Full Judgement
Susme Builders Pvt. Ltd. Vs. Chief Executive Officer, Slum Rehabilitation Authority and Ors.
[Civil Appeal No(S). 18121 of 2017]
Deepak Gupta, J.
1. A dream turned into a nightmare. The dream of over 800 slum dwellers who also happen to be owners of the land of having a permanent roof over their head has not turned into reality for more than three decades. The slum dwellers are embroiled in various litigations. There are many powerful persons involved, be they builders, promoters and even those slum dwellers who have managed to become office bearers of the society of slum dwellers. Learned senior counsel appearing for the parties produced before us graphic photographs showing the sordid conditions in which these slum dwellers continue to reside despite having entered into an agreement with the appellant more than 30 years back to develop the slums and rehabilitate the slum dwellers in proper accommodation.
THE FACTUAL BACKGROUND:
2. This case has a long and chequered history and has some features which are unique to it. The land in question measuring 23018.50 square meters is situated in the heart of Mumbai i.e. Santacruz (East), Mumbai. This land earlier belonged to the Ardeshir Cursetji Pestonji Wadia Trust, hereinafter referred to as 'the Trust'. A slum had developed 3 over the said land. The slum dwellers formed an Association known as 'the Shivaji Nagar Residents' Association. It appears that the Trust had initiated some litigation for eviction of the slum dwellers. On 19.03.1980 a consent decree appears to have been passed in this litigation whereby the Trust agreed to transfer the entire land to the slum dwellers in case the slum dwellers formed a society.
The slum dwellers thereafter constituted a society in the name and style of Om Namo Sujlam Suflam Co-operative Housing Society, Respondent No. 3 herein (hereinafter referred to as 'the Society'). About 800 slum dwellers formed the Society, which was registered under the Maharashtra Co-operative Societies Act, 1960. In furtherance to the decree, the Trust executed a deed of transfer in favour of the Society (Respondent No. 3 herein), transferring the entire land to the Society on 20.02.1985. Thus, this is a unique case where the slum is owned by the Society of which the slum dwellers themselves are the members. The slum dwellers are, therefore, also the owners of the land in question.
3. It would be pertinent to mention that the land in question was declared to be a slum under Section 4 of the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971 (hereinafter referred to as 'the Slum Act') firstly on 16.08.1977 and again on 07.12.1983.
4. On 15.09.1985, a General Body Meeting of the Society was held and in this meeting it was decided to appoint M/s. Susme Builders Private Limited, hereinafter referred to as 'Susme' (the appellant herein), to develop the property. Thereafter, a development agreement was entered into between the Society and Susme on 27.02.1986. It was agreed that there were about 800 occupants on the land in question and each one of the slum dwellers would be provided accommodation measuring 240 sq. ft. built up area with carpet area of 190 sq. ft.
The agreement also contained a condition that the slum dwellers could purchase additional area of 60 or 110 sq. ft. by paying for the extra area at the rate of Rs. 350 per sq. ft.. The project was to be completed within a period of 5 years. Consequent to the agreement, the Society executed a power of attorney in favour of the nominee of Susme on 07.04.1986 virtually empowering it to act on behalf of the Society.
5. Admittedly, no work was done as per the terms of the agreement and nothing was constructed during this period. The stand of Susme is that during the period some public interest litigations were filed, hence the plot of land was not developed.
6. Thereafter, the Development Control Regulations for Greater Bombay, 1991 under the Maharashtra Regional & Town Planning Act, 1966 (for short 'DCR') were enforced. As per these DCRs, each one of the slum dwellers was entitled to a tenement of 180 sq. ft. free of cost. Therefore, the general body of the Society met on 30.10.1994 and passed a resolution that the earlier agreement be modified and a tenement of 225 sq. ft. carpet area be given to each slum dweller.
Thereafter, letter of intent in terms of the DCR was issued in favour of the Society and Susme on 05.04.1995. As per this letter of intent, each slum dweller was to be alloted 225 sq. ft. area. Susme was also to comply with the guidelines laid down for redevelopment of notified slums. It was made clear that first the existing slum dwellers were to be rehabilitated and only thereafter, free sale could be done in the open market. Susme was specifically directed to carry out the activities as per the activity chart and in terms of Regulation No. 33(10) of the DCR within five years from the date of issue of the commencement certificate. Thereafter, another agreement was entered between the Society and Susme on 10.07.1995 and in terms of this agreement each slum dweller was entitled for a tenement of 225 sq. ft.; 180 sq. ft. free of cost and 45 sq. ft. at the cost of Rs. 14,350/-.
7. In terms of the letter of intent dated 05.04.1995 and the agreement, Susme was to construct 12 buildings of ground plus seven floors for re-housing the slum dwellers and project affected persons on about 11,000 sq. mtrs. of land and remaining 12,497 sq. mtrs. was to be developed for the 7 purpose of free sale. During the pendency of this agreement, Susme constructed two buildings in which 128 slum dwellers were rehabilitated. This was the only progress which took place.
8. The DCR was amended in 1997. Under the new DCR, each slum dweller was entitled to a flat having carpet area of 225 sq. ft.. Naturally, the slum dwellers wanted, that as per the amended DCR, which was more beneficial to them, they should be granted a larger flat having carpet area of 225 sq. ft.. Therefore, another meeting of general body was held on 10.08.1997. In this meeting it was resolved that fresh negotiations be held with Susme and that Susme should carry out further development under the amended Regulation 33(10) and that 70% residents should consent for the redevelopment. Thereafter, another supplementary agreement was entered into between the Society and Susme on 07.01.1998.
In this agreement, it was stated that there are 867 occupants, out of which 825 are occupying residential premises, are occupying shops and 15 are occupying industrial units. This agreement also provided that tenements to be provided to each of the residential occupants would have a carpet area of 225 sq. ft.. Relevant portion of the agreement reads as follows: "The parties are aware that under the Slum Redevelopment Scheme and the Development Control Regulations each slum dweller is entitled to, a tenement admeasuring 225 sq. ft. carpet area. As regards 27 shops, the shops members shall be entitled to get such area as they are entitled under Sec. 23(10) of D.C. Regulations 1991 amended from time to time.
