# RAMCHANDRA MAHADEV JAG PAT AND ORS v. CHIEF EXECUTIVE OFFICER AND ORS - **Citation:** [2006] Supp. 8 S.C.R. 658 - **Court:** Supreme Court of India - **Decided:** 2006-11-07 - **Bench:** Dr. Ar. Lakshmanan, Tarun Chatterjee - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/ramchandra-mahadev-jag-pat-and-ors-v-chief-executive-officer-and-ors-21940 - **Pages:** 28 ## Headnote Constitution of India, 1950: Article I36. Special Leave Petition-Necessary party-Application for i1'ipleadment C and recall of order-Slum Rehabilitation Scheme-Development agreementRevocation of-Applicant 'S' was appointed as a developer by the Cooperative Housing Society as a developer in respect of a Slum Rehabilitation Scheme of the property in question-When the applicant was about to get the Letter of Intent, a writ petition was filed by some slum dwellers challenging D the appointment of 'S' as a developer-High Court dismissed the writ petition and directed the Slum Rehabilitation Authority (SRA) to put additional conditions-Special Leave Petition filed against the said order-During its pendency the Society gave 11otices purporting to revoke the development agreement executed in favour of 'S'-The Management. of the Society. also decided to appoint 'K' to execute the project-The said Special Leave Petition E was dismissed-The very same slum dwellers filed another writ petition alleging that 'S' did not commence re-development of the properties in terms of the agreement-'S' was not made a party to this writ petition-The Principal Secretary, Housing Department directed SRA to issue Letter of Intent in favour of 'S'-In the second Special Leave Petition filed against the order F passed in the second writ petition 'S' was again not made a party-This Court passed an order in the second Special Leave Petition directing SRA to iswe a Letter of Intent in favour of 'K'-'S' filed an application for impieadment and recall of the order passed against 'K'-Held: 'S' was a necessary party to the second writ petition and to the second Special Leave Petition as it was directly affected by any order appointing 'K' as a G developer-Therefor~, 'S' should have been made ..i party respondent in the second •vrit petition as well as in the second Special Leave Petition-Hence, the order passed in the second Special Leave Petition is recalled-The SRA is directed to call the two developers, namely, 'K' and 'S' and to award the Letter of Intent to the developer who satisfies the required qualifications and H 658 - RAMCHANDRA MAHADEV JAGPATv. CHIEF EXEClJilVE OFFICER 659 conditions and regulations and the provision of the Slum Areas Improvement A Act-Maharashtra Slum Areas Improvement, Clearance and Re-development Act, 1971. The applicant 'S' was appointed as a developer by the Co-operative Housing Society Limited-respondent No. 2 in respect of a Slum Rehabilita_tion Scheme of the property in question. When the applicant was about to get the B Letter of Intent, a writ petition was filed l>y some slum dwellers challenging the appointment of 'S' as a developer. The High Court dismissed the writ petition and directed the Slum Rehabilitation Authority (SRA) to put additional conditions. During the pendency of the Special Leave Petition challenging the order passed in the aforesaid writ petition the Society gave notices C purporting to revoke the development agreement executed in favour of 'S'. The Management of the Society also decided to appoint 'K' to execute the project However, the said Special Leave Petition was dismissed as withdrawn. The very same slum dwellers filed another writ petition alleging that 'S' did not commence re-development of the properties in terms of the agreement. 'S' was not made a party to this writ petition. 'S' wrote a letter to SRA D enclosing a cheque for a sum of Rs. 2.5 crores towards the interest-free deposit with SRA. However, the cheque was not accepted by SRA stating that there was no specific order of the High Court to accept the amount from 'S'. The Principal Secretary, Housing Department directed SRA to issue Letter of Intent in favour of 'S'. In the second writ petition the High Court passed an order directing the SRA to call the parties and pass an order in terms of the High Court judgment. In the Special Leave Petition filed against this order 'S' was again not made a party. This Court passed an order in the abov ## Text _Characters 0–39,870 of 68,603. This is a partial read: ask again with offset=39870 for what follows._ A RAMCHANDRA MAHADEV JAG PAT AND ORS. v. CHIEF EXECUTIVE OFFICER AND ORS. NOVEMBER 7, 2006 B [DR. AR. LAKSHMANAN AND TARUN