# SUSME BUILDERS PVT. LTD v. CHIEF EXECUTIVE OFFICER, SLUM REHABILITATION AUTHORITY AND ORS

- **Citation:** [2018] 1 S.C.R. 1
- **Court:** Supreme Court of India
- **Decided:** 2018-01-04
- **Case number:** Civil Appeal No. 18121 of 2017
- **Bench:** Madan B. Lokur, Deepak Gupta
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/susme-builders-pvt-ltd-v-chief-executive-officer-slum-rehabilitation-authority-32628
- **Pages:** 61

## Headnote

Slum Dwellers:
Rehabilitation of slum dwellers - 800 slum dwellers in Mumbai
- Relief of rehabilitation - Slum dwellers, who are also owners of
the land, formed a society - Agreement between the society and
appellant-developer to develop the slums and rehabilitate the slum
dwellers in proper accommodation in the year 1986 - Thereafter,
various agreements between the Society and developer - Developer
to obtain consent of 70% slum dwellers in terms of amended DCR -
However, the developer not developing project as per the agreement
- Society entered into an agreement with respondent no. 4, which
was subsequently terminated and appellant again appointed as the
developer - Dispute between the appellant and respondent no. 4 -
Matter before Supreme Court, wherein former judge of Supreme
Court appointed to verify the factum of consentum of the eligible
slum dwellers - Report to the effect that both the developers failed
to show that they had obtained 70% consent - Held: 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 - Appellant delayed
the project, and respondent no. 4 obtained the consent of society
members by holding out a false promise of a larger flat - Thus, both
the contesting developers not entitled to any relief - 800 slum
dwellers, in addition to the flats, to be given compensation for the
land owned by them - In exercise of power u/Art. 142, directions
issued to Slum Redevelopment Authority-SRA to invite letters from
renowned builders/developers, for rehabilitation of all eligible
occupiers/slum dwellers within the stipulated period - Maharashtra
Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971
- Development Control Regulations for Greater Bombay, 1991 -
Development Control Regulations, 1997 - Constitution of India -
Art. 142.
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[2018] 1 S.C.R.
Rehabilitation of 800 slum dwellers - Various agreement
between the slum dwellers and appellant-developer to develop the
slums and rehabilitate the slum dwellers - In terms of amended DCR,
the developer to obtain consent of 70% slum dwellers - However,
project not developed as per the agreement - Dispute between the
appellant and respondent no. 4-new developer - Matter before
Supreme Court, wherein former judge of Supreme Court appointed
to verify the consent of the slum dwellers in praesenti - Scope, ambit
and effect of the said order- Held: Intention of the Court, will have
to be deduced from the entire order - Phrase "there should be
appropriate verification of the consent of the eligible slum dwellers
in praesenti" cannot be read in isolation - It has to be read in the
context of the contention of the contesting parties that each one of
them had the consent of more than 70% of the slum dwellers - This
Court was not oblivious of the requirements of the Slum Act though
may not have explicitly mentioned 70% in its order - It is clear that
the judge 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 or with respondent no. 4 - Holistic reading
of the order admits of no other meaning - Admittedly, neither the
appellant nor respondent no. 4 received 70% support of slum
dwellers, as such, the said order cannot be taken to its logical
conclusion.
Maharashtra Slum Areas (Improvement, Clearance and
Redevelopment) Act, 1971:
s.13(2) - Power of Competent Authority to redevelop clearance
area - Held: Under s.13(2), the Slum Redevelopment AuthoritySRA has the authority to take action and hand over the development
of land to some other recognized agency under three circumstanceswhen there is contravention of the plans duly approved; when there
is contravention of any restriction or condition imposed under subsection 10 of s. 12; and when the development has not taken place
within time, if any, specified - On facts, slum dwellers are virtually
the owners of the land a

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[2018] 1 S.C.R. 1
SUSME BUILDERS PVT. LTD.
v.
CHIEF EXECUTIVE OFFICER, SLUM REHABILITATION
AUTHORITY AND ORS.
(Civil Appeal No. 18121 of 2017)
JANUARY 04, 2018
[MADAN B. LOKUR AND DEEPAK GUPTA, JJ.]