As regards 15 Industrial Units it is agreed that the Developer shall negotiate with them directly for developing the area occupied by them and the society agrees to sign and execute such papers and writings required by the Developer for that purpose." Clause 26 of this agreement provided that the plans shall be submitted by the developer to the Slum Redevelopment Authority (for short 'the SRA') according to Regulation 33(10) of DCR, 1991 as amended from time to time. This agreement was treated to be a supplementary agreement to the earlier agreement.
9. Susme, on behalf of the Society, also moved the SRA for permission to convert the old SRD Scheme into a new slum rehabilitation scheme. The SRA granted letter of intent on 27.01.1998 and approval was granted for conversion of the scheme. Clause 19 of the letter of intent provided that Susme would submit the agreements with photographs of wife and husband in respect of all the eligible slum dwellers before issue of commencement certificate for sale building, or three months as agreed by the developer, whichever is earlier.
10. One writ petition was filed by the Shivaji Nagar Residents' Association being Writ Petition No. 1301 of 1999 challenging the sanction by the SRA in favour of Susme on the ground that Susme had not obtained consent of 70% of the slum dwellers. The said writ petition was dismissed on 13.12.1999. The relevant portion of the Judgment reads as follows:- "We have heard learned counsel appearing for the parties. We do not find any substance in the contentions raised by the petitioners. It is required to be noted that some 109 slum dwellers filed Writ Petition No. 497 of 1997 raising identical challenge to the scheme and the said petition came to be withdrawn unconditionally on 10th July, 1997. Thereafter, as indicated earlier, two new buildings were constructed and the eligible slum dwellers were put in possession of their respective tenements.
Under the 1997 scheme the builder is required to enter into agreement with individual members and accordingly 582 agreements have already been signed between the parties. There is 10 also no merit in the contention of the petitioners that consent of 70% of the Slum dwellers was required under the 1991 scheme. On perusal of the said scheme it is clearly seen that consent of 70% of the slum dwellers was not required and what was contemplated was that if 70% of the Slum dwellers join the society, which is interested in the rehabilitation of the slum dwellers, then such society would be eligible to apply for sanction of the same under DCR 33(10).
It is not disputed before us that practically all the slum dwellers have been enrolled as members of the society and, therefore, it is not possible to hold that the requirement of 1991 scheme was not complied with. It is also pertinent to note that the proceedings of the general body meeting dated 13th October, 1994 were not challenged by the petitioners or any other slum dwellers by adopting appropriate remedy. Indeed, the general body meeting had unanimously, resolved to modify the agreement in terms of the 1991 scheme and it is too late to challenge the resolution for the first time by way of the present petition which was filed in 1999.
As regards the, 1997 scheme there is a Specific provision for conversion, of the old scheme into a new scheme and accordingly the proposal for conversion was accepted by the authorities and in pursuance of the acceptance, two new buildings have been constructed at an estimated cost of Rs. 5 crores. In our opinion, this petition suffers from gross delay and laches. It is clearly seen that the petitioners were aware of the sanction granted to the society under the 1991 scheme as well as the 1997 scheme. The construction on the property began in 1996 and two buildings have already been constructed. Under the circumstances, we do not find any reason to interfere in writ jurisdiction under Article 226 of the Constitution."
11. After Susme had completed 80% construction of the two rehabilitation buildings, it applied for grant of Transfer of Development Rights (for short 'TDR') in terms of the amended DCR and sold the same. Occupation certificate in respect of these two buildings was issued on 03.11.1998. While granting permission it was observed on the file as follows:-
"Further, as per policy & DCR 33(10) it is necessary that agreements with more than 70% slum dwellers as per new scheme is required. This was pointed out to CEO (SRA) during discussion, when CEO (SRA) instructed to submit agreements with 70% slum dwellers before second phase of T.D.R. Developers have informed that out of 869 slum dwellers, they have submitted 450 agreements to the office of S.R.A. (52%)."
12. On 07.07.1999, the architects of Susme, on instructions of Susme, submitted 12 files containing 580 numbers of individual agreements with members of the Society and undertook to file the remaining individual agreements to make up 70% in due course of time. On 18.01.2000, Susme was again asked to furnish 70% individual agreements of eligible slum dwellers. Susme replied that in terms of judgment of the Bombay High Court dated 13.12.1999, it was not required to file 70% individual agreements. Under the 1997 amended DCR, the developer was entitled to a higher Floor Space Index (for short 'the FSI').
Therefore, Susme submitted fresh plans for construction of 14 storey buildings plus ground floor as against the earlier plan submitted for seven storey buildings plus ground floor buildings. These plans were submitted sometime in the year 1998. However, it appears that the plans were not sanctioned and Susme also did not pursue the matter earnestly with the authorities.
13. Thereafter, on 13.02.2001, SRA informed Susme that the request of Susme for approving amended plans for slum rehabilitation scheme was not considered since the plot under reference was affected by the Coastal Regulation Zone Notification (for short 'the CRZ Notification'). Then Susme along with the Society filed Writ Petition No. 2269 of 2001 in which the main prayer was for setting aside the CRZ objection and it was also prayed that the petitioner be permitted to complete the rehabilitation scheme. In this petition, an interim order was passed on 07.08.2002.
14. The Government of Maharashtra during this period also appointed a one man Commission headed by Shri Chandrashekhar Prabhu to enquire into the complaints made with regard to the Society and the manner in which the rehabilitation scheme was implemented. Susme and the Society jointly filed Writ Petition No. 1854 of 2004 against this Commission. It was alleged that the SRA had handed over all the files to Shri Chandrashekhar Prabhu. However, an order was passed on 01.03.2005 in the aforesaid writ petition in which a statement was made on behalf of the SRA that all the concerned files had been retrieved from Shri Prabhu and, therefore, the decision on the plans would be taken within four weeks. The Petition was accordingly disposed of.
15. In 2005 itself it was clarified by the authorities that the property in question does not fall in CRZ, Part I and only a portion of the property falls in the CRZ, Part II. The architects of Susme applied for approval of construction of transit accommodation and this approval was granted by the SRA on 18.08.2005. This was, however, subject to the condition that agreements with individual slum dwellers would be executed before demolition of existing structure on the site. Again complaints were made by some people that transit camps were not constructed as per the approved plans and the SRA issued stop work notice on 14.03.2006.
