Bombay High Court
Vivek Madhavlal Pittie vs State Of Maharashtra Through Its … on 23 April, 2025
Author: A. S. Gadkari
Bench: A. S. Gadkari
2025:BHC-OS:6782-DB
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.204 OF 2025
Vivek Madhavlal Pittie, ]
Indian Inhabitant, residing at Suket, ]
29-B, Dongersey Road, Malabar Hill, ]
Mumbai - 400 006, in his capacity as ]
the Receiver appointed by the High ]
Court of Judicature at Bombay in ]
Suit No.224 of 1961 ] ...Petitioner.
V/s.
1. State of Maharashtra ]
Through its Secretary, Ministry of ]
Urban Development/Housing Department ]
2. Slum Rehabilitation Authority ]
an authority established under the ]
provisions of the Maharashtra Slum ]
Areas (Improvement, Clearance and ]
Redevelopment) Act, 1971, through ]
Chief Executive Officer. ]
3. Omkar Realtors & Developers Pvt. Ltd., ]
a company incorporated under the ]
Companies Act, 1956 having its registered ]
office at Omkar House, Opp. Sion- ]
Chunabhatti Signal, off. Eastern Express ]
Highway, Sion (East), Mumbai - 400022. ]
4. Piramal Capital and Housing Finance Ltd. ]
a company within the meaning of the ]
Companies Act, 2013, having its registered ]
office at 601, 6th Floor, Amiti Building, ]
Agastya Corporate Park, Kamani Junction, ]
LBS Marg, Kurla (W), Mumbai- 400070. ]
Digitally
signed by
ASHWINI
ASHWINI
H GAJAKOSH
5. Alperton Developers and Contractors Pvt. ]
GAJAKOSH Date:
2025.04.23
Ltd. a company incorporated under the ]
15:58:56
+0530 Companies Act, 2013, having its registered ]
office at 4th Floor, Commerce House 3, ]
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Currimbhoy Road, Ballard Estate, ]
Mumbai - 400001. ] ... Respondents
______________________________________
Mr. Darius Khambata, Senior Advocate, a/w Mr. Mustafa Doctor, Senior
Advocate, Mr. Jehangir Jeejeebhoy and Ms. Aishwaryageeta Tawde, i/by
Kanga & Co. for the Petitioner.
Dr. Birendra B. Saraf, Advocate General, a/w Ms. Prachi Tatake, Addl. GP,
Mr. Vaibhav Charalwar and Ms. Usha Rahi, AGP for the Respondent No.1-
State.
Mr. Mayur Khandeparkar, i/by Mr. Anoop Patil for the Respondent No.2-
SRA.
Mr. Bhushan Deshmukh, a/w Mr. Haaris Reshamwala, i/by Diamondwala &
Co. for Respondent No.3.
Mr. Dinyar Madon, Senior Advocate, a/w Mr. Chirag Kamdar and Ms. Gauri
Joshi, i/by Ganesh & Co. for Respondent No.4.
Mr. Ravi Kadam, Senior Advocate, a/w Mr. Rohaan Cama, Mr. Anish
Karande, Mr. Dhawal Mehta, Ms. Jasmin S., Mr. Viren Mandhle and Mr.
Sahil Singh, i/by Wadia Ghandy & Co. for Respondent No.5.
_____________________________________________
CORAM : A. S. GADKARI AND
KAMAL KHATA, JJ.
RESERVED ON : 26th February, 2025.
PRONOUNCED ON : 23rd April, 2025
Judgment (Per : Kamal Khata, J) :-
1) Rule. Rule made returnable forthwith and heard finally with the
consent of parties.
2) By this Writ Petition under Article 226 of the Constitution of India
the Petitioner seeks a Writ of Certiorari to quash and set aside the Order
dated 29th April, 2024 derived from the Minutes of the Meeting dated 13 th
February, 2024 and the communication to the Slum Rehabilitation Authority
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apn 1-oswp-204-2025-F-18-4-25 K.doc(SRA) by letter dated 14th March, 2024.
BRIEF FACTS :
3) The Petitioner a successor of one Mr. Madhavlal Pittie
(hereinafter referred to as “Pittie”) is the owner of the land bearing
Cadastral Survey (CS) No.426 admeasuring approximately 19,741.51 sq.
mtrs. at Parel (Pittie Plot). It was notified as a slum on 14th March 2006.
3.1) Omkar Realtors and Developers Pvt. Ltd. (‘ORDL’) a developer,
who was developing an adjoining slum property admeasuring 79,176.95 sq.
mtrs. (ORDL’s plot), proposed an amalgamation of Pittie’s plot for
development in the Scheme in 2013. Pittie and ORDL agreed to
amalgamate their respective plots for the existing Scheme on the terms and
conditions stated in the MoU dated 24 th February 2014. On the basis of the
application dated 3rd May 2014 ORDL was granted a revised Letter of Intent
(‘LoI’) by the SRA for amalgamation of the two plots in the Scheme.
Pursuant thereto on 8th September 2015 a Development Agreement
between ORDL and Pittie was executed and registered.
3.2) Similarly, unknown to Pittie, after execution of their
Development Agreement, ORDL acquired and amalgamated various other
lands to form a part of the Slum Rehabilitation Scheme (SRS) which now
aggregately measures 1,07,988.64 sq. mts. From 3 rd March, 2016 to 1st
February, 2019 the SRA issued further LoIs to ORDL recording the enhanced
FSI available for construction of saleable area in the SRS.
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apn 1-oswp-204-2025-F-18-4-25 K.doc 3.3) Since ORDL breached the Development Agreement and failed
to commence work for the Pittie’s building, they held several negotiations to
work out alternate solutions between October 2018 to August 2019. It is
important to note that these meetings were attended by a common
Advocate for ORDL and M/s. Piramal Capital and Housing Finance Ltd.
(‘Piramal’). Pittie recorded these breaches by ORDL under the Development
Agreement by their letter dated 2nd January, 2020 to the SRA.