Slum Dwellers:
Rehabilitation of slum dwellers - 800 slum dwellers in Mumbai
- Relief of rehabilitation - Slum dwellers, who are also owners of
the land, formed a society - Agreement between the society and
appellant-developer to develop the slums and rehabilitate the slum
dwellers in proper accommodation in the year 1986 - Thereafter,
various agreements between the Society and developer - Developer
to obtain consent of 70% slum dwellers in terms of amended DCR -
However, the developer not developing project as per the agreement
- Society entered into an agreement with respondent no. 4, which
was subsequently terminated and appellant again appointed as the
developer - Dispute between the appellant and respondent no. 4 -
Matter before Supreme Court, wherein former judge of Supreme
Court appointed to verify the factum of consentum of the eligible
slum dwellers - Report to the effect that both the developers failed
to show that they had obtained 70% consent - Held: 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 - Appellant delayed
the project, and respondent no. 4 obtained the consent of society
members by holding out a false promise of a larger flat - Thus, both
the contesting developers not entitled to any relief - 800 slum
dwellers, in addition to the flats, to be given compensation for the
land owned by them - In exercise of power u/Art. 142, directions
issued to Slum Redevelopment Authority-SRA to invite letters from
renowned builders/developers, for rehabilitation of all eligible
occupiers/slum dwellers within the stipulated period - Maharashtra
Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971
- Development Control Regulations for Greater Bombay, 1991 -
Development Control Regulations, 1997 - Constitution of India -
Art. 142.
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Rehabilitation of 800 slum dwellers - Various agreement
between the slum dwellers and appellant-developer to develop the
slums and rehabilitate the slum dwellers - In terms of amended DCR,
the developer to obtain consent of 70% slum dwellers - However,
project not developed as per the agreement - Dispute between the
appellant and respondent no. 4-new developer - Matter before
Supreme Court, wherein former judge of Supreme Court appointed
to verify the consent of the slum dwellers in praesenti - Scope, ambit
and effect of the said order- Held: Intention of the Court, will have
to be deduced from the entire order - Phrase "there should be
appropriate verification of the consent of the eligible slum dwellers
in praesenti" cannot be read in isolation - It has to be read in the
context of the contention of the contesting parties that each one of
them had the consent of more than 70% of the slum dwellers - This
Court was not oblivious of the requirements of the Slum Act though
may not have explicitly mentioned 70% in its order - It is clear that
the judge 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 or with respondent no. 4 - Holistic reading
of the order admits of no other meaning - Admittedly, neither the
appellant nor respondent no. 4 received 70% support of slum
dwellers, as such, the said order cannot be taken to its logical
conclusion.
Maharashtra Slum Areas (Improvement, Clearance and
Redevelopment) Act, 1971:
s.13(2) - Power of Competent Authority to redevelop clearance
area - Held: Under s.13(2), the Slum Redevelopment AuthoritySRA has the authority to take action and hand over the development
of land to some other recognized agency under three circumstanceswhen there is contravention of the plans duly approved; when there
is contravention of any restriction or condition imposed under subsection 10 of s. 12; and when the development has not taken place
within time, if any, specified - On facts, slum dwellers are virtually
the owners of the land as members of the owner Society, the SRA
had the power u/s. 13(2) to issue the order of setting aside the
appointment of the appellant as developer.
s.3A(3)(c) and (d) - Slum Redevelopment Authority-SRA -
Power to remove the developer - Held: Since SRA issued the letter
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of intent, it necessarily has the power to cancel the same - In terms
of clause (c) and (d) of sub-section (3) of s.3A, 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 necessary for
achieving the object of rehabilitation of slums - On facts, SRA was
faced with a situation where the slum dwellers were suffering for
more than 25 years, thus, action by SRA to remove the developer
for the unjustified delay totally justified - Developer could not have
carried out the development work on the basis of its agreement with
the Society - It needed permission of SRA - Thus, SRA can revoke
such permission.
s.13(2) - Notice u/s.13(2) - Issue of 70% consent, if raised -
Held: When a notice is issued to a party, it must be clear and
unambiguous as to what are the allegations it must meet - No
allegation in the notice that right to develop granted in favour of
the developer was liable to be revoked because it had not obtained
consent of 70% of the slum dwellers but was confined to the issue
of delay - Reference to Regulation 33(10) also did not specifically
raise the issue of 70% consent.