CHATTERJEE, JJ.] Constitution of India, 1950: Article I36. Special Leave Petition-Necessary party-Application for i1'ipleadment C and recall of order-Slum Rehabilitation Scheme-Development agreementRevocation of-Applicant 'S' was appointed as a developer by the Cooperative Housing Society as a developer in respect of a Slum Rehabilitation Scheme of the property in question-When the applicant was about to get the Letter of Intent, a writ petition was filed by some slum dwellers challenging D the appointment of 'S' as a developer-High Court dismissed the writ petition and directed the Slum Rehabilitation Authority (SRA) to put additional conditions-Special Leave Petition filed against the said order-During its pendency the Society gave 11otices purporting to revoke the development agreement executed in favour of 'S'-The Management. of the Society. also decided to appoint 'K' to execute the project-The said Special Leave Petition E was dismissed-The very same slum dwellers filed another writ petition alleging that 'S' did not commence re-development of the properties in terms of the agreement-'S' was not made a party to this writ petition-The Principal Secretary, Housing Department directed SRA to issue Letter of Intent in favour of 'S'-In the second Special Leave Petition filed against the order F passed in the second writ petition 'S' was again not made a party-This Court passed an order in the second Special Leave Petition directing SRA to iswe a Letter of Intent in favour of 'K'-'S' filed an application for impieadment and recall of the order passed against 'K'-Held: 'S' was a necessary party to the second writ petition and to the second Special Leave Petition as it was directly affected by any order appointing 'K' as a G developer-Therefor~, 'S' should have been made ..i party respondent in the second •vrit petition as well as in the second Special Leave Petition-Hence, the order passed in the second Special Leave Petition is recalled-The SRA is directed to call the two developers, namely, 'K' and 'S' and to award the Letter of Intent to the developer who satisfies the required qualifications and H 658 - RAMCHANDRA MAHADEV JAGPATv. CHIEF EXEClJilVE OFFICER 659 conditions and regulations and the provision of the Slum Areas Improvement A Act-Maharashtra Slum Areas Improvement, Clearance and Re-development Act, 1971. The applicant 'S' was appointed as a developer by the Co-operative Housing Society Limited-respondent No. 2 in respect of a Slum Rehabilita_tion Scheme of the property in question. When the applicant was about to get the B Letter of Intent, a writ petition was filed l>y some slum dwellers challenging the appointment of 'S' as a developer. The High Court dismissed the writ petition and directed the Slum Rehabilitation Authority (SRA) to put additional conditions. During the pendency of the Special Leave Petition challenging the order passed in the aforesaid writ petition the Society gave notices C purporting to revoke the development agreement executed in favour of 'S'. The Management of the Society also decided to appoint 'K' to execute the project However, the said Special Leave Petition was dismissed as withdrawn. The very same slum dwellers filed another writ petition alleging that 'S' did not commence re-development of the properties in terms of the agreement. 'S' was not made a party to this writ petition. 'S' wrote a letter to SRA D enclosing a cheque for a sum of Rs. 2.5 crores towards the interest-free deposit with SRA. However, the cheque was not accepted by SRA stating that there was no specific order of the High Court to accept the amount from 'S'. The Principal Secretary, Housing Department directed SRA to issue Letter of Intent in favour of 'S'. In the second writ petition the High Court passed an order directing the SRA to call the parties and pass an order in terms of the High Court judgment. In the Special Leave Petition filed against this order 'S' was again not made a party. This Court passed an order in the above Special Leave Petition directing SRA to issue a Letter of Intent in favour of 'K'. Hence, 'S' filed an application before this Court for impleadment and to recall the order passed by this Court Disposing of the application, the Court E F HELD: 1. The applicant 'S' has explained to this Court as to how the G amount of Rs. 2.5 crores was not deposited with the Slum Rehabilitation Authority (SRA). It also denied that the agreement entered into between 'S' and the society came to an end by efflux of time. From the agreement it would be clear that the developer was to start the actual construction after the issuance of