Dismissed

M/s. Siroya Developers Pvt. Ltd. v. High Power Committee and Ors.

Bombay HC12 Dec 2013WP/662/2012

Case brief

AI extract

What is this about?

The Court dismissed a writ petition by a developer challenging the appointment of another developer for a slum rehabilitation project. It held that under Slum Act rules, the first application to receive 70% support must be processed independently, barring concurrent scrutiny of others, and noted the petitioner had no current member support.

What did the court decide?

Petition was dismissed with no exemplary costs awarded; rule discharged.

M/s. Siroya Developers Pvt. Ltd. Vs… — Constitutional and Fundamental Rights | Bombay HC (2013)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 662 OF 2012

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M/s Siroya Developers Pvt. Ltd.

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…. Petitioner.

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V/s

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High Power Committee constituted by Govt. of Maharashtra & Ors. ….. Respondents.

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Mr. A.V. Anturkar i/b Mr. Akshay Jadhav for the Petitioner. Mr. Milind Sathe, Senior Counsel with Mr. G.D. Utangale with Mr. B.V. Phadnis i/b M/s Utangale & Co. for Respondent Nos. 1 to 3.

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Mr. Vinod Mahadik for Respondent Nos. 4 and 5.

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Mr. A.A. Kumbhakoni i/b A & A Law for Respondent Nos. 6 to 13.

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Mr. P.K. Dhakephalkar, Senior Counsel with Mr. Ajit Jakhadi for Respondent No.14.

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CORAM: V. M. KANADE & M.S. SONAK, JJ.

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DATE: 12^th December, 2013

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P.C.:- ( Per V. M. Kanade, J. )

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Heard.

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Rule. Rule is made returnable forthwith. Respondents waive service. By consent of parties, matter is taken up for final hearing.

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Petitioner has filed this Petition under Article 226 of the Constitution of India seeking appropriate writ, order or direction for quashing the order dated 07/02/2011 passed by the Slum Rehabilitation Committee – Respondent No.2 herein as also Report dated 13/03/2011 prepared by the Municipal Corporation of Greater Mumbai – Respondent No.4 and further letter dated 10/08/2011 issued by Respondent No.2 – SRA. Petitioner is also seeking an appropriate writ, order or direction directing Respondent No.2 – SRA to quash the Letter of Intent (LOI) dated 24/11/2011 issued in favour of Respondent Nos. 6 to 12 and 14. Petitioner is further seeking appropriate writ, order or direction for quashing the order dated 07/02/2012 and also seeking direction to Respondent Nos. 1 and 2 to issue a Letter of Intent (LOI) in favour of the Petitioner.

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4. Brief facts are as under:-

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Petitioner is a Private Limited Company which is duly registered under the provisions of the Companies Act, 1956 and is carrying on business as Developer and Builder. The grievance of the Petitioner, in brief, is that the Petitioner was appointed as Developer by Respondent Nos. 6 to 13 as well as by more than 70% of the slum dwellers for undertaking and implementing the Slum Rehabilitation Project of their Society at Parel, Sewree Division, Kalachowki, Mumbai.

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According to the Petitioner, they had entered into an agreement with the Society in 2005. It is an admitted position that when the said agreement was executed by the Petitioner with the Society of slum dwellers, a Letter of Intent (LOI) was already issued in favour of M/s Mangal Moorti Developers in the year 1998, which was revalidated on 18/06/2005. It is the case of the Petitioner that the Society terminated development agreement of the said M/s Mangal Moorti Developers in a General Body Meeting held on 26/10/2005 and entered into an agreement with the Petitioner.