Development Control Regulations of 1991:
70% consent of the slum dwellers, if mandatory - Held:
Development Control Regulations of 1991 makes it absolutely clear
that at least 70% of the slum dwellers/occupiers were to form a
Society for the purpose of slum re-development scheme - Under the
amended DCR of 1997, the developer/owner was required to enter
into agreements with 70% of the slum dwellers to take up the slum
rehabilitation scheme for consideration - Figure remains at 70% -
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 and they can join the scheme,
and can take benefit even at any later stage - Thus, 70% consent
of the occupiers is mandatory - On facts, developer having applied
for migration to new Scheme, had to obtain consent of 70% of the
slum dwellers - Stand of the developer that it was not required to
submit agreements with 70% slum dwellers, not legally tenable -
Agreements with 70% slum dwellers should have been provided
within a reasonable time and, though almost 20 years have elapsed
since the second letter of intent was granted in favour of developer,
SUSME BUILDERS PVT. LTD. v. CEO, SLUM
REHABILITATION AUTHORITY
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it has till date failed to submit agreements - Development Control
Regulations of 1997.
Rehabilitation of slum dwellers - Whether developer delayed
the construction of the scheme - Entitlement to relief - Held:
Developer never earnestly pursued the authorities for approval of
the plans because it did not have consent/agreements of 70% slum
dwellers - It sought waiver of the requirement of obtaining 70%
consent from the slum dwellers - Furthermore, only a portion of
plot was covered by the CRZ Notification and the developer not
prevented from raising construction on that portion of the land which
was not affected by the CRZ Notification - Finding given by SRA
that developer was responsible for the delay, based on appreciation
of material on record and cannot said to be perverse - Though
there may have been a few stop orders and a few occasions when
the developer may not have been able to raise the construction but,
by and large, developer was itself guilty of delaying the construction
for no reason - Thus, developer rightly held responsible for the
delay in implementation of the rehabilitation scheme.
Rehabilitation of slum dwellers - Developer entered into
rehabilitation scheme for slum dwellers - Inordinate delay in
completion of the project - Developer, if entitled to continue with
the Scheme - Held: Developer not entitled to continue with the
rehabilitation Scheme - Developer cannot take the benefit of
technical points to defeat the rights of the slum dwellers - On facts,
both equity and law against the developer - Slum dwellers dealt in
a highly inequitable manner - Law and the conditions of the letter
of intent and various letters issued by SRA clearly required the
developer to produce agreements with at least 70% of the slum
dwellers - However, developer failed to do so - Developers as a
legal entity was treating the slum dwellers only as a means of making
money, thus, not entitled to any relief.
Rehabilitation Scheme - Cancellation of slum rehabilitation
agreement in favour of appellant-developers - Entitlement of
respondent no.4(new developer) to continue with the rehabilitation
Scheme - Held: Respondent no. 4 had misled the members of the
Society in entering into an agreement with it by holding out a false
promise that they would be given much larger flats - Respondent
no.4 legally not entitled to make this offer - Also respondent no. 4
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failed to get the consent of 70% slum dwellers and Society had
terminated its agreement with the respondent no. 4 - Thus, consent
having been obtained by misrepresentation of facts being no consent,
respondent no. 4 not entitled to continue with the project and not
entitled to any relief.
Constitution of India - Arts. 142 and 136 - Order of this
Court requesting former judge of this Court to verify the consent of
the slum dwellers in praesenti - Held: Court was aware that the
slum dwellers were suffering due to the long protracted litigation
and was moved by the pathetic condition in which most of the slum
dwellers continued to reside - Court felt the need to find an innovative
solution - Thus, the order fell within the ambit of Art. 142 to do
complete justice between the parties.
Judicial propriety - Requirement - Judicial propriety and
discipline requires that a Coordinate Bench must respect the order
of an earlier Bench - 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.