the commencement certificate by the authority. Therefore, the H 660 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R. A period of 3 years must be construed to begin 'from the date when the commencement certificate is issued and not from the date of ex·ecution of the agreement. The letters revoking the development agreement issued in favour of 'S' were issued by 2 or 3 members of the society who were acting with ulterior motive and in collusion with the rival developer. Even.the SRA to whom B the letters were addressed, in its counter affidavit filed before this Court in the present proceedings, has stated that it did not take notice of the said letter of termination as the letter was not suppo'rted by the relevant resolution of the society. 'S' app'roached the SRA on several occasions requesting for the issuance ofthe Letter of Iii tent but no response was coming from the Housing Department. After the dismissal of the Special Leave Petitio~ the order of C the High Court passed in 'the first writ petition attained finality and there was·no proposal of 'K' before the SRA and, therefore, ·there was no question of SRA considering the proposal made by the ri_ew developer. 'S' was a necessary party to the second writ petition and to'the second Special Leave Petition as it was directly affected by any order appointing 'K' as a developer. D [681-E, F, G;H; 682-A, Bl 2. It was rightly contended by the applicant'that in any subsequent proceedings where the termination of the agreement of the applicant 'S' with the society and replacement cif'S' by a·new developer is a·subject-matter, 'S' is a proper and necessary party to it. There is much force and substance in the said argument. The applicant 'S' has also the right to have a hearing E before the SRA along with 'K', the new appointee. It must also be seen that the relief sought in"the second Special Leave Petition'though is only against the SRA but in effect is against the applicant 'S' and, therefore~ 'S' is the necessary party to any proceedings wherein the replac'ement of 'S' with a new developer and the termination of the agreement with 'S' is in issue and, F therefore, 'S' should have been made a party r.espondent in the second writ petition as well as in the' second Special Leave Petition. It is 'also not in dispute that 'S' was impleaded as party respondent N6. 7 in the first Special Leave Petition which came to be withdiawn by the petitimfer therein on which date •s•·appeared through its advocate in'this Court. After the withdrawal of the Special Leave Petition by the petitioner both 'S' and 'K' kept on submitting G applications with the SRA. However, due to pendency of the sec'ond'Special Leave Petition in this Court, SRA was /not able to take any decision on the representations of the developers as well as the society. [683-A, B, C,D, EJ 2.1. Therefore, for the foregoin'g reasons, it is held that 'S' is a necessary and proper party to the second Special Leave Petition. The order H was passed in this SLP on the basis of the representation made by all the .... t RAMCHANDRA MAHADEV JAGPAT v. CHIEF EXECUTIVE OFFICER [LAKSHMANAN, J.] 661 respective senior counsel appearing at that time. The order was not obtained A by playing fraud on the Court as alleged by the applicant. Now 'S' has made out a clear case as to why it was a necessary party to the second Special Leave Petition and in the light of the directions given by the High Court in the writ petitions the order passed in this SLP is recalled. (683-G, H; 684-A, BJ 3. The SRA is directed to call the two developers, namely, 'K' and 'S' B' and dispose of their applications for issuing the Letter of Intent and to pass appropriate orders in accordance with the Maharashtra Slum Areas Improvement, Clearance and Re-development Act, 1971 and also strictly follow the procedure for submission, processing and approval of Slum Rehabilitation Scheme and to award the Letter of Intent to the developer who satisfies the required qualifications and conditions and regulations and the provision of C the 1971 Act. [684-E, F) CIVIL APPELLATE JURISDICTION I.A. Nos. 2-S & 8 IN Special Leave Petition (C) No. 10281/2006. WITH I.A. No. l in S.L.P. (C) No .... 