3.4) During the arbitration proceedings initiated by Pittie against
ORDL, they obtained a Commencement Certificate Report, on an
application under Right to Information (RTI) 2020. The report revealed
that, ORDL had consumed all the FSI generated from rehabilitation
tenements on the amalgamated land and therefore, further FSI for
construction of free sale buildings would necessarily be generated from the
construction of additional rehabilitation tenements solely on Pittie’s plot.
The project stalled.
3.5) On 25th May 2022, the Government of Maharashtra (“GoM”)
implemented the Abhay Yojna Amnesty Scheme (“Amnesty Scheme”).
Under the Amnesty Scheme SRA was authorised to permit Financial
Institutions who have invested funds with the defaulting developers, to
complete stalled project as a “Co-Developer” recorded in the same LoI.
Apparently on 9th December, 2022 the Amnesty Scheme was partially
amended by a Government corrigendum.
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apn 1-oswp-204-2025-F-18-4-25 K.doc 3.6) In the meantime on 29th July 2022, unknown to Pittie, Piramal
executed a Development Agreement with Vistra ITCL India limited (a
Debenture trustee acting on instructions of (Piramal) Alperton and ORDL
(as the confirming party). By this agreement, Alperton was appointed as the
new developer for the project, thereby being entitled to all rights, title,
interest and benefits in respect of the free sale component.
3.7) On 4th December 2023, 29th January 2024, and 13th February
2024 meetings were held by GoM to consider Piramal’s proposal.
3.8) On 5th April 2024, ORDL and Piramal were informed about
hearing before the CEO, SRA on 12 th April 2024 under Section 13(2) of the
Maharashtra Slum Areas (Improvement, Clearance and Redevelopment)
Act, 1971 (“Slums Act“). It was only in mid-June 2024 that the Pittie
became aware of the impugned Order dated 29 th April, 2024 passed by the
SRA. Piramal filed an Appeal before the Apex Grievance Redressal
Committee (‘AGRC’) against the impugned Order.
3.9) In these circumstances, the Pittie filed this Petition on 4 th
September, 2024.
4) Mr. Darius Khambata, the learned Senior Counsel appearing for
Pittie argued that, Pittie appointed ORDL to develop the subject property
since ORDL was developing the surrounding areas under the Slum Scheme.
It was ORDL who failed complete the development of the slum, that the
SRA decided to terminate ORDL as the developer for the SRS. Now, by the
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impugned Order, Pittie’s rights to their land, which is now a part of the
Slum Scheme – partially implemented, is sought to be nullified by the
appointment of the new developer by the SRA.
4.1) Upon taking into consideration the State’s Amnesty Scheme
called the Abhay Yojna Scheme, SRA passed the impugned Order which
effected in the following:
i) Terminated ORDL as developer of the SR Scheme under Section
13(2) of the Slums Act.
ii) Confirmed the appointment of Lender – M/s Piramal Capital and
Housing Finance Private Limited (Piramal) as the Co-Developer
along with developer M/s Alperton Developers (Alperton)
authorised by Lender.
iii) directed Piramal to take steps in accordance with Circular No.
210.
4.2) He asserted that, prior to the Amnesty Scheme, in the event of
default by the developer, proceedings under Section 13(2) of the Slums Act
could be initiated and the defaulting Developer would be removed and a
new developer would be appointed through a transparent tendering
process. Needless to say that the Financier too stood removed. In such
scenario, the Financial Institution who had invested in the project would
suffer a complete financial loss of the monies invested.
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sought to be protected. The financier therefore is given an opportunity to
introduce its own developer, who would not only secure their finance but
also complete the Scheme. In this case, Piramal who were financing ORDL
were allowed to choose developer of their choice. Consequently, Alperton
was appointed as the new developer.
4.4) He asserted that, the SRA’s termination of ORDL as developer
by the impugned Order, is contrary to the provisions of the Amnesty
Scheme (read with the Corrigendum) under which Piramal made its
application to be appointed as a Co-Developer. According to him, the
Amnesty Scheme enables such Financial Institution to come forward to
complete a stalled Scheme by being recorded as a Co-Developer in the LoI.
In doing so, the Amnesty Scheme in Clause 11, expressly states that action
cannot be taken against the developer under Section 13(2) of the Slums Act
during the prescribed period of the Scheme. Therefore necessarily, Piramal
was required to be appointed as the Co-Developer with ORDL in the LoI.
Thus by appointing Alperton, the Scheme is misread and misinterpreted
resulting in Piramal and Alperton being entitled to all the benefits, in the
form of free sale area, arising from the project, without any obligations to
pay consideration to Pittie for ownership rights.
4.5) Mr. Khambata submits that, the ORDL obtaining finance from
Piramal did not concern them since their rights were not affected. He
therefore submits if Piramal chooses to substitute Alperton Developers for
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ORDL they would have no objection. However, Alperton would be bound
and liable for all the terms and conditions in place of ORDL and must
adhere to it in its true letter and spirit.
4.6) Mr. Khambata contends that, the Respondent No.1-State in
paragraphs 3 and 6.5 of its Affidavit in Reply dated 10 th February, 2025 has
supported the Pittie. It states that the Piramal and Alperton are not
absolved of the obligations towards the Pittie, if any, and are bound to
execute all terms and conditions stipulated in the registered Development
Agreement dated 8th September, 2015.
4.7) He submits that, the Amnesty Scheme does not dilute the rights
of the Pittie in any manner by virtue of the removal of ORDL, who has
failed to complete the Scheme. The Scheme’s object is to protect all
concerned in this situation, which is the owner, the financier/s as well as
the slum dwellers. He submits that merely because a new developer is
appointed, he cannot claim all the benefits that are available under the
Scheme and eliminate or dilute all the liabilities that were agreed to by the
original developer. The Amnesty Scheme cannot be interpreted in a manner
that would render the Scheme contrary to the provisions of the Slums Act.