16. Another supplementary agreement was entered into between Susme and the Society on 05.09.2006. This agreement had a clause that the developer i.e. Susme was to deal only with the Managing Committee of the Society. This agreement also provided that any of the Directors of Susme would be treated to be the attorneys of the Society. This agreement also provided that Susme had offered to pay a sum of Rs.75,000/- to each member of the Society having a structure not exceeding 17.00 sq. mtrs. and Rs.1,00,000/- to each of those members whose structure is of more than 17.00 sq. mtrs.. It is, however, not clear whether this amount was actually paid or not. An extraordinary general body meeting of the Society was held on 22.02.2009.
In this meeting it was pointed out that the members of the Society were not taken into confidence by the Managing Committee while issuing power of attorney in favour of the developer and changes to the detriment of the members have been made by the Managing Committee in collusion with Susme. It was also pointed out that agreements were entered into by the Managing Committee with Susme behind the back of the members of the Society. The majority of the members demanded for cancellation of the agreement made with Susme. It would not be out of place to mention that the old Managing Committee had been voted out and a new Managing Committee had taken over during this period.
Thereafter, another general body meeting was held on 29.03.2009 and the minutes of the meeting dated 22.02.2009 were approved. In this meeting it was also pointed out that now Susme had offered to make new plans giving each slum dweller a tenement of 269 sq. ft. carpet in terms of the new circular. But, the benefit of such bigger tenements was not made available to those who were already housed in the rehabilitation buildings. In effect, in this meeting it was decided to terminate the agreement with Susme.
17. Susme, thereafter, invoked the arbitration clause in the agreement and filed a petition for grant of interim relief under Section 9 of the Arbitration and Conciliation Act, 1996 on 29.10.2009. The said arbitration petition was withdrawn on 16 26.06.2012 with liberty to Susme to file a suit. However, the Society was restrained from implementing the Resolution terminating the agreement till 13.07.2012. Civil suit No. 1588 of 2012 was filed by Susme on 10.07.2012 in the High Court of Bombay against the Society and M/s. J.G. Developers Private Limited.
18. The Society made a complaint to the SRA on 05.04.2009 that Susme was not developing the project as per the agreement and necessary action be taken by the SRA against Susme. On 15.06.2009, a communication was sent to the Society on behalf of SRA that since Susme had constructed two buildings and is in the process of construction of transit camp, the developer Susme should be allowed to continue and the request for change of developer was virtually rejected.
There is some dispute as to whether this letter was signed by the Chief Executive Officer or the Executive Engineer but that is not very material for the decision of the case. On 24.07.2009, the Society terminated the agreement with Susme by a written notice. The Society made another complaint to the SRA and on 08.09.2009, the SRA issued notice to Susme in terms of Section 13(2) of the Slum Act, but it appears, that no action was taken pursuant to this notice.
19. Thereafter, on 14.09.2009, the Society entered into an agreement with M/s J.G. Developers Private Limited, respondent no.4 (hereinafter referred to as 'J.G. Developers'). In this agreement J.G. Developers agreed to provide permanent alternative accommodation measuring 269 sq. ft. carpet area to each of the eligible members having residential premises. Sufficient alternative accommodation was also to be provided to those occupying commercial/industrial premises. In Clause (4) of the agreement, it was mentioned that since the Society was the owner of the plot, the developer would also grant it 72,000/- sq. ft. carpet area free of cost for use by the members of the Society.
This was crystallized in the supplementary agreement entered on 22.09.2009 between the Society and J.G. Developers. In terms of this supplementary agreement, 155 members occupying double residential premises would be entitled to additional area of 18 150 sq. ft. and 614 members having single residential premises would be entitled to 75 sq. ft. additional area. This effectively meant that those having single residential area would get a tenement of 344 sq. ft. and those having double residential area would get a tenement of 419 sq. ft.. J.G. Developers took the responsibility of getting permission for giving this extra area. Thereafter, J.G. Developers entered into individual agreements with some of the members of the Society in terms of the agreement and supplementary agreement as referred to above.
20. Complaint No. 30 was filed on 21.09.2006 before the Anti-Corruption Bureau, which was referred to the High Power Committee (for short 'the HPC'), in which it was complained that the names of the occupants at Serial No. 774 to Serial No. 852 of the list of occupants issued on 21.06.1993 by the Additional Collector, Encroachment, are bogus and are based on fabricated documents. Notice was issued on this complaint. On 04.06.2011, Susme again wrote to the SRA to process the proposal submitted to SRA on 01.10.2008. Similar request was made on 16.07.2011 also.
21. Thereafter, on 11.08.2011, show cause notice under Section 13(2) of the Slum Act was issued by the SRA to Susme as to why the SRA should not determine the right granted to Susme to develop the land and entrust the work of rehabilitation of the slum of the Society to some other agency. The reasons for issuing the notice are contained in Annexure- A, which reads as follows:
"1) The LOI for conversion of SRA scheme was issued u/No.SRA/ChE/110/HE/PL/LOI dt. 27/01/1998. It is reported by the Secretary that the developer has failed and neglected to complete the work of Rehab building within the stipulated period as per LOI condition and committed the breach of the terms and conditions of the sanctioned S.R. Scheme.
2) As per complaint of Society, the Developer have not taken effective steps for speedy implementation of Scheme and shown wilful negligence." Susme replied to the notice. Even the Society submitted its reply to the notice and stated that there was inordinate delay in completing the scheme. Written submissions were filed by all sides. Finally, by order dated 24.02.2012, the SRA set aside the appointment of Susme as developer mainly on two grounds:-
(i) that there was unexplained delay in carrying out the work under the rehabilitation scheme and,
(ii) Susme had failed to show that it had filed individual agreements with 70% slum dwellers. The SRA, instead of handing over the work to another agency, held that since the Society had already entered into an agreement with J.G. Developers, it may get the scheme implemented through it. Susme filed an appeal being No. 39 of 2012 before the HPC. This appeal was dismissed on 18.06.2012. This order of the HPC was challenged by filing Writ Petition No. 1718 of 2012, on the ground that one of the Members of the HPC was not entitled to hear the appeal.