5527 of2006. D From the final Judgment and Order dated 4.5.2006 of the High Court of E Judicature at Bombay in W.P. No. 1277 of2006. G.E. Vahanvati, S.G., Arun Jaitely, Ravindra Srivastava, Dushyant Dave, Harish N. Salve, L.N. Rao, U.U. Lalit, Dr. A.M. Singhvi, Jaideep Gupta, P.H. Parekh, Sum it Goel, Shashikant G. Surana, Shekhar Naphade, Lal it Jain, Ashok K. Mahajan, Malvika Trivedi, Shekhar Kumar, Prateek Jalan, Meenakshi Grover, F Goodwill Indeevar, Sanjay V. Kharde, Sunil Kumar Verma, B. Sunita Rao, Arvind Varma, Nemika Jha, Amit Bhandri and Indra Sawhney for the appearing · parties. The Judgment of the Court was delivered by DR. AR. LAKSHMANAN, J. I.A. No. I for impleadment is ordered on G 10.07.2006. Mis. Sigtia Construction Company Private Limited was impleaded as respondent No.5 in Special Leave Petition No. 10281 of 2006. I.A. No.3 of 2006 was filed by the applicant-Mis. Sigtia ConstructioQ Company Private Limited to recall the order dated 27.06.2006 passed by this H 662 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R. A Court in Special Leave Petition No. l 0281 of 2006. The order passed by this· Court in Special Leave Petition No. l 0281/2006 dated 27.06.2006 reads thus: "ORDER •; Heard Mr.L.N.Rao, senior advocate for the petitioners. Mr. Sanjay B V. Khande, Mr. B.S. Rao and Ms. Indra Sawhney, advocates accepts notice on behalf of respondent Nos. l to 3. We also heard their submissions. c D E F G H By a prayer for interim relief, the petitioners seek direction directing the Slum Rehabilitation Authority to issue a letter of intent in favour of Mis. Keya Develope~s and Construction' Company (P) Lti:I. For undertaking re-development work in the slum s~tuated at Irla Tank, S. V. Road, Vile Parle (West) Mumbai. The grievance of the petitioners is that despite no legal impediment, the Slum Rehabilitation Authority was not issuing the letter of intent in favour of Mis. Keya Developers and Construction Company (P) Ltd. despite a request made by the Society. According to them, it was merely a case of replacement of· previous developers Mis. Sigtia Construction Company Pvt. Ltd. who had not even started the project even after almost eight years and whose agreement with the Society had come to an end by efflux of time. Mr. Sunil K.Vanna, advocate, appears for the Chief Executive Officer, Slum Rehabilitation Authority, Bandra (E), Mumbai (respondent No.I). The learned counsel submits. that the Slum Rehabilitation Authority will issue proper orders within two·weeks from today. In view of the submission made by the learned counsel for respondent No. I, we direct the Slum Rehabilitation Authority to issue the letter of intent in favour of Mis. Keya Developers and Construction Company (P) Ltd. which is also represented by Mr. Jaideep Gupta, learned senior counsel and the Society is represented by Mr. P.K. Ghosh; learned senior counsel. The Special Leave Petition is disposed 6f accordingly." The reasons for recalling the order as stated in I.A.No.3 of 2006 are as under:- RAMCHANDRA MAHADEV JAGPAT v. CHIEF EXECUTIVE OFFICER [LAKSHMANAN,J.] 663 The applicant Sigtia Construction Company Private Limited (in short A "Sigtia") was appointed as developer by the Vile Parle Prem Nagar Co-operative Housing Society Limited (hereinafter called "Society" the respondent No.2). The applicant who is directly affected by an order appointing M/s. Keya Developers and Construction Private Limited (in short "Keya") as Developer was not made a party respondent in Writ Petition No. 1277 of2006 and also in the Special Leave Petition No. I 0281 of 2006 although the applicant was B a party in the previous proceedings, namely, Writ Petition No. 988 of 2004 which was filed before the High Court and the Special Leave Petition No. 11318 of2005 and 19848 of2005. According to the applicant, the respondents in the Special Leave Petition No. I 0281 are not contesting respondents and particularly respondent No. I-the Slum Rehabilitation Authority (in short "SRA") C had taken a stand before this Court in earlier round in Special Leave Petition No. 19848 of 2005 by way of an affidavit that they will abide by any orders which may be passed by this Court. Nobody appeared for Bombay Municipal Corporation on 27.06.2006. Therefore, there was nobody present who could have opposed the passing of the order. The applicant, against whom allegations were made, was not made a party to the special leave petition. It D was the duty of the petitioner in the special leave petition, to make the applicant Sigtia, who is directly affected, a party to the special leave petition. However, instead of doing that this Court was given the impression that all the affected parties wt:re before this Court. Mr. Arun Jaitley, learned senior counsel appearing for the applicant E Sigtia made the following submissions as to why the order dated 27.06.2006 in Special Leave Petition No. 10281 of2006 should be recalled. (a) M/s Sigtia was appointed as developers in respect of Slum Rehabilitation Scheme of the property