4.8) The contentions of both Piramal and Alperton are that, they did
not inherit the contractual commitments and obligations of ORDL. The
Amnesty Scheme entitled them to take the Scheme on a ‘clean slate’. He
countered this by pointing out their statements in the ‘Questionnaire’ and
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other documents annexed to the letter dated 10 th October, 2023 where they
acknowledged their liability towards the outstanding obligations of ORDL
to the Pittie under the Development Agreement dated 8 th September, 2015
including the obligation to provide additional area to the Pittie. He relied
on the Alperton’s Development Agreement dated 29 th July, 2022, its
application to the SRA dated 8th July, 2022 and on 1st February, 2022 for
issuance of the amended LoI and communication dated 10 th October 2023,
to submit that, the present stand is contrary to their own stated position
and conduct while applying under the Amnesty Scheme to avail the
benefits. He submits that, even in the Appeal, Piramal has taken stand that
is at complete odds with both, the Amnesty Scheme and the position taken
while applying to avail benefits thereunder thereby trying to renege on its
representations to the State and SRA.
4.9) Mr. Khambata submits that, ORDL too has taken a stand in the
Arbitration proceedings that, by virtue of its termination as a developer, it is
absolved of its obligations under the Development Agreement. Resulting in
the Pittie losing its inherent right to the property both from ORDL – Piramal
and Alperton without any compensation whatsoever while all benefits
accruing therefrom will be available to Piramal /Alperton and the slum
dwellers – who are trespassers on Pittie’s plot.
4.10) Mr. Khambata asserted that, the impugned Order was passed
without their knowledge and intimation despite all concerned parties being
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well aware of Pittie’s ownership rights to the subject property. In support of
his contention he relied upon the communication dated 23 rd January, 2020
(Exhibit ‘T’ at page 229), Piramal’s response to GoM’s Questionnaire in
October 2023 particularly Annexure 1 (Exhibit ‘UU’ at page 706 at Sr. Nos.
23 and 24) and Annexure 22 (Exhibit ‘WW’ at page 722 paragraph B.9),
Fact Sheet prepared by SRA on 23 rd April 2024, SRA’s notice dated 5 th April
2024. He added that ORDL who continued to participate in the arbitral
proceedings failed to even disclose Piramal’s Application under the Amnesty
Scheme and the existence of Alperton’s Development Agreement with
Piramal. In view of the above, he contended that there was collusion
between ORDL, Piramal and Alperton to deprive the Pittie of its property
without any consideration.
4.11) In response to the contention raised by Piramal – Alperton that
the Pittie can prefer an Appeal under Section 35 of Slums Act, he contended
that no appeal was available in relation to the impugned decision taken in
the Minutes of Meeting dated 13 th February, 2024 of GoM, impugned
communication dated 14th March, 2024 by GoM to SRA and impugned
Order dated 29th April, 2024 passed by SRA. Alternately, he submitted that,
the present case was an exception to the discretionary rule of alternate
remedy.
4.12) Mr. Khambata relied upon the judgements of the Supreme
Court in the case of Dharampal Satyapal Limited V/s. Deputy Commissioner
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of Central Excise, Gauhati and Others reported in (2015) 8 SCC 519,
particularly paragraphs 18, 28-32, 34, 36 and 37 and State of U.P. V/s.
Mohammad Nooh reported in AIR 1958 SC 86, paragraphs 10 and 11 in
support of his contentions.
4.13) Finally Mr. Khambata submitted that, undisputedly all existing
(unused) and future free sale FSI was demonstrably and necessarily
generated from the construction of rehabilitation tenements on the Pittie
Plot which Piramal and Alperton seek to usurp and they moreover have a
legitimate expectation that the State of Maharashtra would acquire Pittie
Plot under the Slums Act resulting in usurpation of Pittie’s right at the
expense of State while retaining huge benefits from the Scheme.
5) Dr. Saraf, the learned Advocate General representing
Respondent No.1-State asserts that, the State has not in any manner sought
to dilute the rights of the landowners. He drew our attention to the
Affidavit in Reply dated 10th February, 2025 and particularly pages 836 and
843 thereof. In support of his contention and the clear stand of the State
that the Amnesty Scheme does not absolve the new developer of the
obligations towards the owners, if any. Consequently, it was in this context,
he submitted that in the Affidavit it is stated that the Petition is
misconceived and requires to be dismissed.
6) Mr. Ravi Kadam, learned senior counsel appearing for
Respondent No.5-Alperton, the new developer, submits that, they are
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appointed by the SRA pursuant to the Order under Section 13(2) of the
Slums Act and therefore the liabilities of the earlier developer cannot be
foisted upon them. He submits that they are not liable to adhere to all the
terms and conditions that were agreed to by the erstwhile Developer-ORDL
to the Pittie-owner else the Scheme may be unviable for implementation.
6.1) He contends with reference to the Scheme of the Slums Act
that, any slum area declared under Section 4 of the Slums Act is now
covered by Chapter 1A and is treated as a slum rehabilitation area under
Section 3C of the Slums Act for the purpose of implementation of a Slum
Scheme. Therefore Chapter 1A applies to the Slum Rehabilitation Area. He
contends that Section 12(10) of the Slums Act contemplates that the owner
of the land may redevelop the land in accordance with the plans approved
by the competent authority and subject to the restrictions and conditions, if
any, that the authority may think fit to impose.
6.2) Mr. Kadam submits with reference to the right of an owner of
land declared as a Slum Rehabilitation Area that, this right of the owner is
contemplated as being a one-time preferential right that lapses under
certain conditions of the Slums Act and cannot be exercised again and again
as held in the case of Rajan Garg, Resolution Professional of Truly Creative
Developers Pvt. Ltd. V/s. Chief Executive Officer, Slum Rehabilitation
Authority reported in 2024 SCC OnLine Bom 1060, Veekaylal Investment
Company Private Limited V/s. State of Maharashtra and Others in Writ
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Petition No. 995 of 2018 Order dated 22nd October 2019 and Deena Pramod
Baldota V/s. State of Maharashtra reported in 2022 SCC OnLine Bom 5102.