This writ petition was allowed on 14.08.2012 and the matter was remanded back to the HPC. Thereafter, the HPC again heard the appeal and dismissed the same on 10.10.2012. Against this order of the HPC, the appellant filed Writ Petition No. 5 of 2013, which was rejected by the Bombay High Court by the impugned order dated 11.06.2014 and it is this order of the High Court which is under challenge in this appeal. In the meantime, on 03.08.2012 the Bombay High Court in the suit filed by Susme, refused to grant any interim relief.
22. Letter of intent dated 29.10.2012 was issued by the SRA in favour of the Society, J.G. Developers and also its architects. In this letter of intent approval was given for FSI of 3.78 for slum portion, 3.18 for slum portion in lieu of 128 tenements with carpet area of 20.90 sq. mtrs., already constructed and 2.58 for slum portion in CRZ-II. Effectively, the FSI for the developer had increased substantially. In this letter of intent it was mentioned that the eligible slum dwellers would be re-housed in residential tenements of carpet area of 25 sq. mtrs. (269 sq.ft.) or 20.90 sq. mtrs. (225 sq.ft.). It is thus apparent that no permission was granted for giving larger tenements to the eligible slum dwellers.
23. In another Special General Meeting of the Society held on 13.07.2014, it was decided by majority vote to cancel the agreement with J.G. Developers. It was also decided that in view of the cancellation of appointment of J.G. Developers, the Managing Committee should select a new and capable developer and the offer made by such developer should be put up before the next general body meeting. The Society terminated the appointment of J.G. Developers on 25.08.2014. J.G. Developers challenged the termination of their agreement by filing Civil Suit No. 756 of 2014 on 19.09.2014 and in this civil suit an interim order was passed on 24.09.2014.
24. After the termination of the agreement with J.G. Developers on 25.08.2014, on 26.08.2014 the Managing Committee of the Respondent No. 3, the Society, entered into consent terms with Susme again appointing Susme as the developer.
25. Susme filed the present petition for special leave to appeal challenging the decision of the High Court of Bombay in Writ Petition No. 5 of 2013, before this Court. The respondents put in appearance even before the notice was issued and on 27.03.2015 this Court has passed the following order:
"Heard Mr. Fali S. Nariman, learned senior counsel for the petitioner, Mr. P.C. Chidambaram, learned senior counsel and Mr. Mihir Joshi, learned counsel for respondent no.4, Mr. Kapil Sibal, learned senior counsel for respondent no.3, Mr. C.U. Singh, learned senior counsel for respondent no.1 and Mr. Raval, learned senior counsel for the applicant in IA No.5/14 along with their assisting counsel.
2. The present case frescoes a labyrinthine chequered history that can flummox the prudence of the wise, for the procrastination in putting an end to a litigation. But, a pregnant one, it is a problem created by human beings by use of adroit proclivity at their best and, therefore, as advised at present, this Court is obliged to take recourse to an innovative method, at least to attempt at a solution.
3. We need not reflect the nature of orders passed in various cases fought between the parties. Suffice it to mention that they have invoked the power of the authorities under the Maharashtra Slum Areas (Development, Clearance and Redevelopment) Act, 1971, instituted civil suits on the original side of the Bombay High Court and sometimes the society, namely, Om Namo Sujlam Sujlam Co-operative Housing Society, respondent no.3 herein, has changed its colour as chameleon with afflux of time may be yielding to the "hydraulic pressures of time" and thereby eventually, in all possibilities, making the slum dwellers of the area, i.e., C.T.S. No.7627, 7627/1 to 852 admeasuring 23018.50 sq. mtrs. situated at village Kolekalyan at Santacruz (East), Mumbai remain in that pathetic condition as they were since 1986, as if the parties have nurtured the notion that they can arrest time. Be that as it may, a solution has to be thought of.
4. In course of hearing Mr. Chidambaram, appearing for respondent no.4, assiduously asserted that he has got the 24 consent from 70% of the eligible slum dwellers and, therefore, the society is absolutely justified in entering into an agreement which is called a "development agreement". Mr. F.S. Nariman, learned senior counsel, determined not to lag behind, would astutely asseverated that he has the consentum of 70% of eligible slum dwellers and hence, his case cannot be brushed aside. We have been apprised by Mr. Kapil Sibal, learned senior counsel appearing for respondent no.3, that at present there are slightly more than 800 eligible slum dwellers. Mr. Raval, learned senior counsel appearing for the assumed authorised authority of the society, would present that it is the respondent no.3 who has been correctly granted the privilege of development agreement inasmuch as there was a verification with regard to the consent earlier.
5. In our considered opinion, regard being had to the special features of the case which includes the longevity of the case and indefatigable spirit in which the parties are determined to fight, we think there should be appropriate verification of the consent of the eligible slum dwellers in praesenti. Regard being had to the same, we request Mr. Justice B.N. Srikrishna, formerly a Judge of this Court, to verify the factum of consentum of the eligible slum dwellers. The Slum Rehabilitation Authority represented by the Chief Executive Officer either by himself or by any responsible high level officer nominated by him shall assist Mr. Justice B.N. Srikrishna in this regard.
6. As secretarial staff would be required for this purpose, the petitioner and the respondent no.4 shall deposit a sum of Rs.5,00,000/- (Rupees five lacs only) each so that the verification can be expedited. In addition, learned Judge may fix his honorarium which shall be paid proportionately, as agreed to by the petitioner and the respondent no.4.
7. The parties are at liberty to file documents to facilitate the process of verification with regard to consentum in praesenti before the learned Judge. We repeat at the cost of repetition that such a mode has been adopted, regard being had to the special phenomena of the case. As we have taken recourse to such a method any other the litigation pending in any forum in this regard shall remain stayed.
8. Needless to say, the interim order of status quo passed in this special leave petition, except the directions which have been issued hereinabove, shall remain in force.
9. Let this matter be listed on 09.07.2015 awaiting the report from Mr. Justice B.N. Srikrishna."
26. Thereafter, Justice B.N. Srikrishna, former Judge of this Court carried out the mandate, which he was required to do in terms of the aforesaid order. He decided that voting should be held by secret ballot. He categorized the voters in four categories.
Category "A"
Persons who were original slum dwellers and continue to be occupants as on the cut-off date i.e. 27th March 2015.
Category "B"
Persons who claim to exercise their vote as a result of legal heir ship.
Category "C"
Persons who claim to have become members of the Society by reason of sale and transfer of the shares.
Category "D"
79 persons whose eligibility is under challenge before the Competent Authority as per the directions of the High Power Committee.