in the Suburban district of F Mumbai at Irla Tank by the general body of the proposed Prem Nagar Housing Society; (b) Sigtia submitted the proposal for re-development of the slum known as Prem Nagar situated at Vile Parle (W), CTS No. 439-442; 446-448; 451-1-15, 452, 453, 454A under Slum Rehabilitation Scheme G' on 11.09.2002 with the consent of 1054 hutment dwellers; (c) In all I 054 individual agreements and consent affidavits were filed by slum dwellers in favour of Sigtia before the SRA and approved by the Additional Collector (Encroachment) by its order dated 23.01.2003; 664 A (d) B (e) c (f) D E SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R. When the applicant was about to get the Letter of Intent, the Writ Petition No. 988 of2004 was filed on 31.03.2004 before the High Court of Bombay by Mr. Nazir Khan Yakub Khan and 8 others slum dwellers challenging the appointment of Sigtia as developer to undertake the re-development of the slum area on the ground that Sigtia was having neither technical expe1tise nor financial capability to complete the project. In the above writ petition, the Chief Promoter of the Society filed two affidavits before the High Court dated 07.06.2004 and 29.06.2004 expressing confidence and faith in the technical and financial capability of Sigtia to execute the project. The Chief Executive Officer, SRA also filed additional affidavit on 11.02.2005 supporting the scheme in totality. The High Court, while dismissing the Writ Petition No. 988 of 2004 on 11.03.2005 directed the SRA to put additional conditions as follows:- a. Obtaining security deposit ofRs.2.5 crores from the developer to safeguard the interests of the Slum Dwellers. b. Supervision by the Senior Engineer of Bombay Municipal Corporation at the cost of the developer. c. No construction of sale component till all the slum dwellers are rehabilitated in the new buildings, and d. Undertaking/ indemnity from the developer for fulfilling the above three conditions. Out of 9 petitioners in Writ Petition No. 988 'of 2004, one Nazir Khan F Yakub Khan alone filed a Special Leave Petition No. 11318 of2005 challenging the order of the High Court passed in Writ Petition No. 988 of 2004. Sigtia was impleaded in the special leave petition as Respondent No.7. The Special Leave Petition was withdrawn by the petitioner on 26.09.2005. 4 other petitioners out of original 9 filed Special Leave Petition No. 19848 of 2005 G challenging the order in Writ Petition No. 988 of 2004 and obtained interim stay on 19.09.2005 from this Court. Due to the above said stay order, Sigtia could not take any further steps towards the implementation of the project. The stay order continued till 13.04.2006 on which date this Court dismissed the Special Leave Petition No. 19848 of 2005 as withdrawn. H During the pendency of the Special Leave Petition No. 19848 of 2005, ~ ' RAMCHANDRA MAHADEV JAGPAT "·CHIEF EXECUTIVE OFFICER [LAKSHMANAN, J.) 665 counsel of Prem Nagar Co-operative Housing Society gave notices dated A 26.04.2005 and 06.06.2005 purporting to revoke the development agreement and the Power of Attorney executed in favour of Sigtia. By letter dated 15.06.2005, Sigtia gave reply questioning the authority of the persons purporting to terminate and revoke the said development agreement and Power of Attorney. A public notice dated 05.09.2005 was issued by the Vile Parle Society referring to the termination of the development agreement and power of attorney by the Society. The Management of the society also decided to appoint one - M/s. Keya Developers (in short "Keya") to execute the project B and intimation to this effect was sent to SRA by way of an application. 'C In the above special leave petition, certain interlocutory applications were filed by some hutment dwellers praying for directions to SRA to examine and consider the proposed scheme for rehabilitation submitted by Mis. Keya. These IAs were dismissed along with the special leave petition. The very same slum dwellers filed Writ Petition No. 1277 of2006 seeking the same prayer alleging that Sigtia did not commenced re-development of the properties in terms of the agreement entered into with SRA and was never interested in re-development of the said property for the benefit of slum dwellers. Sigtia was not made a party to this writ petition. ,D E Sigtia wrote a letter to the CEO, SRA on 25.04.2006 stating that Sigtia . was keenly interested in developing the Vile Parle Slum and would take immediate steps to deposit Rs. 2.5 crores by SRA in the matter and also would furnish indemnity as required by SRA. On 04.05.2006, the