Summary
The Supreme Court dismissed appeals by a slum dwellers' proposed society, its developer and the Slum Rehabilitation Authority against a Bombay High Court judgment that had declared void the proposed acquisition under Section 14 of the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971 of land belonging to a church trust at Bandra. Applying its judgment of the same day in Tarabai Nagar, the Court held that the 2018 Amendment did not dilute the landowner's preferential right to redevelop a Slum Rehabilitation Area; the 120-day period in Section 13(1) runs only after the SRA issues a specific notice-cum-invitation to the owner, which was never issued here, and the conduct of the developer, the society and the SRA showed a colourable attempt to take over the land.
Issues
- Whether the High Court should have declined to entertain the writ petition because the notice inviting objections to acquisition and the CEO's order recommending acquisition to the State were merely preliminary steps causing no prejudice.
- Whether the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) (Amendment) Act, 2017 (in force from 26.04.2018), by providing notice and hearing before a Section 3C(1) declaration and a 120-day ceiling in Section 13(1), dispensed with the separate notice-cum-invitation to the landowner required by Indian Cork Mills and Tarabai Nagar.
- Whether the landowner's preferential right to redevelop the land had been extinguished or waived by its conduct, so as to permit acquisition under Section 14.
- Whether the acquisition proceedings were vitiated by the conduct of the society, the developer and the SRA.
Provisions considered
- Section 13 (as modified by Section 3D for Chapter I-A, post-2018 Amendment), Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971Section 13(1) lets the CEO entrust redevelopment of a Slum Rehabilitation Area to an agency or developer if the owners, landholders or occupants do not come forward within a reasonable time not exceeding 120 days. The Court held that the addition of the 120-day ceiling and of the word 'owners' does not remove the mandatory specific notice-cum-invitation to the owner laid down in Tarabai; the 120 days begin to run only after the owner is so notified and invited. No such notice was issued, so the trust's preferential right remained intact. (¶¶ 9.1, 9.2, 22, 23, 24, 27, 30, 31, 32, 46)
- Section 3C, Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971After the 2018 Amendment the CEO must give landowners 30 days' notice and a hearing before declaring land a Slum Rehabilitation Area, with an appeal to the Apex Grievance Redressal Committee under Section 3C(2). The Court held that this notice serves a different purpose (hearing objections to the declaration) from the Section 13 notice (inviting the owner to redevelop), so it cannot substitute for the latter; the SRA also ought not to have pursued acquisition while the Section 3C(1) declaration was itself under appeal. (¶¶ 8, 23, 31, 48)
- Section 14, Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971Section 14 empowers the State, on the CEO's representation, to acquire land in or adjoining a Slum Rehabilitation Area after notice to the owner to show cause, the land vesting on publication of the notice. The Court held that the State or SRA cannot move to acquire until the owner's preferential right has been extinguished after a Section 13 notice-cum-invitation; the notice and order issued in purported exercise of this power were amenable to judicial review, and the prerequisites for acquisition were not met. (¶¶ 9.4, 19, 26, 27, 36, 48, 52)
- Section 3B(5), Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971The 2018 Amendment altered the stakeholders in clauses (c) and (g) from 'landholders and occupants' to 'owners, landholders and occupants', which the Court treated as further entrenching, rather than diluting, the owner's distinct preferential right to redevelop within Chapter I-A. (¶¶ 7.2, 7.4, 22)
- Article 226, Constitution of IndiaIn its plenary jurisdiction the High Court may prevent or annul executive overreach, arbitrary decision-making, mala fide action or colourable exercise of power even at a preliminary stage; a notice and order traceable to statutory power under Section 14 are amenable to judicial review, and intervention before third-party rights were created avoided multiplicity of litigation. (¶¶ 18, 19)
Held
- The preliminary objection that the High Court should not have interfered with a mere notice inviting objections and an order recommending acquisition fails. Under Article 226 the High Court can prevent or annul executive overreach, arbitrary decision-making, mala fide action or colourable exercise of power; where the sole object of the notice and order was to acquire the land, intervention at a preliminary stage was justified to avoid creation of third-party rights and multiplicity of litigation, and actions issued in purported exercise of statutory power under Section 14 must conform strictly to the statute and are amenable to judicial review. (¶¶ 17, 18, 19)
