Slum Rehabilitation Authority Has To Act In Terms Of Its Own Policies Without Allowing Private Arrangements To Prevail: Supreme Court

The Supreme Court recently (on December 15) held that private agreements cannot be enforced in Slum Rehabilitation Schemes as against the statutory mandate of the Slum Rehabilitation Authority (SRA).

To strengthen this, the Court also observed that under the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971, SRA is the final authority for implementing the mentioned scheme. Reliance was also placed upon the Bombay High Court's decision in Smt. Usha Dhondiram Khairnar and Others v. State of Maharashtra and Others, 2016 SCC OnLine Bom 11505. In this case, the High Court had held that slum society or private Developer cannot dictate terms to the SRA, and it must act in terms of its own policies and circulars.

“Thus, SRA has to act in terms of its own policies and circulars without allowing private or contractual interests to prevail over public policy especially a policy which is welfare based,” held Justices Aniruddha Bose and Sudhanshu Dhulia.

In the instant case, SRA had proposed a Slum Rehabilitation Scheme for the slum at CS No. 1(pt) of Lower Parel Division at J.R. Boricha Marg. The project was for the construction of a total built-up area of 75854.716 sq. m., where 1765 slum dwellers were to be rehabilitated.

Pertinently, the construction of nine towers has been completed, and 473 slum dwellers have already been given possession of their tenements in Towers A, B, and C. However, the allotment for the remaining towers has been stalled due to the present dispute.

It may be noted that the SRA has been given the status of Planning Authority for slums under the Maharashtra Regional and Town Planning Act of 1966. Further, as per the scheme of SRA, more than 70 percent of the eligible hutment dwellers were required to choose their developer and take the scheme forward under the overall supervision of SRA.

Accordingly, the majority section of the slum dwellers, who were earlier divided into different independent societies, got together and formed a society called “Shramik Ekta Co-Operative Housing Federation”/ respondent No. 6. The same Federation in turn appointed Lokhandwala Kataria Constructions/ respondent No. 5 as its Developer. Pursuant to this, SRA issued a Letter of Intent (LoI) on 16.04.2005 in favor of the Developer and approved the Slum Rehabilitation Scheme submitted before them.

The work for construction of the nine towers commenced but was stalled shortly afterward in 2007. This was due to the interference caused by a minority section of the slum dwellers. These slum dwellers are also members of the Federation. However, they had formed a separate minority society for themselves, called “Sayunkta Sangharsh Samiti” (SSS)/ appellant.

Aggrieved by this, the Developer filed a civil suit before the City Civil Court, Bombay. In this suit, an injunction was sought against dwellers who were creating obstructions in the construction. The suit ultimately ended in a compromise decree. An MoU was signed between the Developer and the appellant. A purely private arrangement was thus arrived at between the developer and the minority members of the hutment dwellers. As per this arrangement, SSS undertook to construct or supervise the construction of towers D, E, and F, which were then to be occupied exclusively by members of the SSS.

Pursuant to the MoU/Settlement, the appellants approached SRA to do the allotment as per its terms. Notwithstanding, the SRA, vide its order dated 26.10.2020, decided to allot the flats in Tower D, E & F as per the procedure prescribed vide Circular No. 162 dated 23.10.2015. The circular, among other things, provided that the allotment will be done by draw of lots for all the hutment dwellers.

The appellants challenged the same before the Bombay High Court. Therein, it was argued that the SRA had to conduct allotment as per the terms of the MoU. Thus, preferential allotment should be given to the members of the appellant society in Towers D, E and F. However, the appellant's plea was dismissed. Thus, the present appeal.

The Apex Court, at the very outset, pointed out that the above arrangement arrived entirely private, and SRA has no role to play in it.

“As we can see it is an entirely private arrangement arrived at between the Developer on the one hand and some of the hutment dwellers on the other. SRA has no role to play in it, rather it is an arrangement at the back of SRA and is in defiance of an already existing rehabilitation scheme, statutorily sanctioned, which was surviving.”

Apart from this, the Court also observed that the members of the appellant society are much less than 70%. It added:

“The claim of the appellant was based entirely on the terms of consent arrived between the Developer and them, which has no basis in law.”

Moving forward, the Court listed down the procedure for allotment and observed:

“The allotment by draw of lots is not an arbitrary order of SRA but this is the settled procedure, long continuing and in terms of the law.”

With respect to the private arrangement reached between the parties, the Court observed that the same cannot be accepted as per the established law. Further, the settlement was also in violation of the statutory procedure given in Circular No.162.

“We do not agree with the submissions advanced on behalf of the appellant who only seeks to enforce a private arrangement arrived at between the Developer and the appellant in derogation of the procedure laid down by the SRA.,” the Court added.

In view of these observations and findings, the Court upheld the impugned order of the Bombay High Court and directed the SRA to carry out the allotment of flats in accordance with the law. Notably, before parting, the Court also indicated that SRA should seek explanation from the Developer for bypassing the statutory procedure and take suitable action in this regard.

“Considering the conduct of the Developer who has evidently taken a surreptitious route bypassing the statutory procedure, the SRA would be failing in its duty if it does not seek explanation from the Developer in this regard and takes suitable action in accordance with law.”

Case Title: SAYUNKTA SANGHARSH SAMITI vs. THE STATE OF MAHARASHTRA., Diary No.- 29112 - 2021

Citation : 2023 LiveLaw (SC) 1071

Click here to read the judgment