6.3) Mr. Kadam submits that, upon removal of the developer under
Section 13(2) of the Slums Act as applicable under Chapter 1A the CEO
SRA may determine to develop the land declared as Slum Rehabilitation
Area by entrusting it to any agency or other developer recognised by him
for the purpose. Section 13(2) of the Slums Act does not contemplate any
rights continuing in respect of the erstwhile developer or any person
claiming through such erstwhile developer or to whom the erstwhile
developer may have entered into any private contractual obligations. The
Scheme under Section 13(2) of the Slums Act contemplates that the new
developer would complete the Scheme that was left incomplete by the
erstwhile developer and the State and SRA would value the expenses that
were incurred by the erstwhile developer and reimburse the same in
accordance with Section 13(2) of the Slums Act. In this process, the
landowners also loose their right to develop this property. Referring to
Sections 14, 16 and 17 he submitted that, the State may then acquire the
land from the owners under Section 14 of the Slums Act and the owner and
developer may be entitled to the compensation contemplated under the
Statute and substantiated by the judgement in the case of Sara Harry
D’Mello V/s. State of Maharashtra reported in 2013 SCC OnLine Bom 662
that, held that the compensation contemplated thereunder is not illusory.
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He accordingly submits that the new developers would have a ‘clean slate’
and will not be foisted with the liabilities of the erstwhile developer.
6.4) He then drew our attention to the conduct of the Pittie in
attempting to obfuscate the SRS and monetize the said land at the expense
of the slum dwellers. He submitted that, the Pittie has failed twice in
implementing the Scheme first through Darshan Group and then through
ORDL. Therefore referring to Section 226 of the Contract Act,1872 he
submitted that the actions of the agent bind the principal and on that
analogy Pittie has failed twice already and therefore too is not entitled to
one more chance and are only entitled to compensation as contemplated
under the Act from the State upon acquisition of the land. Consequently, the
Pittie’s right under Article 300A of the Constitution of India also lapses after
their failure to develop under the Scheme.
6.5) With regard to the Amnesty Scheme, he submits that Alperton
is not required to take over ORDL’s contractual obligations with Pittie.
He placed reliance on the Government Resolution No. Miscellaneous-
2021/C.No.135/S.I.-1 issued by the GoM dated 25th May, 2022 to submit
that it provides for two measures for completion of delayed Slum
Rehabilitation Schemes viz. (i) appointment of a new developer through the
process of tender and (ii) appointment of the Financial Institutions who
have invested in Slum Schemes and induction of a new developer at their
instance. According to him neither alternative requires the new developer –
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Alperton to meet with all the contractual liabilities and promises of the
defaulting developer. If therefore just as the liabilities of the defaulting
developer are not foisted on the new developer who steps in through the
tender process, similarly it cannot be foisted on the developer brought in by
the Financial Institution.
6.6) Mr. Kadam also drew our attention to the various
correspondences and documents to submit that Piramal has not accepted or
agreed to the terms of the Development Agreement executed between
ORDL and Pittie. According to him the Committee has accepted Piramal’s
proposal without conditions of taking over liabilities or old contracts of the
erstwhile defaulting developer. He submits that, the contention that
contractual rights with ORDL are binding on Alperton is untenable for want
of privity of contract between Pittie and Piramal.
6.7) He contends that, the assertion by GoM that Alperton steps in
the shoes of ORDL is misconceived as neither the Amnesty Scheme nor any
correspondence reflects the same. He placed reliance on the Judgement in
Sanjeev Coke Manufacturing Company V/s. M/s Bharat Coking Coal
Limited & Anr. reported in (1983) 1 SCC 147, to submit that interpretation
is not to be judged by Affidavit filed by the State but by what the legislature
or the State has said in Scheme itself. According to him such contention
would have a drastic consequence and may result in making the Scheme
entirely unviable.
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Scheme does not provide for appointment of a new developer on the basis
of the plain language used in the Amnesty Scheme itself. He submits that
while the Amnesty Scheme contemplates issuance of modified LoI in favour
of the Financial Institution as a Co-Developer along with the newly
appointed developer, the Section 13(2) of Slums Act contemplated issuance
of a new LoI after terminating the old developer in which case the Financial
Institution/s would loose their money invested with the old developer.
6.9) He also vehemently opposed the contentions that the Order
dated 29th April, 2024 was passed by SRA without giving notice under
Section 13(2) of the Slums Act to Pittie placing reliance on the Sections of
the Slums Act, Power of Attorney given to ORDL and Section 229 of the
Contract Act which provides that notice given to the agent will have the
same legal consequences as given to the principle. He also denied any
collusion between Alperton, Piramal and ORDL. He then relied upon
Annexure 22 to the letter dated 10th October, 2023 to submit that Piramal’s
communication to SRA evinced that it intended to proceed with the project
only if certain pre-requisites were fulfilled. Thus, it was clear that no person
would have any right or recourse against Alperton.
6.10) Mr. Kadam finally submitted that, Pittie has already an ongoing
arbitration proceeding against ORDL. Alperton cannot be forced to step into
the shoes of ORDL and defend those arbitration proceedings. The claim of
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Pittie against ORDL is a separate matter and Alperton cannot be forced to
accept the terms and conditions that ORDL had agreed to with Pittie. There
would be a possibility that the project would then become unviable.
Accordingly, he submitted that the Petition is liable to be dismissed.
7) Mr. Dinyar Madon, learned Senior Counsel representing
Respondent No.4- Piramal submits that, he adopts all the arguments of Mr.
Kadam. He further submits that his contract was with ORDL. ORDL had
mortgaged the ‘sale component’ to Piramal. The Amnesty Scheme was to
protect his interest. The foisting of the terms by Pittie on Piramal’s
appointed developer would make the Scheme unviable and thereby the
finance lent to ORDL would then be at stake. He therefore submits that,
Pittie can claim only against ORDL and cannot foist the entire contract on
his developer. He therefore submits that the Petition be dismissed.
8) We have heard all the learned counsel for the parties and
perused the entire record.
REASONS AND CONCLUSIONS:
9) At the outset, it would be pertinent to analyze the Amnesty
Scheme and its clauses to understand the reason for our conclusion.