He found that there were 867 slum dwellers in the four categories:
Category "A"
263
Category "B"
318
Category "C"
207
Category "D"
79
Total
867
Four separate ballot boxes were kept i.e. one for each category and the result of the voting is tabulated as follows:
Category
Total Eligible Voters
Voter turn-out at the Poll on 22/11/2015
Votes polled by Petitioner
Votes Polled by Respondent No.4
Invalid Votes
"A"
263
191
108
70
13
"B"
318
275
179
84
12
"C"
207
172
126
43
03
"D"
079
013
010
03
-
Total
867
651
423
200
28
Thereafter, Justice Srikrishna submitted his report setting out the voting pattern but did not make any recommendation.
CONTENTIONS:
27. The main contention raised on behalf of the appellant- Susme by Shri F.S. Nariman, learned senior counsel is that the order dated 27.03.2015 is an order passed by this Court in exercise of its extraordinary jurisdiction either under Article 136 or under Article 142 of the Constitution of India. It is submitted that this order was passed with a view to settle all disputes between the parties. It is urged that this Court cannot go behind this order especially when there is no application filed for recall of the said order. It is also urged that I.A.No. 10 of 2015 filed by J.G. Developers for modification of the order, was rejected. It is contended that since Justice B.N. Srikrishna has found that the majority supports Susme, the appeal should be allowed and Susme be permitted to carry on with the project.
28. The other contentions raised on behalf of the appellant- Susme by Shri Darius Khambata, learned senior counsel are:
(a) that Section 13(2) of the Slum Act is wholly inapplicable;
(b) that the notice under Section 13(2) was given only in respect of delay and not in respect of 70% consent and hence the SRA, the HPC and the High Court fell in error in insisting on 70% consent;
(c) that when migration of the scheme took place from redevelopment scheme to slum rehabilitation scheme, 70% consent was not necessary.
29. On behalf of J.G. Developers it is contended by Shri Gopal Subramanium, learned senior counsel that the intention of this Court was to find out whether any party had support of 70% of the slum dwellers or not. It is also contended that it was not the intention of this Court to bypass the legal provisions and this Court is not bound by the aforesaid order. In the alternative, it is submitted that the exercise carried out by Justice B.N. Srikrishna only shows that as on date there are more people with Susme. It is contended that the Bombay High Court has consistently held that there should be no competitive voting inter se developers because that gives rise to many malpractices with the developers trying to outbid each other by giving sops to the voters.
It is contended that the consistent view till now has been that once the slum dwellers have given consent for one developer or have entered into an agreement with a developer then they cannot be permitted to withdraw the consent, otherwise, it will lead to chaos and no slum rehabilitation scheme would be implemented. It is also contended that the matter should be decided on merits and not on the basis of this order. It is also contended that Susme does not have the support of 70% of the slum dwellers.
30. It is also contended on behalf of J.G. Developers that Susme is guilty of unexplained delay and the slum dwellers are suffering and, therefore, the Society had rightly decided to enter into a fresh agreement with J.G. Developers. It is also urged that Susme had never obtained the consent of 70% of the slum dwellers, which was mandatory. It is also contended that Susme had taken advantage of trading of the development rights by assuring the SRA that it would get 70% consent. It is further urged that Susme never contested the issue of 70% consent earlier.
31. Here, it would be pertinent to mention that the Society has two factions. One faction supports Susme and the other faction supports J.G. Developers. The faction supporting Susme states that it has terminated the agreement with J.G. Developers and cannot be forced to get the development work done through J.G. Developers. The other faction alleges that there is no valid existing agreement with Susme.
32. The following issues arise for decision in this case:
(i) What is the scope, ambit and effect of the order of this Court dated 27.03.2015;
(ii) What is the scope of powers under Section 13(2) of the Slum Act;
(iii) Whether the SRA has any power to remove the developer;
(iv) Whether in the notice issued under Section 13(2) of the Slum Act the issue of 70% consent was raised;
(v) Whether support of 70% of the slum dwellers is mandatory and whether slum dwellers are entitled to withdraw their consent;
(vi) Whether Susme delayed the construction of the Scheme, and is, therefore, not entitled to any relief;
(vii) Whether Susme is entitled to continue with the Scheme;
(viii) In case Susme is not entitled to continue with the scheme whether respondent no. 4 J.G. Developers is entitled to continue with the rehabilitation scheme.
THE SCOPE, AMBIT AND EFFECT OF THE ORDER OF THIS COURT DATED 27.03.2015:
33. Relevant portion of order dated 27.03.2015 has been quoted hereinabove. The main contention of Mr. Nariman, learned senior counsel appearing for the appellant is that this order is an order passed under Article 142 or Article 136 of the Constitution and is binding upon the parties. On the other hand, it was urged by M/s Gopal Subramanium and Neeraj Kishan Kaul, learned senior counsel appearing for the respondents that the order in question is not a binding order. In the alternative, it was submitted that even if the order is binding, this Court can interpret the order and even as per 32 the said order, the appellant is not entitled to continue with the Scheme.
34. At the outset, we may note that judicial propriety and discipline requires that a Coordinate Bench must respect the order of an earlier Bench. In fact, even a larger Bench should not brush aside the order passed by an earlier Bench even if it be a smaller Bench unless the order is in issue before the larger Bench. Suffice to say that the order in question holds the field. It has not been recalled and prayer for modification in I.A. No. 10 was rejected on 13.05.2015. Therefore, the order of this Court dated 27.03.2015 holds the field and we are bound by the same. At the same time, it is our duty to decipher what was the intention of the Bench while passing the order and to find out what the Court intended to do by the said order.
35. In Para 2 of the order, the Division Bench has noted the long and chequered history of the case and has noted that the 33 Court had to take recourse to an innovative method to try and find a solution. It is thus apparent that this is an order falling within the ambit of Article 142 to do complete justice between the parties. The Court was aware that the slum dwellers were suffering due to the long protracted litigation. Therefore, the Court felt the need to find an innovative solution. In Para 3 of the order, the Court has noted the factual aspects and again emphasized the need to find a solution to resolve the various issues. The Court was obviously moved by the pathetic condition in which most of the slum dwellers continued to reside.