Judgment/Order - Interpretation - Held: Judicial order or
judgment has to be read as a whole and a single line or phrase
cannot be read out of context - Judgment is not to be interpreted
like a statute.
Tender - Bid - Competitive bidding - Rehabilitation scheme
of slum dwellers by developers - Inter se bidding between the
builders - Held: High Court rightly held that consent once given
by the slum dwellers should not be permitted to be withdrawn and
there should be no inter se bidding between the builders -
Competitive bidding 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.
Disposing of the appeal subject to compliance, the Court
HELD: 1.1 Both the contesting developers, the appellant
and respondent no. 4 are not entitled to any relief. It is the duty
to ensure that these owners who also happen to be slum dwellers
do not live in sub-human conditions for eternity. The following
conclusions are arrived at:
SUSME BUILDERS PVT. LTD. v. CEO, SLUM
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(i) That the order dated 27.03.2015 was passed in exercise
of jurisdiction vested in this Court under Article 142 of
the Constitution of India and is an order binding on the
parties;
(ii) That vide order dated 27.03.2015, this Court wanted
Justice B.N. Srikrishna to find out whether appellant or
respondent no. 4 had the consent of 70% slum dwellers;
(iii) That, as a result of the Report submitted by Justice
B.N. Srikrishna both the appellant and respondent no. 4
have failed to show that they enjoyed support of the 70%
of the slum dwellers;
(iv) That, in the peculiar facts and circumstances of this
case, where the owners and occupiers are virtually one,
the SRA had the jurisdiction to invoke the provisions of
Section 13(2) of the Maharashtra Slum Areas
(Improvement, Clearance and Redevelopment) Act,
1971 to revoke and set aside the right to develop and
cancel the letter of intent granted in favour of the
appellant. Even if it be assumed that s. 13(2) is not
applicable, then the SRA could have exercised the power
under Section 3A (3)(c) and (d);
(v) That the notice issued by the SRA to the appellant was
only on the ground of delay and the issue of obtaining
70% consent was not specifically raised in the notice.
Consequently, the order dated 24.02.2012 passed by the
SRA in so far as it rejects the case of the appellant for
lack of 70% consent is beyond the terms of the notice.
Therefore, this part of the judgment of the High Court,
holding that the appellant was aware about this
allegation, is not accepted and is set aside;
(vi) That, the appellant was responsible for the delay in
implementation of the Scheme and construction of the
buildings and, therefore, the SRA was justified in setting
aside the appointment of the appellant as developer and
impliedly cancelling the letter of intent issued in its favour
vide order dated 24.02.2012;
(vii) That, the appellant has failed to show that it has the
consent/agreements of 70% of the slum dwellers and,
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therefore, is not entitled to any relief from this Court;
and
(viii) That respondent no. 4 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 respondent no. 4 with the slum dwellers are legally
unconscionable and not enforceable and, as such,
respondent no. 4 is also not entitled to continue with
the Scheme. [Paras 84, 85][57-B-H; 58-A-C]
1.2 The Court is not only disappointed with the conduct of
the appellant, but also with the conduct of those persons who
were the office-bearers of the Society whichever faction they may
belong to. It is more than obvious that the two rival developers
and the office-bearers of the Society were playing with the lives
of large number of slum dwellers. On examining the various
agreements entered into by the appellant with the Society, it is
found that though the members may have been entitled to larger
flat in each subsequent agreement but, in fact, it was the builder,
who was the biggest gainer as the advantage of higher FSI was
cornered by the builder. Only a small portion of this advantage
was being transferred to the slum dwellers and a large portion
was being retained by the builder. Furthermore, it is the occupiers
who, through the Society, are also the owners of the land. In
addition to the flats which they would be entitled to as slum
dwellers or occupiers or encroachers of land, they should have
been given some benefits as owners of the land. When a slum,
owned by any authority or person, is handed over to the developer,
in addition to rehabilitating the slum dwellers, the developer also
has to compensate the owner. It is these 800 plus slum dwellers,
who own this 23018.50 sq. mtrs. of land, which would be valuing
thousands of crores of rupees and, therefore, there is no reason
why the slum dwellers, who also happen to be the owners of the
land, should also not be compensated for the price of the
land.[Para 86][58-D-H]
1.3 This is a case where the earlier Bench of this Court
had invoked its power under Article 142 of the Constitution of
India and it is a fit case for invocation of this Court's jurisdiction
under Article 142. Hence, in exercise of this Court's power under
Article 142, the SRA is directed to invite letters of interest from
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renowned builders/developers, who have the capacity and
experience to take up such a large project by issuing
advertisements. 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 would be entitled to invoke the bank
guarantee, after giving notice to the developer. [Para 87][59-A,
B-C; 60-A-C]
The scope, ambit and effect of the order of this Court dated
27.03.2015:
2.1 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. 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 the
Court bound by the same. At the same time, it is the 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. [Para 34][36-C-D]
2.2 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 the order, the Court