9.1) The relevant portion of the Amnesty Scheme is reproduced
hereinbelow for ready reference:
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"Government Resolution:-
Approval is given hereby to the Slum Rehabilitation
Authority, to take up the following measures to complete
stalled slum rehabilitation projects:-
1) To appoint Developer through the process of tender:-
…
2) Execution of Abhay Scheme (Amnesty Scheme)
Investment is made by various financial institutions in
the slum rehabilitation projects. The authority to sell the sale
component that will be available through the Developer of
the slum rehabilitation scheme, is given to such financial
institutions in relation to their investment.
The said financial institutions are not on the records of
the Slum Rehabilitation Authority. The Developer of the slum
rehabilitation scheme is not completing the rehabilitation
component in the said scheme due to some reasons. In spite
of finance being provided, the rents of eligible hutment
holders are kept in arrears and since the scheme is being
deliberately stalled, the rehabilitation of the slum holders is
not being done on time. The financial institutions who have
invested in such rehabilitation schemes are facing financial
loss. Since the said financial institutions are not on the
records of the Slum Rehabilitation Authority, it is does not
become possible for the Slum Rehabilitation Authority to give
them approval in spite of their having financial capability to
complete the scheme. In such stalled schemes, if those
financial institutions approved by the Reserve Bank of India,
SEBI or NHB, come forward, they will be given permission to
complete the stalled scheme. [Those financial institutions
(approved by RBI, SEBI, NHB) which have provided funds for
implemention of the scheme, should be entered in the Letter
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of Intent as Co-Developer/Lender. Permission to implement
the scheme will also be given to the competent institution
appointed/authorised by them.]1
The following terms and conditions will be applicable to both
the aforementioned schemes.
1) It will not be necessary to take approval of the General
meeting of the Committee of hutment holders for
appointment of new Developer/Financial Institution.
2) The condition to pay 5% premium by the said financial
institution as per the slum rehabilitation policy, will not be
there.
3) It will be binding on the Developer/Financial Institution
to complete construction of the rehabilitation component
within the prescribed period.
4) It will be binding on the new Developer to pay the rents
of all eligible hutment holders regularly.
5) In connection with payment of the rent arrears of the
hutment holders in the scheme, the Chief Executive Officer,
Slum Rehabilitation Authority will take proper decision
through consensus after holding joint meetings with the
Developer/Financial Institution as well as Office bearers of
the concerned housing society. The Letter of Intent (LOI) will
be given only after that.
6) It will be binding on the said financial institution to
submit certificate regarding financial capability (Annexure-
III).
7) If the said Financial Institution/Developer does not
complete construction of the rehabilitation component within
the prescribed time period, penalty will have to be paid as
1 As per corrigendum dated 9th December 2022 at page 677 of the record.
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follows:-
Sr. Stages of time Percentage of Penalty that will be
No. period construction to charged if there is delay
be completed in construction
within the said
time period
1 Within 1 year 33 Amount equivalent to
1% of value of land
required to construct
sale component
2 Within 2 years 66 Amount equivalent to
2% of value of land
required to construct
sale component
3 Within 3 years Construction of Amount equivalent to
all flats 2% of value of land
required to construct
sale component
(Note- The above time period will be calculated from date of
giving permission for construction of the redevelopment
component).
8) However, regarding large schemes, wherein if it is not
possible to complete the work as per the above schedule,
for such projects, the Chief Executive officer, Slum
Rehabilitation Authority will have the authority to fix the time
period required to complete the scheme as per the size of the
scheme.
9) It will be binding to mention in the Letter of Intent
(LOI), the information regarding the penalty to be charged to
the Financial institution/Developer if the construction of the
rehabilitation component or the construction is not completed
within the prescribed time period.
10) If any instruction is received from the Hon’ble High
Court or the Government in connection with the scheme, it
will be binding on the Financial institution/new Developer to
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comply with the said instruction.
11) In the said scheme, action cannot be taken against the
Developer under Section 13(2) of the Maharashtra Slum
Areas (Improvement, Clearance and Redevelopment) Act,
1971 during the prescribed period of the scheme. However, if
the aforementioned terms and conditions are breached, or the
said Financial institution/new Developer is unable to
complete the slum rehabilitation scheme, action will be taken
against him under Section 13(2) of the Maharashtra Slum
Areas (Improvement, Clearance and Redevelopment) Act,
1971. Any new scheme submitted by him thereafter will not
be accepted.”
[Emphasis Supplied]
9.2) This Amnesty Scheme came into effect on 25 th May, 2022. It
was for those projects that were stalled despite all efforts, including
concessions offered and finance being provided to the developer.
10) Pertinently, the Amnesty Scheme is for such Financial
Institutions that are approved by Reserve Bank of India (RBI), Securities
Exchange Board of India (SEBI) or National Housing Bank (NHB) who
come forward to complete the Scheme. Such Financial Institutions will be
given permission by bringing them on record as Co-Developer in the LoI to
complete the stalled Schemes. It is to enable them from facing financial
losses despite having financial capability to finance completion of the
Scheme.
11) Upon perusal of the entire Scheme, we are unable to accept the
Mr. Khambata’s contention that the clause 11 of the Amnesty Scheme
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contemplated continuance of ORDL as developer, though terminated under
section 13(2) of the Slum Act, because the clause 11 did not use the words
“new developer”. His interpretation, of the words ‘action cannot be taken
against the Developer….’ to mean the ‘defaulting developer’ would in fact
be a misinterpretation and misreading of the Amnesty Scheme. Since the
Scheme is for all those who are affected by the non-performance by
‘defaulting developer’ and his consequent removal. The subsequent line
which mentions the words “…said Financial institution/ new Developer…’
clarifies that the clause refers to the new developer and not the ‘defaulting
developer’ Additionally, a plain reading of paragraphs 7 and 11 reveals that
it is regarding that new developer appointed by the Co-Developer/Lender
who will not face action under Section 13(2) of the Slums Act during the
prescribed period of the Scheme except in the event of breach of the terms
and conditions mentioned in the Amnesty Scheme.