36. Para 4 of the order is very important because it notes the contention of learned counsel appearing for J.G. Developers, who had emphatically stated that his client had the consent of 70% of the eligible slum dwellers and, as such, the Society was justified in entering into a development agreement with his client. On the other hand, learned senior counsel appearing for the appellant equally strongly refuted this claim and claimed that his client had the consent of 70% eligible 34 slum dwellers. It is in this context that the directions contained in Para 5 of the order dated 27.03.2015 were passed wherein this Court directed ".......there should be appropriate verification of the consent of the eligible slum dwellers in praesenti." Justice B.N. Srikrishna was requested to verify the factum of the consent of the eligible slum dwellers.
37. The contention raised on behalf of Susme is that there is no mention of "70%" in the direction given in Para 5 of the order and, therefore, all that Justice B.N. Srikrishna was required to do was to ascertain consent of the slum dwellers in praesenti. It is contended that almost 70%, and at least much more than the majority, have exercised their choice in favour of Susme and, thus, there is no reason why the appeal should not be allowed. Susme should be permitted to carry on the development work in terms of the agreement entered into with the respondent no. 3-Society. It is also urged that as far as respondent no. 4 is concerned, it has got hardly 30% of the votes and, therefore, there is no question of awarding the contract to respondent no. 4.
38. We are not in agreement with this submission. It is settled law that a judicial order or judgment has to be read as a whole and a single line or phrase cannot be read out of context. A judgment is not to be interpreted like a statute. As far as the order dated 27.03.2015 is concerned, the intention of the Court, will have to be deduced from the entire order. We cannot read the phrase ".......there should be appropriate verification of the consent of the eligible slum dwellers in praesenti." in isolation. This has to be read in the context of the rival contention of the contesting parties that each one of them had the consent of more than 70% of the slum dwellers.
According to us, this Court was not oblivious of the requirements of the Slum Act though it may not have explicitly referred to them. It is obvious from Para 4 of the order dated 27.03.2015 that learned counsel for both the parties claimed that their respective clients had the support of 70% of the slum dwellers. Obviously, both of them could not be correct. This factual dispute could not be decided in these proceedings. This was the dispute which was referred for resolution to Justice B.N. Srikrishna. We may observe that Justice B.N. Srikrishna in the first effective procedural order dated 27.04.2015, rightly understood the order to mean as follows:
"After carefully perusing the Order dated 27th March, 2015 made by the Hon'ble Supreme Court and the submissions made in writing and through Counsel and representatives on behalf of the Petitioners as well as the Respondents, I am of the view that the best way of verifying the factum of consentum of the eligible slum dwellers in praesenti would be to hold a secret ballot under my aegis and after counting the votes, make a report to the Court as to whether more than 70% of the eligible slum dwellers are in favour of the redevelopment agreement being signed with the Petitioner or Respondent No.4."
39. It is, thus, clear that Justice B.N. Srikrishna had understood that he was to ascertain whether 70% of the eligible slum dwellers are in favour of the redevelopment scheme signed with the appellant-Susme or with respondent no. 4. We are clearly of the view that a holistic reading of the order admits of no other meaning. The only dispute raised before this Court on 27.03.2015 was which of the builders had the support of the 70% of the slum dwellers. Since this factual dispute could not be decided in Court, Justice B.N. Srikrishna was requested to do this job. It is not necessary for us to go into the other arguments raised with regard to the effect of the order because, according to us, this order admits of no other interpretation. Admittedly, neither the appellant nor respondent no. 4 has received 70% support.
40. Further, the words 'in praesenti' only mean that the Court wanted the verification of the consent of the eligible slum dwellers as on date of passing of the order. 'In praesenti' cannot be read to mean 'present and voting'. It only means eligible slum dwellers as on 27.03.2015. Justice B.N. Srikrishna has divided the slum dwellers into four categories; 263 were the original slum dwellers, 318 were the legal heirs, 207 were those who had become members by means of sale and transfer of shares and 79 voters were disputed.
We may note that during these entire proceedings not a single complaint has been filed that an ineligible slum dweller was permitted to vote or that an eligible slum dweller was not permitted to vote. The procedure followed by Justice B.N. Srikrishna is absolutely correct and no error can be found in 38 this regard. Therefore, we have no hesitation in accepting the report submitted by Justice B.N. Srikrishna.
41. Out of 867 total eligible voters only 651 voted and the appellant secured 423 votes, which would mean 64.98% or roughly 65% of the votes polled. But, if we were to calculate this percentage from the total number of slum dwellers i.e. 867 then the percentage is 48.78%, which is less than 50%. In case we exclude 79 votes which are doubtful, then the total eligible voters would be 788 and the appellant secured 413 i.e. 52.41% of the total eligible slum dwellers, well below the magic figure of 70%. We are unable to accept the contention of Mr. Nariman that to put an end to all litigation, the Court only wanted to find out who had the majority. That, according to us, is not the essence of the order dated 27.03.2015.
It is true that 70% is not reflected in the direction given in Para 5 of the order but as earlier noted by us, the directions have to be understood in view of the intention of the Court, which was to find out that which of the builders had the support of 70% of the slum dwellers.
Unfortunately, both the developers do not enjoy 70% support, though it is true that the appellant has the support of more than twice the number of slum dwellers as compared to respondent no. 4. Since neither Susme nor J.G. Developers has the support of 70% slum dwellers, the order dated 27.03.2015 cannot be taken to its logical conclusion and we have to decide the appeal on merits.
THE SCOPE OF POWERS UNDER SECTION 13(2) OF THE SLUM ACT:
42. Relevant portion of Section 13 of the Slum Act which is the bone of contention between the parties reads as follows;
"13. (1) Notwithstanding anything contained in subsection (10) of section 12, the Slum Rehabilitation Authority may, after any area is declared as the Slum Rehabilitation Area, if the landholders or occupants of such area do not come forward within a reasonable time, with a scheme for re-development of such land, by order, determine to redevelop such land by entrusting it to any agency for the purpose.
(2) Where on declaration of any area as a Slum Rehabilitation Area the Slum Rehabilitation Authority, is satisfied that the land in the Slum Rehabilitation Area has been or is being developed by the owner in contravention of the plans duly approved, or any restrictions or conditions imposed under sub-section (10) of section 12, or has not been developed within the time, if any, specified under such conditions, it may, by order, determine to develop the land by entrusting it to any agency recognised by it for the purpose: Provided that, before passing such order, the owner shall be given a reasonable opportunity of showing cause why such order should not be passed."