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Respondent No. 5 to 8 filed Writ Petition No.1451 of 2010, seeking direction directing SRA to consider their proposal for cancellation of LOI which was issued in favour of M/s Mangal Moorti Developers and sanctioning proposal for granting LOI in favour of the Petitioner herein. The said Writ Petition was disposed of by an order dated 23/12/2010. The Division Bench, after noting the sequence and chronology of events, recorded the statement of the Government Pleader who informed the Court that in view of the letter issued by State Government dated 18/10/2010, Slum Rehabilitation Authority shall issue a show-cause notice to the Developer and take a final decision in accordance with law after giving an opportunity of being heard within six weeks and thereafter the Division Bench observed as under:-

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“.........We clarify that we have had no occasion to adjudicate in these proceedings on the correctness of the decision taken by the Co-operative Society to terminate the agreement with the earlier developer and nothing in this order shall be construed as an expression of any opinion one way or the other in that regard. In view of the statement which has been made on behalf of the Slum Rehabilitation Authority by the learned Government Pleader, counsel appearing on behalf of the Petitioner states that the grievance of the Petitioner in this Petition has been sufficiently redressed and does not seek any further directions. The Learned Government Pleader has also stated that the Slum Rehabilitation Authority shall also take a decision, in accordance with law in regard to the proposal of the co-operative society in the matter of assigning a new developer within a period of six weeks of the first decision.”

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From the aforesaid observations, it can be seen that the Division Bench did not express any opinion on merits on the correctness of the decision of the Petitioners – Co-operative Society of terminating the agreement with M/s. Mangal Moorti Developers and in view of the statement made by the learned Government Pleader on behalf of SRA, Petitioners did not seek any further directions.

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After the said order was passed, Respondent No.2 issued show-cause notice to M/s Mangal Moorti Developers

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under section 13(2) of the Maharashtra Slum Areas(Improvement, Clearance and Redevelopment) Act, 1971 (For short “Slum Act”) and conducted proceedings under the provisions of Slum Act. Respondent Nos. 6 to 12 also filed their Written Submissions dated 13/01/2012. In the said Written Submissions, Respondent Nos. 6 to 12 had prayed that Petitioner herein should be appointed as Developers in place of M/s Mangal Moorti Developers.

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It is firstly contended by the learned Counsel appearing on behalf of the Petitioner that in view of the statement made by the Government Pleader, it was incumbent upon SRA to decide two issues viz (i) cancellation of LOI in favour of M/s Mangal Moorti Developers and (ii) issuing LOI in favour of the Petitioner. It is contended that instead of this, SRA had only cancelled the Letter of Intent which was issued in favour of M/s Mangal Moorti Developers but had not granted or even considered the proposal of the Society to appoint the Petitioner as Developers of the Society. It is contended that on that ground alone, the order of SRA is liable to be set aside. Secondly, it is contended that SRA, in the impugned order, had directed the Society to convene a fresh General Body Meeting in the presence of representative of SRA for appointment of their Developers for further implementation of subject S.R. Scheme on the said plots. It is submitted that SRA could not have given such direction to the Society since

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this exercise had already been carried out by the Society in 2005 when 70% of the slum dwellers had given their consent in favour of the Petitioner and, thereafter, the Society had entered into agreement with the Petitioner in 2005. It is submitted that, therefore, it was not open for the SRA to again start the process of fresh verification and seek a fresh mandate from the General Body of the Society. It is contended that the said direction is patently illegal and contrary to the provisions of the Slum Act and the Rules framed thereunder and also contrary to the law laid down by this Court. Thirdly, it is contended that the order passed by the Redevelopment Authority dated 10/08/2011 accepting the appointment of Respondent No.14 as a new Developer for implementation of the S.R. Scheme was patently illegal. It is contended that the said meeting was not properly held. It is contended that there was no quorum to hold the said meeting and out of 542 eligible slum dwellers only 239 attended the said meeting and voted in favour of Respondent No.14. It is contended that therefore Respondent No.14 had failed to establish that it enjoyed support of 70% slum dwellers. It is then contended that DCR 33(10) read with Appendix IV Clause 1.14 requires consent of 70% slum dwellers. It is contended that Respondent No.2 ought to have considered that 239 unverified members present and voting could not amount to 70% of 542 eligible slum dwellers and hence the Resolution passed in the said