12) We however agree with Mr. Khambata that, though Pittie has
no privity of contract with Piramal, his rights as landowner does not
extinguish or get nullified on account of ORDL’s termination, since Pittie
was not a developer of SRS to whom LoI was issued. A careful reading of
the Amnesty Scheme would indicate that even the financiers who had the
financial capability to complete the scheme could not be granted approval
since they were ‘not on the records of the Slum Rehabilitation Authority’.
Therefore, since Pittie who was neither on record of the SRA nor was in any
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way responsible for the stalling of the scheme, cannot face abrogation of his
rights. It would be akin to nullifying the rights of the financier who
financed the Developer. According to us both are similarly placed as they
are not on record of the SRA.
13) Regarding the contention of Mr. Kadam, learned senior Counsel
for the for Alperton Developers and Contractors Pvt. Ltd.-Respondent No.5,
that the owner’s right to redevelop the property is a one-time preferential
right relying on the Judgments of Rajan Garg (supra), Veekaylal Investment
(supra) and Deena Pramod Baldota (supra), we find this proposition
unacceptable. These judgements do not lay down any such principle.
14) A closer look at Rajan Garg (supra), particularly the line in
paragraph No.23 which reads thus, “This is understandable where no letter
of intent is issued at all or has been issued to somebody else to the
exclusion of the owner.” reveal that it excludes the owner, when letter of
intent is issued to someone else . Thus, this judgment considers a situation
where the LoI has been issued to a developer and not the owner himself.
15) Similarly, in the case of Veekaylal Investments (supra), it was
Veekaylal Investments who had submitted the rehabilitation scheme as
mentioned in paragraph 19 of the judgement and was on the record of the
SRA.
16) Even in the case of Deena Pramod Baldota (supra) to the Court
has categorically observed in paragraph No.34 that, “ultimately the Court is
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called upon to adjudicate matter structured by provisions of beneficial
legislation competing rights of land owner and slum dwellers will have to
be balanced after considering the facts and circumstances in exercise of its
extraordinary writ jurisdiction under Article 226 of the Constitution of
India. The Court has to consider all the relevant facts and circumstances
and is required to satisfy itself that its interference will serve the interest of
justice.”
17) Thus, the commonality in all three cases referred by Mr. Kadam
was that the property owner was granted an opportunity to develop the
land and had failed. The present case is clearly distinguishable. Here Pittie
had offered the land to ORDL a developer who was developing the
adjoining lands under the slum scheme. The LoI was in the name of ORDL
and Pittie’s land was merged in the Scheme. Therefore, the principle laid
down in these judgments will not assist Mr. Kadam’s contention in the
present case.
18) We are unable to accept Mr. Kadam’s contention that if the
developer appointed by the owner, who is not on the record of SRA, fails to
develop the property even then his land is liable to be acquired under
Section 14 read with Sections 16 and 17 of the Slums Act and the owner
will only have a right to receive compensation for the acquisition in
accordance with Sections 16 and 17 of the Slums Act.
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case. Firstly, because the owner is not on record of SRA and undertaken to
develop the property it was ORDL and secondly, Section 14 contemplates
representation from the competent Authority, which is absent in this case.
19) Further, if these contentions are to be accepted, it would result
in the Financier and new Developer enjoying the fruits of Scheme at the
cost of the State who would require paying for the acquisition of the land
from Pittie. Consequently, Pittie’s rights under the contract with developer
are nullified and would get far lesser value than the market value for his
property. In these circumstances, only two stake holders i.e., the financier-
developer and slum dwellers who have no right as such on the property
enrich themselves at the cost of the landowner. This is not justified in any
manner from any point of view.
20) We are also unable to accept the contention of Mr. Kadam that
Pittie attempted to obfuscate the SR Scheme and monetize the land at the
expense of the slum dweller. Pittie’s inability to develop the land cannot be
construed as an attempt to obfuscate the SR Scheme. Pittie has all rights to
monetize the land as an owner. On the contrary, it is the slum dwellers who
have illegally trespassed on Pittie’s land and deprived him of his rights. The
State has failed to help Pittie in protecting his land.
20.1) In this context the learned Single Judge of this Court in the
case of Reverend Father, Peter Paul Fernandes, Parish Priest and Sole
Trustee of the Church of St. Francis Xavier V/s. State of Maharashtra
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reported in 1991 SCC OnLine Bom 92 : AIR 1991 Bom 445, has observed
about the formation of slum colonies in Bombay way back in 1991. The
relevant passage is reproduced for ready reference.
“6. ……. It is unthinkable that person whose land
has been encroached upon, which land is situated in
Greater Bombay, would keep quiet and not seek the
assistance of Public Authorities to get rid of squatters. It
will have to be presumed that the Petitioners predecessors
had done so and an indirect confirmation of this comes
from the portion accepted from the Order at Exh. A. The
same speaks of demolition by the B.M.C. or the
demolitions squad of the encroachment department of the
revenue. This demolition of the unauthorized structure is
to be undertaken by the B.M.C. and the Revenue
Authorities and that is they alone who can deal with the
squatters. Slum colonies in Bombay had their origin in acts
of trespass and the private citizens suffering could do little
to get even with the wrongdoers. For this reason,
demolition of unauthorized structures is the responsibility
of the Corporation or the demolitions squad of the
Revenue Authorities. Judicial notice can be taken of the
fact that the squatters are the creations of either slumlords
or they themselves and that where the lands encroached
upon are of private parties: the latter having no remedy
against the wrongdoers. Mr. Bora says that the Petitioner
or his predecessors could have filed a complaint or a suit in
a Court of law against the trespassers. It is well known that
the complaints and the suits take decades to reach decision
in the city of Bombay and that even where relief is
granted, it is merely on paper. To execute decrees and
secure the eviction of trespassers through the process of
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or fine or penalty is to add insult to injury. The owners
whose property has been occupied and perhaps lost
forever, are further burdened with liability to pay for the
benefits originating in the acts of trespass and enjoyed by
the trespassers or their successors-in-interest….”