43. Shri Darius Khambata, learned senior counsel appearing for Susme urged that under Section 13(2) of the Slum Act, the SRA is entitled to take action only against the owner. He also submits that Section 13(2) will apply only when there is violation of the conditions imposed under sub-section 10 of Section 12 of the Slum Act and the condition with regard to the time should also be a condition contained in sub-section 10 of Section 12. He submits that there is no power to take action under this section against the developer. According to him, action could have been taken by the SRA against the Society but not against Susme.
44. We cannot accept such a wide submission. According to us, under Section 13(2) of the Slum Act, the SRA has the authority to take action and hand over the development of land to some other recognized agency under three circumstances:
i. When there is contravention of the plans duly approved;
ii. When there is contravention of any restriction or condition imposed under sub-section 10 of Section 12 of the Slum Act; and
iii. When the development has not taken place within time, if any, specified.
45. The requirement to complete the development within time may be there in the letter of intent issued by the SRA or may be in the agreement entered into between the owner/developer with the slum dwellers. Such condition, if violated, would attract the provisions of Section 13(2) of the Slum Act. Over and above that, when a clearance order is passed, then in terms of sub-section 10 of Section 12, the competent authority can include a condition with regard to the time within which the development should be completed and in that case also Section 13(2) would be attracted. We are not, however, able to accept the very wide argument that 42 in case of delay, the condition that is violated must be laid down under Section 12(10) of the Slum Act.
46. There may be cases where the slum dwellers do not offer any resistance and willingly consent to move into transit accommodation provided by the owner/developer. Therefore, the conditions laid down under Section 12(10) will come into play only when there is a clearance order, but in case there is no clearance order, then under Section 13(2), the SRA would be empowered to take action when there is violation of any plan or when there is violation of any condition relating to developing the project within time. The time limit can, some time, be provided in the letter of intent, in the agreement or even in the regulations.
47. Having held so, we are of the view that Shri Darius Khambata, learned senior counsel, is right in his submission that normally under Section 13(2) of the Slum Act, action by the SRA has to be taken against the owner. Here, we may repeat that this is a unique case where the slum dwellers are the members of the owner-Society. The Society, in turn, has given power of attorney to the builder. The builder virtually has two roles - one as developer and the other as power of attorney holder of the owner. Both are closely interlinked and inextricably mixed with each other. Therefore, though normally we would have accepted the contention that under Section 13(2) action can only be taken against the owner, in the present case, we are unable to accept this contention in its totality.
We may point out that even the SRA, in its order, has itself noted that since the Society is the owner of the plot of land, it is empowered and within its right to terminate the agreement executed with the said developer for breaches committed by the developer. It has, however, held that a private dispute between the Society and the developer cannot prevent the SRA from discharging its obligations. The SRA agreed with the submission made by the Society that Susme had not completed the project within time. It has taken action under Section 13(2) of the Slum Act. The action taken 44 by the SRA is to remove Susme as developer which amounts to cancelling the letter of intent issued in favour of Susme.
48. Otherwise, there would be an anomalous situation where the Society would have terminated its contract with Susme but the letter of intent issued by the SRA would continue to hold the field and it would be entitled to develop the land. The Society approached the SRA, in fact, asking it to take action against Susme. Since the SRA is the authority which issued the letter of intent, it will definitely have the power to cancel the letter of intent.
49. We are of the considered view that in the peculiar facts and circumstances of the case where the slum dwellers are virtually the owners of the land as members of the owner Society, the SRA had the power under Section 13(2) of the Slum Act to issue the order dated 24.02.2012.
WHETHER THE SRA HAS ANY OTHER POWER TO REMOVE THE DEVELOPER:
50. Even if we were to assume that the SRA did not enjoy this power under Section 13(2) of the Slum Act, we are of the considered view that since it was the SRA which issued this letter of intent, it necessarily must have the power to cancel the same. The SRA can also derive this power under clauses (c) and (d) of sub-section (3) of Section 3A of the Slum Act, which read as under:
"3A. (1) Notwithstanding anything contained in the foregoing provision, the State Government may, by notification in the Official Gazette, appoint an authority to be called the Slum Rehabilitation Authority for such area or areas as may be specified in the notification; and different authorities may be appointed for different areas.
xxx xxx xxx
(3) The powers, duties and functions of the Slum Rehabilitation Authority shall be,-
xxx xxx xxx
(c) to get the Slum Rehabilitation Scheme implemented;
(d) to do all such other acts and things as may be necessary for achieving the objects of rehabilitation of slums."
51. A bare reading of these provisions shows that in terms of clause (c) and (d) of sub-section (3) of Section 3A of the Slum Act, the SRA not only has the power, but it is duty bound to get the slum rehabilitation scheme implemented and to do all such other acts and things as will be necessary for achieving the object of rehabilitation of slums. In this case, the SRA was faced with a situation where the slum dwellers were suffering for more than 25 years and, therefore the action taken by SRA to remove Susme for the unjustified delay was totally justified.
52. A perusal of the various provisions of the Slum Act would show that normally in a case falling under the Slum Act, it is the owner of the land, whether it be the Government, a statutory authority or a private person, who will be interested in the development work. Normally, the occupiers will be encroachers of slum land.
Therefore, there will be a conflict of interest between the occupiers and the owner. The owner, in turn, will always engage a developer/builder to carry out the development work. In case the owner gives a power of attorney to the developer, as in the present case, the developer now has two identities -
(i) the power of attorney holder of the owner and
(ii) the developer. As far as the present case is concerned, the Society is made up of the members who are occupiers and this Society has given power of attorney to the developer-Susme. Therefore, the developer Susme is actually having a dual role of owner and developer. Both the letters of intent have been issued in favour of the Society, Susme and the architects of Susme. Susme could not have carried out the development work on the basis of its agreement with the Society. It needed the permission of the SRA. Therefore, SRA can obviously revoke such permission.