High Court passed an order in Writ Petition No. 1277 of2006 directing the SRA to call the parties , in terms of the judgment of the Court. F On 02.06.2006, Sigtia wrote a letter to the SRA stating that Keya had ' obtained the order dated 04.05.2006 from the High Court in writ petition No. 1277 of2006 and that the applicant was not inade a party to the writ petition' and, therefore, they were not heard at all and requested the SRA to postpone G the hearing fixed on 03.06.2006 to enable Sigtia to move the High Court.' However, there was no response from the SRA. On 02.06.2006, Sigtia wrote a letter to SRA enclosing a cheque for a sum of ~.2.5 crores towards the interest free deposit with SRA as the performance1 related guarantee as directed by the High Court in its judgment dated H 666 SUPREME COURT REPORTS [2006] SUPP. 8 S.C.R. A 11.03.2005. The Law Officer of SRA conveyed to Sigtia that the cheque for Rs.2.5 crores could not be accepted by SRA as there was no specific order of the High Court to accept Rs.2.5 crores from Sigtia. The Principal Secretary, Housing Department in compliance with the order dated I I.03.2005 issued clear directions to SRA to issue Letter of Intent in favour of Sigtia. On B 21.06.2006, the petitioners in the Writ Petition No. 1277 of2006 filed special leave petition before this Court against the order dated 04.05.2005 and by way of interim relief prayed that SRA be directed to issue Letter of Intent in favour of Keya. Sigtia was again not made a party in the special leave petition. This Court, on 27 .06.2006, passed an order directing SRA to issue Letter C of Intent in favour of Keya within two weeks. Mr. Arun Jaitley, learned senior counsel strenuously contended that before issuance of the Letter of Intent certain conditions ought to be fulfilled by a developer as per the rules and regulations of 'SRA and as per the guidelines and regulations of SRA, a developer needs to obtain AnnexureD II and Annexure-III from SRA. Annexure II is issued when the developer shows that he has consent from atleast 70% eligible hutment dwellers and Annexure III is issued when SRA is satisfied about the financial and technical capability of the developer. It is not disputed that the applicant has obtained both the Annexures and therefore there is no reason for not issuing LOI to the applicant. It is submitted that the Keya Developer does not have consent E of atleast 70% hutment dwellers and therefore is not entitled to get LOI issued in its favour for the said project. Moreover SRA having been set up by the State in exercise of its powers under the Slum Act, it is ultimately for it to decide as to who should be permitted to undertake the redevelopment of slum and the SRA has shown confidence in the applicant by filing affidavits before p the Bombay High Court in Writ Petition No.988 of 2004. According to Mr. Arun Jaitley, the purported termination of the development agreement with Sigtia by the society is illegal, without authority of law as the society has no authority to do so. It is fmther submitted that I 054 slum dwellers filed consent affidavits in favour of the applicant in the G year 2002 itself and therefore the Chief Promoter and few Committee members of the Society cannot terminate the appointment of the developer. In fact the original Writ Petitioner who filed Writ Petition No. 988/2004, namely, Nazir Khan Yakub Khan and others made serious allegations against the Chief Promoter-Shri Vichare and few Managing Committee members that they H have manipulated the records and got the extra units to their family members. RAMCHANDRA MAHADEV JAGPAT v. Cl-llEF EXECUTIVE OFFICER [LAKSHMANAN, J.] 667 He would further submit that as per Section 3(k) of the Maharashtra A Slum Area (Improvement, Clearance and Re-development) Act, 1971, the SRA is bound to follow the directions given by the Government of Maharashtra for the implementation of provisions under the Act and that the Government issued directions to SRA to issue letter of intent to Sigtia way back on 20.06.2005 but those directions have not been complied with. Mr. Jaitley further submitted that the main grievance of the slum dwellers in the I.As filed B in this Court and in the Writ Petition No.1277 of 2006 is that no steps have been taken by Sigtia Constructions towards the completion of the project. It is submitted that after obtaining Annexure II and Annexure III from SRA, when the applicant was about to get LOI the writ petition No. 988 of 2005 was , filed on 31.3.2004 challenging the technical and financial capability of the C applicant. After the said Writ Petition was dismisse