the above, the Petitioner have been able to obtain consent of only 1286 slum dwellers out of 17000 slum dwellers. Although, the Petitioner do claim that a further 1871 slum dwellers have given consent to the Petitioner being the developer, no evidence of the same is forthcoming.

(b) The ownership/ development rights over the land in case of the Petitioner is with Maharashtra Housing Area & Development Authority (MHADA) and Municipal Corporation of Greater Mumbai. As against the above, M/s. Sterling Buildcon has ownership/development rights over almost 50% of the land which is part of its cluster development ;

(c) Consequent to the passing of the impugned order dated 24 April 2012, the Petitioner had accepted the amount of Rs.52.41 Crores being the premium amount paid by it as a refund. On the other hand, in the case of M/s. Sterling Buildcon (supra), the refund of land premium was not accepted by it and it continued to be with the SRA; and

(d) Further, the Petitioners have been changing the time within which the requisite consent of slum dwellers would be obtained from the slum dwellers. To begin with a few weeks time on 6 February 2010 to obtain consent of the slum-dweller's society and thereafter to obtain consent of slum dwellers, a reasonable time is originally sought during adjudication proceedings which is thereafter extended to about 18 months in the impugned order and about two years before this Court. This conduct itself disentitles them to any relief in writ jurisdiction.

In view of the above, it is submitted that the facts in the present case are completely different from that existing in M/s. Sterling (supra) and in view of the above differences, it is clear that the Petitioner is not in a position to comply with the LOI dated 23 November 2010 and the directions dated 5 October 2010 passed under Section 3(k) of the Slum Act. Therefore, the benefit of this Court's decision in M/s. Sterling Buildcon (supra) should not be extended to the Petitioner.

7. As against the above, it was contended on behalf of the Petitioner that the above distinctions as made out are of no consequence and it is submitted as under:-

(a) The Petitioner has obtained consent of about 30 to 35% of the 17000 slum dwellers. In any case, the consent is required to be filed/ submitted after Annexure II has been issued by the Competent Authority as held in M/s. Sterling Buildcon (supra) by the Court. This stage has not yet been reached. Therefore, at this stage, the aforesaid distinction sought to be made in the facts is immaterial;

(b) So far as ownership of land is concerned, it does not make any difference to the requirement of obtaining the consent of the slum dwellers. Thus, the distinction is of no consequence; and

(c) The refund of land premium of Rs.52.41 Crores was accepted by the Petitioner as a consequence of the impugned order. However, the Petitioners are ready to furnish an undertaking to pay the amounts as directed by this Court. This taking of refund cannot be held against the Petitioner as it is consequence of the impugned order. It is the impugned order which is a subject matter of challenge before this Court.

8. It is not disputed that this Court in its decision rendered in M/s. Sterling Buildcon (supra) on 24 September 2013 while allowing the Petition had factored in the following distinguishing features pointed out by the State. In particular, at paragraph 47, it was observed as under:-

"There is no dispute about the fact that the petitioner has already obtained consent of 3749 slum dwellers out of 7000 slum dwellers in the slum spread over 1.89 lacs sq. mtrs., out of which for almost 88000 sq. mtrs. of land the petitioner has acquired ownership/development rights. The petitioner, thus, has obtained consent of almost 55% of all the slum dwellers. Out of the remaining slum dwellers, about 1149 slum dwellers, are such who have already expressed their willingness and desire for redevelopment, but they had earlier submitted proposals through other developers, which proposals have already been rejected by the SRA as far back in January 2012. Thus, more than 70% of the slum dwellers have expressed their readiness and willingness for redevelopment and are keen to obtain rehab tenements. The petitioner was given LOI on 7 December 2010 for providing not only 4900 rehab tenements to the eligible slum dwellers, each tenement admeasuring 269 sq.ft. but similar tenements to about 1846 project affected persons. Both these rehab tenements to the slum dwellers and projected affected persons are to be provided by the petitioner free of cost. Besides the petitioner is to provide free of cost primary school building, secondary school building and college building, library, health center, fire station, police chowky, office buildings and Municipal staff quarters to Municipal Corporation and MHADA with built-up area of about 25,000 sq. mtrs. besides providing roads, playgrounds and recreation areas over 48,000 sq. mtrs, of land.

Besides, the petitioner is going to pay amount of premium of about 92.91 crore approximately, out of which the petitioner has already paid amount of premium of about 13.94 crore approximately being the first installment of 15% of the amount of premium as per the Government circular dated 2 July 2010. The amount is still lying with the SRA and the petitioner has not withdrawn the same, though offered by SRA under the impugned order dated 24 April 2012. It is in the background of the aforesaid facts that we have considered issues raised in the petition.

Besides, also the fact that almost 50% of the land belonged to the Petitioner - M/s. Sterling Buildcon and consequently, had a prior claim for slum redevelopment on the land belonging to it (see para 17 (i) of the judgment dated 24 September 2013 in M/s. Sterling Buildcon). In the present facts, all the aforesaid factors which weighed with the Court in allowing the Petition in M/s. Sterling Buildcon (supra) are not present. However, although the above factors were taken into consideration, we have to examine the law laid down in the above decision and whether the same is fact specific or generally applicable.