[ Emphasis Supplied ]
21) This case is the stark reality of the learned Judge’s prediction in
1991. Pittie is a victim and thus cannot be blamed for not being able to
protect his land. It is the concerned authorities and the State that are to be
blamed.
22) All landowners are not developers and have the wherewithal or
the expertise in development. Obviously, in the eventuality that illegal
structures are erected on their land and declared as Slum, they would either
sell, assign or self-develop as they deem fit.
23) In this case, Pittie has assigned his rights to ORDL for
consideration because he was developing the adjoining lands. Prior to
ORDL Pittie had attempted to develop through another developer. That too
did not fructify.
24) Questions that arise in our minds are:
i) Can the owner be blamed in these circumstances?
ii) Should his rights be nullified for contracting with a
developer who fails for whatever reason?
24.1) In our view, the owner cannot be faulted. He is the victim in
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this whole scheme. But the Slum Act gives preference to those illegal
trespassers on private land. They are permitted to dictate terms and their
rights are sought to be protected contrary to all general principles.
25) Thus Mr. Kadam’s contention that Pittie attempted to develop
his land twice and failed and cannot get a chance again is to be rejected.
Moreover, a landowner’s right cannot be nullified on account of breach by a
developer-a third party whose actions are not within the control of the
landowner.
26) We are unable to accept the contention of Mr. Kadam that,
Pittie has sought to delay the SRS for his own personal motives and has
failed to take steps for completion of the SRS.
27) According to us, this is merely a bald statement with no
particulars stated in support of this contention. He is unable to point out
the obligations that were reneged by Pittie which led to the delay in
implementation of the SR scheme. In the absence of such particulars, it
cannot be asserted that Pittie was responsible for delay in implementation
of the SR scheme. Consequently, the same can only be called as a conjecture
or surmise. The allegation that Recital 18 of the Development Agreement
and Clause 8 of the MoU evinces that Pittie contracted with ORDL to avoid
acquisition of the land and utilize the slum process to enrich himself is
baseless. However, in our view, Pittie cannot be blamed for trying to protect
his rights to the land.
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cannot be construed as collusion between them to thwart the SR scheme by
any stretch of imagination. In our view, Pittie was only a recipient under the
contract without any obligations. ORDL had to perform by constructing a
building for Pittie on it plot apart from other consideration. Whilst, Pittie’s
land is used and rehab constructed thereon, no part of the consideration is
received by them as contended. Obviously therefore, Pittie has chosen not
to terminate the contract with ORDL. In these circumstances, we are unable
to accept Mr. Kadam’s contention that, a bona fide owner would have
forthwith terminated the deal with the developer.
29) We also do not agree with Mr. Kadam’s contention that since
Alperton was appointed pursuant to the termination of the old developer
under Section 13(2) of the Slums Act, it was not required to take over
ORDL’s contractual obligations with Pittie relying on the Government
Resolution dated 25th May 2022. According to us if the Amnesty Scheme
were not applicable then, even the financier of the developer would be
ousted from the Scheme as contemplated under Section 13(2) of the Slums
Act.
30) In our view, the status of the Financier cannot be higher than
the landowner. If viewed from the perspective of a financier to a developer
in a redevelopment project, is a financier who finances the developer for his
entitlement to the free sale component in the redeveloped building would
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be placed in the same position as a third-party purchaser.
31) In the case of Deepak Prabhakar Thakoor and Others V/s.
Maharashtra Housing and Area Development Authority (MHADA) and
Others reported in 2023 SCC Online Bom 2234, the Division Bench of this
Court has held that a flat purchaser of the free sale component of a building
proposed to be developed by the developer will have no right to decide on
the developer of the society whose building was being redeveloped.
Applying the same ratio, a financier to the developer, will also have no right
to decide on the new developer of the society whose building was to be
redeveloped. It would thus be preposterous to contend that a financier to
the developer of a society redevelopment project, who is similarly placed in
the slum project would eliminate the right of the society whose building
was sought to be developed. According to us the only right the financier has
is against the developer who has reneged on his contractual obligations
with the financier.
32) In this context, the Amnesty Scheme must be read in the
broader sense and purposively to secure both the landowner and the
financier. It cannot be only to secure the financier. In the present case he
stands on a lower footing than Pittie who is the landowner. It would be
different if Pittie as developer would have been removed under section
13(2) of the Slums Act.
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be doing sheer injustice to Pittie the landowner who is principally a victim
in this Scheme. He is not only stripped of his rights to vacant land by
slumlords (against whom no action is taken by the State), then by the slum
dwellers who claim right to shelter though are trespassers and whose
interest the State seeks to protect and the financier who has no right
whatsoever save and accept to recover the money from the developer who
has reneged on his contractual terms. We cannot and do not propose to
permit such ex-facie blatant injustice to perpetrate.
34) We are also unable to accept the contention of Mr. Kadam that
notice under Section 13(2) of the Slums Act was required to be given only
to the defaulting Developer (who was a Power of Attorney holder of Pittie)
and would be deemed notice to the landowner. In our view, Pittie ought to
have been given Notice as provided under Section 13(2) of the Slums Act
inasmuch as he was clearly and directly affected with the outcome of the
hearing.
35) While considering this aspect, it would be pertinent to note the
definition of “developer” and “owner” under the Slum Act. The definitions
are reproduced herein for ready reference:
“2 (c-a) “developer” means such agency as may be
appointed or registered under section 3B by the Chief
Executive Officer of the Slum Rehabilitation Authority to
implement the Slum Rehabilitation Scheme.
2 (f) "owner", when used with reference to any building or
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land, means the person who receives or is entitled to receive
the rent of the building or land, if the building or land were let,
and includes, –
(i) an agent or trustee who receives such rent on
account of the owner;
(ii) an agent or trustee who receives the rent of, or is
entrusted with, or concerned for, any building or land devoted
to religious or charitable purpose;
(iii) a receiver, sequestrator or manager appointed by a
court of competent jurisdiction to have the charge of or to
exercise the rights of owner of the said building or land, and
(iv) a mortgage in possession
but does not include, a slumlord.”