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meeting could not be held to be valid. It is contended that Respondent No.3 should have cancelled the meeting dated 13/3/2011 for want of quorum and should have verified the list of members preset in and signed in the attendance register. The learned Counsel appearing on behalf of the Petitioner invited our attention to the definitions of various terms in the Slum Act and has further taken us through the provisions of section 13(2) of the said Act in Chapter IV. It is submitted that the said provisions had not been complied with by SRA. It is then contended that it was not open for the Society to cancel or terminate the agreement with the earlier Developers viz the Petitioner herein. It is submitted that, therefore, the Resolution passed by the Society – Respondent Nos. 6 to 10 appointing Respondent No.14 as Developer in their General Body Meeting on 13/03/2011 is illegal, bad in law and is liable to be set aside. Against this order, Petitioner preferred an appeal before the High Power Committee. The High Power Committee by a detailed order dated 07/01/2012 was pleased to dismiss the said appeal/application No.145 of 2011. The High Power Committee dismissed the application filed by the Petitioner. However, in para 10, it observed as under:-

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“10) Considering the aforesaid facts of this case, this Committee directs the Assistant Commissioner, F/South Ward of MCGM to issue the Revised Annexure II of total 541 slum dwellers,

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including names of those legal heirs and representatives of the eligible slum dwellers who have expired, within a period of 8 weeks from today. Thereafter, the SRA to verify the 70% consents of the eligible Slum Dwellers and take, further necessary steps for the purpose of implementation of the subject S.R. Scheme. In the meanwhile, LOI approved on 30.09.2011 is stayed.”

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This order is also challenged by the Petitioner by amending the Petition. It is then submitted by the learned Counsel for the Petitioner that this Court had by order dated 20/03/2013 in view of the directions given by the High Power Committee in paras 9 and 10 of its order, directed Assistant Commissioner, F/South Ward of MCGM to prepare revised Annexure-II at the earliest within a period of four weeks and it was further directed that thereafter SRA may verify 70% membership as directed by High Power Committee within two weeks thereafter. It is submitted that even these directions which were given by this Court were not followed and the Assistant Commissioner F/South Ward had not only prepared the revised Annexure-II but also had carried out exercise of verification of 70% membership, though the said direction was given to SRA.

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On the other hand, Mr. Milind Sathe, the learned Senior Counsel appearing on behalf of SRA submitted that SRA had followed the procedure laid down under section 13(2) of

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Chapter IV of the Slum Act. He submitted that as long as LOI issued in favour of M/s Mangal Moorti Developers was not cancelled, it was not open for the Society to have entered into agreement with the Petitioner herein in 2005 during the subsistence of the earlier LOI. It is contended that therefore the said agreement did not create any rights in favour of the Petitioner. It is submitted that, therefore, the SRA had rightly first considered the question of cancellation of LOI of M/s Mangal Moorti Developers and, thereafter, had directed the Society to hold a fresh General Body Meeting and find out in whose favour 70% of the members had voted. It is submitted that this exercise was conducted in the presence of representative of SRA and more than 70% of the members had voted in favour of Respondent No.14. It is submitted that since the agreement executed by the Petitioner with the Society in 2005 itself was illegal, there was no question of SRA considering the proposal of the Petitioner in the order dated 07/02/2011. It is further submitted that the exercise of verification was done in the presence of representative of the SRA and, thereafter, again a fresh verification was made pursuant to the direction given by the High Power Committee. It is therefore submitted that there is no substance in the submissions made by the learned Counsel appearing on behalf of the Petitioner.

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Mr. Dhakephalkar, the learned Senior Counsel

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appearing on behalf of the Societies – Respondent Nos. 6 to 12 submitted that it was not open for the Petitioner to challenge the decision taken by the SRA since it had taken active part in making an attempt to persuade members of the Society to vote in their favour. It is submitted that the Petitioner had put up banners and posters before the meeting and had canvassed for accepting their proposal. It is contended that the Petitioner had met each and every member of the Society before the meeting was held. It is contended that having participated in the process of selection of Developer, it was not open for the Petitioner thereafter to challenge the order of SRA after three months. It is submitted that SRA passed an order on 17/2/2011. Thereafter, General Body Meeting was held on 13/3/2011 and the Appeal was filed by the Petitioner in May, 2011. He submitted that on this ground alone, Petition is liable to be dismissed. It is submitted that the Petitioner had no locus in filing the present Petition. It is further contended that not a single member was in favour of the Petitioner and more than 95% of the members have voted in favour of Respondent No.14.