- The 2018 Amendment made no attempt to remove or dilute the landowner's preferential right to redevelop a Slum Rehabilitation Area as recognised in Indian Cork Mills and Tarabai Nagar; by inserting the word 'owner' into Section 3B(5) and Section 13 alongside 'landholders' and 'occupants', the Legislature further entrenched that right. (¶ 22)
- The notice and hearing under Section 3C before declaring land a Slum Rehabilitation Area serve a different purpose (inviting objections to the declaration) from the specific notice under Section 13 (inviting the owner to initiate redevelopment); the two operate at different stages and in different directions, so the Section 3C procedure cannot render the Section 13 notice-cum-invitation moot. Forwarding the Section 3C(1) declaration to the owner is not compliance with Section 13. (¶¶ 23, 31, 46)
- The 120-day ceiling added to Section 13(1) by the 2018 Amendment does not dispense with the notice-cum-invitation; the time limit begins to run only after the owner is notified and invited to redevelop, whereupon the owner must come forward within that ceiling. The contention that the owner must present a scheme within 120 days of the Section 3C(1) declaration without any invitation is wholly misconceived. Subject to this legislatively stipulated timeline, the interpretation of the Slums Act in Tarabai applies equally to post-amendment actions. (¶¶ 24, 25)
- The owner has a preferential right to develop the Slum Rehabilitation Area; the SRA must invite the owner to submit a redevelopment proposal and allow reasonable time before that right is extinguished; and the State or SRA cannot acquire the land before the right is extinguished. Since no Section 13 notice or invitation was ever issued to the trust, its preferential right remained intact, there was no legal basis to extinguish it, and the acquisition was vitiated in law. (¶¶ 26, 27, 30, 31, 32, 36)
- Because the preferential right can be extinguished only after an invitation, the threshold for waiver before any invitation is high: without a clear and overt communication by the owner that it does not wish to exercise the right, there is no automatic waiver. The trust had consistently expressed its intent to redevelop since 2013, submitted a consolidated proposal to the SRA and the municipal corporation after the declaration, and appointed a developer by bidding, so no waiver could be inferred; questions about the permissibility of an amalgamated development did not fall for decision. (¶¶ 33, 34, 35)
- On independent scrutiny, the society's persistent resistance to the owner's proposal, which offered the slum dwellers larger units and better entitlements than the developer's scheme, showed the developer was orchestrating the society's actions as its proxy. The developer's earlier letter pressing the trust to convey the land, with a veiled threat of adverse possession or SRA acquisition, revealed a calculated attempt to take the land at a fraction of its market value, warranting an inference of dishonest intent. (¶¶ 37, 39, 40, 41, 42, 43)
- The SRA's conduct showed a lack of application of mind: it never issued a specific notice to the owner, ignored the owner's consolidated proposal while processing the developer's, rejected the owner's proposal between two acquisition hearings on the flimsy ground of format and addressee without any chance to rectify, and pressed ahead with the acquisition recommendation although the Section 3C(1) declaration, the sine qua non for acquisition under Section 14, was itself under statutory appeal. Such collusive conduct by a public authority, motivated by private builders' profit interests, is highly deprecable. (¶¶ 44, 45, 46, 47, 48, 49, 50)
- The Slums Act gives wholesome protection to slum dwellers but no express protection to the landowner, a vacuum that allows opportunistic developers to exploit slum dwellers and manipulate authorities; given the colourable conduct of the appellants, the High Court rightly nipped the acquisition proceedings in the bud. (¶¶ 51, 52)
Result
Appeals dismissed; High Court judgment dated 11.06.2024 upheld. The church trust is at liberty to submit, within 120 days, a Slum Rehabilitation Scheme for the slum strictly in accordance with the laws and regulations in force, and is bound by the apartment sizes and other benefits it has already offered the slum dwellers; the SRA shall give full support for surveys and demarcation; the SRA and the State shall process the trust's proposal within 60 days of its submission; pending applications disposed of.