9. Let us first consider the first objection - viz: the Petitioner does not have the requisite consent of the slum dwellers as possessed by the Petitioner in M/s. Sterling Buildcon (supra). The contention of the Petitioner that in any case, the occasion to submit the consent of the slum dwellers has not yet arisen, for the reason that it is only after annexure II has been issued by the competent authority would that occasion arise. This Court in M/s. Sterling Buildcon (supra) had negatived the contention of the State that the Petitioner is required to obtain consent of 70% of the eligible slum dwellers before obtaining annexure II and has observed in paragraphs 38 to 42 of judgment dated 24 September 2013 as under:-

"38:- The contention of the State Government that the petitioner should have been required to obtain consent of 70% of the eligible slum dwellers before obtaining annexure 2 flies in the face of the Government's own Directive dated 8 October 2010, wherein the Government specifically directed as under:

"2.17:- It will be mandatory for the developer M/s. Sterling Buildcon Pvt. Ltd. to obtain consent of 70% eligible slum holders within a period of 1 year from the date of receipt of Annexure 2 for the present scheme at Mauje Borla, Tal. Chembur and to enter into individual agreements with eligible beneficiaries and to start the work of the scheme failing which said project may be reviewed at Govt. level." (emphasis supplied)

39:- It is necessary to note that at the hearing learned Advocate General proceeded on the basis of the aforesaid translation of clause 2.17 of the Government approval dated 8 October 2010, original of which is in Marathi. In fact, in the other matter raising somewhat similar controversy being Writ Petition 741 of 2013, when a similar clause 2.17 came up for consideration, learned Advocate General objected to the translation furnished by that petitioner and the learned Advocate General submitted that the correct translation of clause 2.17 in the said writ petition is as under:

"2.17 For SRA Scheme at at village Malwani M/s.Lashkaria Construction Pvt.Ltd. is appointed developer in principle. It will be mandatory for the developer in the proposed scheme after the date of obtaining Annexure II within one year to obtain 70% individual consent of the eligible slum dwellers and enter into individual agreements and accordingly commence work. If the developer fails to do so the Government will review the scheme at the State Government level." (emphasis supplied)

40:- Hence on the question of alleged default on the part of the petitioner, it is clear that the time limit to obtain 70% individual consent of eligible dwellers is one year from the date of obtaining Annexure 2 from the Competent Authority i.e. certification of Annexure 2 by the Competent Authority after the developer submits the draft Annexure 2, as provided in guidelines. This certification is admittedly not done even in respect of draft Annexure 2 submitted by the petitioner in respect of 3489 slum dwellers even before the impugned order was passed.

It is clarified that the finding that the consent of 70% of the eligible slum dwellers is required to be given within one year from the date of certification of Annexure 2 by the Competent Authority is only applicable to the Township Development Scheme (and not to individual slum rehabilitation scheme) in view of special directives of the State Government under section 3K(1) of the Slum Act.

41:- It is necessary to note that Clause 2.17 by itself does not prescribe any time limit for the petitioner to submit draft Annexure 2 to the Competent Authority. Learned Advocate General would however submit that merely because clause 2.17 of the Government Directive does not prescribe any time limit, it does not mean that the draft Annexure 2 can be submitted at any point of time, but it must be submitted within reasonable time.

42:- Even after accepting the above submission, we cannot over look the fact that the provisional LOI was issued by SRA on 7 December 2010 and even before expiry of six months, the State Government exparte cancelled the provisional LOI and all the approvals granted in favour of the petitioner. The petitioner, therefore, has not been given an opportunity to submit the draft Annexure 2 of eligible slum dwellers within reasonable time. There is considerable substance in the submission of the learned counsel for the petitioner. Once SRA cancelled the LOI on 7 May 2011 and thereafter there has been litigation and subsequent order dated 24 April 2012 of the State Government, the petitioner has not been able to obtain any further consent and therefore the petitioner needs to be given at least further six months time to submit the draft Annexure 2 of other slum dwellers, without obtaining their consent at this stage."

Therefore, the failure of the Petitioner to obtain consent of 70% eligible slum dwellers or more at this stage could not result in cancellation of the LOI dated 23 November 2010, Circular dated 12 November 2010 issued by the SRA and State Government letter dated 5 October 2010 as held in the impugned order.

10. So far as the second distinction sought to be made by the State is concerned namely the ownership/ development rights over almost 50% of the land belonged to the Petitioner in the case of M/s. Sterling Buildcon (supra) while this is not so in the present case. The ownership of land and/or development rights over the land in respect of a slum rehabilitation area certainly puts the party who owns it in a better position. This in view of the provisions of the Slum Act which provides that the owner of the land would have a prior claim for slum redevelopment of its land. This Court in M/s. Sterling Buildcon (supra) had taken a view that it may not be in the best interest of all to set the clock back as the Petitioner therein had certainly a prior claim to redevelop in respect of over 50% of the land to be developed under cluster redevelopment. In this case, the Petitioner does not make any such claim. However, there is no requirement that for the purposes of cluster development, atleast 50% of the land must be owned by the Developer. This factor by itself cannot dis-entitle the Petitioner from participating in cluster development as there is no such requirement in the SRA Circular as well as the State Government directives dated 5 October 2010.