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After having heard the learned Counsels for the Petitioner and the Respondents at length, in our view, there is no substance in the submissions made by the learned Counsel for the Petitioner. It is an admitted position that

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Letter of Intent was issued in favour of M/s Mangal Moorti Developers in the year 1998-99 in a Scheme for Redevelopment under section 33(10) of DCR. This Court in Atesham Ahmed Khan & Ors vs. Lakadawala Developers Pvt. Ltd. & Ors¹ has laid down the procedure which is required to be followed in respect of the Scheme under DCR 33(10) in para 10, which reads as under:-

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“10. The grievance, however, of the Petitioners relates to the consequential directions that have been issued by the High Power Committee. The Committee has directed the Slum Rehabilitation Authority to obtain a report of the Competent Authority which was to verify draft Annexure II submitted by the Architect of the First and Second Respondents. Now, in this regard it would be necessary to note that when a proposal is submitted by a proposed Cooperative Housing Society of slum dwellers the application is initially accepted and verified. The applicant is then required to pay the scrutiny fees upon which a scrutiny is conducted. Draft Annexure II containing a list of slum dwellers is thereafter forwarded by the Slum Rehabilitation Authority to the Competent Authority for verifying the names of eligible slum dwellers. In the case of public lands which are of the ownership of the State Government, the Additional Collector (Encroachment and Removal), who is the Competent Authority, has to verify draft Annexure II containing names of slum dwellers who are eligible to participate in the Slum Rehabilitation Scheme and to certify it. At the

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1 2011 (5) Bom. C.R. 192

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stage when an application is submitted before the Slum Rehabilitation Authority, the application, as it stands, must indicate that the applicant fulfills the requirement of the requisite consent of 70% of the slum dwellers. The claim of the applicant is thereupon subject to scrutiny. But before the question of scrutiny arises, the application must on its face indicate that it fulfills the requirement of 70% consents. Hence, we find merit in the contention which has been urged on behalf of the Petitioners in these proceedings that an application which on its face does not fulfill the requirement of DCR 33(10), must be rejected. The applicant cannot be allowed to progressively make up a deficiency in an application which does not ex facie fulfill the conditions on the date when it is submitted. In view of the judgment of the Division Bench in Awdesh Tiwari, the submission of an application operates to exclude all other Societies from having their applications received and processed by the Slum Rehabilitation Authority in respect of the scheme. Since the effect of the acceptance of the first application is to exclude from scrutiny all other applications until the scrutiny of the first application is complete, it is the bounden duty of the applicant to ensure that the application is complete in all respects and does not suffer from any deficiency. Any other construction would lead to the undesirable result that an application which is otherwise deficient and incomplete can progressively be improved upon over a prolonged period of time leading to a delay in the implementation of the Slum Rehabilitation Scheme. Moreover, the mere submission of an application, however deficient, will operate to block all other applicants. This could not possibly be the

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intent underlying DCR 33(10). Again it must be emphasized that the underlying logic of the judgment of the Division Bench in Awdesh Tiwari (supra) is to exclude the possibility of undesirable competition by unscrupulous elements resorting to extraneous means in the implementation of slum schemes. Hence the first applicant must act bona fide and in compliance with law by submitting an application which fulfills the requirements of a valid application. The application must fulfill the essential requirements of a valid application on the date on which it is submitted.”

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Similarly, Division Bench of this Court in Awdesh Vasistha Tiwari & Ors. vs. Chief Executive Officer, Slum Rehabilitation Authority & Ors¹ has observed that Scheme under section 33(10) does not contemplate simultaneous consideration of an application made by the proposed Society with an application subsequently made by another proposed Society relating to same land. The Division Bench has observed in para 20 of the said judgment as under:-

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“20. If the entire scheme under Regulation 33(10) is perused it is obvious that if 70% of the slum dwellers on a particular area come together and apply after formation of proposed co-operative housing society, the said application has to be independently considered in accordance with law. The scheme does not contemplate simultaneous consideration of such an application made by