WHETHER IN THE NOTICE ISSUED UNDER SECTION 13(2) THE ISSUE OF 70% CONSENT WAS RAISED:
53. Shri Darius Khambata, learned senior counsel, has raised another contention that there is no allegation in the notice under Section 13(2) of the Slum Act that Susme has violated any provisions of the Act, Regulations or Scheme in not getting consent of 70% of the slum dwellers. We have gone through all the three notices and find that, in fact, in the 48 notices there is no specific allegation in this behalf. On the other hand, Shri Gopal Subramanium, learned senior counsel appearing for J.G. Developers, urges that in the last notice reference has been made to violation of DCR and this will obviously include violation of requirement of consent of 70% slum dwellers.
54. We are unable to accept the contention of Shri Gopal Subramanium, learned senior counsel. When a notice is issued to a party it must be clearly told what are the allegations which it must meet. The notice should be clear and unambiguous.
55. There was no allegation in the notice(s) that the right to develop granted in favour of Susme was liable to be revoked because it had not obtained consent of 70% of the slum dwellers. The reference to Regulation 33(10) also did not specifically raise the issue of 70% consent. Susme was never put to notice by the SRA that its right to develop the land may be cancelled because of not having consent of 70% slum dwellers. It was confined to the issue of delay. We answer this issue accordingly.
56. However, we are of the view that while considering the issue of delay, the SRA was justified in making reference to the various communications made by Susme and its architects seeking time to obtain consent of 70% slum dwellers and, therefore, while dealing with the issue of delay, we shall take into consideration all these matters.
WHETHER SUPPORT OF 70% OF THE SLUM DWELLERS IS MANDATORY AND WHETHER SLUM DWELLERS ARE ENTITLED TO WITHDRAW THEIR CONSENT:
57. It would be important to note that under DCR of 1991, which were initially applicable to this project, a Scheme for rehabilitation could be initiated where more than 70% of the eligible hutment dwellers on the land agreed to the redevelopment scheme by becoming members of a cooperative society. Thereafter, the Scheme was to be considered by the 50 authorities for implementation. Relevant portion of the DCR reads as follows:
"INITIATION OF THE SCHEME:-
Where more than 70% of the eligible hutment dwellers on the land agree to join the redevelopment scheme and become members of the cooperative society, the scheme should be considered for implementation."
58. Under Development Control Regulations 33(10) of 1991, the essential requirement was that at least 70% of the slum dwellers had to form a society with a view to redevelop the slum area. In case 70% slum dwellers did not join, there could be no rehabilitation scheme. As far as the present case is concerned, it is not disputed that more than 70% slum dwellers had formed the respondent no. 3-Society. It is the admitted case of the parties that 800 out of 867 slum dwellers formed respondent no. 3-Society, which is 92.27%.
59. DCRs of 1991 were amended in 1997.
Clause 1.15 of Appendix (IV) of the amended DCR provided that 70% or more of eligible hutment dwellers in a slum must agree to join a rehabilitation scheme before it can be considered for approval. This clause reads as follows: "Where 70 per cent of more of the eligible hutmentdwellers in a slum or pavement in a viable stretch at one place agree to join a rehabilitation scheme, it may be considered for approval: Provided that nothing contained herein shall apply to Slum Rehabilitation Projects undertaken by the State Government or Public authority or as the case may be a Government Company as defined in section 617 of the Companies Act, 1956 and being owned and controlled by the State Government."
Clause 1.16 of Appendix (IV) of this DCR reads as follows:
"In respect of those [eligible] hutment-dwellers on site who do not join the Project willingly the following steps shall be taken:-
(i) Provisions for all of them shall be made in the rehabilitation component of the scheme.
(ii) The details of the actual tenement that would be given to them by way of allotment by drawing lots for them on the same basis as for those who have joined the Project will be communicated to them in writing by the Managing Committee of the Co-operative Housing Society. [If it is registered or the developer and in case of dispute decision of the CEO/SRA shall be final and binding on all the parties concerned.
(iii) The transit tenement that would be allotted to them would also be indicated alongwith those who have joined the Project.
(iv) If they do not join the scheme within 15 days after the approval has been given to the Slum Rehabilitation Project on that site, then action under the relevant provisions including sections 33 and 38 of the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971 as amended from time to time, shall be taken and their hutments will be removed, and it shall be ensured that no obstruction is caused to the scheme of the majority of persons who have joined the scheme willingly."
60. It is thus obvious that under the amended DCR, not only 70% or more of the eligible hutment dwellers must first agree to join a rehabilitation scheme before it is taken up for consideration, but the owner/developer or cooperative society must also enter into individual agreements with each of these eligible hutment dwellers. We may also point out that the amended DCR in clause 1.16 of Appendix IV provides that even in respect of those eligible hutment dwellers who do not join the project willingly, the developer/builder has to make provision for accommodation of these hutment dwellers in the scheme.
They are entitled to the same benefits as the hutment dwellers who actually join the scheme. They are also entitled to similar transit accommodation as is allotted to those who willingly join the scheme. Further, the regulations also provided that if such hutment dwellers do not join the scheme and do not accept the transit accommodation or the completed premises, then they can be removed from their hutments and it will be ensured that these hutment dwellers do not cause any hindrance to the project.
61. Very lengthy arguments were addressed by learned counsel on the issue whether 70% support of the slum dwellers is mandatory. A large number of authorities have also been cited but, in our view, it is not necessary to refer to the various authorities because the bare provisions of law are sufficient to decide this issue. A bare reading of DCR of 1991 makes it absolutely clear that under the said DCR at least 70% of the slum dwellers/occupiers have to get together and form a Society for the purpose of slum re-development scheme.
Therefore, unless 70% slum dwellers agree to form a Society, the provisions of the Slum Act could not be invoked to frame an SRD scheme. Under the amended DCR of 1997, there is a change and the change is that now the developer/owner was required to enter into agreements with 70% of the slum dwellers and unless 70% of the slum dwellers agree, the slum rehabilitation scheme cannot be entertained. The magic figure remains at 70%. The idea behind it is that more than 2/3 of the occupiers must agree for the rehabilitation scheme.
62. As pointed out above, even if the remaining minority slum dwellers do not agree to be part of the scheme, the owner/developer is duty bound to make adequate arrangements for their rehabilitation under the scheme and they can join the scheme, and can take benefit of the scheme even at any later stage. We are, therefore, of the considered view that 70% consent of the occupiers is mandatory. As clarified above, we are not dealing with this aspect in relation to