36) A plain reading of the owner’s definition reveals that it does
not include a developer. Moreover, an agent under the definition of the
owner also does not include a developer. Therefore, a developer cannot be
read into the definition of owner under the Slums Act, enlarging it, though
not contemplated by the Act.
37) Additionally, the proviso to Section 13(2) of the Slums Act
contemplates notice to the landowner. The Section 13 (2) and the relevant
proviso under section 3D is reproduced herein for ready reference:
“S. 13(2) Where on declaration of any land as Slum
Rehabilitation Area, the Chief Executive Officer is satisfied
that, the land in the Slum Rehabilitation Area has been or is
being developed by the owners, land holders or occupants or
developers in contravention of the plans duly approved, or32/37
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of section 12, or in contravention of any provision of any
Slum Rehabilitation Scheme or any condition specified in the
approval or has not been developed within the time, as
specified under such conditions of approval, he may, by order,
determined to develop the land declared as Slum
Rehabilitation Area by entrusting it to any agency or the other
developer recognised by him for the purpose.
Provided that, such compensation shall not be payable by the
agency appointed by the Chief Executive Officer, for any
expenditure incurred towards construction to meet
conditional obligations made to any third party by the
landowners or occupants or previous developers, as the case
may be. The Chief Executive Officer before passing such order
shall obtain report from approved valuer independently
appointed on his behalf and by the concerned parties to the
proceeding before the Chief Executive Officer.
Provided further that, before passing such order by the Chief
Executive Officer, the concerned landowner or occupant or
developer, as the case may be, shall be given a reasonable
opportunity of being heard and time which shall not be more
than thirty days of showing cause why the order should not
be passed.”
[Emphasis supplied]
38) According to us when the rights of the landowner are likely to
be affected by termination of the developer a separate entity, then notice to
the landowner, being an affected party, is necessary and cannot be
dispensed with by the SRA. The Sections or the provisos cannot and ought
not to be read to exclude the landowner’s right to be heard which is
contemplated by the Slums Act. The words “as the case may be” is meant to
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include all parties affected and not otherwise as contended by Mr. Kadam.
39) In the present case admittedly, no notice was given to Pittie.
Hence, the Order under Section 13(2) of Slums Act would necessarily have
no binding effect on Pittie.
40) Sections 226 and 229 of the Contract Act referred to by Mr.
Kadam would therefore not be applicable to a ‘developer’ under the Slums
Act as he is not an “agent” as contemplated or covered under the definition
of the “owner” under the Slums Act. The word “developer” and “owner”
have two distinct definitions under the Slums Act and are not interlinked in
any manner or form.
41) We are unable to accept and accede to the contentions and
propositions of Mr. Kadam and Mr. Madon who are the new developers and
financiers respectively in this case. Pursuant to the termination of ORDL –
the developer, under Section 13(2) of the Slums Act, since the Scheme is
partially implemented and there cannot be restitution for the landowner or
recovery for the financier, the incoming developer must secure rights of
both. The Amnesty Scheme must be effectively read to secure the rights of
all the three stakeholders namely, the landowner, slum dwellers and the
financier.
42) On an overview of the matter, according to us, the Abhay Yojna
Amnesty Scheme evidently caters to all the three stakeholders. The Amnesty
Scheme envisages the developer’s failure to perform his obligations and is
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initiated to protect the rights of the three stakeholders under the Scheme.
While the Abhay Yojna Scheme has categorically protected the financier and
the slum dweller, in our view, it also protects the right of the landowner. It
is the defaulting developer who is substituted. The State has rightly taken a
stand in its Affidavit in Reply dated 10 th February 2025 to the said effect in
unequivocal terms that Piramal/Alperton will be bound by the terms of the
Registered Development Agreement between the Private entity and
erstwhile Developer dated 8th September 2015 and is bound to execute all
terms and conditions stipulated therein and we appreciate. The State’s
stand is absolutely justified being rational. The only thing that the State has
sought to do by bringing out the Amnesty Scheme is to protect the interests
of all concerned. In this regard in paragraph 6.5 of the same Affidavit it
states that the new developer is not absolved of the obligations towards the
owners, if any.
43) In this context Mr. Kadam’s contention that, Affidavits cannot
bind the parliament and validity of legislation is not to be judged merely by
affidavits filed on behalf of the State relying on the case of Sanjeev Coke
(supra) is misconstrued. As held by the Supreme Court we have therefore
judged this case and the intention of the Amnesty Scheme not merely on
basis of affidavits filed on behalf of the State but by taking into
consideration all the relevant circumstances and especially from what we
gathered from what the legislature has itself said. This statements amply
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clarify that the Amnesty Scheme certainly does not permit the new
developer to get a ‘clean slate’ and take the benefits under the Scheme and
thereby deprive the landowner of their benefits for having volunteered to
join the Scheme for the development of their lands.
44) In conclusion, with a view to balance the equities amongst all
the parties herein Alperton-the developer’s appointment is to continue. It
may choose to either agree to the terms and conditions of ORDL in totality
or may choose to enter into another set of terms with the landowners.
Choice is left to the new developer. If an agreement (either on the same
terms or other terms) with Pittie is not possible then they may choose to
decline the contract and exit the Scheme. In which case Piramal may choose
to bring in another developer who will cater to the terms of Pittie. But
having accepted the contract, it is bound to secure the rights of all the three
stakeholders namely, Pittie, Piramal and Slum Dwellers.
45) The plea of alternate efficacious remedy raised by Piramal and
Alperton is to be rejected as ex facie and admittedly, Pittie was neither
given a notice nor a hearing, and therefore the ratio in the case of State of
U.P vs Mohammad Nooh reported in AIR 1958 Supreme Court 86, would
squarely apply as this case is clearly an exception to the discretionary rule
being in violation of the principles of natural justice.
46) Pittie’s claim against ORDL in the arbitration proceedings will
have no bearing to the issue before us and hence we do not propose to
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comment on the same. As fairly submitted by Mr. Khambata, the arbitration
proceedings will independently continue.
47) We accordingly dispose off the Petition in the above terms.
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