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. It is thus, apparent that this is an
order falling within the ambit of Article 142 to do complete justice
between the parties. [Para 35][36-E-G]
2.3 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
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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. The
phrase " there should be appropriate verification of the consent of
the eligible slum dwellers in praesenti." cannot be read 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. 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 the order dated 27.03.2015
that 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. 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 or with
respondent no. 4. 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. Admittedly, neither the appellant nor respondent no. 4
has received 70% support. [Paras 38, 39][37-E-G; 38-C-D]
2.4 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. 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 this regard. Therefore, there
is no hesitation in accepting the report submitted by Justice B.N.
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Srikrishna. [Para 40][38-D-G]
2.5 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 the percentage is
calculated from the total number of slum dwellers-867 then the
percentage is 48.78%, which is less than 50%. In case 79 votes
are excluded 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%.
It cannot be said that to put an end to all litigation, the Court only
wanted to find out who had the majority. That, is not the essence
of the order dated 27.03.2015. It is true that 70% is not reflected
in the direction given in the order but 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 the appellant nor respondent No.
4 has the support of 70% slum dwellers, the order dt 27.03.2015
cannot be taken to its logical conclusion. [Para 41][38-G-H; 39A-C]
The scope of powers under section 13(2) of the Slum Act:
3.1 Under Section 13(2), 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 subsection 10 of Section 12 of the Slum Act; and (iii) When the
development has not taken place within time, if any, specified.
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
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completed and in that case also Section 13(2) would be attracted.
It cannot be said that in case of delay, the condition that is violated
must be laid down under Section 12(10) of the Slum Act. [Paras
44-45][40-D-G]
3.2 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.
[Para 46][40-G-H; 41-A-B]
3.3 Normally under Section 13(2) of the Slum Act, action by
the SRA has to be taken against the owner. 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 it would be accepted that under Section 13(2)
action can only be taken against the owner, in the instant case, it
cannot be accepted in its totality. 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 that appellant had
not completed the project within time. It took action under Section
13(2) of the Slum Act. The action taken by the SRA is to remove
appellant as developer which amounts to cancelling the letter of
intent issued in favour of appellant. Otherwise, there would be
an anomalous situation where the Society would have terminated
its contract with appellant but the letter of intent issued by the
SRA would continue to hold the field and it would be entitled to
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develop the land. The Society approached the SRA, in fact, asking
it to take action against the developer. Since the SRA is the
authority which issued the letter of intent, it will definitely have
the power to cancel the letter of intent. 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) to issue the order dated
24.02.2012 setting aside the appointment of the appellant as
developer. [Paras 47-49][41-B-H]
Whether the SRA has any other power to remove the developer:
4.1 Since it was the SRA which issued this letter of intent,
it necessarily must have the power to cancel the same. A bare
reading of clause (c) and (d) of sub-section (3) of Section 3A of
the Slum Act shows that in terms of the provisons, 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 the instant 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
the appellant for the unjustified delay was totally justified. [Paras
50, 51][42-B, F-G]
4.2 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
instant case, the developer now has two identities-(i) the power
of attorney holder of the owner and (ii) the developer. As far as
the instant 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. Therefore, the developer is actually
having a dual role of owner and developer. Both the letters of
intent have been issued in favour of the Society, developer and
the architects of the developer. The developer could not have
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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.[Para 52][42-G-H;
43-A-C]
Whether in the notice issued under section 13(2) the issue of
70% consent was raised:
5. 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. There was no allegation in the notice(s)
that the right to develop granted in favour of the appellant 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. The appellant
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. However,
while considering the issue of delay, the SRA was justified in
making reference to the various communications made by the
developer and its architects seeking time to obtain consent of
70% slum dwellers. [Paras 54-56][43-F-H; 44-A]
Whether support of 70% of the slum dwellers is mandatory and
whether slum dwellers are entitled to withdraw their consent:
6.1 A bare reading of Development Control Regulations 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
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. 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.