11. However, it is submitted by the State Government that in any event the conduct of the Petitioners dis-entitles the Petitioner to any relief in these proceedings as set out herein below:

(a) It is emphasized that the area of this Cluster Development is huge/ mamoth i.e. 5.13 lakh sq. mtr. In view of the decision of this Court in Awdesh Tiwari v/s. Chief Executive Officer 2006 (4) Mah. Law Journal 282 : [2006(4) ALL MR 67] - once a developer submits a proposal then the person concerned has a monopoly and others are prevented from submitting proposal for redevelopment of the land in issue. Thus, in such circumstances, it is expected of the applicant of the project for cluster development to be candid and forthright. It is not open to an applicant to make loose statements and, thereafter go back on the same, bringing the entire project to peril or unreasonably delay it. In this case, the Petitioner on 6 February 2010 had promised to produce the requisite consent of the remaining slum dwellerssociety within a few weeks. Thereafter, during adjudication proceedings, the Petitioner originally sought a reasonable time to obtain the requisite consent of slum dwellers and thereafter stated that it would obtain the consent within 18 months while before us the Petitioner states that it will obtain the consent of requisite slum dwellers within two years from the date of the order of this Court ; and

(b) The Petitioner has taken the refund of the premium paid by it on passing of the impugned order, while the Petitioner in M/s. Sterling Buildcon (supra), had not accepted the refund of the land premium which had been paid. It continued to be with SRA. This is the factor which would indicate the Petitioner in M/s. Sterling Buildcon (supra) was involved in the project by not taking the refund while challenging the order. In this case, the Petitioner took the refund immediately after the passing of the impugned order dated 24 April 2012 and are now taking the chance of getting the impugned orders quashed.

12. We find considerable substance in the aforesaid submissions made by the learned Advocate General. As per the settled position, writ jurisdiction is discretionary. The writ remedy is an extra ordinary prerogative remedy which is not to be exercised by this Court merely because, the Petitioner has shown some illegality in the impugned order. In fact, the Supreme Court in State of Maharashtra v/s. Prabhu 1994 (2) SCC 481 in paragraph 4 has observed as under:-

"4:- Even assuming that construction placed by the High Court and vehemently defended by the learned Counsel for respondent is correct should the High Court have interfered with the order of Government in exercise of its equity jurisdiction. The distinction between writs issued as a matter of right such as habeas corpus and those issued in exercise of discretion such as certiorari and mandamus are well known and explained in countless decisions given by this Court and English Courts. It is not necessary to recount them. The High Courts exercise control over Government functioning and ensure obedience of rules and law by enforcing proper, fair and just performance of duty. Where the Government or any authority passes an order which is contrary to rules or law it becomes amenable to correction by the courts in exercise of writ jurisdiction. But one of the principles inherent in it is that the exercise of power should be for the sake of justice. One of the yardstick for it is if the quashing of the order results in greater harm to the society then the court may restrain from exercising1 the power."

The project in hand is for rehabilitation of about 17000 slum dwellers. The Petitioner has not been stead fast with regard to the time required for obtaining requisite consent of slum dwellers. Initially, it was a reasonable time and thereafter within 18 months during adjudication proceedings and now at the hearing before us that the Petitioner states that it would require 2 years time to obtain consent of 70% of the slum dwellers. Soon after passing of the impugned order on 24 April 2012, the Petitioner also took the refund of the deposit of Rs.52.41 Crores. Thus, without putting the deposit amount of Rs.52.41 Crores at stake, unlike M/s. Sterling Buildcon (supra), as indicted above, the Petitioner has kept cluster development of the lands as large as 5.13 lakh sq. mtrs in limbo. Without having made any progress in implementation of the project, without anything at stake and without any equity in its favour the Petitioner wants restoration of all the orders, conferring on the Petitioner the monopoly to redevelop 5.13 lakh sq. mtrs. of land with no ownership rights over the same (albeit with liability to rehabilitate 17,000 slum dwellers on the site). In such extra ordinary circumstances and in these peculiar facts, we will not exercise our extra ordinary discretionary jurisdiction in favour of the Petitioner.

13. For the aforesaid reasons, the Petition is dismissed. Since the Writ Petition is disposed of, Chamber Summons No.109 of 2013 for intervention does not survive and the same is disposed of as infructuous.

After the judgment is pronounced, the learned Counsel for the Petitioners pray that the ad-interim stay granted by order dated 24 April 2013 of this Court be continued for twelve weeks to enable the Petitioners to move the Apex Court in accordance with law. The learned Counsel for the Respondents opposes the same. In the facts and circumstances, since the ad-interim relief has been operative since 24 April 2013, the same shall be continued for a period of eight weeks from today.

Petition dismissed.