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1 2006(5) Bom.C.R. 772

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a proposed society with an Application subsequently made by another proposed society relating to same land. The Applicantsociety has to have 70% support which obviously two societies cannot have. The Application received first is to be processed first independently. If it fails to get 70% support, Second Application can be examined. The obvious intention is to avoid unhealthy competition between the different builders who are interested in supporting such societies. If such a course of simultaneous consideration is permitted to be adopted, unscrupulous persons and builders will try to win over the hutment dwellers who have supported the application made earlier by another society. Therefore, it is not desirable that an application which is earlier made and the one which is subsequently filed should be considered together. That is not the scheme provided under D.C.Regulation 33(10). It is necessary that the application which is first received in respect of a particular property by the SRA should be processed and decided first. After decision of the first Application, the second Application made by another society can be considered depending on the result of the first Application. The reason is that none of the societies have any right, title and interest in respect of the property. Such a course will prevent the unhealthy competition between the builders or between the leaders of two groups in a slum area.”

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In the present case, it is an admitted position that Respondent No.14 had made an application for being appointed as a Developer and, thereafter, after a couple of

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months, Petitioner had filed an application. In view of the observations made by Division Bench of this Court in the said case, therefore, SRA processed the application of Respondent No.14 first and, therefore, in our view, no illegality has been committed by SRA in granting approval and issuing LOA in favour of Respondent No.14 since after verification, it was found that more than 70% of the members of the Society had given their consent in favour of the said Respondent. The contention of the Petitioner therefore that it had entered into agreement with the Society in 2005 and therefore their proposal had to be considered first is without any substance. It is an admitted position that in 2005, LOI which was issued in favour of M/s Mangal Moorti Developers was still in existence and during the subsistence of the said LOI, Petitioner could not have entered into an agreement with the Society in 2005. It is only after the LOI which was issued in favour of M/s Mangal Moorti Developers was cancelled, Petitioner could have staked their claim seeking support of 70% of the members of the Society. It is an admitted position that, as of today, not a single member of Respondent Nos. 6 to 12 – Society is in favour of the Petitioner.

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The contention of the learned Counsel appearing on behalf of the Petitioner that SRA had not followed the direction given by this Court in Writ Petition No.1451 of 2010

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is also without any substance. Though the written submissions given by the Society refer to two proposals viz (i) for cancellation of LOI in favour M/s Mangal Moorti Developers and (ii) granting LOI in favour of the Petitioner herein, the SRA could not have considered the second part of the proposal viz granting LOI in favour of the Petitioner. In our view, the SRA rightly has not considered the second part of the proposal. It is vehemently sought to be urged that Division Bench of this Court had directed SRA to consider the proposal which included proposal for acceptance of the Petitioner as Developer. This submission is without any substance since in view of section 13(2) Chapter IV of the Slum Act, the SRA had to first consider whether Letter of Intent issued in favour of M/s Mangal Moorti Developers was liable to be cancelled and only thereafter Developer approved by the SRA could have been selected. SRA, therefore, rightly directed the Society to hold fresh General Body Meeting so that in the said meeting the application of Respondent No.14 which was first in point of time could be taken into consideration.

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So far as the submission regarding legality of the meeting which was held on 13/3/2011 is concerned, the said submission that there was no quorum and therefore the said meeting was illegal is also without any substance. This question has been considered by the High Power Committee

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and even thereafter again re-verification was done pursuant to the order passed by this Court on 20/03/2012 and again in the fresh verification it was found that more than 70% members voted in favour of Respondent No.14. We are of the view therefore that the Petitioner has tried to pull on the litigation only for the purpose of harassing Respondent No.14 in whose favour LOI has been issued and though not a single member of the Society is in favour of the Petitioner. As a result of this litigation and the interim orders which have been obtained by the Petitioner, the entire Scheme has been stalled and the members who have shifted into transit accommodation have suffered in the process and rehabilitation of these slum dwellers have been stalled. The record indicates that even transit accommodation is now in a dilapidated condition but no steps could be taken by Respondent No.14 on account of interim orders which were passed by this Court.

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In our view, this is a fit case where Petition should be dismissed with exemplary costs. However, we are not inclined to award the costs since on that ground, again, Petitioner would get another excuse to prolong the litigation.

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Petition is dismissed. Rule is discharged.

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bdp

M/s. Siroya Developers Pvt. Ltd. v. High Power Committee and Ors.

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M/s. Siroya Developers Pvt. Ltd. v. High Power Committee and Ors.

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