SC Tells Slum Rehabilitation Authority To Help Mumbai Slum-Dwellers Entangled In Litigation [Read Judgment]

In a relief to over 800 slum-dwellers in Mumbai whose dream of having a permanent roof over their head has become a nightmare due to multitudes of litigation between builders and the authorities, the Supreme Court, invoking its inherent powers, has issued directives to the Slum Rehabilitation Authority (SRA) to ensure development of the slums and rehabilitate the slum-dwellers in proper accommodation.

Slum-dwellers, who are also the owners of the land, formed a society, and it entered into an agreement with M/s Susme Builders Private Limited to develop the property.

In the meanwhile, disputes arose between Susme and JG Developers, another builder whom the society had approached later, and when the matter reached the apex court, the court appointed Justice BN Srikrishna to find out whether Susme or JG Developers had the consent of 70% slum-dwellers. It was reported that both the builders failed to show that they had such a consent.

Justice Madan B Lokur and Justice Deepak Gupta observed that the Slum Redevelopment Authority had the jurisdiction to invoke the provisions of Section 13(2) of the Slum Act to revoke and set aside the right to develop and cancel the letter of intent granted in favour of Susme.

The bench also agreed with the Bombay High Court view that there should be no inter se bidding between the builders, and that the proper course is that the scheme of the developer who is the first choice, should be placed before the slum-dwellers and if it gets 70% votes, then the scheme can be considered, but if it does not get 70% consent, then obviously, the second developer can be considered.

“Competitive bidding should not be done because that can lead to a very unholy practice of developers trying to buy out the slum-dwellers, which is also not in the interest of the rehabilitation scheme,” the bench said.

The court also held that JG Developers obtained the consent of the members of the Society by holding out a false promise of a larger flat and, therefore, the agreements entered into by JG Developers with the slum-dwellers are legally unconscionable and not enforceable and, as such, JG Developers is also not entitled to continue with the scheme. The court observed that both the contesting developers are not entitled to any relief.

It is our duty to ensure that these owners who also happen to be slum dwellers do not live in sub-human conditions for eternity, the court observed while issuing the following directives:

1. The SRA shall within three weeks of the receipt of this order, invite letters of interest from renowned builders/developers, who have the capacity and experience to take up such a large project by issuing advertisements in not less than three newspapers having wide circulation in Mumbai, one each in English, Hindi and Marathi;


2. The advertisement may be brief but all necessary details must be incorporated in the advertisement. The details of the project including a copy of this judgment should be made available on the website of the SRA;


3. After the letters of interest are submitted, the SRA shall consider which is the best offer and while considering the best offer, it shall ensure that the terms offered to the occupiers are in no manner disadvantageous to them when compared to the last offer made by Susme in regard to the area of flat offered, the nature of construction and other facilities available on the site. The SRA must, while evaluating the proposals, take into consideration the past record of the party/person expressing interest: it shall also take into consideration the financial viability of such party/person and, therefore, it may ask such party/person to submit all the documents to support their financial viability. In case of any doubt, the SRA can move appropriate application before this court;


4. The persons who express interest must be willing to give an assurance that they will submit plans within one month of the approval of their proposal and all the concerned authorities must, within 15 days thereafter, raise objections, if any, giving the successful bidder a chance to remove the objections, if any, within one month thereafter;


5. Thereafter, the concerned authorities should ensure that the plans are approved and sanctions granted latest within two months of the submission of the original plans. The successful developer should undertake to complete the rehabilitation of part of the project to rehabilitate all eligible occupiers/slum-dwellers within a period of two years from the date of sanction of the plan. The successful bidder must give a bank guarantee of Rs. 200,00,00,000/- (Rupees Two Hundred crores only) to ensure that it does not violate the terms and conditions of the rehabilitation scheme. In case of violation of the terms and conditions of the rehabilitation scheme without reasonable cause, the SRA will be entitled to invoke the bank guarantee, after giving notice to the developer;


6. Keeping in view the fact that the slum dwellers are also the owners, the developers may also indicate what benefit they will give to the members of the Society either in cash or in kind by means of giving additional built up area out of their own free sale area to such members of the Society;


7. The SRA shall monitor the progress of the Scheme to ensure that it is completed within the time granted by this court;


8. No Court or authority shall pass any order which will in any manner affect the implementation of the directions/orders issued by us;


9. The Society, its members, the SRA and all concerned will render complete assistance to the builder/developer, who is awarded the project by the SRA; and


10. All pending litigation shall be disposed of in view of the aforesaid orders passed by us and shall be disposed of by the court(s) accordingly.