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Therefore, 70% consent of the occupiers is mandatory. [Paras
61-62][46-D-F]
6.2 The circulars issued by the SRA, specially Circular
dated 21.08.1997, 19.09.1998 and Circular No. 27 permit
conversion of old approved SRD Scheme to new SRA Scheme
under the provisions of Clause No.10.1 of Appendix IV of DCR.
In the instant case, the scheme was initiated under the old DCR
of 1991. There is no manner of doubt that the Society was formed
by more than 90% of the occupiers. The migration was done to
the Scheme of 1997. Since there is no clear cut provision in the
1997 DCR as to how this migration has to be done, it is presumed
that while migrating, it was not necessary for the appellant to
have individual agreements with 70% of the slum dwellers.
However, it was the appellant who applied for migration to the
new Scheme, obviously because the new Scheme gave greater
benefits to the developer. When migration was done, it was on
the clear cut understanding that after the migration, the provisions
of amended DCR would be applicable. When this application of
the Society and the appellant for conversion was taken up, it was
noticed that one of the main objections was that there were no
individual agreements with the slum dwellers. Later, the appellant
submitted agreements of 450 of the eligible slum dwellers and
stated in writing that the remaining to make up 70% would be
submitted before start of Phase II of the construction. Fresh letter
of intent dated 27.01.1998, in terms of the new DCR, was issued
in favour of the appellant and approved in accordance with Clause
No.33(10) and Appendix IV of amended DCR subject to certain
conditions. [Paras 63-65][46-G-H; 47-A-E]
6.3 In a migration from 1991 Scheme to 1997 Scheme,
obviously 70% individual agreements cannot be obtained prior
to submission of the Scheme. However, while granting migration,
the SRA can lay down conditions and such conditions can also be
laid down during the course of the Scheme. From the facts
narrated, it is more than amply clear that the SRA envisaged, and
appellant clearly understood, that it had to obtain consent of 70%
of the slum dwellers. Even in the resolutions of the Society
authorizing the appellant to take up the development work
entered after DCRs were amended it was clearly mentioned that
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amended Regulation 33(10) would govern the agreements. The
appellant cannot now say that it is not governed by the amended
regulations. Even the letters issued by the architects of the
appellant clearly indicate that they would make up the balance to
achieve 70% agreements. The main dispute is by when this should
have been done. Initially, time was given till commencement
certificate of the sale building was issued. This was a meaningless
condition because if this condition was to be applied after the
rehabilitation buildings had been built, then having the consent
of the slum dwellers would be an exercise in futility because by
then they would have been thrown out of their dwellings. At best,
it can be understood to mean commencement of the rehabilitation
buildings. The slum dwellers are interested with the rehabilitation
buildings and not with the free sale buildings. Later on, when
applying for permission to trade their development rights, the
appellant clearly understood and undertook that it would furnish
the consent forms of 70% of the slum dwellers. The architects of
the appellant, in fact, deposited 580 individual agreements but
out of these, only 372 were found to be correct. Thereafter, the
appellant took a U-turn and, relying upon the judgment of the
High Court took a stand that it was not required to submit
agreements with 70% slum dwellers, which was not legally
tenable. The appellant cannot be permitted to back out of its
commitments. The agreements with 70% slum dwellers should
have been provided within a reasonable time and, though almost
20 years have elapsed since the second letter of intent was granted
in favour of the appellants, it has till date failed to submit the
agreements. This only dealt with for showing that the appellant
delayed the project because it failed to get consent from 70% of
the occupiers.[Para 70][49-G-H; 50-A-E]
Whether the appellant delayed the construction of the scheme,
and is, therefore, not entitled to any relief:
7.1 Both SRA and the High Court came to the concurrent
finding of fact that the appellant was responsible for the delay in
implementation of the Scheme. It is more than obvious from the
facts narrated that the appellant never earnestly pursued the
authorities for approval of the plans and the reason is not far to
seek-the reason being the appellant did not have consent/
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agreements of 70% slum dwellers. It is more than obvious that
the appellant was buying time on one excuse or the other. On
18.01.2000, the SRA called upon the appellant to submit revised
plans in respect of rehabilitation buildings within 10 days of the
receipt of the letter. In reply thereto, the architects of the
appellant sent a letter on 27.01.2000 expressing their intention
to start Phase II of the project but, at the same time, sought
waiver of the requirement of obtaining 70% consent from the
slum dwellers. This clearly shows that the appellant was using
this excuse to delay the construction. On 05.01.2001, the appellant
addressed a letter to the SRA praying that the plan submitted in
1997 be approved. Thereafter, the SRA did not consider
appellant's proposal since, the proposal was affected by the
Coastal Regulations Zone (CRZ) Notification. [Para 71][50-G;
51-G-H; 52-A-B]
7.2 On 07.07.2001, the appellant and the Society filed Writ
Petition in the High Court seeking removal of the remarks which
indicated that part of the property of the Society was being affected
by the CRZ Notification. A perusal of the writ petition and the
other documents clearly shows that the entire property was not
affected by the CRZ Notification, but only a part thereof. On
07.08.2002, in the petition filed by the appellant and the Society,
the High Court passed an order. It is apparent from the said order
that stay was granted not to raise construction in the area which
is covered by the CRZ Notification. No material has been brought
on record to show that the entire plot was covered by the CRZ
Notification and it is amply clear that only a portion of the plot
was covered by the CRZ Notification and nothing prevented the
appellant from raising construction on that portion of the land
which was not affected by the CRZ Notification. However, for
reasons known only to the appellant, it withdrew the Writ Petition
only on 07.04.2008. It was only thereafter that respondent no. 3Society passed a resolution on 29.03.2009, terminating the
development agreement with the appellant. Even after that, the
SRA on 15.06.2009 issued a letter that the Society's request for
change of developer need not be considered. On 14.09.2009,
the Society entered into agreement with respondent no. 4.
Thereafter, civil litigation started. It has also been urged on behalf
of the appellant that, in the meantime, a one man Commission
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was constituted and due to the constitution of this Commission,
work was affected. [Paras 72-73][52-B-C, F, G; 53-C-D]
7.3 The finding given by the SRA that the appellant was
responsible for the delay, is a finding based on appreciation of
material on record. It cannot be said to be a perverse finding. It
is a finding of fact and, therefore, the High Court was justified in
coming to the conclusion that it could not set aside this finding of
fact in writ jurisdiction. Though there may have been a few stop
orders and a few occasions when the appellant may not have been
able to raise the construction but, by and large, the appellant was
itself guilty of delaying the construction for no reason at all.
Therefore, the appellant was rightly held responsible for the delay
in implementation of the rehabilitation scheme and, as such, there
is no error in the impugned order. [Para 74][53-E-G]
Whether the appellant is entitled to continue with the scheme:
8.1 The appellant is not entitled to continue with the
rehabilitation Scheme on account of the fact that it has been
responsible for the delay in completion of the project for an
inordinately long time. The appellant has not been able to explain
the delay. The slum dwellers are dealt with and the appellant
cannot take the benefit of technical points to defeat the rights of
the slum dwellers. The claim of the appellant that it had the support
of 70% slum dwellers, was contested before Justice B.N.
Srikrishna and his findings clearly reveal that the appellant does
not have the support of 70% of the slum dwellers. Since the notice
by the SRA to the appellant did not make any specific allegation
with regard to the appellant not having 70% consent, that portion
of the order of the SRA, setting aside the right to develop the
land on the ground of lack of 70% consent, may have been beyond
the scope of the notice. However, this issue was argued before
the HPC and the High Court and on rival claims being made, this
Court vide order dated 27.03.2015, referred this dispute to
Justice B.N. Srikrishna who submitted his report.